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Yet labour markets are softening, the euro zone faces recession and China's property sector is in crisis. Here's what some closely-watched market indicators say about global recession risks:1/ AMERICAN EXCEPTIONALISM? Britain's economy avoided the start of a recession in the third quarter but still failed to grow. Economists broadly expect the global economy to slow next year but avoid a recession. If supply shocks resulting from the Israel-Hamas war become severe enough to push Brent crude to $150, a level it has never breached, a "mild and fleeting" global recession could result, Oxford Economics reckons.

Persons: Brendan McDermid, Guy Miller, COVID, Zurich Insurance's Miller, Torsten Slok, Austria's, David Katimbo, We've, Brent, Yoruk Bahceli, Dhara Ranasinghe, Naomi Rovnick, Alexandra Hudson Organizations: Wall, REUTERS, Zurich Insurance, Reuters, Traders, U.S . Federal Reserve, ECB, Apollo Global Management, P, Sweden's SBB, HK, Bank of England, Business insolvencies, EdenTree Investment Management, Oxford Economics reckons, Reuters Graphics Reuters, Alexandra Hudson Our, Thomson Locations: New York, U.S, China, Zurich, England, Wales, Europe, Israel

For much of this year central banks have successfully pushed back against rate cut bets. "I believe the Fed will act rationally and begin to cut rates by the end of next year, but we can't rule out the scenario that the Fed is not going to cut rates and just let the ramifications of recession do what they do." Reuters GraphicsSHIFT NEARINGMarkets now fully price in a 25 basis point U.S. rate cut in May, having seen a 65% chance earlier this week. "There are now committee members in all three (banks) willing to talk about rate cuts next year," said Chris Jeffery, head of rates and inflation strategy at LGIM. "The ECB should begin to ease policy as soon as April 2024, with risks that a more sinister downturn in growth could warrant a rate cut as soon as March," he said.

Persons: Jonathan Ernst, ramping, It's, Nate Thooft, Goldman, Christopher Waller, Huw Pill, Yannis Stournaras, Chris Jeffery, we'd, Dario Perkins, Simon Harvey, Yoruk, Naomi Rovnick, Harry Roberston, Davide Barbuscia, Ira Iosebasvili, Saqib Iqbal Ahmed, Dhara Ranasinghe, Catherine Evans Organizations: . Federal, REUTERS, ECB, U.S . Federal Reserve, European Central Bank, Manulife Investment Management, Treasury, Graphics, Bank of England, Deutsche, Lombard, Traders, Yoruk Bahceli, Thomson Locations: Washington, United States, Europe, Goldman Sachs, Greek, Amsterdam, London

☆ Goldilocks meets Santa as global stocks power to best month in three years
▼ + stars: | 2023-11-30 | by ( Naomi Rovnick | ) www.reuters.com time to read: +5 min

MSCI's world stock index (.MIWO00000PUS) is set to close the month up around 9%, its best performance since November 2020, when markets cheered the arrival of COVID-19 vaccines. Global bond prices have soared, with an ICE BofA index of global investment-grade bonds in major markets set to return 3.4% in November, the best month on record going back to 1997. Global growth stocks in high-tech sectors are up 11% (.dMIWO0000GNUS) while value stocks, which are mainly in cyclical industries and offer high dividends, have gained 6.5% (.dMIWO0000VNUS). And a cloudier outlook for stocks suggests a divergence could open up between again between stocks and bonds. The broader global index is set to return 1.6% for the year.

Persons: Joshua Roberts, That's, bode, Altaf Kassam, Wall, We've, Guy Miller, Joost Van Leenders, Van Lanschot Kempen, Van Leenders, Kassam, Naomi Rovnick, Yoruk Bahceli, Dhara Ranasinghe, Christina Fincher Organizations: Federal Reserve, REUTERS, U.S . Federal Reserve, European Central Bank, State Street Global Advisors, Traders, Fed, Insurance Group, Equity, Reuters Graphics Reuters, Treasury, Thomson Locations: Washington , U.S, COVID, U.S

☆ Dutch election: what's at stake for markets after far-right Wilders' victory
▼ + stars: | 2023-11-23 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +5 min

Dutch politician Geert Wilders, the leader of the PVV party, speaks during the final debate between the lead candidates in the Dutch election before polls open on Wednesday, in The Hague, Netherlands, November 21, 2023. REUTERS/Piroschka van de Wouw/File Photo Acquire Licensing RightsAMSTERDAM, Nov 23 (Reuters) - A shock win for Geert Wilders's far-right, anti-EU Freedom Party in Dutch elections has set the stage for months of uncertainty. However, Wilders took a more pragmatic approach during the campaign and he will need to collaborate with pro-EU parties if he wants to govern. Opponents of a critical pension fund reform, which went into effect in July, now have a majority in parliament. There is broad support for raising taxation on banks, including from Wilders' party, which also backs taxing lenders' windfall profits from higher interest rates.

Persons: Geert Wilders, de, Geert Wilders's, Mark Rutte, Wilders, Marcel Klok, Klok, WILDERS, Rutte, van Zanden, Rabobank's van Zanden, Banks, ING's Klok, Joost Beaumont, Yoruk, Amanda Cooper, Toby Chopra Organizations: REUTERS, Rights, EU, Party, ING, European Union, Rabobank, ABN AMRO, Thomson Locations: The Hague, Netherlands, Dutch, Europe

[1/2] People walk past a booth of ICBC Credit Suisse Asset Management Co at the 2020 China International Fair for Trade in Services (CIFTIS), in Beijing, China September 5, 2020. China's foreign ministry spokesperson Wang Wenbin said that business remained normal at ICBC head office, other branches and subsidiaries across the globe. Some market participants said trades going through ICBC were not settled due to the incident and that market liquidity had been affected. ICBC said it had successfully cleared Treasury trades executed on Wednesday and repurchase agreements (repo) financing trades done on Thursday. While market sources said on Thursday the impact of the ICBC hack appeared limited, the attack underlined how vulnerable systems at large organizations continue to be.

Persons: Tingshu Wang, ICBC, Wang Wenbin, Wang, Jerome Powell, Lockbit, Harry Robertson, Yoruk, Dhara Ranasinghe, Alexander Smith Organizations: Asset Management, Fair for Trade, Services, REUTERS, Industrial, Commercial Bank of China, Global, ICBC's, Authority, Traders, U.S . Treasury, Federal, Treasury, Cybersecurity, Infrastructure Security Agency, Thomson Locations: Beijing, China, China's, ICBC's U.S, Europe, Hong Kong, Shanghai, London, Amsterdam

ICBC's U.S. unit told market participants on Friday it was hoping to finish the cyber review over the weekend, but the sources said they expected it would spill into next week. The cyberattack sent ripples through the U.S. Treasuries market, where ICBC acts as a broker for hedge funds and other market participants, helping them trade in the securities. The Chinese parent then injected capital into the U.S. unit, allowing it to settle the trades and pay back BNY Mellon, the sources said. They also told market participants about the capital injection but did not disclose the amount or the reason for it, the sources said. SIFMA, the trade group, organized calls for market participants with updates, the sources said.

Persons: Tingshu Wang, BNY Mellon, ransomware, ICBC, SIFMA, Janet Yellen, Lifeng, Scott Skyrm, Jack McIntyre, Harry Robertson, James Pearson, Naomi Rovinick, Yoruk, Davide Barbuscia, Chris Prentice, Mike Derby, Carolina Mandl, Laura Matthews, Paritosh, Zeba, Megan Davies, Dhara Ranasinghe, Alexander Smith, Richard Chang, Anna Driver Organizations: Asset Management, Fair for Trade, Services, REUTERS, Commercial Bank of China, U.S ., ICBC Financial Services, Securities Industry, Financial Markets Association, ICBC, Treasury, China, U.S, New York Federal Reserve, Securities, Depository Trust, Clearing Corp, Thomson Locations: Beijing, China, ICBC's U.S, U.S, San Francisco, Treasuries, Hong Kong, Shanghai, London, Amsterdam, Carolina, New York

Logos of Swiss banks Credit Suisse and UBS are seen before a news conference in Zurich Switzerland, August 30, 2023. The state-engineered merger led to a wipeout of $17 billion of Credit Suisse's AT1 bonds. "Their structure is very new and shows they listened to investors who were angry about the permanent write-down feature," said Jerome Legras, head of research at Axiom Alternative Investments, who held Credit Suisse AT1 bonds before the March banking crisis. The Credit Suisse AT1s wipeout spurned a number of claims against Switzerland's financial regulator FINMA, which inverted the long-established seniority of bondholders over shareholders over the assets of a company in distress. That dented sentiment in the key market for bank bonds and prompted regulators in Europe and Asia to reassure investors.

Persons: Denis Balibouse, Jerome Legras, Joost Beaumont, March's writedown, Noele Illien, Dhara Ranasinghe, Elaine Hardcastle, Alexander Smith Organizations: Credit Suisse, UBS, REUTERS, CS, AT1s, ZURICH, P Global, Suisse, ABN AMRO, Singapore, Thomson Locations: Zurich Switzerland, Swiss, Switzerland's, Europe, Asia

☆ Analysis: Traders bet ECB will be first big central bank to cut rates
▼ + stars: | 2023-11-03 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +5 min

A view shows the logo of the European Central Bank (ECB) outside its headquarters in Frankfurt, Germany March 16, 2023. With investors confident that big central banks are likely done raising rates, focus has switched to when rate cuts will start. Traders now price in over an 80% chance of a 25 basis-points (bps) ECB cut by April, which had been fully priced for July last week. Piet Christiansen, chief analyst at Danske Bank, said the expectations for ECB rate cuts now reflected a "doom and gloom" scenario. He added the ECB would need to cut rates at least as much as traders expect next year.

Persons: Heiko Becker, BoE, Shamik Dhar, Christine Lagarde, Piet Christiansen, Lagarde, Goldman, Gurpreet Gill, Dario Perkins, Yoruk, Sumanta Sen, Kripa Jayaram, Dhara Ranasinghe, Emelia Organizations: European Central Bank, REUTERS, Traders, ECB, Fed, Federal Reserve, Bank of England, BNY Mellon Investment, Treasury, Reuters, Danske Bank, Asset Management, Lombard, Thomson Locations: Frankfurt, Germany, United States, Europe, U.S, Britain, Israel

A view shows the logo of the European Central Bank (ECB) outside its headquarters in Frankfurt, Germany March 16, 2023. That was a relief to financial markets, roiled in recent weeks by a surge in government bond yields led by U.S. Treasuries. The central bank reiterated it would reinvest all the cash it receives from maturing bonds it holds under its 1.7 trillion euro pandemic-era bond scheme until the end of 2024. Instead, the ECB kept the emphasis on slowing inflation, raising investors' conviction that September's rate rise was the central bank's last. And inflation risks have not disappeared.

Persons: Heiko Becker, Christine Lagarde, Lagarde, Piet Christiansen, Gabriele Foa, reinvestments, Marcus Brookes, Sabrina Kanniche, Yoruk Bahceli, Naomi Rovnick, Amanda Cooper, Nick Zieminski Organizations: European Central Bank, REUTERS, ECB, U.S, Treasuries, Reuters, Danske Bank, The Bank of, Algebris, Quilter Investors, Asset Management, Thomson Locations: Frankfurt, Germany, Italy, Copenhagen, Israel, The Bank of Canada, wean, Ukraine

REUTERS/Wolfgang Rattay/File Photo Acquire Licensing RightsLONDON, Oct 27 (Reuters) - The steepest jump in interest rates in decades will spark a domino effect on corporate defaults in the years ahead, asset manager Janus Henderson Investors said in a report on Friday. Rising borrowing costs are back in stark focus following a rout in government bonds since September as investors adjust to the prospect of interest rates staying persistently high, which has also raised corporate bond yields. "The credit cycle tends to turn only if three conditions are present: high debt loads, lack of access to capital, and an exogenous shock to cash flow. These conditions ... are all present today," Janus' global head of fixed income Jim Cielinski said. But as inflation starts slowing and higher rates are here to stay, headwinds are mounting, and the risk is that the increase in borrowing costs could outpace revenue growth, it added.

Persons: Wolfgang Rattay, Janus Henderson, Janus, Jim Cielinski, ”, Chiara Elisei, Yoruk Bahceli, Mark Potter Organizations: European Central Bank, European Union, REUTERS, Janus Henderson Investors, P Global Market Intelligence, Thomson Locations: Frankfurt, Germany

☆ Big central banks hit pause, with rate cuts far off
▼ + stars: | 2023-10-26 | by ( ) www.reuters.com time to read: +5 min

On Oct. 23, Fed Chair Jay Powell said a strong economy and tight jobs market could warrant more rate rises. Interest rate futures show traders believe the BoE will not cut rates, now at their highest since 2008, until at least June 2024. "The Governing Council’s past interest rate increases continue to be transmitted forcefully into financing conditions," the ECB said, adding it would follow a "data-dependent" approach and future decisions would be based on incoming data. Prime Minister Jonas Gahr Stoere told parliament last week interest rates may have peaked. Reuters Graphics Reuters Graphics8) AUSTRALIAThe Reserve Bank of Australia held rates steady at 4.1% for a fourth meeting in October.

Persons: Jonathan Ernst, Jay Powell, BoE, Jonas Gahr Stoere, Michele Bullock, Naomi Rovnick, Harry Robertson, Alun John, Yoruk Bahceli, Samuel Indyk, Chiara Elisei, Kripa Jayaram, Pasit, Riddhima, Sumanta Sen, Vineet, Amanda Cooper, Giles Elgood Organizations: . Federal, REUTERS, European Central Bank, Federal Reserve, Bank of England, UNITED, Reuters, Reserve Bank of New Zealand, BRITAIN, Bank of Canada, BoC, ECB, Norges Bank, Reuters Graphics Reuters, Reserve Bank of Australia, Bank of Japan, Thomson Locations: Washington, Japan, hawkish, dovish, NORWAY, SWEDEN Sweden, SWITZERLAND, Swiss, Gaza, JAPAN

High funding needs and central banks removing support are increasing pricing uncertainty for investors, Sophia Drossos, hedge fund Point72 Asset Management's chief economist, said. Spending plans lacking credibility were seen as most likely to spark market turmoil. I suspect not by default, but when markets start reflecting their worries in Treasury prices, by a political crisis and a potentially ugly adjustment," the former IMF chief economist said. "We need more investment, not less," said King's College London professor Jonathan Portes, Britain's cabinet office chief economist during the financial crisis. Not enough reforms are being implemented, OECD chief economist Clare Lombardelli warned.

Persons: Andrew Kelly, Peter Praet, Praet, Sophia Drossos, Daniel Ivascyn, Claudio Borio, Olivier Blanchard, Ray Dalio, Janet Yellen's, Yellen, Jim Leaviss, Giancarlo Giorgetti, Daleep Singh, Joe Biden, Britain's, Yellen's, Jonathan Portes, Clare Lombardelli, Moritz Kraemer, Yoruk Bahceli, Maria Martinez, Leigh Thomas, Giuseppe Fonte, Nell Mackenzie, Naomi Rovnick, William Schomberg, Jan Strupczewski, Dan Burns, Elisa Martinuzzi, Riddhima Talwani, Jayaram, Emelia Sithole Organizations: Financial, of, REUTERS, Institute of International Finance, Reuters, European Central Bank, ECB, Bank for International, Peterson Institute for International Economics, Associates, U.S . Treasury, Wall, Economy, Britain's Treasury, Congressional, Britain's, Institution, Reuters Graphics ACT, King's College London, Labour Party, OECD, Graphics, Thomson Locations: of Manhattan , New York City, U.S, Italy, Britain, United States, Europe, Ukraine, Berlin, Paris, Rome, London, Brussels, Washington, Marrakech

High funding needs and central banks removing support are increasing pricing uncertainty for investors, Sophia Drossos, hedge fund Point72 Asset Management's chief economist, said. Spending plans lacking credibility were seen as most likely to spark market turmoil. I suspect not by default, but when markets start reflecting their worries in Treasury prices, by a political crisis and a potentially ugly adjustment," the former IMF chief economist said. Italy's 2.4 trillion-euro debt pile is the focus in Europe, where the IMF has said high debt leaves governments vulnerable to crisis. "We need more investment, not less," said King's College London professor Jonathan Portes, Britain's cabinet office chief economist during the financial crisis.

A calmer tone set in later on Wednesday, with bond yields retreating. In the U.S. Treasury market -- considered the bedrock of the global financial system -- 10-year yields have jumped as much as 20 basis points (bps) to 4.8% this week alone. Bond yields move inversely to prices, and many asset managers who had held bonds expecting prices to rally are now throwing in the towel. Australian and Canadian 10-year bond yields have surged over 20 bps each this week , , and British 30-year government bond yields hit a fresh 25-year high above 5% on Wednesday . , ,World stocks (.MIWD00000PUS) hit their lowest since April on Wednesday, and the cost of insuring exposure to a basket of European corporate junk bonds hit a five-month high, according to data from S&P Global Market Intelligence.

Persons: Bond, Juan Valenzuela, Artemis, Kevin McCarthy, Jason Lee, Michael Metcalfe, Vikram Aggarwal, that's, Everybody's, you've, Richard McGuire, McGuire, Dhara Ranasinghe, Naomi Rovnick, Alun John, Yoruk Bahceli, Chiara Elisei, Marc Jones, Andy Bruce, Kim Coghill, Toby Chopra Organizations: bund, U.S . Treasury, Federal Reserve, Reuters, ADP, U.S . House, Congress, Hong, REUTERS, Street Global Markets, P Global Market Intelligence, Jupiter, New York Fed, Rabobank, Thomson Locations: Treasuries, British, U.S, Hong Kong, London

In the U.S. Treasury market -- considered the bedrock of the global financial system -- 10-year yields have jumped 20 basis points (bps) to 4.8% this week alone. Bond yields move inversely to prices, and asset managers who had held bonds expecting prices to rally are now throwing in the towel. Australian and Canadian 10-year bond yields have surged over 20 bps each this week , , and British 30-year government bond yields hit a fresh 25-year high above 5% on Wednesday . In a further sign of investor nervousness, the closely-watched MOVE bond volatility index is at a four-month high. (.MOVE)Rise in global yields beyond 10yr average levels Rise in global yields beyond 10yr average levelsRIPPLESGovernment borrowing costs influence everything from mortgage rates for homeowners to loan rates for companies.

Persons: Jason Lee, Bond, Juan Valenzuela, Artemis, Vikram Aggarwal, that's, Everybody's, you've, Richard McGuire, Dhara Ranasinghe, Naomi Rovnick, Alun John, Yoruk Bahceli Chiara Elisei, Andy Bruce, Kim Coghill, Toby Chopra Organizations: Hong, REUTERS, U.S . Treasury, Federal Reserve, Reuters, P Global Market Intelligence, Jupiter, New York Fed, Rabobank, Thomson Locations: Hong Kong, Treasuries, British

Yet increasingly, euro area specific factors, particularly exposure to higher oil prices, risk further weakness in an already stagnating economy, and the single currency. The euro is especially vulnerable to rising oil prices, with net imports accounting for over 90% of oil products available in the European Union. "High oil prices are weighing on the euro area's terms of trade, and if oil prices move above $100 per barrel to $110 per barrel we think it will be difficult for the euro to avoid parity," said Nomura's G10 FX strategist Jordan Rochester. But it also lifts price pressures through higher import costs, compounding the impact from higher oil prices. "Definitely the euro zone is not in a good place right now," said Moec, adding that he did not rule out a euro move to parity.

Persons: Dado Ruvic, Jordan, Nomura, Morgan Stanley, Jens Eisenschmidt, Francesco Pesole, Athanasios, Gilles Moec, Dhara Ranasinghe, Alun John, Yoruk, Christina Fincher Organizations: U.S, REUTERS, European Union, OPEC, Barclays, European Central Bank, ECB, ING, Germany, Bank of America, AXA Investment, Thomson Locations: Jordan Rochester, United States, ITALY, Italy, U.S, London, Amsterdam

Why are global bond yields rising? With inflation excluding food and energy prices elevated and the U.S. economy resilient, central banks are pushing back against rate cut bets. Many investors were also betting bond yields would drop, so are extra sensitive to moves in the opposite direction, analysts say. That is no surprise, and analysts do not rule out a rise in 10-year Treasury yields to 5%, from 4.7% now . Bond yields determine governments' funding costs, so the longer they stay high, the more they feed into the interest costs countries pay.

Persons: Brendan McDermid, August's, Goldman Sachs, Mahmood Pradhan, Treasuries, Andrea Kiguel, Yoruk, Dhara Ranasinghe, Karin Strohecker, Marc Jones, Amanda Cooper, Ed Osmond Organizations: New York Stock Exchange, REUTERS, U.S . Treasury, August's Fitch, Reuters, Treasury, Deutsche Bank, Amundi Investment, U.S, JPMorgan, Barclays, Yoruk Bahceli, Thomson Locations: New York City, U.S, Germany, Japan, Italy, Europe, Americas, Amsterdam, London

Benefiting from the highest interest rates since 2008, pension funds are better funded to meet future payouts than they have been in years. Because insurers hold a lot less government debt than pension funds, favouring higher-return assets such as corporate debt, they are expected to sell some of the gilts they receive. It is selling 240 billion pounds of debt this year, a record, save for 2020-21. Helped by the pension fund demand of past years, Britain's average debt life is around 15 years, more than double the U.S. and Germany's. Britain has already started skewing its funding towards shorter debt this year, citing high borrowing needs, a move investors reckon also reflects declining pension fund appetite.

Persons: Dado Ruvic, BoE, gilts, Chris Jeffery, Lane Clark, Peacock, Barry Kenneth, Van Lanschot, Arif Saad, Craig, Owen Davies, LGIM's Jeffery, Yoruk, Carolyn Cohn, Dhara Ranasinghe, Toby Chopra Organizations: REUTERS, Bank of England, Legal, General Investment Management, Fund, Investment, Royal London Asset Management, Investors, Yoruk Bahceli, Thomson Locations: gilts, Germany's, Britain, Amsterdam, London

Traders cheered the expected end of rate hikes that have raised borrowing costs from minus 0.5% in just over a year. That sent euro zone government bond yields tumbling, the euro down and stocks (.STOXX) higher. The ECB cut its outlook for euro area growth this year to 0.7%, while economists polled by Reuters expect growth of 0.6%. A market rally is also likely unwelcome to the ECB. Hawkish policymakers have started calling for an earlier end to PEPP reinvestments, and the ECB is likely to begin a debate on furthering its balance-sheet runoff with rate hikes likely done.

Persons: Charles Diebel, Simon Bell, Jason Simpson, Anna Stupnytska, reinvesting, Mediolanum's Diebel, reinvestments, Divyang Shah, Christine Lagarde, Shah, Yoruk Bahceli, Naomi Rovnick, Dhara, Dhara Ranasinghe, Hugh Lawson Organizations: European Central Bank, Traders, Reuters Graphics, Mediolanum Asset Management, ECB, Reuters, Legal, General Investment Management, State, Fidelity International, Thomson Locations: Italy, Germany

☆ Crunch time after string of aggressive central bank rate hikes
▼ + stars: | 2023-09-14 | by ( ) www.reuters.com time to read: +5 min

Major central banks have confounded economists with a string of interest rate rises that, so far, have moderated inflation without causing global recession. So far, nine developed economies have raised rates by a combined 3,915 bps in this cycle. Reuters Graphics2) NEW ZEALANDThe Reserve Bank of New Zealand lifted its cash rate to a 14-year high of 5.5% in May and has kept it there since. Reuters Graphics7) AUSTRALIAThe Reserve Bank of Australia kept rates steady at 4.1% for a third consecutive meeting in September, the last under former Governor Philip Lowe. Reuters Graphics10) JAPANThe Bank of Japan, the world's most dovish major central bank, meets next week.

Persons: BoE, Macklem, Philip Lowe, Lowe's, Michele Bullock, Naomi Rovnick, Harry Robertson, Samuel Indyk, Nell Mackenzie, Alun John, Yoruk Bahceli, Chiara Elisei, Vincent Flasseur, Sumanta Sen, Pasit, Dhara Ranasinghe, Sharon Singleton Organizations: European Central Bank, U.S . Federal Reserve, UNITED, Reuters, Federal Reserve, Reserve Bank of, BRITAIN, of England, CANADA Bank of Canada, Bank of Canada, ECB, Norges Bank, SWEDEN Traders, Swiss, Bank of Japan, Thomson Locations: U.S, Japan, Reserve Bank of New Zealand, NORWAY, Reserve Bank of Australia, SWEDEN, Swedish, SWITZERLAND Swiss, JAPAN

European Central Bank (ECB) President Christine Lagarde speaks to the media following the Governing Council's monetary policy meeting at the ECB headquarters in Frankfurt, Germany, July 27, 2023. "It's such a close call between the pause and the rate hike," said ING's global head of macro Carsten Brzeski. Traders are torn but favour an ECB pause, pricing in around a 40% chance of a hike. For many economists, one thing is clear: if the ECB has further tightening to deliver, September is likely its last chance. Even the hawks, keeping a hike on the table, say fresh ECB projections on Thursday are key to the decision.

Persons: Christine Lagarde, Kai Pfaffenbach, Reinhard Cluse, Mario Centeno, Isabel Schnabel, Austria's Robert Holzmann, Iain Stealey, Philip Lane, Kaspar Hense, Yoruk Bahceli, Stefano Rebaudo, Dhara Ranasinghe, Susan Fenton Organizations: European Central Bank, ECB, REUTERS, Central Bank, Traders, UBS, JPMorgan Asset Management, Reuters, ING, BlueBay Asset Management, Reuters Graphics Reuters, Thomson Locations: Frankfurt, Germany, Italy

☆ Take Five: Doves versus hawks
▼ + stars: | 2023-09-08 | by ( ) www.reuters.com time to read: +5 min

Key UK jobs data and a G20 summit, marked by the absence of China's Xi Jinping, are also in focus. The doves urge caution; the most hawkish hawks say a pause is not a done deal, but haven't explicitly called for a hike either. Wednesday's August U.S. inflation data, followed by producer price and retail sales numbers a day later, are the next test. Next up are consumer and factory price data this weekend, with industrial output and retail sales out on the 15th. The unemployment rate has been edging above last year's 48-year low, indicating some softening in the jobs market, while basic earnings are rising at record pace.

Persons: Andrew Kelly, China's Xi, Ira Iosebashvili, Kevin Buckland, Li Gu, Amanda Cooper, Ahmad Ghaddar, haven't, Goldman Sachs, Xi Jinping, He's, BoE Governor Andrew Bailey, BoE, RUSH Brent, Dhara, Philippa Fletcher Organizations: Financial, of, REUTERS, European Central Bank, United States, Key, Yoruk Bahceli, ECB, Reuters, Huawei, SMIC, West, Bank of England, Thomson Locations: of Manhattan , New York City, U.S, Yoruk, Amsterdam, New York, Tokyo, Shanghai, London, China, United States, Washington, Beijing, India, Britain, Saudi Arabia, Russia, Iran, Venezuela, Libya

☆ Belgium raises record 22 billion euros from savers in 'clear signal' for higher bank rates
▼ + stars: | 2023-09-04 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +4 min

It marks the biggest funding drive from households in Belgium's history and is likely Europe's biggest retail bond sale, the country's debt agency said on Monday. Equivalent to around 5% of Belgian deposits, it eclipses the 5.7 billion euros raised from savers at the height of the euro zone debt crisis in 2011 and beats the 18 billion euros Italy raised from savers earlier this year. European lenders awash with cash have resisted raising savings rates while market interest rates have surged as central banks fight inflation, prompting withdrawals by households looking for better returns. While demand for the bond is high, the country's biggest lenders are yet to raise rates paid on savings accounts. "This will be different for every bank, but the financial stability of every bank needs to be monitored closely."

Persons: Dado Ruvic, Bonds, Vincent Van Peteghem, Jean Deboutte, Isabelle Marchand, Van Peteghem, Marchand, Febelfin, Yoruk Bahceli, Bart Meijer, Sudip Kar, Dhara Ranasinghe, Ed Osmond Organizations: REUTERS, Reuters, Thomson Locations: Europe, Belgium, BRUSSELS, Italy, Portugal, Belgian

☆ For traders, September's ECB move is far from clear cut
▼ + stars: | 2023-08-31 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +5 min

REUTERS/Kai Pfaffenbach/File PhotoData on Thursday showed euro zone inflation held at 5.3% in August rather than dropping. Overall money supply in the bloc contracted in July for the first time since 2010, demonstrating the extent to which ECB policy has tightened financial conditions. And even if investors are divided on September’s decision, the consensus is that the ECB will be done raising rates soon. Longer-term, markets expect the ECB to start cutting rates by the second quarter of 2024. (This story has been corrected to clarify that Aviva favours a small overweight in European bonds, not longer-dated euro zone bonds, in paragraph 19)

Persons: Christine Lagarde, Kai Pfaffenbach, Piet Christiansen, ’ indecisiveness, ” Christiansen, Isabel Schnabel, Robert Holzmann, ”, Mauro Valle, Valle, Edward Hutchings, Frederik Ducrozet, ” Aviva’s Hutchings, ” Pictet’s Ducrozet Organizations: Reuters, European Central Bank, Central Bank, ECB, REUTERS, Danske Bank, Generali Investments, Treasury, Aviva Investors, Pictet Wealth Management, Aviva Locations: Frankfurt, Germany, Austrian

☆ Analysis-For traders, September's ECB move is far from clear cut
▼ + stars: | 2023-08-31 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +5 min

REUTERS/Kai Pfaffenbach/File PhotoData on Thursday showed euro zone inflation held at 5.3% in August rather than dropping. Another inflation hawk, Austrian central bank chief Robert Holzmann, said the ECB could deliver “another hike or two”. Overall money supply in the bloc contracted in July for the first time since 2010, demonstrating the extent to which ECB policy has tightened financial conditions. And even if investors are divided on September’s decision, the consensus is that the ECB will be done raising rates soon. Longer-term, markets expect the ECB to start cutting rates by the second quarter of 2024.

Persons: Christine Lagarde, Kai Pfaffenbach, Piet Christiansen, ’ indecisiveness, ” Christiansen, Isabel Schnabel, Robert Holzmann, ”, Mauro Valle, Valle, Edward Hutchings, Frederik Ducrozet, Aviva’s Hutchinson, ” Pictet’s Ducrozet Organizations: Reuters, European Central Bank, Central Bank, ECB, REUTERS, Danske Bank, Generali Investments, Treasury, Aviva Investors, Pictet Wealth Management Locations: Frankfurt, Germany, Austrian

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