Central bank bonanza

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Morning Bid Weekend

A Reuters Open Interest newsletter

Check out what ROI Editor-at-Large Mike Dolan and the rest of the ROI team are excited to read, watch and listen to over the weekend.

From the Editor

Hello Morning Bid readers!

U.S stocks hit record highs on Thursday, buoyed by the Federal Reserve's first interest rate cut in 2025, a drop in U.S. jobless claims, and the announcement that Nvidia will invest $5 billion in the struggling U.S. chipmaker Intel.

On Friday morning, the big news in Asia was not so much that the Bank of Japan kept short-term interest rates unchanged at 0.5%, which was widely expected, but that two members voted for a hike and also that the central bank announced that it would begin selling its vast holdings of exchange-traded funds and real-estate investment trusts.

Much of the financial world's focus this week has been on central banks, most notably the U.S Federal Reserve. Some argue that the Fed's 25 basis point cut and dovish steer may cause it to unintentionally stumble into stimulative territory, simply because it is so challenging to determine where the so-called neutral rate is. Others argue that the Fed's problems may be of its own making given its questionable record on inflation control.

One of the biggest takeaways from Chair Jerome Powell's remarks was the lack of clarity surrounding the U.S. labor and inflation outlooks. This confusion is epitomized by inconsistencies between the Fed's statements and changes to its economic predictions, argues ROI Markets Columnist Jamie McGeever. He also discusses why Fed easing could be a mixed blessing for the rest of the world.

Over in the United Kingdom, the Band of England held rates steady on Thursday but said it was slowing the pace of its quantitative tightening program. ROI Editor-at-Large Mike Dolan asks why the BoE doesn't just scrap direct gilt sales entirely.

In the commodities markets, China's surplus crude surged in August as robust imports and domestic production offset an increase in refinery processing.

Data about China's crude stockpiling remains opaque, one of a growing number of blind spots in the oil market. ROI Energy Columnist Ron Bousso argues that this is making it harder to determine the true supply-demand balance in the world's most important commodity market.

On the renewables side, ROI Energy Transition Columnist Gavin Maguire discusses the widening lead Texas and California are building over the rest of the country on the clean energy front. He also explains why wind speeds around the UK in the coming months could have potentially far-reaching consequences for Europe's gas and power sectors

And over in the metals world, ROI columnist Andy Home explains why the aluminium market, defined by historical excess, may be facing an imminent shortfall.

As we head into the weekend, check out the ROI team's recommendations for what you should read, listen to, and watch to stay informed and ready for the week ahead.

I'd love to hear from you, so please reach out to me at anna.szymanski@thomsonreuters.com.

This weekend, we're reading...

GAVIN MAGUIRE, ROI Global Energy Transition Columnist: Airlines are racing to cut carbon emissions with biofuels, but a Reuters investigation reveals a troubling link between U.S. green jet fuel and illegal deforestation in the Amazon, raising urgent questions about the integrity of sustainability certifications and the unintended consequences of climate policy.

RON BOUSSO, ROI Energy Columnist: The international Energy Agency this week published a free report on the decline rates of oil and gas fields. While it's very technical is some parts, it also illustrates very clearly how much investment is needed to simply keep oil and gas production steady, let alone to see it grow.

ANNA SZYMANSKI, ROI Editor-in-Charge: China's auto industry is facing a crisis of oversupply that threatens profitability for automakers and dealers alike. The fascinating Reuters investigation warns that this situation could trigger a painful shakeout with far-reaching implications.

We're listening to...

CLYDE RUSSELL, ROI Asia Commodities and Energy Columnist: In the latest episode of The Smoking Barrel podcast, the hosts are back from the APPEC break with some market insights taken from the various discussions around the events. The team dives into Russian oil production and how current events could impact market structure going forward.

MIKE DOLAN, ROI Financial Markets Editor-at-Large: This audio summary of the Bank for International Settlements' quarterly review this week goes through the most important issues facing world financial markets, stressing that becasue markets have rebounded sharply from the trade uncertainties of the early part of the year, financial conditions are, if anything, loosening excessively.

And we're watching...

JAMIE MCGEEVER, ROI Markets Columnist: This lively, informal chat from Ritholtz Wealth Management's podcast 'The Compound,' discusses what happens after an interest rate cut and other issues du jour like President Trump's call for companies to scrap quarterly reporting.

Want more market-moving news and analysis? You can find ROI on the Reuters website, and you can follow us on LinkedIn and X.

Opinions expressed are those of the authors. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

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