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With some German property developers filing for insolvency, construction activity has dropped over a third from a year ago. That bleak outlook was despite the government recently announcing a 45 billion euro ($47 billion) support package for the property sector and measures to encourage house building, including tax incentives. With overall economic activity expected to remain weak over the coming quarters, it could take a while for the property sector to recover. The euro zone's commercial property sector could also struggle for years, posing a threat to the banks and investors who financed it, the ECB said recently. The median view of 12 property experts forecast average home rental prices to rise 4.0% or more until 2026.

Persons: Lisi Niesner, Sebastian Schnejdar, Carsten Brzeski, Indradip Ghosh, Purujit Arun, Rahul Trivedi, Sarupya Ganguly, Ross Finley, David Evans Organizations: REUTERS, European Central Bank, ECB, ING, Thomson Locations: Berlin, Germany, BENGALURU

REUTERS/Andrew Kelly Acquire Licensing RightsSummary poll dataBENGALURU, Nov 22 (Reuters) - Most key global stock indexes are forecast to rise modestly over the coming year, closing 2024 below record highs, while a slim majority of stock market experts polled by Reuters expected their markets to touch new peaks within the next six months. However, only a handful of the 15 top stock indexes were predicted to trade at record peaks by end-2024, based on a wider Nov. 9-22 poll of more than 120 stock market experts. LOWER BOND YIELDSFor now, markets are pricing in a series of 2024 rate cuts, which is sending bond yields lower and stock prices higher. "Falling bond yields are being interpreted by equity markets as a positive in the near-term," said Marko Kolanovic, chief global markets strategist at J.P. Morgan. Canada's main stock index was expected to rise less than previously thought over the coming year as a slowdown in the global economy weighs on the outlook for corporate earnings.

Persons: Andrew Kelly, Ajay Rajadhyaksha, Marko Kolanovic, Morgan, Hari Kishan, Indradip Ghosh, Ross Finley, Alex Richardson Organizations: New York Stock Exchange, REUTERS, Reuters, Traders, U.S . Federal, Barclays, Nikkei, Thomson Locations: New York City, U.S, BENGALURU, Monday's, Bengaluru, Buenos Aires, London, Mexico City, Milan, New York, San Francisco, Sao Paulo, Tokyo, Toronto

☆ Dollar holds steady, yuan rises on better-than-expected China data
▼ + stars: | 2023-09-15 | by ( Brigid Riley | ) www.reuters.com time to read: +3 min

The U.S. dollar index last stood somewhat lower at 105.32, but still near Thursday's six-month peak of 105.43. The yuan and Australian and New Zealand dollars received a boost after a batch of economic data from China in the Asian morning came in better-than-expected for some key indicators, providing a rare lift in sentiment. The offshore yuan inched up against the dollar to 7.2918 following the release. The Australian dollar , a proxy for China growth, rose nearly 0.3% to $0.6443, while the New Zealand dollar was up 0.2% at $0.5912. The yen stuck near 147.41 per dollar in the Asian morning.

Persons: Dado Ruvic, Rodrigo Catril, Sterling, Simon Harvey, Brigid Riley, Indradip Ghosh, Lincoln, Navaratnam Organizations: REUTERS, Rights, Central, U.S, greenback, New Zealand, People's Bank of China's, National Bank of Australia, Australian, Mizuho Bank, Thomson Locations: Asia, China, Thursday's, Europe

With average house prices having surged 25% during the COVID-19 pandemic, higher interest rates and higher living costs in a struggling economy have driven many to rent while they anticipate house prices will fall. All but one predicted prices would fall this year. House prices were forecast to stagnate next year, an upgrade compared to the 2.0% fall predicted three months ago. That comes after many years of close to zero and negative policy interest rates following the global financial crisis and during the pandemic. Eleven of 14 respondents said rental affordability would worsen over the coming year.

Persons: Thomas Peter, Carsten Brzeski, Brzeski, Sebastian Schnejdar, Indradip Ghosh, Anitta Sunil, Maneesh Kumar, Ross Finley, Barbara Lewis Organizations: REUTERS, Reuters, Housing, ING, European Central Bank, Analysts, Thomson Locations: Berlin, Germany, Europe's

☆ Short U.S. housing correction likely over; tight supply to keep prices high: Reuters poll
▼ + stars: | 2023-08-30 | by ( Prerana Bhat | ) www.reuters.com time to read: +4 min

After falling nearly 7% from a cycle high in June 2022 - well short of predictions made late last year for a 12% peak-to-trough fall - average house prices started rising again in February and are now only around 1% below their peak. "While we expect house prices to lose some of their recent momentum, the worst of the correction appears to have passed and we don't expect further sustained declines," said Andrew Burrell, chief property economist at Capital Economics. Average house prices were forecast to stagnate in 2024 despite predictions for a rate cut by the middle of the year. They were forecast to average 4.17 million units in the second half of this year, lower than 4.27 million in the previous poll. Despite a near 45% pandemic-era rise in house prices and the market starting to climb again, respondents were equally split on what would happen to purchasing affordability for first-time homebuyers over the coming year.

Persons: Octavio Jones, Andrew Burrell, Brad Hunter, Hunter, Prerana Bhat, Indradip Ghosh, Pranoy Krishna, Ross Finley, Sharon Singleton Organizations: REUTERS, Reuters, Federal Reserve, Capital Economics, Hunter Housing Economics, Thomson Locations: Tampa , Florida, U.S

☆ Global stock market correction likely before year-end: Reuters poll
▼ + stars: | 2023-08-23 | by ( Hari Kishan | ) www.reuters.com time to read: +4 min

REUTERS/Brendan McDermid/File Photo Acquire Licensing RightsSummary poll dataReuters poll graphic on global stock market outlookBENGALURU, Aug 23 (Reuters) - Global stock markets are heading for a correction in coming months, though overall they should post marginal gains between now and the end of 2023, according to a majority of analysts polled by Reuters. A bad year for stocks in 2022 carried into this year as global central banks battled inflation with interest rate rises that are now largely drawing to an end. A 71% majority of analysts, 55 of 77, who answered an additional question in the Aug. 9-23 poll said a correction by year-end in their local equity market was either likely or very likely. A "fear of missing out" is said to have helped drive much of the equity market rallies of recent years. The year-end forecast in February's Reuters poll was 4,200.

Persons: Brendan McDermid, Jerome Powell, Marko Kolanovic, Morgan, Terry Sandven, Europe's, Hari Kishan, Indradip Ghosh, Ross Finley, John Stonestreet Organizations: New York Stock Exchange, REUTERS, Reuters, Treasury, NIKKEI, February's Reuters, U.S, Bank Wealth Management, Japan's Nikkei, IPC, Thomson Locations: New York City, U.S, BENGALURU, Jackson, February's, Bengaluru, Buenos Aires, London, Mexico City, Milan, New York, San Francisco, Sao Paulo, Tokyo, Toronto

A 90% majority, 99 of 110 economists, polled Aug 14-18 say the Fed will keep the federal funds rate in the 5.25-5.50% range at its September meeting, in line with market pricing. The Fed's preferred gauge of inflation has fallen sharply from a peak of 7.0% following 11 interest rate hikes from near-zero in early 2022. As recently as June, over a three-quarters majority of economists polled said the Fed would start by end-March. Another 33 respondents, roughly 35%, forecast the Fed will go for its first rate cut in Q2, leaving 79 of 95, or 83% expecting at least one rate cut by mid-2024. That would help price pressures decline over the coming months, making the fed funds rate adjusted for inflation - the real interest rate - more restrictive if held unchanged.

Persons: Jerome Powell, Powell, Sal Guatieri, David Mericle, Goldman Sachs, Prerana Bhat, Indradip Ghosh, Pranoy Krishna, Ross Finley, Sharon Singleton Organizations: U.S . Federal, Reuters, BMO Capital Markets, Federal, Committee, Thomson Locations: BENGALURU

"We now forecast a mild recession in the U.S. economy this year ... In May and June, the Fed staff projections "continued to assume" the U.S. economy would be in recession by the end of the year. Fed policymakers' projections, which are issued on a quarterly basis, never showed GDP contracting on an annual basis. 'CHUGGING ALONG'What made the difference between an in-the-moment recession that many thought was underway last year to growth that has surprised to the upside? An Atlanta Fed GDP "nowcast" puts output growth for the current July-September period at 5.0%, showing continued strong momentum.

Persons: Biden, Michael Gapen, Gapen, Jerome Powell, Powell, Sharif, We've, Sal Guatieri, Howard Schneider, Paul Simao Organizations: Federal, Bank of America, Fed, Reuters, Valley Bank, Atlanta Fed, BMO Capital Markets, Thomson Locations: U.S, California

REUTERS/Dado Ruvic/IllustrationBENGALURU, Aug 3 (Reuters) - The U.S. dollar will hold its ground against most major currencies over the coming three months as a resilient domestic economy bolsters expectations interest rates will remain higher for longer, according to FX strategists polled by Reuters. The dollar is unlikely to give up recent gains in coming months, according to the July 31-Aug. 2 Reuters poll of 70 FX strategists, which showed most major currencies would not reclaim their recent highs for at least six months. In response to an additional question, 27 of 40 FX strategists said net short USD positions would either not change much or decrease over the coming month, suggesting the dollar would be rangebound. Typically, these conditions often coincide with a more negative dollar outlook," said Kamakshya Trivedi, head of global FX at Goldman Sachs. At this point in time I wouldn't say so," said ECB President Christine Lagarde last week after delivering a widely anticipated 25 basis points (bps) rate increase.

Persons: Dado Ruvic, Kamakshya Trivedi, Goldman Sachs, Christine Lagarde, Kit Juckes, Sterling, Indradip Ghosh, Shaloo Shrivastava, Sujith Pai, Veronica Khongwir, Vijayalakshmi Srinivasan, Jonathan Cable, Ross Finley, Alex Richardson Organizations: REUTERS, U.S, Reuters, greenback, Federal Reserve, Central Bank, Fed, ECB, Societe Generale, Bank of England, bps, Bank of, Thomson Locations: U.S, Bank of Japan

Inflation is falling, with the headline consumer price index (CPI) measure slowing to 3.0% in June from 4.0% in May. The current debate is whether more rate increases might be needed to ensure "disinflation" continues or if doing more could cause unnecessary damage to the economy. Core PCE was last reported at 3.8% for May. But none of the inflation gauges polled by Reuters - CPI, core CPI, PCE and core PCE - were expected to reach 2% until 2025 at the earliest. A slight majority of economists who answered an additional question, 14 of 23, said wage inflation would be the most sticky component of core inflation.

Persons: Jerome Powell, Jan Nevruzi, Doug Porter, Indradip Ghosh, Prerana Bhat, Maneesh Kumar, Ross Finley, Paul Simao Organizations: U.S . Federal Reserve, Reuters, Fed, NatWest Markets, PCE, CPI, BMO Capital Markets, Thomson Locations: BENGALURU, U.S

BENGALURU, July 6 (Reuters) - The U.S. dollar will hold its ground against most major currencies for the rest of the year despite expectations of narrowing interest rate differentials as the U.S. economy stays resilient, according to FX strategists polled by Reuters. "The tightness of the U.S. labour market may help the economy and the dollar in the very short term," said Kit Juckes, chief FX strategist at Societe Generale. "Even if we see (interest) rate convergence, it seems unlikely a new major euro uptrend will start without stronger growth." Indeed, a majority of common contributors showed the dollar view against most major currencies for the coming six months has been either upgraded or kept unchanged from a month ago. "The dollar is getting a tailwind from the Fed ... the current strength is on a repricing of the Fed (rate) higher," said John Hardy, head of FX strategy at Saxo Bank.

Persons: Jerome Powell, Kit Juckes, Jonas Goltermann, Sterling, John Hardy, Indradip Ghosh, Shaloo Srivastava, Sarupya Ganguly, Anitta Sunil, Veronica Khongwir, Hari Kishan, Ross Finley, Matthew Lewis Organizations: U.S, Reuters, Federal Reserve, European Central Bank and Bank of England, Societe Generale, Futures Trading Commission, Capital Economics, Saxo Bank, Thomson Locations: BENGALURU, U.S, Europe, Asia, Britain, Bengaluru

☆ Bond market divergence from Fed entrenched in U.S. yield forecasts
▼ + stars: | 2023-06-21 | by ( Sarupya Ganguly | ) www.reuters.com time to read: +3 min

Three-quarters of strategists, 15 of 20, who answered an extra question said the 2-year Treasury yield was unlikely to revisit its cycle peak over the coming three months. Only two of 27 respondents had the 2-year yield trading higher than the current level at the end of August. The benchmark 10-year note yield , meanwhile, was forecast to decline by much less, about 25 basis points over the coming six months. An inverted yield curve has historically been a reliable indicator of an oncoming recession but so far, having been inverted for almost a year, that has not happened. "Persistence of this configuration — continued growth along with above target inflation — will keep mild upward pressure on two-year and 10-year yields."

Persons: Jerome Powell, Bas Van Geffen, Robert Tipp, Sarupya Ganguly, Indradip Ghosh, Shaloo, Emelia Sithole Organizations: Reuters, Silicon Valley Bank, Rabobank, Fed, Thomson Locations: BENGALURU, Silicon

That hawkish change in market expectations has helped boost the U.S. dollar to its highest level since March. Just over 25% of economists in the poll, 23 of 86, forecast at least one Fed rate cut by the end of 2023, but that is down from 28% in the last poll. The U.S. Labor Department is due to release consumer price inflation data on June 13, the first day of the Fed meeting. "If most Fed officials feel at least another 25-basis-point hike will be necessary, it seems simplest to deliver that hike in June rather than 'skip'." Inflation as measured by core PCE was forecast to remain above 2% at least until 2025.

Persons: Jerome Powell, Powell, Philip Marey, Janet Yellen, Andrew Hollenhorst, Oscar Munoz, Prerana Bhat, Indradip Ghosh, Vijayalakshmi Srinivasan, Maneesh Kumar, Ross Finley, Mark Potter, Paul Simao Organizations: U.S . Federal, Reuters, U.S, Rabobank, Treasury, Bank of Canada, U.S . Labor Department, Citi, National Bureau of Economic Research, TD Securities, Thomson Locations: BENGALURU, U.S, Canadian

The outlook was little changed for Britain and in India where prices have kept rising. Adam Challis, executive director of research and strategy for EMEA at JLL, said strong wage gains over the past year had kept many housing markets resilient despite significantly higher borrowing costs. Peak-to-trough falls for nearly all housing markets surveyed were downgraded from the March poll. British and U.S. house prices were expected to fall around 3% and Australia's to be flat for the full year 2023. Average house prices are expected to rise about 6% in India.

Persons: Mike Blake, Goldman Sachs, Adam Challis, hasn't, Hari Kishan, Prerana Bhat, Jonathan Cable, Anant Chandak, Sarupya Ganguly, Indradip Ghosh, Vivek Mishra, Milounee, Susobhan Sarkar, Devayani, Vijayalakshmi Srinivasan, Ed Osmond Organizations: KB, REUTERS, EMEA, Thomson Locations: Valley Center , California, U.S, BENGALURU, Canada, Germany, Australia, New Zealand, Britain, India, JLL

"Germans are cautious by nature," said Stephan Fetsch, Germany's head of consumer goods at KPMG. Economists polled by Reuters are split on its second quarter fortunes: views ranged from a 0.3% GDP fall to a 0.5% gain, with a median forecast of 0.2% growth. However, German consumer sentiment remains below its pandemic low in the spring of 2020 and the consumer barometer from the German Retail Association (HDE) shows a similar picture. German consumers were hit particularly hard by high energy prices, being more dependent on Russia gas. "The German consumer has reasons to be scared and the result of all the economic uncertainty is usually an increase in precautionary savings," said Michael Burda, economics professor at Humboldt University Berlin.

Persons: Wolfgang Rattay, Germany's, Stephan Fetsch, Holger Schmieding, Carsten Brzeski, KPMG's Fetsch, Joerg Kraemer, Michael Burda, Brzeski, Maria Martinez, Prerana Bhat, Indradip Ghosh, Mark John, Toby Chopra Organizations: REUTERS, KPMG, Reuters, German Retail Association, Berenberg, ING, European Central Bank, Humboldt University Berlin, Thomson Locations: Cologne, Germany, BERLIN, Europe, France, Italy, Russia, Berlin, China, Bengaluru

Average house prices as measured by the S&P CoreLogic Case-Shiller composite index of 20 metropolitan areas were forecast to stagnate next year. "Looking ahead, we think there is scope for prices to fall a little further. "Given supply is likely to stay tight, there is a risk house prices may not fall as much as we previously expected." The 30-year fixed mortgage rate, currently around 6.7%, was expected to average 6.2% in 2023. Those high mortgage rates are restricting housing supply, which puts upward pressure on prices, as well as demand.

Persons: Sam Hall, haven't, Sal Guatieri, Indradip Ghosh, Prerana Bhat, Aditi Verma, Maneesh Kumar, Jonathan Cable, Ross Finley, Sharon Singleton Organizations: stagnating, Reuters, U.S . Federal Reserve, Capital Economics, BMO Capital Markets, Thomson Locations: BENGALURU

"Put simply, inflation is more than double the Fed's target rate and the unemployment rate is below every FOMC participant's estimate of the natural rate. "In our view, rather than lean against a mild recession, the Fed would view it as an acceptable price for bringing inflation back down to target." A slight majority, 22 of 41 respondents, said the risk of a default was higher this time compared to prior episodes of debt ceiling brinkmanship. Elevated worries about a default will push U.S. Treasury yields higher over the coming weeks, a separate Reuters poll showed. The macroeconomic consequences of a short default would be somewhat more severe."

The survey's flash services sector PMI rose to 53.7, the highest reading in a year, from 52.6 in March. Economists polled by Reuters had forecast the services PMI falling to 51.5. Flash PMIIn the euro zone, the bloc's dominant services industry saw already-buoyant demand rise too, more than offsetting a deepening downturn in manufacturing. However, the manufacturing PMI fell to 45.5 from 47.3, its lowest since the coronavirus pandemic was cementing its grip on the world three years ago. "The PMI sheds a positive light on the economic performance in the euro zone, as a pickup in service sector activity is boosting growth," said Bert Colijn, senior euro zone economist at ING, noting manufacturing weakness remained a concern.

Nearly 90% - 94 of 105 - of the economists who participated in the latest Reuters poll, predicted the U.S. central bank would hike its key policy rate by 25 basis points to the 5.00%-5.25% range at a May 2-3 meeting, in line with market pricing. Beyond that, 59 of 100 economists expected the Fed to keep its policy rate unchanged through at least this year. Only 26 respondents with an end-2023 view forecast a cut, similar to market expectations. "We maintain the first rate cut in March 2024. In an exclusive interview with Reuters this week, St. Louis Fed President James Bullard called for a much higher peak policy rate than currently expected, as inflation remains stubbornly high.

☆ Strategists slash U.S. yield view again despite Fed's inflation focus
▼ + stars: | 2023-04-12 | by ( Sarupya Ganguly | ) www.reuters.com time to read: +4 min

Yields on U.S. 2-year Treasury notes have plunged over 100 basis points following the failure of some regional U.S. banks last month. But markets are pricing for a series of interest rate cuts starting just two months later, underscoring an exceptionally large divergence from the central bank's own view. That recent downward trend in yields is forecast to continue further, according to the April 5-12 poll of over 60 bond strategists. However, in the coming three months, yields on both 2-year and 10-year notes were expected to rise 20 and 25 basis points, respectively, before resuming their fall. Relatively high volatility has also been a driver of yield forecasts over the past few months.

EURNOK and inflationGoldman Sachs and UBS said that the rising cost of borrowing would likely support the Norwegian crown. But those daily sales are well down from the 4.3 billion crowns per day the central bank sold in October. "Any budget surplus that was generated from the commodity exports was basically being neutralized by the Norges bank," said Simon Harvey, head of FX analysis at Monex. Much of the crown's fate could also depend on what the U.S. central bank does. If the Fed stops hiking rates, this would likely boost global equities, which have a strong positive correlation to the Norwegian crown.

BENGALURU, April 6(Reuters) - The Bank of Canada will keep its key interest rate steady at 4.50% through 2023, according to most economists polled by Reuters, with an even smaller minority now expecting an interest rate cut by year-end than a poll taken a month ago. In March, the BoC was the first major central bank to stop its aggressive hiking cycle and is on what it calls a conditional pause. So all 33 economists polled March 31-April 6 said it will hold its overnight rate at 4.50% on April 12. A majority of forecasters, 23 of 31, said the rate would remain unchanged for the rest of 2023. Only seven expected at least one 25-basis-point rate cut by end-year, down from 13 in a survey taken about a month ago.

☆ Colombia's peso to stay weak on c.bank pause signs, mismatch vs oil price
▼ + stars: | 2023-04-05 | by ( Gabriel Burin | ) www.reuters.com time to read: +3 min

BUENOS AIRES, April 5 (Reuters) - Colombia's peso will likely stay weak on signs the central bank is turning to a wait-and-see approach on interest rates, combined with downside pressures from the currency's mismatch against oil prices, a Reuters poll showed. Officials at BanRep, as the central bank is known, last week raised the benchmark rate by 25 basis points to 13.0%, a more than 20-year high. "If March inflation behaves as expected, they suggested this could be the last hike," J.P. Morgan analysts wrote in a report. We think this supports our underweight (view) for the peso, which has also decoupled from lower oil prices these past few weeks and offers good entry levels for shorts." The currency has fared poorly for months even while Colombia's central bank conducted an aggressive tightening cycle that added 1,125 basis points in rate increments since a pandemic-time low of 1.75%.

☆ Dollar's crown to slip as peers catch up in rates race: Reuters poll
▼ + stars: | 2023-04-05 | by ( Hari Kishan | ) www.reuters.com time to read: +4 min

Median forecasts in the March 31-April 4 poll of 90 foreign exchange strategists showed the dollar ceding ground to all major currencies in a year. "Our take on the dollar is that we continue to look for further weakness over the next three to six months. With the dollar's expected retreat, the European single currency is finding its spot in the sun after briefly crossing below parity on lagging rate expectations in 2022. The safe-haven currency, which hit 32-year lows in 2022 again on rate differentials, was forecast to recoup that loss over the forecast horizon. Indeed, the 12-month median view for nearly all of the major currencies surveyed was identical with the March poll.

That would come after the European Central Bank's decision on Thursday to follow through with a 50 basis point rise it pre-announced in February, prioritizing sticky inflation. Only five respondents in the latest Fed poll expected a pause, including four primary dealers, with only one bank, Nomura, expecting a 25 basis point cut. "The past week's financial turmoil will give the Fed some misgivings about pushing rates much higher," said Bill Adams, chief economist at Comerica Bank. Mericle expects more hikes however, with a peak rate of 5.25%-5.50% in Q3, higher than the poll median. Meanwhile the labor market is showing few signs of weakness, with unemployment rate forecasts broadly lower compared with last month's poll.

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