Argentinian bonds have fallen sharply after President Javier Milei was defeated in a crucial provincial election.
The shock election defeat has cast doubt on whether Mr Milei has the political support to push through his economic reforms.
The disappointment was felt in Argentina’s markets as the peso fell 7pc against the US dollar to 1,450. The country’s benchmark dollar bonds fell by 10.5pc to trade at around 55 cents.
Investors were disappointed by the result of the election. Many had expected that a defeat of more than 5 percentage points would lead to a sell off in Argentinian assets.
Fernando Sedano and Simon Weaver, from Morgan Stanley, told investors that the election defeat increased the chances that “the market questions the likelihood of continued reforms, and uncertainty rises around the future external financing sources”.
Fresh from this defeat in Buenos Aires province, Mr Milei now faces a nationwide mid-term congressional election on October 26.
The new boss of car giant Stellantis has called on the EU to rescue the region’s automotive industry.
Antonio Filosa, chief executive of Stellantis, said it was “vital” that the EU show flexibility on the transition to electric vehicles in order to protect the auto industry.
He said: “A strategic dialogue is very important, but now it’s vital to act with urgency. There is no time for delays.”
Mr Filosa urged the bloc to support the sale of hybrid vehicles to reduce the average age of cars on the road and said that EU emissions targets were “unrealistic”.
He also warned the bloc’s regulation was increasing the cost of small cars, causing a drop in the number of cars sold and put the auto industry at risk.
The EU will ban the sale of new petrol and diesel cars in 2035 as part of its net zero targets. Some car markers have warned the ban could impact their sales and the emissions targets are no longer feasible for the industry.
Mr Filosa said: “A European policy that encourages the replacement of older cars with new cars and a wider choice of powertrains would have a greater impact on global CO2 emissions than the annual new car market does.”
His comments come as European car makers grapple with the impact of tariffs and face growing competition from Chinese rivals, such as BYD.
Mr Filosa became head of Stellantis in June. The company owns a range of car brands, including Vauxhall, Fiat, Peugeot and Jeep.
Ursula von der Leyen, the president of the European Commission, will meet business leaders from the automotive sector on Friday to discuss the future of the industry.
Brazilian president Luiz Inacio Lula da Silva has denounced what he called “tariff blackmail” as the South American giant deals with a 50pc tariff imposed by Donald Trump.
“Tariff blackmail is being normalised as an instrument for market conquest and to interfere in domestic affairs,” Mr Lula said during a virtual meeting of emerging market Brics leaders.
Other participants included China’s Xi Jinping, Vladimir Putin of Russia and South Africa’s Cyril Ramaphosa.
Brazil’s exports to the United States plunged 18.5pc year-on-year in August after Mr Trump slapped his highest level of trade tariff on a range of goods from Latin America’s biggest economy.
Mr Trump is punishing Brazil for what he calls a “witch hunt” against his ally, former far-Right president Jair Bolsonaro.
Brazil has said it is considering retaliatory trade measures against the United States, and has asked the World Trade Organisation for help in resolving the dispute.
The S&P 500 and the Nasdaq have risen this afternoon on hopes that the Federal Reserve will lower borrowing costs soon.
A troubling non-farm payrolls report on Friday confirmed a weakening US job market, stoking fears of a potential slowdown in the world’s biggest economy.
Following the report, traders solidified their expectations for several rate cuts this year.
Money markets are almost fully pricing in three rate cuts during the rest of 2025.
Barclays now anticipates three cuts of a quarter of a percentage point each this year, while Standard Chartered expects a half point trim in September.
“Markets are trying to understand if the (September) rate cut is going to be enough to stave off further weakening of the economy and that’s why you see a market that is just neutral,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
The S&P 500 is up 0.3pc, the Nasdaq is up 0.8pc and the Dow Jones is roughly flat.
Xi Jinping, the Chinese president, has called on emerging economies to support globally agreed trade rules and resist protectionism in the face of Donald Trump’s trade war.
He told a virtual summit of emerging market countries known as Brics: “No matter how the international situation changes, we must unwaveringly promote the construction of an open world economy, share opportunities and achieve win-win outcomes through openness.
“We must maintain a multilateral trading system centred on the World Trade Organisation and resist all forms of protectionism.”
He said: “At this critical juncture, the Brics spirit of openness, inclusiveness and win-win cooperation, jointly defend multilateralism and the multilateral trading system, advance greater Brics cooperation, and build a community with a shared future for humanity”
The comments, first reported by Chinese state news agency Xinhua, come after Donald Trump upeneded global supply chains with a series of zig-zagging tariff announcements.
Argentinian bonds have fallen sharply after President Javier Milei was defeated in a crucial provincial election.
The shock election defeat has cast doubt on whether Mr Milei has the political support to push through his economic reforms.
The disappointment was felt in Argentina’s markets as the peso fell 7pc against the US dollar to 1,450. The country’s benchmark dollar bonds fell by 10.5pc to trade at around 55 cents.
Investors were disappointed by the result of the election. Many had expected that a defeat of more than 5 percentage points would lead to a sell off in Argentinian assets. 
Fernando Sedano and Simon Weaver, from Morgan Stanley, told investors that the election defeat increased the chances that “the market questions the likelihood of continued reforms, and uncertainty rises around the future external financing sources”. 
Fresh from this defeat in Buenos Aires province, Mr Milei now faces a nationwide mid-term congressional election on October 26.
Gold prices have climbed above $3,600 to hit a record high as concerns about central bank independence and expectations of a US interest rate cut boost demand for the precious metal.
The price of spot gold rose 0.8pc to 3,613.87 on Monday morning.
Investors have been flocking to gold as they search for other assets because lower interest rates tend to lead to lower returns from cash and bonds.
It comes after downbeat jobs figures released on Friday raised the prospect that the Federal Reserve will cut interest rates when it meets next week.
Gold has risen over 35pc this year as investors pile into the precious metal. It is also in demand because it acts as a hedge against inflation and is viewed as the ultimate safe haven asset.
Some investors are worried that the US is facing a combination of high inflation and slow growth – known as stagflation.
Mark Haefele, from UBS, expects gold to “benefit from lower real rates and ongoing geopolitical risks”. The bank believes gold will climb even further to reach $3,700 per ounce by the end of June 2026.
Traders are also awaiting the outcome of Donald Trump’s attempt to sack Federal Reserve governor Lisa Cook. The US President’s latest move to criticise the central bank has added to worries about its independence.
Trump’s attempt to oust Ms Cook is currently making its way through the American court system and is just the latest in a series of attacks against the Fed.
The US President has also repeatedly called Federal Reserve chairman Jerome Powell a “numbskull” and labelled him Mr “too late” Powell.
In Mr Trump’s first term, he famously described Bitcoin as a “scam”, but he has become an enthusiastic convert. During his second stint in the White House, he has presented himself as the most crypto-friendly president in history. At the same time, the Trump family has made billions from a series of crypto ventures.
Last week, two of the family’s crypto investments were valued at a combined $6.5bn (£4.8bn), more than it has ever made from generations in the real estate business.
The moment Mr Trump was converted is believed to have come shortly after he was booted out of the White House.
The UK is heading for a slowdown in economic activity in the second half of the year, analysts at Deutsche Bank have warned.
The forecast of sluggish economic activity comes amid a slump in employment and slowing wage growth.
The bank expects that declines in exports, public sector spending and stockpiling will all weigh on economic growth in the final six months of 2025.
Sanjay Raja, a senior economist at Deutsche Bank, said that uncertainty over the upcoming autumn Budget will be “hanging over household consumption and business investment”.
Rachel Reeves revealed last week that her autumn Budget will take place on November 26. She is widely expected to increase taxes this autumn in a bid to plug a black hole in public finances.
Despite the economic headwinds, the bank still expects the British economy to grow albeit at a sluggish rate of 0.2pc quarter on quarter.
Rachel Reeves’s Budget delay is leaving Britain’s struggling pubs in limbo, bosses have warned.
Hospitality chiefs said the decision by the Chancellor to push back her autumn Budget until the end of November – its latest date in 10 years – risks preventing them from planning for the new year at a time when many are already struggling with earlier tax rises.
Ms Reeves revealed last week that her autumn Budget will take place on Nov 26, meaning it will fall just before the festive period, which is critical for pubs and restaurants. Last year’s Budget was held on Oct 30.
French borrowing costs have edged lower despite the upcoming political turmoil this afternoon.
Benchmark borrowing costs in France slipped 0.3pc to 3.43pc as tensions in the bond market eased ahead of a vote of confidence in French Prime Minister François Bayrou later this afternoon.
Bayou is largely expected to lose the vote of confidence which is due to begin at 3pm but traders have largely shrugged off concerns about political uncertainty.
French stocks made gains in the run up to the vote. The pan-European STOXX 600 index gained 0.3pc and France’s benchmark CAC 40 added 0.4pc.
The rise in equities likely means that markets have priced in the latest political drama in Paris.
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