Business

By Anirban Sen and Pritam Biswas

June 4 (Reuters) – CME Group CEO Terry Duffy warned on Thursday that U.S. regulators are creating systemic risk by allowing perpetual cryptocurrency futures, and criticized the Commodity Futures Trading Commission’s process for approving the novel products.

Speaking at the Global Exchange & Fintech conference hosted by Piper Sandler, Duffy said the CFTC’s approval of “perps,” futures products that typically carry large amounts of leverage, was extremely risky for the financial system. 

“It is a disaster waiting to happen,” Duffy said. “I believe the market has been supplanted by the speculation market, and that does not suit anyone’s interest.”

Cryptocurrency exchange Coinbase and prediction market platform Kalshi last month said they would launch perpetual crypto futures after the CFTC gave them the green light, marking the first time such instruments will be ​available to U.S. investors through domestic, regulated exchanges.

Perpetual futures, or “perps,” are listed derivatives without an expiration date, allowing traders to maintain positions indefinitely without the need to roll over contracts. The products also permit high degrees of leverage — often as much as 50-to-1 — ​enabling investors to amplify their exposure to market moves. 

Duffy warned that this extreme leverage, combined with the automatic liquidation models prevalent in the sector, poses a significant threat to retail investors who may not fully grasp the corrosive effects of funding rate costs on their positions.

A CFTC spokesperson did not immediately respond to a request for comment. The agency has said it will approve the products on a case-by-case basis. 

CME, CBOE and New York Stock Exchange parent Intercontinental Exchange have been hit by a share selloff this week as investors fret that the CFTC’s decision creates a major new competitive threat for the incumbent bourses in the long term.

Duffy dismissed those fears, however, noting that institutional demand for the risky products remains limited. He said 85% to 90% of the CME’s business is institutionally driven and that analysts do not expect perps to have a meaningful impact on traditional futures products, as they are ​not a viable ​alternative to instruments ⁠designed for institutions.

Duffy also criticized the CFTC’s approval process as hasty, saying it bypassed a traditional “full review” for what it deemed a “novel and complex” instrument. 

(Reporting by Pritam Biswas in Bengaluru and Anirban Sen in New York; Editing by Michelle Price and Matthew Lewis)

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PARIS/HONG KONG, June 4 (Reuters) – Singapore Airlines is in discussions with Airbus and Boeing for the purchase of at least 50 of the industry’s biggest jets as it plans the next phase of its growth from next decade, industry sources said.

The Southeastern Asian giant is seeking offers for more 400-seat Boeing 777X, the industry’s largest current model, or for the slightly smaller Airbus A350-1000, they said. Talks are at an early stage but could include options for dozens more jets.

Airbus and Boeing declined comment. Singapore Airlines did not immediately respond to a request for comment.

(Reporting by Tim Hepher, Julie Zhu; editing by Barbara Lewis)

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June 4 (Reuters) – Coca‑Cola is adjusting ways to keep its drinks both affordable and appealing as consumer demand remains uneven across income groups, CFO John Murphy said at an industry conference on Thursday.

The beverages giant, which raised its annual profit target in April, said it was navigating the disruption from the U.S.-Israeli war on Iran “not perfectly well, but without fear, without trepidation.” 

“The outlook… of the Middle East situation is still not clear,” Murphy told investors at the Deutsche Bank consumer conference in Paris, adding that it “is going to be a topic on all of our agenda as we go into 2027.”

Coca‑Cola is leaning on a mix of pack sizes, formats and price points, from smaller, lower-cost, single-serve options to larger and premium offerings, to cater to a wider range of consumers while keeping prices affordable for budget-conscious shoppers.

Recent earnings from major U.S. retailers suggest consumers remain resilient but are spending more selectively, as rising fuel costs linked to the Iran conflict and persistent inflation weigh on budgets.

Murphy echoed that view, cautioning that “the narrative on the consumer being resilient is a nuanced narrative… because they’re not all the same.”

He added that parts of Coca‑Cola’s consumer base are under strain, particularly those earning between $50,000 to $60,000 annually, noting “we have segments… that are under pressure, and we have a choice to stay relevant with them or not.”

“The math is pretty obvious. It doesn’t work… they just don’t have the purchasing power,” he said. 

Shares of the company were up about 1.5% in premarket trading.

(Reporting by Savyata Mishra in Bengaluru; Editing by Devika Syamnath)

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NEW DELHI (AP) — Indian Prime Minister Narendra Modi held talks with Venezuela’s acting President Delcy Rodriguez on Thursday as New Delhi seeks to deepen ties with the oil-rich South American nation following disruptions in global energy supplies.

Rudrendra Tandon, a senior official in India’s foreign ministry, said the talks held in New Delhi focused on strengthening energy cooperation. He said Venezuela had become India’s third-largest crude oil supplier in recent weeks.

Tandon said India is “aggressively seeking new sources of crude oil and energy to strengthen its energy security,” adding that Venezuela represents an “opportunity and is very much part of our plans.”

Modi and Rodriguez also explored opportunities for Indian companies to invest in Venezuela’s sectors including mining, critical minerals, pharmaceuticals and automobiles, he said.

The meeting comes as India has increased imports of Venezuelan crude in recent months, making the South American country a more important supplier for the world’s third-largest oil importer.

India imports about 90% of its oil. Around half of those supplies pass through the Strait of Hormuz, a key shipping route effectively closed by the Iran war.

Rodriguez also met India’s foreign minister, Subrahmanyam Jaishankar, on Thursday and is scheduled to hold talks with Petroleum Minister Hardeep Singh Puri. She is also expected to visit facilities in India’s energy, pharmaceutical and automobile sectors.

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June 4 (Reuters) – Australia’s Lynas Rare Earths said on Thursday that Chief Operating Officer Pol Le Roux will take over as interim CEO from June 30, marking a leadership transition at the world’s largest producer of rare earths outside China.

Le Roux will be succeeding Amanda Lacaze, who is retiring from the helm after 12 years in the role.

Le Roux joined Lynas in late 2010, a few years before Lacaze, and has overseen the company’s operations across Australia and Malaysia.

He has previously held multiple roles at French chemicals company Rhône-Poulenc, which is now a part of Belgium-based Solvay.

“Pol has over 20 years of experience in the rare earths industry and is recognised among our customers, investors and industry for his extensive knowledge of Lynas’ operations and the rare earths market,” Lynas Chair John Humphrey said.

(Reporting by Roushni Nair and Jasmeen Ara Shaikh in Bengaluru; Editing by Vijay Kishore and Mrigank Dhaniwala)

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By Mike Dolan

June 4 (Reuters) –

What matters in U.S. and global markets today

By Mike Dolan, Editor-at-Large, Finance and Markets

The S&P 500 failed to clock its 10th straight daily gain on Wednesday and there are some clouds gathering in markets. Despite the frenzy in the red-hot chip sector, Broadcom, now the world’s sixth-biggest company by market cap, stumbled after its latest earnings release.

The chipmaker’s stock dropped more than 13% overnight following a slight miss on sales and revenue forecasts. That reaction speaks to the high bar companies must now meet to impress markets amid the AI boom. In the words of one analyst, the market now demands perfection.

I’ll get into that and more below.

But first, check out my latest column on why Kevin Warsh’s Fed could catch investors off guard.

And listen to the latest episode of the Morning Bid daily podcast. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.

SUMMER CLOUDS

Broadcom’s miss also speaks to the rising competition in the sector, where shares of chip designers like Marvell Technology have zoomed higher over the past week. Marvell’s shares touched a record high after Nvidia CEO Jensen Huang on Tuesday stated it is likely to become a trillion-dollar company.

Meantime, the broader economy has shown few signs of slowing, fuelling hawkish bets on the Federal Reserve’s next move, with futures now seeing almost a 50% chance of a rate rise as soon as October.

The Fed’s so-called Beige Book, which lays out the economic conditions facing policymakers when they meet this month, showed activity has picked up even as energy price pressures have become pervasive.

That was clear in the recently released ISM business surveys for May, as well as labor market numbers like May’s forecast-beating 122,000 rise in ADP private sector payrolls.

The May employment report will be released tomorrow, but overall U.S. economic surprise indexes are running at their most positive in three years.

There’s been little relief on the energy front, meantime, with oil prices still elevated as we enter a crunch month for global crude supplies. And despite reports of a ceasefire between Israel and Lebanon boosting hopes for a broader Iran deal, fighting continued in southern Lebanon on Thursday.

In otherwise calm currency markets, the softening Japanese yen continued to flirt with the 160-per-dollar level, even in the face of warnings from BOJ sources that an interest rate rise is likely this month – unless a sharp escalation in the Middle East conflict upends markets.

And while investors await a wave of mega IPOs this summer, there have been renewed jitters in private equity and credit markets. Swiss asset manager Partners Group is facing heavy redemption requests from some of its funds and will cap withdrawals from its $16 billion U.S.-based fund after they exceeded the 5% quarterly limit.

Moving into Thursday’s open, U.S. stock index futures were in the red while oil prices and Treasury yields slipped back slightly from Wednesday’s highs. And with regular tech stocks now recording extraordinary short-term moves that once seemed the preserve of frothier crypto markets, bitcoin seems almost forgotten. It’s shed almost 20% since mid-May and fell to its lowest level since February on Wednesday.

Chart of the day

Even though a ceasefire deal between Israel and Lebanon encouraged hopes for a broader agreement to end the U.S.-Israeli war with Iran, fighting continued both there and in the Gulf region.

Global crude prices remain about 35% higher than before the war and concerns about dwindling reserves are rising. U.S. crude stockpiles fell by 8 million barrels to 434 million barrels in the week ended May 29, the Energy Information Administration said – twice the draw analysts had expected.

Today’s events to watch

• U.S. weekly jobless claims (8:30 a.m. EDT), Q1 productivity and costs (8:30 a.m. EDT)

• Fed’s Michelle Bowman, Richmond Fed’s Thomas Barkin, Kansas Fed’s Jeffrey Schmid and San Francisco Fed’s Mary Daly all speak

Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X.

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

(By Mike Dolan)

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BRUSSELS, June 4 (Reuters) – The European Commission will delay the introduction of a new market risk capital framework for banks for three years to see how the U.S. and Britain implement the same international standards, it said on Thursday.

The framework is part of the Fundamental Review of the Trading Book (FRTB) and the global Basel III banking standards that are to strengthen risk measurement in banks’ trading and make sure their capital accurately reflects the risks they take.

Pushing back the implementation of the capital requirement rules related to trading risk is meant to avoid putting European banks at a disadvantage to peers in the U.S. and Britain until it is clear how the two jurisdictions will proceed.

“Europe’s banks must be able to compete on equal terms with their international peers,” EU Commissioner for Financial Services Maria Luis Albuquerque said.

“These targeted and time-limited measures help preserve a level playing field in global financial markets while maintaining our commitment to the Basel standards.”

“They… give us the necessary time to monitor developments in other major jurisdictions before determining the most appropriate long-term approach,” she said.

Under EU law, the new capital requirement rules would have otherwise applied in full from January 2027. The Commission’s new regime, unless vetoed over the next six months by either EU governments or the European Parliament, will run from 2027 to the end of 2029.

The three-year delay has been agreed with the European Central Bank and the European Banking Authority, officials said.

(Reporting by Jan Strupczewski; Editing by Jan Harvey)

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By Suzanne McGee

ORLANDO, Florida, June 3 (Reuters) – The Vanguard S&P 500 ETF, the index investing pioneer’s flagship exchange-traded product, became the first in the history of ETFs to reach and exceed $1 trillion in assets, the investment firm confirmed on Wednesday.

The Vanguard fund hit this milestone, the latest record in the remarkable ascent of exchange-traded funds, on Tuesday, less than 18 months after overtaking State Street Investment Management’s SPDR S&P 500 ETF in assets, as investors looking for broad market exposure also sought out the lowest-cost funds. VOO levies a management fee of only 0.03%, compared to 0.09% for the State Street fund, which now is third in the three-way race between those two firms and BlackRock Inc..

BlackRock, the world’s largest asset manager, has the second-largest ETF tracking the Standard & Poor’s 500 index, with its iShares Core S&P 500 ETF that now boasts $860 billion in assets and fees of 0.03%, according to VettaFi. SPY, the market pioneer that helped open up the ETF market with its 1993 launch, now has $785 billion in assets.

“This is a key milestone,” said Todd Rosenbluth, head of research at VettaFi. “Investors continue to turn to low-cost broad market exposure to gain access to the S&P 500 using VOO.” 

(Reporting by Suzanne McGee in Orlando, Florida; Editing by Stephen Coates)

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By David Shepardson

WASHINGTON, June 3 (Reuters) – The Federal Communications Commission said on Wednesday it plans to toughen oversight of submarine communications cables that handle ‌99% of international internet traffic, proposing rules that will make it harder for Chinese companies to provide equipment and fast-track approvals for trusted U.S. tech firms.

The FCC said it was planning to require licenses for the first time for operators of submarine line terminal equipment, which perform the most critical function of a submarine cable system by connecting to U.S. terrestrial facilities.

U.S. companies such as Facebook parent Meta and Alphabet unit Google are likely to benefit from the process to get quicker approval to operate additional undersea cable systems to handle growing internet traffic.

The fast-track requires companies that operate cables to guard against espionage and other security incidents and strictly monitor compliance with national security and data security. Operators would also have to agree not to use foreign equipment that could pose security risks.

With the undersea internet cable business booming, the FCC last year barred the use of equipment or services in undersea cable facilities from companies on its list of companies deemed to pose threats to U.S. national security.

The firms that were barred included Huawei, ZTE, China Telecom and China Mobile, but the new rules are expected to expand the ban to include use equipment from China or any other foreign adversary in submarine cable systems.

For more than a year, U.S. officials have voiced concern about the network of more than 400 subsea cables that handle nearly all ‌international ⁠internet traffic and about threats from China and Russia.

U.S. Senate Foreign Relations Committee Chair Jim Risch in April urged new efforts to address growing national security concerns over submarine communications cables.

“To end undersea sabotage, we need to call it out when it happens and say publicly who did it, if possible,” Risch said. “We also need a concerted international effort to ​improve the resiliency of undersea infrastructure and prevent or mitigate the impact of ⁠these attacks when they happen.”

In 2021, the Justice Department said that national security agreements on submarine cables with Google and Meta were needed given China’s “sustained efforts to acquire the sensitive personal data of millions of U.S. persons.”

(Reporting by David Shepardson; Editing by David Gregorio)

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By Philip Blenkinsop

BRUSSELS, June 4 (Reuters) – EU steel exports to the U.S. have fallen by 34% since Washington hiked tariffs to 50%, with higher duties on derivative products such as washing machines and motorbikes also hitting European demand, steel industry association Eurofer said on Thursday. 

Steel exports to the U.S. fell to 1.94 million metric tons in the three quarters since the Trump administration doubled import tariffs on steel and aluminium from 25% a year ago.

European Union producers exported 3.4 million tons to the United States in 2025, compared with 4.1 million tons in 2024 and 4.7 million tons in 2017, Eurofer said.

Eurofer said it was important the EU and the U.S. carried out their trade deal struck last July in full. 

That agreement, struck at President Donald Trump’s Turnberry golf course in Scotland, sets out that the EU should remove its duties on most U.S. goods imports in return for a broad 15% U.S. tariff on EU exports.

It also said the two sides should discuss possible tariff-free steel and aluminium quotas and cooperation to address global overcapacity.

Axel Eggert, Eurofer director general, said the U.S. needs to fulfil its commitment to work with the EU to find a solution.

A further problem EU producers have faced are U.S. tariffs on ‘derivative’ products, for which the metal content was initially subject to a 50% tariff. Trump even widened the range of products a month after the Turnberry deal.

Trump’s administration has since lowered a number of tariff rates, with a proclamation on Monday reducing the rate on some products to 15% for the EU. Still, for fridges, lawn mowers or rail parts, the rate is 25%. 

The EU could suspend some concessions if this does not fall to 15% by the end of the year.  

(Reporting by Philip Blenkinsop; Editing by Alexander Smith)

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