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☆ Morning Bid: Caution the watchword for inflation tests
▼ + stars: | 2023-08-07 | by ( ) www.reuters.com time to read: +3 min

[1/2] Produce is seen at El Progreso Market in the Mount Pleasant neighborhood of Washington, D.C., U.S., August 19, 2022. REUTERS/Sarah Silbiger/File PhotoA look at the day ahead in European and global markets from Wayne Cole. It's been a slow start in Asia, with little in the way of market-moving news over the weekend. Both Bank of America and JPMorgan last week ditched their forecasts for a U.S. recession and embraced the soft landing theme. Inflation figures from the United States and China will be major tests for investors this week.

Persons: Sarah Silbiger, Wayne Cole, It's, Walt Disney, Huw Pill, Raphael Bostic, Michelle Bowman, Edmund Klamann Organizations: El Progreso Market, Washington , D.C, REUTERS, Nasdaq, Bank of Japan, Bank of America, JPMorgan, U.S, CPI, New Corp, Fox, Sony, Bank of England's, Atlanta Fed, Thomson Locations: Mount Pleasant, Washington ,, Wayne, Asia, U.S, United States, China, Beijing, Japan

☆ Bank of England set to raise rates to 5.25% as high inflation persists
▼ + stars: | 2023-07-28 | by ( David Milliken | ) www.reuters.com time to read: +5 min

Expectations for peak BoE rates reached 6.5% on July 11 after data showed record wage growth. But they fell back after a bigger-than-expected decline in consumer price inflation. Still, that inflation rate is nearly four times the BoE's 2% target and double the rate in the United States. Following the end of Silvana Tenreyro's tenure on the BoE's Monetary Policy Committee, fellow external member Swati Dhingra is likely to be alone in making the case that producer price inflation - rather than wage growth - is a better guide to future consumer price inflation trends. Annual producer price inflation fell to 0.1% in June, its lowest since December 2020, down from a high of nearly 20% last July, which it hit just a few months before CPI peaked at 11.1%.

Persons: BoE, Andrew Goodwin, BoE Governor Andrew Bailey, Dave Ramsden, Ramsden, Peter Schaffrik, Cathal Kennedy, Silvana Tenreyro's, Swati Dhingra, Megan Greene, Bailey, Huw Pill, David Milliken, Kirsten Donovan Organizations: Bank of England, U.S . Federal Reserve, European Central Bank, Oxford Economics, Reuters, MPC, HSBC, RBC, Committee, Kroll Institute, Tenreyro, Monetary, Thomson Locations: Britain, United States, Germany

☆ Morning Bid: Get ready for the debt ceiling rally
▼ + stars: | 2023-05-18 | by ( ) www.reuters.com time to read: +3 min

A look at the day ahead in European and global markets from Kevin BucklandEuropean shares look poised to rally after a wave of optimism that a U.S. debt ceiling deal could be reached as soon as the weekend, which lifted stocks on Wall Street and in Asia. Analysts highlighted how both parties agreed to new, smaller teams to continue negotiations, which they took as a sign that discussions have moved to a more advanced stage. Cash available at the U.S. Treasury general account, used to pay for all official U.S. obligations, is draining fast as extraordinary measures are exhausted, pending a debt ceiling deal to raise the limit. The Nasdaq is on the cusp of a 13-month peak, and the Dax is hovering near its highest since January of last year. Reporting by Kevin Buckland; Editing by Edmund KlamannOur Standards: The Thomson Reuters Trust Principles.

☆ AMERICAS Debt cap tick-tock leaves eerie calm
▼ + stars: | 2023-05-12 | by ( ) www.reuters.com time to read: +4 min

The issue dominated much of the G7 finance chiefs meeting in Japan. Dimon claimed any technical default could cause financial panic and JPMorgan had convened a 'war room' internally to deal with the issue. "It's very unfortunate, it's time-consuming, hopefully it won't happen, but it affects contracts, collateral, clearing houses, clients," Dimon said. Chinese stocks underperformed, with the G7 meeting mulling restrictions on investment to the world's second-biggest economy. Bank of England chief economist Huw Pill speaksReuters GraphicsJobless claimsReuters GraphicsReuters GraphicsBy Mike Dolan, editing by Christina Fincher, <a href="mailto:mike.dolan@thomsonreuters.com" target="_blank">mike.dolan@thomsonreuters.com</a>.

☆ Bank of England poised to raise rates again to tackle stubborn inflation
▼ + stars: | 2023-05-10 | by ( William Schomberg | ) www.reuters.com time to read: +4 min

Investors are fully pricing in another quarter-of-a-percentage point increase in Bank Rate, taking the BoE's benchmark rate to 4.5%, when the Monetary Policy Committee (MPC) announces the outcome of its May policy meeting at 12 p.m. (1100 GMT). Markets' main focus will be any signals from the BoE about the likelihood of further rises in the months ahead. "We expect that the Bank will only start to reduce rates from 2024 Q2 given resilient growth momentum," Goldman Sachs economist James Moberly told clients this week. "We have to be very alert to any signs of persistent inflationary pressures," Bailey said on March 27, before the latest round of data showed inflation fell less than expected. Last week, the U.S. Federal Reserve and the European Central Bank both raised their benchmark borrowing rates by 25 basis points.

☆ Inflation’s real benefits beat theoretical costs
▼ + stars: | 2023-05-05 | by ( Felix Martin | ) www.reuters.com time to read: +7 min

Yet economic theory has a remarkably hard time identifying the social costs imposed by a rising price level. A more serious charge is the uncertainty that rising prices introduce into financial planning. If the theoretical costs of inflation are elusive, the potential advantages it has to offer are more concrete. U.S. house prices, meanwhile, peaked last year at a full 45% higher in real terms than when Rogoff made his plea. In the end, the practical benefits of inflation will trump its theoretical costs.

☆ Ending the retailers’ crisis has a high price tag
▼ + stars: | 2023-05-02 | by ( Aimee Donnellan | ) www.reuters.com time to read: +5 min

BARCELONA, May 2 (Reuters Breakingviews) - High-street retailers are facing a heavy bill to weather the cost-of-living crisis. The cost of heating stores and staff requests for pay rises are squeezing operating margins at top players like H&M (HMb.ST) and Next (NXT.L). Shrinking disposable income is making it hard for these retailers to boost sales to protect margins. Most bricks-and-mortar retailers trade on higher multiples than they did before the war in Ukraine sparked soaring inflation. But that leaves a squeezed middle of retailers like H&M exposed to the brunt of the retail crisis.

☆ Bank of England policymakers consider 12th straight rate hike
▼ + stars: | 2023-05-02 | by ( ) www.reuters.com time to read: +3 min

LONDON, May 2 (Reuters) - The Bank of England is weighing up whether to raise interest rates for the 12th meeting in a row next week as it continues to grapple with an inflation rate that remains above 10%, higher than in any other big, rich economy. Following is a summary of recent comments by members of the Monetary Policy Committee. If they become evident, further monetary tightening would be required. JON CUNLIFFE, DEPUTY GOVERNORHas not commented on monetary policy in recent months. MPC MEMBERS WHO VOTED IN MARCH TO STOP RAISING RATESSILVANA TENREYRO, EXTERNAL MPC MEMBERApril 14: "We need to be patient (to see the effects of past rate increases).

☆ Brits need to accept they are now poorer, Bank of England chief economist says
▼ + stars: | 2023-04-26 | by ( Jenni Reid | ) www.cnbc.com time to read: +2 min

LONDON — Companies and workers are trying to pass the impact of inflation onto each other — and that risks persistent inflation, according to Huw Pill, the Bank of England's chief economist. "What we're facing now is that reluctance to accept that yes we're all worse off, we all have to take our share," Pill said on an episode of Columbia Law School and the Millstein Center's "Beyond Unprecedented" podcast, released on Tuesday. That has been followed by adverse weather and an outbreak of avian flu driving up food prices. The U.K. imports nearly half its food. "If what you're buying has gone up a lot relative to what you're selling, you're going to be worse off," Pill said.

Inflation, which hit a 41-year high of 11.1% in October, continued to eat into the spending power of workers whose pay is rising by less. Britain's headline inflation rate is now the highest in western Europe and compares with an average of 6.9% in the euro zone and 5.0% in the United States. Austria recorded a higher inflation rate than Britain in February. Reuters GraphicsPOLITICAL PRESSUREHigh inflation is a problem for Britain's government as well as the BoE, which forecast in February that inflation would be below 4% by the end of the year. Producer price inflation - which measures changes in prices charged and paid by manufacturers and often leads changes in CPI - tumbled in March due to lower oil prices.

☆ Marketmind: Dollar skids, China revs
▼ + stars: | 2023-04-13 | by ( ) www.reuters.com time to read: +4 min

The dollar's DXY index - the Swiss franc hit its strongest level in more than two years. Taking in all the information, futures markets still show a near 75% chance of another quarter point rate rise to the 5.0-5.25% range in May, but more than 60 basis points of cuts from there to yearend. Two-year Treasury yields were stuck at 4%, with producer price inflation and weekly jobless up next on Thursday's data calendar. European markets were further pepped by reports the European Central Bank was minded to downsize its rate hikes to a quarter point in May after six successive half point moves. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Reuters GraphicsNOTHING 'BROKEN' YETInternational economic officials gathering in Washington this week for the IMF and World Bank spring meetings can take some comfort that pandemic-era risks are continuing to diminish. An aggressive year of central bank rate hikes hasn't yet "broken" any of the economies involved, with the U.S. unemployment rate at 3.5%, near its lowest level since the late 1960s. Still, that terminal rate remains unclear, and the end of synchronized tightening by the Fed, BoE and European Central Bank doesn't mean tight monetary policy is going away. Wages, services and food are driving price growth to the point that the ECB's attention has shifted almost entirely to underlying inflation on fears that rapid price growth is at risk of getting stuck above target. The U.S. central bank is expected to increase its benchmark overnight interest rate by another quarter of a percentage point next month, and signal whether more hikes may be warranted.

☆ Morning Bid: Markets brush off OPEC as factories stall
▼ + stars: | 2023-04-04 | by ( ) www.reuters.com time to read: +5 min

A look at the day ahead in U.S. and global markets from Mike DolanRelatively calm world markets have brushed off OPEC's latest twist and focussed more squarely on stalled global manufacturing and edgy U.S.-China relations. Crude oil prices held much of Monday's pop higher on the surprise weekend production cut by the Organization of Petroleum Exporting Countries. But Brent crude remains below levels seen just before the Silicon Valley Bank bust last month and is still tracking year-on-year declines of 20%. Strikingly, both short and long-term inflation expectations embedded in the Treasury markets , have barely budged since the OPEC news. McCarthy, the third-most-senior U.S. leader after the president and vice president, is due to host a meeting in California on Wednesday with Tsai.

☆ Sterling ticks higher against dollar as focus stays on rate outlook
▼ + stars: | 2023-04-03 | by ( ) www.reuters.com time to read: +2 min

LONDON, April 3 - Sterling ticked higher against the dollar on Monday, with market moves largely driven by news of a surprise announcement from OPEC+ of more production cuts which sent the price of oil and the dollar sharply higher earlier in the session. By 1030 GMT the pound was up 0.18% against the dollar which trimmed gains, at $1.2352. "The impact overnight in the Asian session was one of higher oil after the OPEC cuts, meaning lower chances of rate cuts by the Fed and so a higher dollar. With little in the way of UK-specific data this week, attention is staying on the Bank of England's rate outlook and the UK's economic outlook. British inflation is around 10.4% - over five times the Bank of England's target rate of 2% and the highest among the Group of Seven rich nations.

☆ Morning Bid: EU inflation risks loom large for markets
▼ + stars: | 2023-03-02 | by ( ) www.reuters.com time to read: +3 min

March 2 (Reuters) - A look at the day ahead in European and global markets from Wayne Cole. Asian markets had thought to bask in the glow from Wednesday's radiant PMI data from China, and the region in general. Markets are now leaning toward a peak of 5.50%-5.75%, compared with 5.0% just a month ago. That leaves a lot riding on what EU (HICP) inflation figures for February show later on Thursday. Median forecasts are for an annual figure of 8.2%, but risks are on the upside following the surprises from France, Spain and Germany.

☆ Morning Bid: Ten-four, Treasury yields soar
▼ + stars: | 2023-03-02 | by ( ) www.reuters.com time to read: +4 min

The remarkable sight of 10-year Treasury yields back above 4% for the first time in almost four months is only matched by two-year yields at 15-year highs stalking 5%. Weekly jobless claims on Thursday and the latest Fed speakers take on unusual importance in such a febrile rates market. And 6% Fed rates that seemed fanciful only a month ago are now being openly discussed by banks. Despite year-on-year oil prices now tracking declines of 25%, European inflation fears are a key feature of this week's nervousness. Benchmark German 10-year bond yields soared to 11-year highs at 2.77%.

☆ FTSE 100 falls as Ocado sinks; still set for best Feb in six years
▼ + stars: | 2023-02-28 | by ( Shashwat Chauhan | ) www.reuters.com time to read: +2 min

The blue-chip FTSE 100 (.FTSE) lost 0.6% with shares of Ocado (OCDO.L) plunging 10.5% on the online supermarket and technology group's worse-than-expected full-year loss. "Ocado is in the eye of the cost-of-living storm because its offering isn't synonymous with being the best value," said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. Lund-Yates said Ocado is a higher-end option, without the same benefits of enticing people with tangible, physical goods like peer Marks & Spencer (MKS.L). Despite recent volatility, the exporter-heavy FTSE 100 is on track to record its best February performance since 2017 as higher earnings and weakness in the pound earlier in the month made equities more attractive. On the flipside, hedge fund firm Man Group (EMG.L) gained 7.9% after posting a higher full-year core pretax profit and beating expectations on assets under management.

☆ Morning Bid: Irksome inflation won't die down
▼ + stars: | 2023-02-28 | by ( ) www.reuters.com time to read: +4 min

Friday's latest U.S. inflation surprise was matched in Europe on Tuesday, with French and Spanish headline inflation rates unexpectedly rising again in February - making for an uncomfortable final day of a transformative month for markets. And worryingly, market-based measures of inflation expectations are rising sharply again too. U.S. two-year 'breakeven' inflation rates , taken from inflation-protected Treasury securities, have jumped 80 basis points this month to 2.8% - wiping away the prior assumption that inflation would return to the Fed's 2% target over two years. In Europe, the five year, five-year forward inflation linked swap has jumped 20bps to a 9-month high just under 2.5%. Stock markets steadied after early losses, with U.S. futures only slightly in the red ahead of the open and month end.

☆ Morning Bid: When doves cry
▼ + stars: | 2023-02-17 | by ( ) www.reuters.com time to read: +2 min

The market has succumbed to the Fed and is now pricing U.S. interest rates to stay above 5% for the year. This has pushed benchmark 10-year Treasury yields to their highest since late December, with the dollar at six-week highs. Thursday's report showed goods and services prices increased, raising questions about the goods disinflation narrative, according to strategists from Saxo Markets. UK retail data and French inflation data are on deck and will help investors to gauge the state of inflation in the region. The data comes a day after France's CAC 40 touched a record high while London's FTSE 100 continued its recent run of record highs.

☆ FTSE 100 at record high on positive Centrica, StanChart earnings
▼ + stars: | 2023-02-16 | by ( Shashwat Chauhan | ) www.reuters.com time to read: +2 min

SummarySummary Companies FTSE 100 hits record high, trading above 8,000 pointsCentrica, StanChart, Relx jump on upbeat resultsVodafone rises on report of looking at options for Africa unitFTSE 100 up 0.3%, FTSE 250 adds 0.4%Feb 16 (Reuters) - UK's FTSE 100 rose to a record high on Thursday, underpinned by corporate earnings from Centrica and Standard Chartered, while higher commodity prices drove up heavyweight miners. The blue-chip FTSE 100 (.FTSE) gained 0.3%, trading comfortably above the 8,000-point mark it had breached in the previous session. The exporter-heavy FTSE has had a stellar start to the year as positive corporate earnings and rising commodity prices supported the index. Shares of Centrica (CNA.L) jumped to top the FTSE 100, adding 4.2%, after the British gas owner's annual profit more than tripled and as it announced an extension of its share buyback programme. Standard Chartered (STAN.L) rose 1.8% after the lender reported a 28% rise in annual pretax profit and unveiled a $1 billion share buyback programme.

SummarySummary Companies Centrica, StanChart jump on upbeat earningsVodafone up on report exploring options for African UnitFTSE 100 up 0.2%, FTSE 250 flatFeb 16 (Reuters) - Britain's internationally-focussed FTSE 100 on Thursday closed above 8,000 points for the first time as upbeat earnings from Centrica and Standard Chartered countered global risk-off sentiment after hotter-than-expected U.S. inflation data. The blue-chip FTSE 100 (.FTSE) gained 0.2%, off an intra-day record high hit earlier in the day, but still at its highest ever closing level of 8,012.53 points. The exporter-heavy index has had a stellar start to the year, gaining 7.5% so far as positive corporate earnings and rising commodity prices supported the index. Data showed U.S. producer prices rose more than expected in January while jobless claims unexpectedly fell, fanning speculation the U.S. Federal Reserve would keep raising interest rates for longer than expected. Shares of Centrica (CNA.L) jumped to top the FTSE 100, adding 5.7%, after the British Gas owner's annual profit more than tripled and it announced an extension of its share buyback programme.

☆ 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.

☆ Morning Bid: The waiting game
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: +2 min

Worries over an economic slowdown, the direction of inflation and concerns about the pace of monetary tightening are all weighing on sentiment. But before that, UK GDP data for fourth quarter is due later on Friday and is expected to be flat, according to a Reuters poll. That's the third time it has scaled a new peak in less than a week and the GDP report will likely influence the market on the day. Investors are also waiting for Japan's government to present the new Bank of Japan governor nominee, also due on Tuesday. Since short-seller Hindenburg published its report on Adani last month, some $110 billion has been wiped off the value of the group's main seven listed firms.

☆ Morning Bid: Volatility stirs
▼ + stars: | 2023-02-10 | by ( ) www.reuters.com time to read: +5 min

World markets end a rough week of confusing and competing narratives in distinctly edgy form, with peculiarly subdued volatility gauges flickering back to life. Both 10 and 30-year yields hit their highest levels in over a month early on Friday. Job shedding in the digital sector continued, with Yahoo's plans to lay off more than 20% of its total workforce. That said, the year-on-year oil price trend continues to be negative, as it's been all year and base effects from last year's price spike around the Ukraine invasion will only deepen that and weigh on headline inflation further. Goldman Sachs lowered its oil price forecasts for this year and next, cutting its Brent 2023 price forecast by $6 to $92 per barrel - still above current levels around $86.

Last week, Bailey signalled the tide was turning on inflation, even if it was too soon to declare victory. We have got the largest upside skew in our forecasts that we have ever had on inflation," Bailey said. Haskel aligned himself with Catherine Mann who also sees big upside risks to the BoE's price forecasts. By contrast, Tenreyro said the full force of the BoE's rate hikes over the last year had yet to be felt, with economic momentum already fading. "It's crucial to see it through, that we do enough to address potential upside risks to inflation," he said.

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