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☆ Ukraine war live updates: Russia cannot swallow the West whole, Orban says; G7 finance chiefs meet with Ukraine on agenda
▼ + stars: | 2024-05-24 | by ( Natasha Turak | ) www.cnbc.com time to read: +1 min

Governor of the Bank of Italy Fabio Panetta (L), Italy's Minister of Economy and Finance Giancarlo Giorgetti (R) and President of the European Central Bank Christine Lagarde pose on the sidelines of the G7 Finance Ministers meeting in Stresa on May 24, 2024. Earlier this week, U.S. Treasury Secretary Janet Yellen told Sky News she saw the "possibility" that G7 nations could assist Ukraine with as much as $50 billion in loans linked to frozen Russian assets. "The Russian assets are not earning interest anymore, but they are generating returns for Euroclear. That alone could be given to Ukraine that would be repaid over several years by that flow of interest," Yellen added. It remains to be seen whether G7 nations can strike consensus on such a loan and what final sum will be extended to support Kyiv's military effort.

Persons: Bank of Italy Fabio Panetta, Finance Giancarlo Giorgetti, European Central Bank Christine Lagarde, Janet Yellen, Yellen Organizations: Bank of Italy, Italy's, Economy, Finance, European Central Bank, Ukraine, Treasury, Sky News, Euroclear Locations: Stresa, Italy, Ukraine

☆ Euro zone inflation tumble pits ECB against markets
▼ + stars: | 2023-11-30 | by ( Balazs Koranyi | ) www.reuters.com time to read: +5 min

Inflation has dropped quickly towards the ECB's 2% target from levels above 10% just a year ago but policymakers have cautioned against excessive optimism. The rapid inflation slowdown puts the euro zone central bank and investors on a collision course as the two appear to see greatly different paths ahead, both for consumer prices and ECB interest rates. "And if the recent trends in inflation and growth continue then 2024 will be the year when the ECB implements a pirouette in monetary policy." "The market is therefore right to start looking at rate cuts for 2024. Some economists argue that modelling current inflation is exceptionally difficult because corporate profits are the main driver, not wages as in normal bouts of rapid inflation.

Persons: Sarah Meyssonnier, Kamil Kovar, Yannis Stournaras, Fabio Panetta, Panetta, Christine Lagarde's, Bert Colijn, Balazs Koranyi, Catherine Evans Organizations: REUTERS, ECB, Moody's, Bank of Italy, ING, Thomson Locations: Paris, France, FRANKFURT

☆ Morning Bid: November bids adieu with inflation data, OPEC
▼ + stars: | 2023-11-30 | 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 26, 2023. With signs of turn emerging in Federal Reserve policy guidance and October PCE inflation readings set to encourage that later in the day, rate cut fever was in full flow across the Atlantic too. Headline annual inflation in the bloc fell as low as 2.4% - within arm's length of the ECB's 2% target. Later on Thursday, U.S. PCE inflation for the prior month is pencilled to fall 3.0% from 3.4% - with a core also ebbing to 3.5%. "Monetary policy is in a good place," Cleveland Fed President Loretta Mester said on Wednesday, echoing comments from previously hawkish Fed governor Christopher Waller the previous day.

Persons: Brendan McDermid, Mike Dolan, policymaker Fabio Panetta, Loretta Mester, Christopher Waller, John Williams, Christine Lagarde, Megan Greene, Kroger, Bernadette Baum Organizations: New York Stock Exchange, REUTERS, Treasury, Federal, European Central Bank, Bank of Italy, policymaker, U.S ., ECB, Cleveland Fed, Wall, OPEC, Dallas Fed, PMI, York Federal, Bank of England, Academy Sports, Rock Biotech, Titan, Reuters, Thomson Locations: New York City, U.S, China, Canada, Vienna, Automotive, Duluth, BOS, Jan

☆ Euro zone inflation dents euro, dollar rises from three-month low
▼ + stars: | 2023-11-30 | by ( Samuel Indyk | ) www.reuters.com time to read: +4 min

A New Zealand dollar coin sits atop a United States one dollar bill in this photo illustration taken on March 11, 2016. Consumer price growth in the 20 nations that share the euro currency dropped to 2.4% in November from 2.9% in October, well below expectations for a fall to 2.7%. The euro dropped as much as 0.5% against the dollar to $1.0910. The Japanese currency has firmed almost 3% against the dollar in November and is on course for its strongest month this year. Sterling was last at $1.2646, down 0.39% on the day, while the Australian dollar fell 0.1% to $0.6610.

Persons: David Gray, Matthew Landon, disinflation, Landon, ECB policymaker Fabio Panetta, Mohamad Al, Jerome Powell, Christopher Waller, Christopher Wong, Toyoaki Nakamura, Sterling, It's, Samuel Indyk, Ankur Banerjee, Vidya Ranganathan, Kim Coghill, Miral Fahmy, Susan Fenton Organizations: New Zealand, REUTERS, European Central Bank, Morgan Private Bank, ECB, ECB policymaker, Danske Bank, Bank of Japan, Thomson Locations: States, Europe, U.S, London, Singapore

☆ Be cautious, dove Visco tells ECB on last day as council member
▼ + stars: | 2023-10-31 | by ( ) www.reuters.com time to read: +1 min

A view shows the logo of the European Central Bank (ECB) outside its headquarters in Frankfurt, Germany March 16, 2023. REUTERS/Heiko Becker/File Photo Acquire Licensing RightsROME, Oct 31 (Reuters) - The European Central Bank (ECB) should be cautious in coming months having hiked rates steeply to curb inflation, Bank of Italy Governor Ignazio Visco said on Tuesday on his last day in office. In a speech to bankers in Rome Visco, long seen as a dove on the ECB's governing council, reiterated his frequent calls for prudence. "I think the (ECB's) orientation to keep rates at current levels for a sufficiently long period of time... is a wise decision," Visco said. Visco will be replaced as Bank of Italy governor by Fabio Panetta, a former member of the ECB executive board.

Persons: Heiko Becker, Ignazio Visco, Rome Visco, Visco, Fabio Panetta, Giuseppe Fonte, Angelo Amante, Gavin Jones Organizations: European Central Bank, REUTERS, Rights, Bank of Italy, Bank of, ECB, Thomson Locations: Frankfurt, Germany, Rome, Bank of Italy

☆ Analysis: Time for central bank digital currencies to prove their worth
▼ + stars: | 2023-10-22 | by ( Marc Jones | ) www.reuters.com time to read: +5 min

REUTERS/Dado Ruvic/Illustration//File Photo Acquire Licensing RightsLONDON, Oct 22 (Reuters) - A milestone move by the European Central Bank toward launching a digital euro within a few years means the time has come for the newest incarnation of money to prove its worth. A few countries have introduced central bank digital currencies (CBDCs), China is trialling a prototype yuan with 200 million users, India is gearing up for a pilot and some 130 countries representing 98% of the global economy are exploring digital cash. Commercial bankers fret about the costs and possible deposit bleeds as customers could move money into central bank accounts, while developing countries worry that an easily accessible digital dollar, euro or yuan could cause havoc in their systems. DEFINING A GLOBAL STANDARDA key unknown is whether the U.S. Federal Reserve or Bank of Japan will launch retail CBDCs. "The current adoption level of eNaira has been reflective of the early stage of CBDC awareness," the country's central bank said in a written response to questions, adding it had been "consistent" with expectations.

Persons: Dado Ruvic, Josh Lipsky, Fabio Panetta, couldn't, Lee Braine, Bo Li, Atlantic Council's Lipsky, Lipsky, Marc Jones, MacDonald Dzirutwe, William Mallard Organizations: REUTERS, European Central Bank, Reuters, Atlantic Council, Facebook, ECB, Barclays, Bank of, U.S . Federal Reserve, Bank of Japan, International Monetary Fund, Atlantic, Thomson Locations: China, India, Western, Nigeria, U.S, Canada, Bahamas, London, Lagos

☆ Morning Bid: MidEast tension keeps markets on edge
▼ + stars: | 2023-10-16 | by ( ) www.reuters.com time to read: +4 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 RightsAlthough price moves remain contained in the absence of a dramatic weekend escalation, world markets are still on edge as Middle East tension builds without obvious resolution. Disputed reports of a temporary ceasefire in southern Gaza partly stabilised jittery macro prices first thing on Monday. Yet the extent to which the backup in oil prices over recent months can impact wider economic sentiment was clear from the University of Michigan's household survey on Friday. That appeared to be the case last week as oil prices, gold, the dollar and Treasuries gained into the close while stocks fell back.

Persons: Brendan McDermid, Israel, Treasuries, Goldman Sachs, Morgan Stanley, Jerome Powell, Poland's, Patrick Harker, Christine Lagarde, Fabio Panetta, Mike Dolan, Ed Osmond Organizations: New York Stock Exchange, REUTERS, University of Michigan's, U.S, Treasury, Wall, JPMorgan, Citigroup, Bank of America, Netflix, Federal Reserve, European Union ., York Fed, Bank of Canada, Philadelphia Federal, European Central Bank, ECB, Global, Thomson, Reuters Locations: New York City, U.S, Gaza, Wells Fargo, Luxembourg, LSEG, CHINA

☆ Morning Bid: Dot plots, oil blots and auto strikes
▼ + stars: | 2023-09-18 | by ( ) www.reuters.com time to read: +4 min

A nighttime view of Marathon Petroleum's Los Angeles Refinery, which processes domestic & imported crude oil into gasoline, diesel fuel, and other refined petroleum products, in Carson, California, U.S., March 11, 2022. But updated quarterly economic and rate projections from its individual policymakers will map out the remainder of the year and 2024. And just like global markets have been discombobulated this month, the central bank will be grappling with low visibility and a plethora of mixed signals. Chief among the irritants for the central banks has been the rebound in crude oil price and the fading annual base effects that have flattered headline disinflation progress this year. Events to watch for on Monday:* U.S. September NAHB Housing Market Survey, July TIC data on foreign holdings of U.S. Treasuries* U.S. Treasury auctions 3- and 6-month bills* European Central Bank Board Member Fabio Panetta speaksReuters Graphics Reuters GraphicsReuters GraphicsReuters GraphicsReuters GraphicsReuters Graphics Reuters GraphicsBy Mike Dolan, editing by Bernadette BaumOur Standards: The Thomson Reuters Trust Principles.

Persons: Bing Guan, Mike Dolan Gatecrashed, That's, Detroit's, Taiwan's, TW, chipmaker, Member Fabio Panetta, Mike Dolan, Bernadette Baum Organizations: Petroleum's, Angeles Refinery, REUTERS, U.S . Federal, Bank of England, Bank of Japan, University of Michigan's, automakers, United Auto Workers, General Motors, Ford, chipmakers, China, HK, Survey, Treasury, Central Bank, Member, Reuters Graphics Reuters, Reuters, Thomson Locations: Angeles, Carson , California, U.S, Saudi, China

☆ Morning Bid: China adds fuel to global equity rally
▼ + stars: | 2023-09-15 | by ( ) www.reuters.com time to read: +2 min

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, August 29, 2023. Signs that the recent flurry of support measures from Beijing are working to stabilise the economy showed up in August retail sales and factory production data released this morning. The dollar remains king, with the euro swooning in the course of a very eventful few days. That sets the stage for another pivotal week ahead, featuring policy decisions from not just the Fed, but the Bank of England and the Bank of Japan. There will be plenty of opportunity to hear from ECB officials today, with the Eurogroup convening in Spain.

Persons: Kevin Buckland, Moody's, Boss Christine Lagarde, Fabio Panetta, Edmund Klamann Organizations: REUTERS, Staff, Graphics, Bank of England, Bank of Japan, ECB, Bank of Italy, Sweden CPI, France CPI, NY Fed, Thomson Locations: Frankfurt, Germany, China, Beijing, Spain, Sweden, France, Italy, Michigan, NY

☆ Morning Bid: Asia mood lifts as China's small steps add up
▼ + stars: | 2023-09-04 | by ( ) www.reuters.com time to read: +3 min

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, August 24, 2023. There was also much relief at Country Garden's deal with creditors for an extension on onshore debt payments worth 3.9 billion yuan ($537 million). As a result, Chinese blue chips are up another 1.2% on top of last week's 2.2% rally. Companies are holding an astonishing 555 trillion yen ($3.80 trillion) of earnings in reserve, which is more than the entire 447 trillion market capitalisation of the Topix. The market also foresees 107 basis points of easing next year, up from around 90 basis points early last week.

Persons: Wayne Cole, Treasuries, Cash, Christine Lagarde, Frank Elderson, Philip Lane, Fabio Panetta, Edmund Klamann Organizations: REUTERS, Staff, Nasdaq, Fed, Washington Post, Thomson Locations: Frankfurt, Germany, Wayne, China

☆ Italy to propose ex-minister Franco for ECB board, source says
▼ + stars: | 2023-08-20 | by ( ) www.reuters.com time to read: +2 min

Italy's Economy Minister Daniele Franco addresses a news conference after the G7 Summit in Koenigswinter, near Bonn, Germany May 20, 2022. REUTERS/Benjamin Westhoff/File photo Acquire Licensing RightsROME, Aug 20 (Reuters) - Italy will put forward former economy minister Daniele Franco as its candidate for the executive board of the European Central Bank (ECB), a source close to the matter said on Sunday. He was appointed economy minister in 2021 in Mario Draghi's unity government, helping Italy navigate the COVID-19 crisis and the turbulence caused by Russia's invasion of Ukraine. However, in a surprise move, Economy Minister Giancarlo Giorgetti decided instead to propose his predecessor, a source close to the matter told Reuters, confirming a report in Il Sole 24 Ore newspaper. The government had initially put Franco forward as the Italian candidate to lead the European Union's lending arm, the European Investment Bank (EIB).

Persons: Daniele Franco, Benjamin Westhoff, Fabio Panetta, Franco, Mario Draghi's, Piero Cipollone, Giancarlo Giorgetti, Giorgia Meloni, Crispian Balmer, Giuseppe Fonte, Christina Fincher, David Holmes Organizations: REUTERS, Rights, European Central Bank, ECB, Bank of Italy, European Investment Bank, Reuters, Thomson Locations: Koenigswinter, Bonn, Germany, Italy, Ukraine, France, Rome, Italian, Franco

☆ Analysis: ECB is on back foot and for once it's down to Germany
▼ + stars: | 2023-08-10 | by ( Francesco Canepa | ) www.reuters.com time to read: +6 min

The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, April 26, 2018. This is forcing a change of tune at the ECB -- from ruling out a pause in its steepest and longest streak of interest rate hikes to openly talking about one as soon as next month. Higher borrowing costs hurt manufacturers particularly hard because they depend on investment and no euro zone country has a larger industrial sector than Germany. "They've made a mistake in accentuating underlying inflation too much," said Carsten Brzeski, global head of macro for ING Research, said. And ECB board member Fabio Panetta then made the case for "persistence" in keeping rates high rather than raising them further.

Persons: Kai Pfaffenbach, Richard Portes, It's, Emperor Nicholas I of Russia, Ralph Solveen, Portes, They've, Carsten Brzeski, Ricardo Reis, Fabio Panetta, Francesco Canepa, Mark John, Christina Fincher Organizations: European Central Bank, REUTERS, ECB, London Business School, Berlin, ING Research, London School of Economics, ABN, AMRO, Thomson Locations: Frankfurt, Germany, FRANKFURT, Greece, Italy, China, Russia, United States, Portugal, Ireland, Spain, Cyprus, Europe, Ottoman Empire, Ukraine

☆ ECB is on back foot and for once it's down to Germany
▼ + stars: | 2023-08-10 | by ( Francesco Canepa | ) www.reuters.com time to read: +6 min

☆ Morning Bid: Bland China data leaves market hungry for stimulus
▼ + stars: | 2023-07-17 | by ( ) www.reuters.com time to read: +2 min

The Q2 GDP number of +0.8% q/q just pipped forecasts, but y/y undershot at 6.3% suggesting revisions somewhere to the past. The market reaction was disgruntled with Chinese shares down and the yuan easing. The data underlined the need for much more serious fiscal spending but Beijing seems in no hurry to satiate market wishes this time. The central bank left one-year rates unchanged on Monday, and analysts seem resigned to wait for a Politburo meeting later this month for fresh steps. Goldman Sachs says passive funds that track NDX will rebalance their portfolios but the 2011 special rebalance experience suggests the stock-level impact will be limited.

Persons: Wayne Cole, BofA, Goldman Sachs, Fabio Panetta, Christine Lagarde, Frank Elderson, Philip R, Jacqueline Wong Organizations: Investors, Aussie, Tesla, Nasdaq, Microsoft, Finance Ministers, Central Bank Governors, ECB, Federal Reserve Bank of New, Manufacturing Survey, Thomson Locations: Wayne, China, Beijing, 4ppt, Gandhinagar, India, Federal Reserve Bank of New York

☆ Euro holds ground on world stage despite Russia slashing use -ECB
▼ + stars: | 2023-06-21 | by ( ) www.reuters.com time to read: +3 min

The euro kept or even increased its share of the world's foreign exchange reserves (20.5%), international debt (22%) and loans (27.6%), as well as foreign exchange turnover last year, the report said. But the rouble's usage on the SWIFT system collapsed after Russian banks were disconnected from that network, the world's largest. It cited evidence from Europe itself, where the euro has replaced the dollar as an invoicing currency in countries neighbouring the euro zone since it was launched in 1999. "International currency status should not be taken for granted," ECB President Christine Lagarde said in a statement accompanying the report. The report also showed London remained the main venue for foreign exchange trading in euros and that Britain's importance for international financial activities in euros had not changed materially since Brexit.

Persons: renminbi, SWIFT, Christine Lagarde, Fabio Panetta, Francesco Canepa, Gareth Jones, Catherine Evans Organizations: European Central Bank, U.S ., European Union, London, Thomson Locations: FRANKFURT, Russia, China, India, Brazil, Ukraine, Europe

☆ Morning Bid: China disappoints again, fanning speculation on stimulus
▼ + stars: | 2023-06-07 | by ( ) www.reuters.com time to read: +2 min

For the record, exports posted a bigger-than-expected drop of 7.5% year-on-year, sending the trade surplus to a 13-month low, while imports remained mired in negative territory. Indeed, RBA Governor Philip Lowe was still explaining Tuesday's policy decision in a speech to bankers after the central bank wrong-footed economists who predicted there would be a rate pause for a second straight month. Expectations of a follow-up hike in July cushioned the Aussie from the weak Chinese trade numbers and Australia's own below-forecast first-quarter gross domestic product data. Stock markets in Asia were mixed, as were U.S. equity futures, following a slightly firmer finish on Wall Street. Light positioning could well persist into next week's lineup of major central bank meetings, as the earnings season draws to a close.

Persons: Sonali Desai China's, Philip Lowe, Fabio Panetta, Edouard Fernandez, Bollo, Luis de Guindos, Klaas, Sonali Desai, Edmund Klamann Organizations: Reuters, Bank, Bank of Canada, Stock, U.S, Thomson Locations: Beijing, Europe, Asia, Brussels

☆ ECB’s crisis tool works best if it’s never used
▼ + stars: | 2023-05-30 | by ( Rebecca Christie | ) www.reuters.com time to read: +8 min

BRUSSELS, May 30 (Reuters Breakingviews) - In the euro zone bond market, unlimited backstops are the cheapest. The European Central Bank has been trumpeting its ability to buy member states’ debt if it comes under attack from investors. The danger here is that too much divergence would lead the euro zone to fracture, creating a powder keg for crisis. The central bank has been deliberately quiet about exactly when and how it might activate the crisis tool, except to say it will be ready if necessary. They have noted that the euro zone central bank has a new instrument to combat any sharp increase in the differential between yields of euro zone government bonds.

Persons: Christine Lagarde, –, Lagarde, Fabio Panetta, hasn’t, there’s, Nils Redeker, Berlin’s Jacques Delors, Philip Lane, Francesco Guerrera, Oliver Taslic Organizations: Reuters, European Central Bank, ECB, Italy, Reuters Graphics Reuters, ECB won’t, Reuters Graphics, U.S . Federal, Silicon Valley Bank, Signature Bank, ”, European Union, Twitter, Thomson Locations: BRUSSELS, Frankfurt, Italy, Spain, Greece, Lithuania, Silicon, EU, Ukraine

☆ Morning Bid: Amazon cools, Intel warms, Japan hesitates
▼ + stars: | 2023-04-28 | by ( ) www.reuters.com time to read: +5 min

[1/2] A smartphone with a displayed Intel logo is placed on a computer motherboard in this illustration taken March 6, 2023. But the dramatic re-acceleration of Big Tech stocks this week - where the NYFANG+TM (.NYFANG) index of the top 10 Big Tech stocks is now up 37% so far this year - is competing with multiple macro narratives that are increasingly hard to read. With the Fed meeting in view, the release of March PCE price inflation data later on Friday tops the diary. Wall St stock futures fell back 0.4% after a wild ride in Amazon.com shares overnight. With much of Europe and Asia closed on Monday for the May Day bank holiday, Asia bourses advanced in Wall St's slipstream but Europe retreated sharply on some jarring corporate updates.

☆ Morning Bid: Fresh spur from Meta and Europe's banks
▼ + stars: | 2023-04-27 | by ( ) www.reuters.com time to read: +5 min

Perhaps even more surprising, Europe's big banks are wowing the gallery too - showing limited, if any, fallout from the failure of ailing Credit Suisse at the end of the quarter. And so the glass appears half full again despite background tensions around regional U.S. banks and as wider markets brace for several weeks of a U.S. debt ceiling standoff. With Amazon reporting later, its stock rose another 2% ahead of the bell too. The U.S. House of Representatives on Wednesday narrowly passed a bill to raise the government's $31.4 trillion debt ceiling that includes sweeping spending cuts over the next decade. The dollar was marginally weaker, with crude oil prices struggling to recover from their latest lunge lower this week.

☆ Morning Bid: Tech tally in focus, China alarms Europe
▼ + stars: | 2023-04-24 | by ( ) www.reuters.com time to read: +5 min

Otherwise, a packed earnings season dominates this week's investment radar as more than a third of S&P500 companies report. Including Intel (INTC.O), those five tech stocks have accounted for two-thirds of the S&P500's gains this year - with the Artificial Intelligence craze sparked by the emergence of ChatGPT adding a new non-cyclical attraction to the sector. But before markets get a taste of Q1 tech profits, the reverberations from last month's banking blow-up are still being absorbed. European stocks were slightly negative and U.S. stock futures also marginally in the red ahead of Wall Street's open. The dollar was mixed - up against Asian currencies but off against European currencies amid hawkish European Central Bank soundings on interest rates.

☆ Morning Bid: Singapore signals a peak for policy tightening
▼ + stars: | 2023-04-14 | by ( ) www.reuters.com time to read: +3 min

A look at the day ahead in European and global markets from Wayne Cole. Singapore's central bank sprang the surprise of the Asian day by halting its tightening cycle when markets had expected a sixth straight round of restraint. The Monetary Authority of Singapore (MAS) said there was enough currency appreciation - controlling the SGD is its primary policy tool - already in the pipeline to ensure inflation slowed sharply as the year progressed. It also sounded more downbeat on the economic outlook as GDP growth missed forecasts with a rise of just 0.1%. It made a five-month top on the yen, a 10-month peak on the Singapore dollar and a 17-month high on the Australian dollar.

☆ Morning Bid: Stocks defy negativity in CPI vigil
▼ + stars: | 2023-04-12 | by ( ) www.reuters.com time to read: +5 min

The Federal Reserve's interest rate stance hinges on incoming data such as Wednesday's consumer price report, but fears of recession remain just that. And so investors return to scrutinising the Fed to see if the central bank forces the recession by tightening ever further. With Fed policy meeting minutes due later in the day, the runes of what must have been a tense gathering of officials in the middle of the regional banking shock will be eyed closely. Minneapolis Fed President Neel Kashkari reckoned recession was still a risk but inflation wouldn't get back close to the 2% target until next year. Hong Kong stocks (.HSI) underperformed overnight - with geopolitical tensions high surrounding Taiwan and Chinese military operations around the island.

☆ Morning Bid: Leaning back to Fed hike, UK inflation jolt
▼ + stars: | 2023-03-22 | by ( ) www.reuters.com time to read: +5 min

Two weeks of U.S. and European banking stress and failures leaves the Federal Reserve and other major central banks in the unenviable position of choosing between stabilising financial systems and fighting still historically high inflation. On top of that, the latest quarterly economic projections from Fed policymakers may reveal a big dispersion of views. Beyond the Fed, the dire UK inflation reading seems to have solidified expectations of another BoE rate rise on Thursday and a further move later in the year. If nothing else, it underlines in red ink just how all central banks are totally dependent now on incoming data evidence on what's happening in the real economy. With the U.S. dollar lower across the board ahead of the Fed meeting, sterling hit its highest level since early February.

☆ Morning Bid: Bank rescue leaves Fed in a rate bind
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: +3 min

Given the strain on the U.S. banking system, investors were also wondering whether the Fed would really risk hiking interest rates by an outsized 50 basis points next week. Fed fund futures duly extended an early surge to completely price out the chance of 50 basis points, when this time last week it was priced at 72%. Yields on two-year Treasuries dived 19 basis points to 4.40%, and got as low as 4.34% at one stage. That brought the fall since Thursday to an astounding 66 basis points, the biggest three-session decline since the Black Monday crash of 1987. The ECB is still expected to go 50 basis points this week, but it will have to at least acknowledge the risks to financial stability, which could make it a dovish hike.

☆ Italy's Visco raps ECB colleagues in widening hawk-dove divide
▼ + stars: | 2023-03-08 | by ( Gavin Jones | ) www.reuters.com time to read: +2 min

ROME, March 8 (Reuters) - European Central Bank governing council member Ignazio Visco on Wednesday criticized some fellow policymakers for comments on future interest rates that diverged from what had been agreed at ECB meetings. "For this reason I don't appreciate comments by my colleagues regarding future and prolonged increases in rates," Visco added, in unusually blunt remarks that highlight a widening rift at the Frankfurt-based ECB. Visco said that while the ECB had managed to stabilise inflation expectations, geopolitical uncertainties meant economic developments were hard to predict. Other governing council members, considered policy hawks who attach overriding importance to curbing inflation even if it means hurting growth and employment, have gone further. The ECB has no policy meeting in April.

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