SEOUL (Reuters) - South Korea's central bank cut policy interest rates for a second straight meeting in a surprise move as the economy stalled and inflation slowed more rapidly than policymakers predicted.

The Bank of Korea (BOK) lowered its benchmark interest rate by a quarter percentage point to 3.00% at its monetary policy review, an outcome only four of 38 economists polled by Reuters expected. All others forecast the bank to keep rates unchanged.

Governor Rhee Chang-yong holds a news conference at around 0210 GMT, which will be livestreamed via YouTube.

By Sarah Morland, Raul Cortes and Brendan O'Boyle

MEXICO CITY (Reuters) -Mexican President Claudia Sheinbaum said on Wednesday Mexico would retaliate if U.S. President-elect Donald Trump followed through with his proposed 25% across-the-board tariff, a move her government warned could kill 400,000 U.S. jobs and drive up prices for U.S. consumers.

"If there are U.S. tariffs, Mexico would also raise tariffs," Sheinbaum said during a press conference, in her clearest statement yet that the country was preparing possible retaliatory trade measures against its top trade partner.

Mexican Economy Minister Marcelo Ebrard, speaking alongside Sheinbaum, called for more regional cooperation and integration instead of a war of retaliatory import taxes. 

"It's a shot in the foot," Ebrard said of Trump's proposed tariffs, which appear to violate the USMCA trade deal between Mexico, Canada and the U.S.

Ebrard warned the tariffs would lead to massive U.S. job losses, lower growth, and hit U.S. companies producing in Mexico by effectively doubling the taxes they paid. "The impact on companies is huge," he said.

The proposed tariffs would hit the automotive sector's top cross-border exporters especially hard, Ebrard added, namely Ford (NYSE:F), General Motors (NYSE:GM) and Stellantis (NYSE:STLA).

Ebrard noted that 88% of pickup trucks sold in the U.S. are made in Mexico and would see a price increase. These vehicles are popular in rural areas that overwhelmingly voted for Trump.

“Our estimate is that the average price of these vehicles will increase by $3,000,” Ebrard said.

Sheinbaum and Trump spoke by phone later on Wednesday, the Mexican president said on social-media platform X, adding the two discussed "strengthening collaboration on security issues" and that the conversation was "excellent."

Trump has said the tariffs would remain in effect until the flow of drugs - particularly fentanyl - and migrants into the U.S. was controlled.

Sheinbaum added migrant caravans are no longer arriving at the U.S.-Mexico border "because they are attended to" in Mexico.

A caravan of several thousand migrants had been heading through southern Mexico but numbers have dwindled in recent days.

Many analysts regard Trump's tariff threats as more of a negotiating tactic than trade policy.

"The lack of a clear link between this threat and questions related to trade suggests the new president plans to use tariffs as a negotiating strategy to achieve goals largely unrelated to trade," said David Kohl, chief economist at Julius Baer (SIX:BAER).

PROFIT WIPED OUT

Mexico's automotive industry is the country's most important manufacturing sector, exporting predominantly to the United States. It represents nearly 25% of all North American vehicle production.

Analysts at Barclays (LON:BARC) said they estimate the proposed tariffs "could wipe out effectively all profits" from the Detroit Three automakers.

"While it's generally understood that a blanket 25% tariff on any vehicles or content from Mexico or Canada could be disruptive, investors under-appreciate how disruptive this could be," they wrote in a note on Tuesday.

Brian Hughes, a spokesperson for Trump's transition team, said the tariffs would protect U.S. manufacturers and workers from "unfair practices of foreign companies and foreign markets."

Hughes said Trump would implement policies to make life affordable and more prosperous for his country.

GM and Stellantis declined to comment. Ford did not comment on how the threatened tariffs would affect its business but said it manufactures more vehicles in the United States than most major automakers.

Mexico's automotive industry group AMIA said it would prepare for any possibility and wait to see what formal actions are taken. 

The Institute of International Finance, a trade group for the global financial services industry, warned Mexico-U.S. relations would be challenging going forward.

"The imposition of tariffs, eventually leading to increased protectionism, and other policies affecting exchange rates and commodity prices could have significant implications for the region," it said in a note. 

The USMCA is up for review in 2026.  

Katia Goya, director of international economics at Grupo Financiero Banorte (BMV:GFNORTEO), said it was likely the three USMCA countries would seek wholesale renegotiation of the pact rather than just rubber-stamp it to continue in its current form.

"The effect of a trade-conflict situation is that it will mean lower economic growth in the United States, higher unemployment and higher inflation," Goya said.

Ebrard said USMCA trade amounted to $1.78 trillion in the first nine months of this year.

"We can fragment and divide with tariffs," Ebrard said. "Mexico does not want conflicts and divisions, but to build a stronger region."

By Hyunjoo Jin and Heekyong Yang

SEOUL (Reuters) -Samsung Electronics sought to inject impetus into its memory and foundry chip units by appointing new leaders on Wednesday, as it scrambles to catch SK Hynix and Taiwan's TSMC in the booming AI chip market.

The world's biggest memory chipmaker reavowed its faith in semiconductor chief Jun Young-hyun by naming him co-CEO and bestowing direct control of its struggling memory chip business.

Samsung (KS:005930) also made U.S. chip head Han Jin-man president and head of its foundry business making customer-designed chips.

However, Samsung kept Chung Hyun-ho, second-in-command to Chairman Jay Y. Lee, as head of its Business Support Task Force and appointed a former CFO as Chung's deputy. That disappointed some analysts who argued for change among the biggest decision makers whose missteps they said made Samsung slow to embrace AI.

Samsung's share price closed down 3.4% as the reshuffle did little to calm concern about how the technology giant will navigate risk associated with the protectionist policies of U.S. President-elect Donald Trump.

Even before Trump's election triumph, Samsung's stock had been falling due to investor concern that it lags rivals as supplier to leading AI chip designer Nvidia (NASDAQ:NVDA).

Chip chief Jun takes on direct oversight of the memory chip business having headed the overall semiconductor division since May in an appointment Samsung said would tackle a "chip crisis".

Profit in the division plunged 40% in the third quarter from the second, with Samsung saying AI chip business had suffered a delay with a "major" customer - with analysts naming Nvidia as the likely customer. Samsung has since said it has made headway.

The extra responsibility indicates "Samsung is backing Jun's strategy to regain its competitiveness," said KB Securities' head of research Jeff Kim.

Still, with Chung remaining head of the Business Support Task Force - widely regarded as Lee's de facto secretariat involved in key decision-making - there are questions as to whether the reshuffle will address concerns about leadership, said Park Ju-gun, head of corporate analysis firm Leaders Index.

Joining the Business Support Task Force is President and CFO Park Hark-kyu, with a new CFO yet to be announced.

As well as catching up in AI and stemming a stock price decline, management has to contend with slowing profit growth and intensifying competition from Chinese rivals.

"I am fully aware that there are grave concerns about the future of Samsung recently," Chairman Lee said this week during a final hearing of an accounting fraud trial where he is a defendant. He has denied wrongdoing.

Wednesday's appointments also included a new chief technology officer of the foundry business and an executive tasked with finding new growth areas.

Samsung said the reshuffle is aimed at overcoming business uncertainty, revamping its organisation and raising the technological competitiveness of its chip business.

These doubts were furthered by the minutes of the Fed’s early-November meeting, released on Tuesday. The minutes showed that policymakers were divided over future rate cuts, and recommended a gradual easing in rates. 

Tech gains help Wall St weather Trump tariff threat 

Gains in heavyweight technology stocks saw Wall Street indexes rise past Trump’s tariff threats to hit record highs on Tuesday. 

The S&P 500 rose 0.6% to a record high of 19,172.81 points, while the Dow Jones Industrial Average rose 0.3% to a record high of 44,860.31 points. The NASDAQ Composite rose 0.6% to 19,172.81 points, closing just below recent peaks. 

Five of the Magnificent Seven stocks closed higher on Tuesday, led by an over 3% jump in Amazon.com Inc (NASDAQ:AMZN) after Bloomberg reported the firm plans to trim its dependence on NVIDIA Corporation (NASDAQ:NVDA) by developing its own custom artificial intelligence chips.

After hours movers: HP, Dell slide 

Among major aftermarket movers, HP Inc (NYSE:HPQ) slid 7.2% after it issued disappointing guidance for 2025, while Dell Technologies Inc (NYSE:DELL) tumbled 10% after its quarter revenue missed some estimates.

Autodesk Inc (NASDAQ:ADSK) shed nearly 10% even as its earnings beat estimates, while Workday Inc (NASDAQ:WDAY) fell 8% on disappointing guidance.

“One risk to the outlook is potential tariff increases, most of which we would expect to be passed along to consumers. However, we would expect tariffs to cause a one-time increase in the price level rather than triggering sustained higher inflation over the medium term,” UBS said. 

UBS said the Fed was more likely to leave rates near 4% if inflation remained sticky. 

On the U.S. policy front, UBS uncertainty was “unusually high” ahead of Trump’s inauguration on January 20.

While the Republicans did maintain a slim lead in both chambers of Congress, it still remained to be seen if they could pass the sweeping policy changes promised by Trump. 

Investing.com-- U.S. stock index futures steadied on Tuesday evening after a positive session on Wall Street, with focus turning squarely to upcoming inflation data that is likely to factor into the outlook for interest rates.

Futures steadied after a positive session on Wall Street, as gains in technology stocks helped offset concerns over increased import tariffs under President-elect Donald Trump, after he threatened to impose more tariffs on China, Canada, and Mexico. 

Investors were also digesting a mixed outlook on U.S. interest rates, after the minutes of the Federal Reserve’s November meeting showed policymakers were divided over future rate cuts. 

S&P 500 Futures rose 0.1% to 6,041.50 points, while Nasdaq 100 Futures steadied at 20,989.25 points by 18:17 ET (23:17 GMT). Dow Jones Futures rose 0.1% to 44,986.0 points. 

Trading volumes are expected to be muted in the remainder of the week, with the Thanksgiving holiday on Thursday.

PCE inflation data awaited for more rate cues 

Focus on Wednesday will be on PCE price index data for October, due at 10:00 AM ET (03:00 GMT). 

The reading is the Fed’s preferred inflation gauge, and is likely to factor into the central bank’s plans to cut interest rates further.  

Core PCE price index data is also expected to have risen steadily in October and remained above the Fed’s 2% annual target.

Recent signs of sticky U.S. inflation sparked some doubts over just how much the Fed will cut interest rates further. Markets also began questioning the prospect of a 25 basis point cut in December.

These doubts were furthered by the minutes of the Fed’s early-November meeting, released on Tuesday. The minutes showed that policymakers were divided over future rate cuts, and recommended a gradual easing in rates. 

Tech gains help Wall St weather Trump tariff threat 

Gains in heavyweight technology stocks saw Wall Street indexes rise past Trump’s tariff threats to hit record highs on Tuesday. 

The S&P 500 rose 0.6% to a record high of 19,172.81 points, while the Dow Jones Industrial Average rose 0.3% to a record high of 44,860.31 points. The NASDAQ Composite rose 0.6% to 19,172.81 points, closing just below recent peaks. 

Five of the Magnificent Seven stocks closed higher on Tuesday, led by an over 3% jump in Amazon.com Inc (NASDAQ:AMZN) after Bloomberg reported the firm plans to trim its dependence on NVIDIA Corporation (NASDAQ:NVDA) by developing its own custom artificial intelligence chips.

After hours movers: HP, Dell slide 

Among major aftermarket movers, HP Inc (NYSE:HPQ) slid 7.2% after it issued disappointing guidance for 2025, while Dell Technologies Inc (NYSE:DELL) tumbled 10% after its quarter revenue missed some estimates.

Autodesk Inc (NASDAQ:ADSK) shed nearly 10% even as its earnings beat estimates, while Workday Inc (NASDAQ:WDAY) fell 8% on disappointing guidance.

Investing.com-- China's economic outlook for 2025 remains clouded by weak domestic demand and mounting deflationary pressures, despite a recent uptick in expectations for policy stimulus, according to Bank of America (BofA) analysts.

While the country has benefited from a technology product upcycle and resilient demand from the global south, consumer and investor confidence remains subdued, exacerbated by a struggling property market.

BofA analysts, in a research note, revised their forecast for China's GDP growth to 4.5% in 2025, down from 4.8% in 2024. While the Chinese government continues to target a 5% growth rate for the final year of its 14th Five-Year Plan, achieving this goal will hinge on both the effectiveness of domestic stimulus measures and the external pressures posed by escalating trade tensions, particularly with the U.S..

China’s policymakers have signaled a pivot toward more aggressive fiscal and monetary easing. Since late September, a series of modest stimulus measures have been rolled out, including increased fiscal expenditure and efforts to stabilize the property market. Analysts believe these steps reflect a shift in policy orientation, with top leadership prioritizing economic stabilization over structural reforms.

In its base case, BofA anticipates that the U.S. will increase tariffs on Chinese goods in 2025, raising rates from 20% to 30% in the second quarter and up to 40% by the end of the year. Should these tariffs materialize, China is expected to counter with a range of policy responses, including widening the fiscal deficit to 3.5% of GDP, increased bank capital injections, and further interest rate cuts. Additionally, the People's Bank of China (PBoC) may deploy its targeted lending tools to support the property sector, which remains a key drag on overall growth.

WASHINGTON (Reuters) - Sales of new U.S. single-family homes dropped to the lowest level in nearly two years in October, likely as a rise in mortgage rates drove buyers to the sidelines and hurricanes disrupted activity.

New home sales plunged 17.3% to a seasonally adjusted annual rate of 610,000 units last month, the lowest level since December 2022, the Commerce Department's Census Bureau said on Tuesday. The sales pace for September was unrevised at a rate of 738,000 units.

Economists polled by Reuters had forecast new home sales, which account for about 15% of U.S. home sales, would ease to a pace of 725,000 units. New home sales are counted at the signing of a contract, and can be volatile on a month-to-month basis. They dropped 9.4% year-on-year in October.

Mortgage rates have reversed all of the decline that had pushed them to more than a 1-1/2-year low of 6.08% at the end of September after Federal Reserve began cutting interest rates.

The average rate on a 30-year fixed-rate mortgage jumped to 6.72% by the end of October, tracking a rise in the 10-year U.S. Treasury yields, which have increased on strong domestic data that have suggested a slower path of rate cuts from the U.S. central bank.

Expectations of fewer rate cuts next year have also been strengthened by fears of a resurgence in inflation. President-elect Donald Trump said on Monday he would impose a 25% tariff on all products from Mexico and Canada, and an additional 10% tariff on goods from China, on his first day in office.

The 30-year fixed-rate mortgage averaged 6.84% last week.

New home sales tumbled 27.7% in the densely populated South, likely as hurricanes disrupted activity. They dropped 9.0% in West, but rose 1.4% in the Midwest and soared 53.3% in the Northeast.

The median new house price increased 4.7% to $437,300 in October from a year earlier. The inventory of new homes increased to 481,000, the highest level since early 2008, from 471, 000 units in September.

At October's sales pace it would take 9.5 months to clear the supply of houses on the market, up from 7.7 months in September.

BERLIN (Reuters) - The mood in Germany's export industry improved slightly in November as companies, generally cautious about foreign business developments, wait to see which trade policies U.S. President-elect Donald Trump will implement, a survey said on Tuesday.

The Ifo economic institute's indicator for export expectations rose to minus 5.9 points in November from minus 6.5 points in October, the first increase in six months.

"Companies are unsettled but are still waiting to see which trade policy Trump will ultimately implement," said Klaus Wohlrabe, head of Ifo surveys.

"In addition, the dollar has appreciated strongly since the election, which may benefit exporters," he added.

Some analysts assume that German deliveries to the United States could initially increase in the coming months as companies there try to order goods before the possible introduction of tariffs, which would make them more expensive.

Trump, who announced plans for drastic tariff increases on imports from Canada, Mexico and China on Monday, had said during his election campaign that he would place high tariffs on goods from the European Union.

That would hit the already lagging German economy particularly hard as the U.S. is the largest buyer of its goods.

SHANGHAI (Reuters) - The yuan fell against the U.S. dollar to its weakest in nearly four months after U.S. President-elect Donald Trump said he would impose a 25% tariff on all products from Mexico and Canada, and an additional 10% tariff on goods from China.

Offshore yuan dropped roughly 0.3% on the news to 7.2730 per dollar, its lowest since July 30, while onshore yuan also fell after the market opening.

"The directional impact is clear for the yuan – weaker – but Chinese authorities will be nervous about devaluing too much and encouraging outflows," said Ben Bennett, head of investment strategy for Asia at LGIM.

Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1910 per dollar, which was 450 pips firmer than the Reuters' estimate.

The effectiveness of the fixing as a tool to manage yuan depreciation expectations is limited, said analysts at Nomura in a note.

"We believe that, if onshore spot USD/CNY rises above the 7.30 level, market activity will shift where USD demand strengthens versus sellers," the Nomura analysts said, adding that this will present a challenge to authorities if they don't allow the yuan fixing to get weaker.

Nomura suggested to go long dollar against the offshore yuan.

The spot yuan opened at 7.2524 per dollar and was last trading 105 pips lower than the previous late session close at 7.2553 as of 0239 GMT.

Actual tariff announcements and negotiations will drive the yuan in coming quarters, said Liang Ding, an analyst at research firm Macro (BCBA:BMAm) Hive.

"Given the 'promise made, promise kept' rhetoric of the Trump campaign, markets may begin to price in additional risk premia related to the second trade war as Trump’s inauguration approaches," Ding said.

During Trump's first term as president, the yuan weakened about 5% against the dollar after the initial round of U.S. tariffs on Chinese goods in 2018, and fell another 1.5% a year later when trade tensions escalated.

As part of his pitch to boost American manufacturing during the recent election campaign, Trump said he would impose tariffs of 60% or more on goods from China.

The proposed tariffs, as well as other policies such as tax cuts, are seen as inflationary and likely to keep U.S. interest rates relatively high, hurting currencies of U.S. trading partners.

The dollar's six-currency index was 0.075% lower at 107.27.

LEVELS AT 02:39 GMT

INSTRUMENT CURRENT UP/DOWN( % DAY'S DAY'S 

vs USD -) VS. CHANGE HIGH LOW

PREVIOUS YR-TO-

CLOSE % DATE

Spot yuan 7.2553  -0.21 -2.12 7.2466 7.2568

Offshore 7.2629  -0.24 -1.91 7.2518 7.273

yuan spot

Investing.com-- U.S. stock index futures fell on Monday evening after President-elect Donald Trump threatened to impose higher import tariffs on China, Canada and Mexico on concerns over illegal drugs and immigration.

S&P 500 Futures fell 0.3% to 5,989.75  points, while Nasdaq 100 Futures fell 0.3% to 20,817.75 points by 19:03 ET (00:03 GMT). Dow Jones Futures fell 0.3% to 44,707.0 points. 

Futures reversed initial gains after Trump’s threat, which cut short momentum from a positive session on Wall Street. U.S. stock benchmarks hit record highs on Monday as investors cheered the nomination of Scott Bessent as Treasury Secretary, while flows into cyclical sectors persisted.

Risk appetite was also supported by reports that a ceasefire between Israel and Lebanon was close, which saw oil prices fall sharply. 

Trump threatens more tariffs 

Trump said in a social media post that he will impose an additional 10% tariff on all Chinese imports, citing a lack of progress on China’s part towards curbing the flow of illegal drugs into the U.S.

His threat follows promises during his campaign that he will impose a 60% tariff on all Chinese goods.

Additionally, Trump also said he will impose a 25% tariff on all imports from Canada and Mexico over inflows of allegedly illegal immigrants and drugs into the U.S. through open borders with the two countries.

Trump’s tariff threats ramped up concerns over a renewed global trade war between the world’s biggest economies- a trend seen through much of his first term. Such a scenario bodes poorly for global trade, especially for countries with heavy trade exposure to the U.S.

The dollar and Treasury yields surged on Trump’s tariff threats. 

Wall St hits record highs on Treasury nomination 

Losses in Wall Street futures came after a positive session on Monday, after Trump’s nomination of Bessent was welcomed by investors.

Bessent- a seasoned investor- is expected to push for more tax reforms for U.S. firms, and is also expected to have a more moderate view on trade tariffs. 

Wall Street was also buoyed by a steady pivot into economically sensitive sectors, as markets bet on more expansionary policies under a Trump administration.

The Dow Jones Industrial Average was an outperformer among its peers, rising 1% to a record high of 44,746.57 points on Monday. The S&P 500 rose 0.3% to 5,987.37 points, while the NASDAQ Composite rose 0.3% to 19,054.89 points. 

Trading volumes are expected to be muted this week, on account of the Thanksgiving holiday. 

But focus is also on key upcoming economic data, with PCE price index data- the Federal Reserve’s preferred inflation gauge- due on Wednesday.