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☆ 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

☆ 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

☆ 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: 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.

☆ ECB confronts a cold reality: companies are cashing in on inflation
▼ + stars: | 2023-03-02 | by ( Francesco Canepa | ) www.reuters.com time to read: +9 min

"It's clear that profit expansion has played a larger role in the European inflation story in the last six months or so," said Paul Donovan, chief economist at UBS Global Wealth Management. "The ECB has failed to justify what it's doing in the context of a more profit-focused inflation story." Instead, national accounts and earnings reports from listed companies are being used as proxies to paint the inflation picture. "The main story of the risks going forward is still that there's a looming wage-price spiral which should make the central bank even more aggressive in hiking interest rates." loadingloadingEven inside the ECB, labour representatives demanding higher pay for central bank staff have distanced themselves from what they described as the institution's "anti-worker bias".

"Markets are priced for perfection," Schnabel, the head of the ECB's market operations, told Bloomberg. Money markets now show investors betting on a peak ECB rate at around 3.75% by late summer, up from levels around 3.4% earlier this month, as a string of hawkish ECB comments in recent days unwound earlier bets. He and fellow board member Fabio Panetta said the impact of many of the ECB's rate hikes so far had yet to be felt by the economy, with the latter calling for "small steps" going forward. The ECB raised rates by 50 basis points this month and pre-announced another increase of the same size for March 16. But it kept an open mind about future moves, with most policymakers expecting another rate hike in May.

☆ Morning Bid: Growth trumps rates
▼ + stars: | 2023-02-16 | by ( ) www.reuters.com time to read: +6 min

While there were some questions about seasonal adjustments in the data, economists were impressed that sales growth was pretty broad based and have scrambled to re-crunch first quarter U.S. output forecasts as a result. There may be a more mixed picture from Thursday's data slate on producer prices, housing starts and weekly jobless claims. Even though rates futures and Treasury yields ticked back a bit today, pricing now has Fed policy rates moving as high as 5.25% and staying above 5% all year. And while full-year earnings growth estimates for S&P500 companies have sunk to zero, consensus forecasts are now pencilling in a rebound of almost 12% next year. Uncertainty about the pace of growth and annual tax receipts in April makes it difficult for government officials to predict the exact "X-date", it said.

☆ ECB's Panetta calls for small rate hikes as inflation falls
▼ + stars: | 2023-02-16 | by ( ) www.reuters.com time to read: +2 min

LONDON, Feb 16 (Reuters) - The European Central bank should start raising its interest rates in smaller increments and avoid committing to future moves as inflation in the euro zone falls, ECB board member Fabio Panetta said on Thursday. "With rates now moving into restrictive territory, it is the extent and duration of monetary policy restriction that matters," Panetta told an event in London. Financial markets expect the ECB to increase the rate it pays on bank deposits to at least 3.5% by the summer, from 2.5% currently. Panetta also predicted that core inflation, which has become the key variable in the ECB's debate, "would eventually follow" headline inflation in falling and there was no evidence of price expectations getting out of control despite rising wages. He also called for a "a measured approach" to the ECB's unwinding of its bond holdings, which Knot and Nagel, among others, want to accelerate.

This would take the rate the ECB pays on bank deposits to the highest level since November 2008, after a steady climb from a record low of -0.5% in July. Reuters GraphicsThe ECB said in December that rates would be increased "at a steady pace" until it is happy inflation is heading back down to its 2% target. BNP Paribas also thought the ECB might take out the reference to a "steady pace" of rate hikes or offset it so that a 50-basis-point increase would be "not predetermined (but) still a possible outcome". And an ECB survey showed banks were tightening access to credit by the most since the 2011 debt crisis - usually the harbinger of lower growth and slowing inflation. To some observers, this meant the ECB would be wise not to commit to any future policy move.

☆ The European Central Bank says it'll 'stay the course' on rate hikes. But it's not clear for how long
▼ + stars: | 2023-01-26 | by ( Silvia Amaro | ) www.cnbc.com time to read: +1 min

European Central Bank President Christine Lagarde has repeatedly used the phrase "staying the course" when referring to upcoming rate decisions, but some market watchers doubt the bank will keep its hawkish stance for much longer. The ECB entered tightening mode last year with four rate hikes in an attempt to control high inflation across the euro zone. But ECB watchers are asking: for how long? "The size of those rate hikes will depend on the inflation outlook. ECB Executive Board Member Fabio Panetta reportedly said earlier this week that the central bank should not pre-commit to any specific rate moves beyond its March meeting.

☆ Digital euro will be free but limited in scope, ECB says
▼ + stars: | 2023-01-23 | by ( ) www.reuters.com time to read: +2 min

"The digital euro would be a public good," Panetta told the European Parliament's Committee on Economic and Monetary Affairs. "It would therefore make sense for its basic services to be free of charge – for example when using the digital euro to pay another person, as is the case for cash." If issued, the ECB could develop its own standalone app for payments or may allow commercial banks to integrate the digital euro into their own platforms. "The ECB would not set any limitations on where, when or to whom people can pay with a digital euro," Panetta said. The ECB is still only investigating the creation of a digital euro and actual issuance is still years away.

☆ Expansionist dreams threaten ECB digital euro plan
▼ + stars: | 2023-01-17 | by ( Rebecca Christie | ) www.reuters.com time to read: +4 min

The idea of a digital euro with the same reserve backing as its physical equivalent is thus partly about Frankfurt controlling the process. At best, a digital euro could bring more citizens into the banking system, particularly those who don’t have enough money for traditional financial services products. That jars with central bankers’ preference to limit the digital euro to the EU at first. The euro does not need a digital currency, but its members have signalled they want one. Reuters GraphicsFollow @rebeccawire on TwitterCONTEXT NEWSEuro area finance ministers issued a statement on the so-called digital euro on Jan. 16, calling for political oversight and an international approach of a European central bank digital currency (CBDC).

☆ Morning Bid: Let it go
▼ + stars: | 2023-01-16 | by ( ) www.reuters.com time to read: +2 min

A look at the day ahead in European and global markets from Anshuman DagaThe land of rising yields is the No. 1 focus of investors on Monday, as Japan's central bank may again let its bond-market peg go higher. Global inflation data due this week could underscore investors' expectations that the worst of the global price squeeze is over. A final read of euro zone inflation for December, as well as readings from Britain, Canada and Japan are due. Core inflation in all four regions is mostly rising and above target but the worst may have passed.

☆ European shares edge up on pharma boost, UK's FTSE 100 nears record-high
▼ + stars: | 2023-01-16 | by ( Bansari Mayur Kamdar | ) www.reuters.com time to read: +3 min

The pan-European STOXX 600 (.STOXX) gained 0.1% in early trading, boosted by a 0.8% rise in healthcare stocks (.SXDP). UK's FTSE 100 (.FTSE) rose 0.1% to 7,852.84, inching closer to a record 7,903.50. "Investors appear to have fallen back in love with UK assets, after a difficult period when FTSE 100 was the wallflower among global indices," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. Weakness in luxury heavyweights such as LVMH (LVMH.PA) and Hermes International (HRMS.PA) weighed on Europe's STOXX 600 on Monday. German arms maker Rheinmetall (RHMG.DE) gained 2.9% on acquiring a stake in Dutch IT hardware specialist Incooling B.V.

☆ Morning Bid: Crude deflation?
▼ + stars: | 2022-12-07 | by ( ) www.reuters.com time to read: +4 min

With everyone on Wall St seemingly hand wringing about stagflation next year, the price of crude oil has plummeted by up to 10% this week to its lowest since early January - offering some relief in an otherwise murky outlook. Crucially for inflation worriers, year-on-year crude price gains - which were running at 50-100% between February's Ukraine invasion and midyear - have now fallen to just 4% and could soon be a disinflationary force in consumer price baskets. But, contrary to many prior energy market assumptions, the impact of Monday G7's Russian oil price cap at $60pb for seaborne crude is anchoring prices and underscoring massive discounts for Russia oil - already selling for as low as $55pb. The Bank of Canada is the latest on the list on Wednesday and expected to hike rates by another half point, as are the Federal Reserve, European Central Bank and Bank of England next week. European and Asia bourses - even Shanghai and Hong Kong despite the lifting COVID restrictions - were in negative territory too.

☆ ECB seeks urgent regulation after multiple crypto bubbles burst
▼ + stars: | 2022-12-07 | by ( ) www.reuters.com time to read: +2 min

Crypto investors suffered a series of blows this year from the collapse of the FTX exchange, to the crash of stablecoin TerraUSD and the decline of Bitcoin. It is like froth: multiple bubbles are bursting one after another," Panetta said in a speech in London. Unbacked crypto assets are a form of financial gambling without any socially or economically useful function, so the task is to thwart criminal activity, protect unassuming investors and save a financial system that may become increasingly intertwined with crypto assets, Panetta said. The links between the crypto market and the financial system could strengthen, especially if major tech companies enter the sector, meaning regulation is urgently required, Panetta said. Regulatory efforts should be directed primarily at preventing the use of crypto-assets to circumvent financial regulation and in shielding the mainstream financial system from crypto risks, Panetta said.

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