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☆ Morning Bid: Rates buzz sustained before Fed loan data
▼ + stars: | 2023-11-06 | by ( ) www.reuters.com time to read: +5 min

A street sign for Wall Street is seen in the financial district in New York, U.S., November 8, 2021. Ten-year U.S. Treasury yields have fallen about 50bps from October's peaks and the drop last week was the biggest recoil since March. For now, S&P500 futures are pointing to further slight gains on Monday - which if realized on the cash market later would make for the sixth straight gain and the longest daily run since June. Undermined by the retreat in Treasury yields, the dollar (.DXY) slipped back to the lowest since Sept 20. The backdrop of an easier dollar and Treasury yields provides significant relief for emerging markets, with MSCI's emerging market stock index (.MSCIEF) hitting its highest since Sept 20 too.

Persons: Brendan McDermid, Mike Dolan, Jerome Powell, underscoring, Janet Yellen, Lisa Cook, Huw Pill, Bernadette Organizations: Wall, REUTERS, Federal Reserve, Treasury, U.S, Pacific Rim, South, Ryanair, Europe's, Goodyear Tire &, Aspen, Conterra Energy, Constellation Energy, Diamondback Energy, Vertex Pharmaceuticals, NXP Semiconductors, Bank of England, Reuters, Reuters Graphics Reuters, Thomson Locations: New York, U.S, Gaza, China, Western, San Francisco, South Korean, Asia, Europe, Telesat

☆ The Japanese yen's underlying forces are so weak the currency is in the 'same league' as the Argentine peso and Turkish lira, Deutsche Bank says
▼ + stars: | 2023-11-01 | by ( Filip De Mott | ) www.businessinsider.com time to read: +3 min

The yen's key drivers are so weak the currency is comparable to the Turkish lira and Argentine peso, Deutsche Bank said. The country's balance of payments are also weak as the Bank of Japan has triggered capital flight. AdvertisementAdvertisementThe Japanese yen's fundamentals are so weak the currency is comparable to some of the world's worst performing tenders, a Deutsche Bank note said on Wednesday. "A simple glance of the yen's drivers - yields and external accounts - puts the Japanese yen in the same league as the Turkish lira and Argentine peso," George Saravelos, the bank's global head of foreign exchange research, wrote in the report. Intervention by the Bank of Japan in currency markets won't help the yen, and may actually backfire.

Persons: —, George Saravelos, Saravelos Organizations: Argentine, Deutsche Bank, Bank of, Service, Bank of Japan Locations: Japan, Bank of Japan

☆ Morning Bid: Markets juggle 5% yields and 150 yen
▼ + stars: | 2023-10-23 | by ( ) www.reuters.com time to read: +5 min

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 11, 2023. REUTERS/Brendan McDermid/File Photo Acquire Licensing RightsA look at the day ahead in U.S. and global markets from Mike DolanPartly unwinding pre-weekend safety hedges related to the Middle East conflict, world markets are back focused on some critical macro priced levels and milestones that may once again define the week. The dollar retained its bid as a result and continued to probe the 150 yen level many suspect the Bank of Japan will be keen to protect against with open-market yen buying. But even these megacaps are still in thrall to the worrying squeeze in U.S. bond markets and the breach of the 5% threshold on 10-year tenors on Monday. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Persons: Brendan McDermid, Mike Dolan, Goldman Sachs, thrall, that's, That's, Sergio Massa, Javier Milei, Maria Corina Machado, Hess, Berkley, Brown, Susan Fenton Organizations: New York Stock Exchange, REUTERS, Bank of Japan, European Central Bank, Industrial, China, Goldman, Microsoft, Meta, Federal Reserve, Economy, Banco BBVA Argentina, Peronist, Massa, Venezuelan, Chevron, Exxon, Natural Resources, Brown, Cadence, Packaging Corp of America, Fed, Bank of Israel, Trade Organization, Treasury, Reuters, Thomson Locations: New York City, U.S, Gaza, China, Taiwan, outflows, 50bps, York, America, Venezuela, Geneva

☆ VIEW Bank of England raises rates for a 14th time
▼ + stars: | 2023-08-03 | by ( ) www.reuters.com time to read: +7 min

The BoE raised interest rates by 25 basis points to 5.25% and said high inflation meant it was unlikely to stop raising rates any time soon. However, with Thursday's decision, traders began to price in a lower peak in UK rates. MONEY MARKETS: Interest-rate derivatives showed traders believe UK rates will peak around 5.67% by March, compared with an expected peak of 5.73% in the run-up to the decision. Rising interest rates means higher borrowing costs, which will lead to larger monthly mortgage payments for many homeowners." The Bank of England remains committed to bringing inflation down, unfortunately raising interest rates is one of the only tools the Bank can use to sap demand out of the economy."

Persons: BoE, Sterling, VIVEK PAUL, we’ll, STUART COLE, JEREMY BATSTONE, CARR, RAYMOND JAMES, MARCUS BROOKES, ” SEEMA SHAH, Rishi Sunak, GILES COGHLAN, THOMAS PUGH, JOHN LEIPER, Amanda Cooper, Samuel Indyk Organizations: Bank of England, FTSE, BLACKROCK, LONDON, TOM HOPKINS, Bank of, RSM, Bank, EMEA, Thomson Locations: LONDON, EUROPEAN, U.S

☆ The CPI trade: What JPMorgan sees the market doing, based on these scenarios
▼ + stars: | 2023-07-10 | by ( Fred Imbert | ) www.cnbc.com time to read: +2 min

Under this scenario, the S & P 500 would rise 0.5%-0.75%. 25% chance — CPI between 2.8% and 2.9%: The S & P 500 would rally between 1.5% and 1.75% under this scenario. The S & P 500 would drop between 1% and 1.25% under this outcome. The S & P 500 would rally 2.5%-3%. 5% probability — CPI at 3.7% or higher: This outcome would spark a market selloff to the tune of 2%-2.5% in the S & P 500.

Persons: Michael Bloom Organizations: Federal Reserve, JPMorgan, 25bps, Fed

☆ Investments in updating the electrical grid is entering a new phase of growth, which could benefit one stock in particular
▼ + stars: | 2023-07-10 | by ( Brian Evans | ) www.cnbc.com time to read: +2 min

The effort to upgrade the U.S. power grid is heating up rapidly, according to UBS, which says the trend could be a driver for Quanta Services stock. Analyst Steven Fisher wrote in a Monday note that "electric grid investment is entering a new phase of growth, with renewables activity accelerating and large transmission projects gaining momentum." Fisher attributed the growth of these large scale projects to the IRA, which contained about $350 billion in funds for investments into renewable energy and updating the power grid. "For Quanta, we believe the implications of this new phase include potentially faster top-line growth, higher margins and increasing scope on projects," Fisher said. In addition to large transmission projects already planned, Fisher updated the list to include Oregon Public Utility Commission's Boardman to Hemmingway as well as Colorado's Power Pathway and Ready Wyoming .

Persons: Steven Fisher, Fisher, Boardman, Michael Bloom Organizations: UBS, Biden Locations: Oregon, Hemmingway, Wyoming

☆ Reaction: June US jobs growth cools, but wages won't comfort Fed
▼ + stars: | 2023-07-07 | by ( ) www.reuters.com time to read: +6 min

Nonfarm payrolls increased by 209,000 jobs last month, the Labor Department said on Friday. "Today's numbers confirm the job market is still strong... and this report gives the green light to the Fed to raise rates. "If anything, it probably confirms this idea that the Fed has had that they are making progress in the right direction." "It's not like this is a sudden vast improvement in the labor market." The hours worked numbers are rising slower than the payrolls numbers.

Persons: Nonfarm, payrolls, CANDICE, GOLDMAN, BEN JEFFERY, “, PETER CARDILLO, we're, STUART COLE, JASON PRIDE, MICHAEL BROWN, ”, ” BRIAN JACOBSEN, MENOMONEE Organizations: YORK, Labor Department, Reuters, Treasury, BMO, NFP, Fed, Global Finance, Markets, Thomson Locations: GOLDMAN SACHS, PHILADELPHIA, WISCONSIN

☆ While Asia markets may cheer a Fed pause, watchers are split on growth prospects
▼ + stars: | 2023-05-08 | by ( Jihye Lee | ) www.cnbc.com time to read: +4 min

Ping Shu | Moment | Getty ImagesWhile a pause in the U.S. Federal Reserve's rate-hike cycle would lead to stronger Asian currencies, the region's recent earnings and disappointing Chinese economic data leave watchers split on the growth outlook. Stock Chart Icon Stock chart iconA Fed pause could boost U.S. stocks, but its effect on regional growth in Asia may not be as straightforward. Nomura's equity strategists kept their views for Asia-Pacific stocks unchanged despite the likelihood of a potential Fed pause, maintaining its year-end target for MSCI Asia ex-Japan. "Nonetheless, in our base case, we do not expect a meaningful decline in Asian stocks. "Asian investors' big worry surrounds China," he said, pointing to the "unsustainability of consumption rebound, especially against the backdrop of persistently high youth unemployment levels."

☆ Stocks slide into Fed mode, shorts stalk banks
▼ + stars: | 2023-05-03 | by ( Tom Westbrook | ) www.reuters.com time to read: +4 min

Overnight, tumbling regional bank stocks (.KRX) dragged the S&P 500 (.SPX) down 1.2% and oil dived more than 5% on fears that shaky bank confidence and signs of weakness in the U.S. job market were harbingers of a looming broader slowdown. Bonds rallied as investors reckoned the Federal Reserve, which sets policy later on Wednesday, will soon be switching from rate hikes to cuts. Among banks, PacWest Bancorp (PACW.O), down 27.8%, Western Alliance Bancorp (WAL.N), down 15.1%, and Comerica Inc (CMA.N) down 12.4%, were the biggest losers. If that happens, focus will be on whether or how hard Fed Chair Jerome Powell pushes back on investors' expectations for rate cuts by year's end. The Australian dollar has given back some of the ground gained on Tuesday, following a surprise rate hike from the central bank, and sat at $0.6670.

☆ Morning Bid: Volatile news, not markets
▼ + stars: | 2023-05-02 | by ( ) www.reuters.com time to read: +5 min

While the Federal Reserve is almost certain to raise interest rates again on Wednesday, the move could be its last. So in a holiday-strewn month around the world, the VIX (.VIX) - Wall St's so-called 'fear gauge' of the implied stock market volatility for the month ahead - hit its lowest level on Monday since November 2021. Even though it ticked back up a bit above 16 overnight, it remains three full points below its 33-year historical average. For macro markets, the Fed decision is complicated by the debt ceiling and banking backdrop. March job openings numbers later on Tuesday will give an indication of just how tight the labor market remains.

☆ Stocks meander as US jobs dry up, kiwi jumps on RBNZ surprise
▼ + stars: | 2023-04-05 | by ( Tom Westbrook | ) www.reuters.com time to read: +4 min

Futures indicated European markets were set for a broadly lower open, with Eurostoxx 50 futures down 0.26%, German DAX futures down 0.12%. Two-year treasury yields , which closely track short-term rate expectations, dived almost 15 basis points and the dollar tracked the move to hit two-month troughs. Elsewhere investors see a few more rate hikes in store in Europe, where German exports have turned surprisingly strong. The euro flat at $1.0952, just shy of a two-month high it hit overnight on the dollar at $1.0973. Commodity markets are settling after Monday's surge in oil prices on news of surprise OPEC+ production cuts.

☆ Stocks struggle as US jobs dry up, kiwi leaps on RBNZ surprise
▼ + stars: | 2023-04-05 | by ( Tom Westbrook | ) www.reuters.com time to read: +4 min

Two-year treasury yields , which closely track short-term rate expectations, dived almost 15 basis points and the dollar tracked the move to hit two-month troughs. U.S. interest rate futures have rallied strongly over the last few weeks, as traders figure that under pressure banks will tighten up on lending anyway and save the need for monetary policymakers to do the job. DOLLAR SQUEEZEDOutside the United States, markets see other central banks staying the course on hikes to tame inflation. Elsewhere investors see a few more rate hikes in store in Europe, where German exports have turned surprisingly strong. Commodity markets are settling after Monday's surge in oil prices on news of surprise OPEC+ production cuts.

☆ This bank set a fresh high for yield paid on 1-year CDs, now topping 5%
▼ + stars: | 2023-03-21 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +2 min

That's because the online bank just lifted the rate on its 1-year certificate of deposit to a fresh high. Bread boosted the rate on its 1-year CD by 5 basis points this week to an annual percentage yield of 5.05% — a new high and a threshold that's 55 basis points above the median rate, according to Stephens. One basis point is equal to one one-hundredth of a percentage point. Discover Financial Services hiked rates to 3.6%, a 10 basis point boost, while American Express increased its rate by 25 basis points to 3.75%. SoFi added 25 basis points to its rate, landing at 4%.

The U.S. unemployment rate ticked up to 3.6% in February as more workers entered the labor force, and wage gains slowed to 0.2% from 0.3% in January, the Labor Department's report showed. "This report screams soft landing and looks to be a pretty good one for the Fed," said Omair Sharif of Inflation Insights. After the report, futures tied to the Fed policy rate pointed to a quarter-point rate hike as the most likely outcome of the central bank's meeting this month. Traders also slashed expectations for the Fed to ultimately raise rates any higher than 5.5%. "However, the February CPI report will also weigh heavily in the Fed’s deliberations of whether to raise rates 25bps or 50bps.

☆ Morning Bid: The perils of not keeping up with Powell
▼ + stars: | 2023-03-08 | by ( Wayne Cole | ) www.reuters.com time to read: +3 min

That's been Asia's market reaction to the Fed chief's warning on faster hikes and higher rates. Fed fund futures took Powell at his hawkish word and now imply a 70% chance the Fed will hike by 50bp this month, up from just 9% a month ago. JPMorgan noted Powell's focus on the "totality" of data places a lot of weight on Friday's payrolls figures and next week's CPI. Essentially, the cost of not keeping up with the Fed can be a much weaker currency and a greater risk of imported inflation. ADP employment and trade figures- Bank of Canada announcement at 1500 GMTEditing by Sam HolmesOur Standards: The Thomson Reuters Trust Principles.

☆ Stock futures are little changed after major averages suffer biggest weekly losses of the year: Live updates
▼ + stars: | 2023-02-26 | by ( Tanaya Macheel | ) www.cnbc.com time to read: +2 min

Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on February 01, 2023 in New York City. U.S. equity futures were little changed Sunday evening after the major averages posted their biggest weekly losses of the year and ahead of another big week in retail earnings. S&P 500 futures eased 0.01% and Nasdaq 100 futures dipped slightly below the flat lineThe major averages Friday ended the day lower and posted their biggest weekly declines for 2023. The S&P 500 lost 2.7% and the Nasdaq Composite fell 3.3% for the week. Target, Costco, Lowe's and Macy's are some of the big names set to report earnings this week.

☆ Fed will be more aggressive starting in March with a 50bps hike, says NatWest's Michelle Girard
▼ + stars: | 2023-02-24 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailFed will be more aggressive starting in March with a 50bps hike, says NatWest's Michelle GirardMichelle Girard, NatWest Markets, joins 'The Exchange' to discuss her expectation that the Fed will be more hawkish as inflation reports continue to be hot.

☆ NZ cenbank hikes 50bps, flags more to come as inflation 'too high'; kiwi gains
▼ + stars: | 2023-02-22 | by ( Lucy Craymer | ) www.reuters.com time to read: +3 min

The RBNZ continues to expect the cash rate to peak at 5.5% in 2023, according to the monetary policy statement (MPS) accompanying the rate decision. That would mark the most aggressive policy tightening streak since the official cash rate was introduced in 1999. "While there are early signs of price pressure easing, core consumer price inflation remains too high, employment is still beyond its maximum sustainable level, and near-term inflation expectations remain elevated," the central bank said in a statement. The New Zealand dollar rose as high as $0.6246 after the decision, reflecting the hawkish tone of the statement, having traded as low as $0.6206 earlier. New Zealand's annual inflation is currently running near three-decade highs of 7.2%, well above the central bank's medium term target of 1%-3%.

☆ RBNZ to hike rates 50bps on Feb. 22, another 50bps due by mid-year
▼ + stars: | 2023-02-16 | by ( Devayani Sathyan | ) www.reuters.com time to read: +4 min

The RBNZ has already raised rates by a total of 400 basis points since October 2021. The remaining five economists expected a second successive 75-basis point move at the Feb. 22 policy meeting. But nearly half of respondents, 45%, predicted a lower peak rate. Inflation was expected to fall to 5.1% this year and 2.6% in 2024, a Reuters poll showed last month. A recent RBNZ survey expected price pressures to slow to 3.30% in the next two years.

In both the United States and Europe, the words of central bankers led investors to cut their estimates of the peak or "terminal" rate expected in the current tightening cycle. With financial conditions loosening despite rising policy rates, "central banks must...be resolute in their fight against inflation and ensure policy remains appropriately tight long enough to durably bring inflation back to target," Adrian and others wrote. The European Central Bank seems furthest from a likely stopping point. Combined, the statements mark the start of the endgame for central banks that were slow to recognize the onset of inflation last year before engaging in a record-setting round of rate increases. Central bankers long ago stopped using the word "transitory" in reference to inflation that proved faster and more persistent than any expected.

☆ Sticky underlying inflation set to keep ECB on its toes
▼ + stars: | 2023-02-01 | by ( ) www.reuters.com time to read: +4 min

The drop in headline inflation is unlikely to expunge concerns among conservative policymakers that rapid price growth is becoming entrenched, a worry reinforced by high underlying inflation on Wednesday. Inflation excluding volatile food and fuel prices picked up to 7% from 6.9% while an even narrower measure watched closely by the ECB held steady at 5.2%, exceeding forecasts for 5.1%. Underlying inflation was driven by a jump in processed food and industrial goods prices but services inflation, a key worry because it reflects wage growth, eased a touch. Euro zone unemployment held steady at 6.6% in December, its lowest rate on record, separate data showed on Wednesday. Markets now expect ECB rates to peak at 3.5%, the highest rate in over 20 years, suggesting another 100 basis points of hikes after Thursday's move.

☆ VIEW U.S. consumer prices fall in December
▼ + stars: | 2023-01-12 | by ( ) www.reuters.com time to read: +5 min

NEW YORK, Jan 12 (Reuters) - U.S consumer prices unexpectedly fell for the first time in more than 2-1/2 years in December amid declining prices for gasoline and other goods, suggesting that inflation was now on a sustained downward trend. The consumer price index dipped 0.1% last month after gaining 0.1% in November, the Labor Department said on Thursday. MARKET REACTION:STOCKS: U.S. stock index futures fall after the inflation data BONDS: U.S. Treasury yields slid across the board. But I will note that it is an especially volatile period, which is not atypical for inflection points in market expectations and the broader macro outlook." BRIAN KLIMKE, INVESTMENT DIRECTOR, CETERA INVESTMENT MANAGEMENT LLC, LOS ANGELES"It (the report) came in as expected, but investors were somewhat optimistic leading into this reading, so that they were buying the rumor and selling the new.

☆ Instant View: U.S. consumer prices fall in December
▼ + stars: | 2023-01-12 | by ( ) www.reuters.com time to read: +5 min

NEW YORK, Jan 12 (Reuters) - U.S consumer prices unexpectedly fell for the first time in more than 2-1/2 years in December amid declining prices for gasoline and other goods, suggesting that inflation was now on a sustained downward trend. The consumer price index dipped 0.1% last month after gaining 0.1% in November, the Labor Department said on Thursday. MARKET REACTION:STOCKS: U.S. stock index futures fall after the inflation dataBONDS: U.S. Treasury yields slid across the board.FOREX: The dollar fell against the euro and yen. But I will note that it is an especially volatile period, which is not atypical for inflection points in market expectations and the broader macro outlook." BRIAN KLIMKE, INVESTMENT DIRECTOR, CETERA INVESTMENT MANAGEMENT LLC, LOS ANGELES"It (the report) came in as expected, but investors were somewhat optimistic leading into this reading, so that they were buying the rumor and selling the new.

☆ Asia shares up on Fed rate wagers, China reopening lifts yuan
▼ + stars: | 2023-01-09 | by ( Wayne Cole | ) www.reuters.com time to read: +4 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 2.0% to a five-month top, with South Korean shares (.KS11) gaining 2.2%. Japan's Nikkei (.N225) was closed for a holiday but futures were trading at 26,215, compared with a cash close on Friday of 25,973. Earnings season kicks off this week with the major U.S. banks, with the Street fearing no year-on-year growth at all in overall earnings. "China reopening is one upside risk to 2023 EPS, but margin pressures, taxes, and recession present greater downside risks." Fed fund futures now imply around a 25% chance of a half-point hike in February, down from around 50% a month ago.

☆ Asia shares rise on U.S. rate bets, China reopening
▼ + stars: | 2023-01-09 | by ( Wayne Cole | ) www.reuters.com time to read: +4 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 1.5% to a five-month top, with South Korean shares (.KS11) gaining 2.1%. S&P 500 futures added 0.2% and Nasdaq futures 0.3%. EUROSTOXX 50 futures added 0.5%, while FTSE futures firmed 0.4%. "China reopening is one upside risk to 2023 EPS, but margin pressures, taxes, and recession present greater downside risks." The market scaled back bets on rate hikes for the Federal Reserve.

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