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The stakes are high as it potentially affects the future use and effectiveness of extraordinary monetary policies such as bond-buying 'quantitative easing' (QE) and questions the wider political independence of central bank policymaking. The European Central Bank, Bank of England and U.S. Federal Reserve are all - to differing degrees - now facing a backwash from years of policy-driven but lucrative balance sheet expansion. As they lift interest rates, that balance sheet burns a hole in their pockets - or more particularly the pockets of their governments long used to windfalls coming the other way. That will surely climb as the BoE is expected to at least double its policy rate, the rate paid on bank reserves, by May. G4 central bank balance sheetsThe easy-money era is overReuters Graphics Reuters GraphicsThe opinions expressed here are those of the author, a columnist for Reuters.

Technology stocks (.SX8P) fell 1.8% to lead sectoral losses in Europe after their U.S. peers were dragged down by weak results from Microsoft Corp (MSFT.O) and Alphabet Inc (GOOGL.O). The European banking index (.SX7P) fell 0.7%. read moreItaly's UniCredit (CRDI.MI) was a rare bright spot as its shares rose 3.9% after the bank raised its 2022 profit goal. "Nonetheless, we are likely to see some hesitation, with the economic implications of rising interest rates yet to be felt. read moreReporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur and Saumyadeb ChakrabartyOur Standards: The Thomson Reuters Trust Principles.

☆ UniCredit ups 2022 profit goal after Q3 earnings beat
▼ + stars: | 2022-10-26 | by ( Valentina Za | ) www.reuters.com time to read: +2 min

MILAN, Oct 26 (Reuters) - Italy's No.2 bank UniCredit (CRDI.MI) on Wednesday raised its 2022 profit goal above 4.8 billion euros ($4.8 billion), helped by higher interest rates and lower loan loss provisions that also drove quarterly earnings above forecasts. UniCredit posted a profit for July-September of 1.71 billion euros, well above analysts' consensus forecast of 1.00 billion euros provided by the bank. UniCredit had already improved its 2022 guidance in July, indicating a net profit target of around 4 billion euros. Quarterly earnings were also boosted by much higher than expected trading income, which UniCredit said had been helped by companies' demand for hedging products. The erosion reflects a second share buyback UniCredit is carrying out as it hits a goal of returning 3.75 billion euros of last year's earnings to shareholders.

And Italy's UniCredit (CRDI.MI) raised its 2022 profit goal, helped by higher interest rates and lower loan loss provisions that also drove quarterly earnings above forecasts. For years, banks bemoaned ultra loose monetary policy, but now higher interest rates means banks can start to benefit from the increased gap between what they charge borrowers and what they pay savers. Standard Chartered's third-quarter profit surged 40% as higher interest rates boosted the emerging markets-focused bank's income, giving it ammunition to upgrade its revenue outlook despite a weakening global economy. For Santander, higher loan loss provisions in key markets like Brazil and the United States overshadowed better than expected third-quarter earnings. While benefiting from higher interest rates, banks also face the unwinding of a scheme that buoyed their profits for years.

☆ Russia bans dealing in capital of 45 foreign-owned banks or banking units
▼ + stars: | 2022-10-26 | by ( ) www.reuters.com time to read: +1 min

[1/3] The logo of Swiss bank Credit Suisse is seen at its headquarters in Zurich, Switzerland October 4, 2022. REUTERS/Arnd WiegmannSummarySummary Companies This content was produced in Russia where the law restricts coverage of Russian military operations in UkraineMOSCOW, Oct 26 (Reuters) - Russia on Wednesday banned dealings in the shares or share capital of 45 banks or banking units, all either owned by parties in countries that Russia terms "unfriendly" or owned through foreign capital. Western countries and allies, including Japan, have piled financial restrictions on Russia since it sent troops into Ukraine in late February. Moscow retaliated with obstacles for Western businesses and their allies leaving Russia, and in some cases seized their assets. read more read more read moreReporting by Reuters; Editing by Louise HeavensOur Standards: The Thomson Reuters Trust Principles.

☆ Delayed, not denied
▼ + stars: | 2022-10-25 | by ( ) www.reuters.com time to read: +2 min

Markets have welcomed Sunak's appointment, with sterling creeping towards a one-month high and gilts rallying on the news. Register now for FREE unlimited access to Reuters.com RegisterMeanwhile, the did-they-or-didn't-they question around yen intervention continues. The beaten-down currency traded at 148.81 per dollar following two consecutive days of suspected Bank of Japan intervention straddling the weekend. Japanese Finance Minister Shunichi Suzuki insists the two policy objectives - monetary easing to get wage growth up and intervention to defend the yen - are not contradictory. ($1 = 0.8853 pounds)Register now for FREE unlimited access to Reuters.com RegisterReporting by Ankur Banerjee; Editing by Edmund KlamannOur Standards: The Thomson Reuters Trust Principles.

☆ Morning Bid: Delayed, not denied
▼ + stars: | 2022-10-25 | by ( ) www.reuters.com time to read: +2 min

"When you run a business, if you keep hearing on the news that gas supplies are at risk, you've got to do something. It's not like you can start screaming and stamping your foot when they actually do halt flows for two hours a day," Checchi told Reuters. Higher prices contributed to the 16.2% rise in manufacturing turnover Italy reported in July on a calendar adjusted basis, but volumes also increased by 1.7%. "We invested 10 million euros to build two cogeneration plants and save 4 million euros this year," he said, adding Italcer saved another million by reducing the tiles' thickness to 8.5 from 10 millimetres. Italian business lobby Confindustria has warned of an "economic earthquake", saying the new government will struggle to offset the hit from energy prices on firms like Draghi managed to do without hurting Italy's fragile public finances.

The entrance to the headquarters of Monte dei Paschi di Siena (MPS), the oldest bank in the world, in Siena, Italy, August 11, 2021. Rome failed to meet an initial EU deadline when talks to sell MPS to UniCredit (CRDI.MI) collapsed a year ago. One of the sources said UniCredit and Banco BPM are still seen in Rome as the best options for MPS. Investor commitments cover more than half of the up to 900 million euro portion of MPS's share sale that will not be funded by the state. Five years after spending 5.4 billion euros to rescue MPS Italy is having to pump another 1.6 billion euros into the bank.

☆ Economist discusses UK economy and fiscal measures
▼ + stars: | 2022-10-18 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailJeremy Hunt's announcement on restoring macro stability doesn't change the growth outlook: EconomistDaniel Vernazza, UniCredit's chief international economist, discusses the country's recent economic turmoil, and how the reversal of Prime Minister Liz Truss' "mini-budget" is likely to affect its outlook.

☆ Liz Truss' 'trickle-down economics' is dead. Now the UK faces an uncertain future
▼ + stars: | 2022-10-18 | by ( Sam Meredith | ) www.cnbc.com time to read: +4 min

Britain's Prime Minister Liz Truss holds a press conference in the Downing Street Briefing Room in central London on Oct. 14, 2022. Daniel Leal | Afp | Getty ImagesLONDON — Just six weeks into U.K. Prime Minister Liz Truss' tenure and the political future of yet another Conservative leader looks to be in jeopardy. The approach has been sharply criticized by U.K. political opponents — and even U.S. President Joe Biden — at a time when Britain faces a deepening cost-of-living crisis. However, analysts at political risk consultancy Eurasia Group assign only a 10% possibility that Truss is able to hold on as prime minister. "The consensus at Westminster is now that that the Prime Minister is so weak that she can do nothing without the assent of her Chancellor.

By late on Wednesday six banks, including global coordinators Bank of America (BAC.N), Citigroup (C.N), Credit Suisse (CSGN.S) and Mediobanca (MDBI.MI), had signed the guarantee contract, the sources said. Five years after an 8.2 billion euro ($8 billion) bailout that handed the state its 64% stake, MPS plans to raise the extra cash to lay off staff and bolster capital. The eight banks due to underwrite the MPS issue are willing to backstop only a third of the 900 million euro private portion of the capital raising, one of the sources said. MPS CEO Luigi Lovaglio had until recently not produced the written commitments, triggering a race in the last few days to get all the necessary documents signed. The Tuscan bank has so far secured support from its insurance partner AXA (AXAF.PA), local banking foundations and asset manager Anima Holding (ANIM.MI).

☆ Euro zone bond yields rise, focus on UK gilts, inflation data
▼ + stars: | 2022-09-29 | by ( Stefano Rebaudo | ) www.reuters.com time to read: +3 min

Sept 29 (Reuters) - Euro zone government bond yields rose on Thursday as German data shifted the market focus to surging inflation, while gilt investors resumed selling after the Bank of England (BoE) stepped in to quell a storm the day before. Register now for FREE unlimited access to Reuters.com RegisterGermany's 10-year government bond yield , the benchmark of the bloc, rose 11 basis points (bps) to 2.25%. The UK 10-year gilt yield rose 16 bps to 4.16%, after falling almost 50 bps the day before. Italy's 10-year government bond yield rose 9 bps to 4.67%, after hitting its highest level since February 2013 at 4.927% the day before. Analysts said that while Italian politics do not affect the bond market much, the main worries for Italian bond investors are a possible quantitative tightening by the ECB and a further rise in inflation across the euro area.

☆ Euro zone yields fall from multi-year highs tracking UK gilts
▼ + stars: | 2022-09-28 | by ( Stefano Rebaudo | ) www.reuters.com time to read: +3 min

Sept 28 (Reuters) - Euro zone borrowing costs fell on Wednesday, tracking moves in British gilts, after hitting multi-year highs amid monetary tightening expectations and concerns about potentially growing bond supply due to more public spending. The euro area bond market has recently trailed yields in British gilts, which recorded their sharpest rise in decades in response to new finance minister Kwasi Kwarteng's tax cuts and borrowing plans. The German yield curve steepened after being close to inversion last week, with the gap between 2- and 10-year yields hitting an almost 3-week high of 42.7 bps. The jump of yields in British gilts also widened yield spreads between core and peripheral government bonds. gilt&spreadItaly's 10-year bond yield was down 13 bps to 4.6%, after hitting its highest since February 2013 at 4.927%, with the spread between Italian and German 10-year yields tightening to 243 bps.

☆ Market reaction to Italy election
▼ + stars: | 2022-09-26 | by ( ) www.reuters.com time to read: +3 min

Leader of Brothers of Italy Giorgia Meloni reacts at the party's election night headquarters, in Rome, Italy September 26, 2022. read moreFollowing is some of the initial reaction from market observers:LUCA CAZZULANI, HEAD OF STRATEGY RESEARCH; LOREDANA MARIA FEDERICO, CHIEF ITALIAN ECONOMIST, UNICREDIT"We expect a rather muted market reaction in terms of BTPs credit spread in the short term, as the election outcome was broadly in line with expectations. Some short covering is possible given investors entered the election moderately short BTPs and as the risk scenario of a landslide victory by the right is priced out. "The market knew this was how it was going to end and will remain focused at this stage on economic growth, monetary policy tightening and public finances, which remain a slippery slope for Italy." Register now for FREE unlimited access to Reuters.com RegisterReporting by Italy bureau and London Markets Team; Compiled by Agnieszka FlakOur Standards: The Thomson Reuters Trust Principles.

☆ Italy's right-wing bloc wins election: five questions for markets
▼ + stars: | 2022-09-26 | by ( ) www.reuters.com time to read: +6 min

REUTERS/Guglielmo MangiapaneMILAN/LONDON, Sept 26 (Reuters) - Italy's right-wing bloc should have a solid majority in both houses of parliament following Sunday's election, potentially giving the country a rare chance of political stability after years of upheaval and fragile coalitions. The absence of the anti-euro rhetoric seen in the 2018 election had reassured investors in the run-up to the vote. With markets watching closely, we take a look at five key questions on the radar. Reuters Graphics2/ Could Italy's EU funding plan be modified? The Brothers of Italy sees room to amend Italy's EU-backed recovery fund programme to account for the energy shock.

☆ Market reaction to Italy election outcome
▼ + stars: | 2022-09-26 | by ( ) www.reuters.com time to read: +6 min

Leader of Brothers of Italy Giorgia Meloni reacts at the party's election night headquarters, in Rome, Italy September 26, 2022. It last traded at 234 basis points. "Today's upward movement is a continuation of the market reaction seen on Friday after Britain's mini-budget and sounds like a warning to the eurozone countries as well." LUCA CAZZULANI, HEAD OF STRATEGY RESEARCH; LOREDANA MARIA FEDERICO, CHIEF ITALIAN ECONOMIST, UNICREDIT"We expect a rather muted market reaction in terms of BTPs credit spread in the short term, as the election outcome was broadly in line with expectations." We continue to expect the 10-year BTP-Bund spread to trade close to 250 basis points until year end."

☆ Factbox: Companies potentially affected by Italy's election
▼ + stars: | 2022-09-25 | by ( ) www.reuters.com time to read: +5 min

A woman walks at a polling station during the snap election in Rome, Italy September 25, 2022. read moreHere is a list of companies that could be affected by the outcome of the election. The change of government and calls by Meloni to revisit Italy's national recovery plan could threaten Italy's ability to meet the commitments to which European Union post-pandemic funds are tied. Brothers of Italy welcomed CDP's decision to wait for the election before filing its non-binding bid for TIM's network. read moreBrothers of Italy has called for the new government to be allowed to make a final decision on ITA.

The logo of Monte dei Paschi di Siena bank is seen in a bank entrance in Rome, Italy August 16, 2018. Closer ties could hamper MPS' future search for a merger partner as the state seeks to cut its 64% stake. The banks organising the stock issue, however, have long seen the need for cornerstone investors, sources had previously said. Anima could contribute up to 250 million euros towards MPS' capital raise, when including an upfront payment for the improved partnership terms, a source had previously said. The state is allowed to cover 64% of MPS' capital raise based on the size of the stake it acquired after a 2017 bailout.

☆ UniCredit focused on "internal delivery", open to M&A in all its markets
▼ + stars: | 2022-09-21 | by ( ) www.reuters.com time to read: +1 min

REUTERS/Dado Ruvic/Illustration/File PhotoROME, Sept 21 (Reuters) - UniCredit (CRDI.MI) is focused on delivering targets set under its business plan, though it remains ready to seize M&A opportunities in all the markets where it operates, CEO Andrea Orcel said on Wednesday. read moreOrcel said he had not deviated from his standard message that M&A can provide a way to accelerate growth in all the markets where UniCredit is present if opportunities arise "at the right conditions." "We're a lot more focused on internal delivery," he said. "When I took this job, UniCredit's stance was 'no M&A' while I said that at the right conditions M&A can be an accelerator. This, together with the fact that I've done my fair share of M&A deals in the past, made everyone think we would do deals, that a financial tsunami was on the cards."

☆ Unicredit CEO eyes acquisitions in Germany -Handelsblatt
▼ + stars: | 2022-09-20 | by ( ) www.reuters.com time to read: +1 min

The headquarters of UniCredit in downtown Milan, Italy, February 4, 2016. REUTERS/Stefano Rellandini/File PhotoBERLIN, Sept 20 (Reuters) - UniCredit (CRDI.MI) is eyeing acquisitions in Germany as part of plans by Italy's second-biggest bank to become a fully developed European bank, Chief Executive Andrea Orcel told German daily Handelsblatt on Tuesday. "A significant increase in our market share in Germany would be good for Unicredit as a whole," he said, according to the paper, adding that mergers and acquisitions could be an accelerator and create added value under the right conditions. read more"There was no closer communication on this," he replied, when asked about the talks with the No. Register now for FREE unlimited access to Reuters.com RegisterWriting by Miranda Murray; Editing by Clarence FernandezOur Standards: The Thomson Reuters Trust Principles.

☆ Dollar firm as Fed headlines big week for central banks
▼ + stars: | 2022-09-19 | by ( Dhara Ranasinghe | ) www.reuters.com time to read: +3 min

U.S. One dollar banknotes are seen in front of displayed stock graph in this illustration taken, February 8, 2021. Still, world stock markets remained on edge and the dollar maintained its firm tone, given expectations that the Fed would maintain its aggressive rate-hike path to contain uncomfortably high inflation. "The Fed is not close to being done and that is supportive for the dollar." Markets fully price in a 75 basis point Fed rate hike this week and a roughly 20% chance of a 100 bps increase. read moreCanada's dollar fell to its lowest in almost two years at 1.3324 per U.S. dollar .

☆ JPMorgan, Deutsche Bank, and other major European banks are turning off hot water, stopping fountains, and preparing diesel generators as Russia chokes the energy supply
▼ + stars: | 2022-09-07 | by ( Kate Duffy | ) www.businessinsider.com time to read: +3 min

Big banks in Europe are preparing for an energy crisis as Russia tightens the gas taps, per Reuters. JPMorgan may use diesel generators, while Deutsche Bank turned off fountains and hot water. The German banking giant Deutsche Bank told Reuters it was switching off hot water in bathrooms, changing the temperature in offices, and turning off the fountain outside its main office in Frankfurt. The bank also told the publication it was switching off lit-up outdoor ads and some lighting inside its workplaces overnight. The Swiss insurer Zurich told Insider it planned to turn off office lights overnight and stop using decorative features that use energy, including fountains.

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