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

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

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

☆ Europe's weaker economy limits fallout of US bond rout
▼ + stars: | 2023-08-30 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +5 min

Last week, U.S. 10-year Treasury yields touched their highest relative to Germany's since December. For rate-sensitive short-dated German bond yields yields are even down 17 bps in August as weak data has raised expectations of a European Central Bank rate hike pause in September. SPILLOVERBofA, Goldman Sachs and Barclays expect Treasury yields to end the year slightly below current levels. Barclays's Khanna estimates German bond yields would have been 50-60 bps lower had they only been driven by domestic factors. The spillover from higher Treasury yields is more challenging elsewhere.

Persons: Dado Ruvic, Mauro Valle, Valle, Salman Ahmed, Rohan Khanna, Fitch, Mondher, SPILLOVER BofA, Goldman Sachs, Jackson, Barclays's Khanna, Frederik Ducrozet, Ataru Okumura, Yoruk, Chiara Elisei, Junko Fujita, Kevin Buckland, Dhara Ranasinghe, Tomasz Janowski Organizations: REUTERS, Generali Investment Partners, European Central Bank, Fidelity International, U.S, Fitch, AAA, Vontel Asset Management, Barclays, Treasury, Federal Reserve, ECB, Pictet Wealth Management, of Japan, Nikko Securities, Yoruk Bahceli, Thomson Locations: U.S, United States, Europe, Germany, Britain, Germany's, It's, Italy, France, Japan, Amsterdam, London, Tokyo

☆ Bounce in European property stocks: false start or turning point?
▼ + stars: | 2023-08-24 | by ( Danilo Masoni | ) www.reuters.com time to read: +5 min

MILAN, Aug 24 (Reuters) - It's hard to be bullish about real estate in an environment of sharply higher interest rates. Two years of steep falls have made European property a short-seller favourite as sector valuations and investor positioning plunged to levels last seen during the 2008 global financial crisis. A gauge of European real estate shares (.SX86P) has halved in value to about $131 billion since 2021, but the mood shifted in July as earnings expectations improved. "Things aren't great for real estate companies and that's why they are trading at a huge discount. Meanwhile, BlackRock's iShares European Property ETF (IPRP.L) has seen a 10% surge in inflows from late February, according to data on its website.

Persons: Gerry Fowler, Zsolt Kohalmi, BlackRock's, Natixis, Banks, Charles de Boissezon, Kohalmi, UBS's Fowler, Danilo Masoni, Sinead Cruise, Elaine Hardcastle Organizations: MILAN, European Equity, UBS, European Central Bank, Pictet, Advisors, P Global Market Intelligence, Property, Bank of, Societe Generale, Equity, Thomson Locations: Europe, London, U.S

REUTERS/Aly Song/File Photo Acquire Licensing RightsHONG KONG/AMSTERDAM, Aug 24 (Reuters) - Global investors fleeing China have one simple message for the country's leadership: put prudence aside for a short while, and start spending big. "At this point there is confusion and, as long as there is confusion, then there's lack of credibility and that means investors are more likely to stay away," said Seema Shah, chief global strategist at Principal Global Investors in London. Prominent examples are heavy Chinese government spending during the 2008 Global Financial Crisis and its swift intervention during the 2015 market crash. But the subsidies need to come from local governments, many of which are cash-strapped or even drowning in debt and unable to pay their civil servants. The lack of concrete stimulus measures now is prompting many China watchers to downgrade their growth estimates for the next few years.

Persons: Aly, China's, Seema Shah, Chen Zhao, Zhao, hasn't, Frederik Ducrozet, Ducrozet, Principal's Shah, Yan Wang, Xi Jinping's, we’ve, Lorraine Tan, Dhara Ranasinghe, Davide Barbuscia, Yoruk, Xie Yu, Ankur Banerjee, Tom Westbrook, Li Gu, Vidya Ranganathan, Kim Coghill Organizations: REUTERS, Global, Global Investors, policymaking Politburo, Pictet Wealth Management, Local, UBS Bank, Federated Hermes, Foreigners, Asia, Morningstar, Thomson Locations: Huangpu, Shanghai, China, HONG KONG, AMSTERDAM, London, Beijing, Japan, United States, New York, Amsterdam, Hong Kong, Singapore

☆ Emerging markets' dependency on China and US for growth is diminishing
▼ + stars: | 2023-08-08 | 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 EmailEmerging markets' dependency on China and US is weakening compared to before: Portfolio managerSabrina Jacobs of Pictet Asset Management says the linkages between emerging market economies and China as well as the U.S. are becoming less pronounced than before, due to export decline and stronger domestic growth in some EM countries.

Persons: Sabrina Jacobs Organizations: Pictet, Management Locations: China

☆ Euro zone inflation falls further in comforting sign for ECB
▼ + stars: | 2023-07-31 | by ( ) www.reuters.com time to read: +2 min

FRANKFURT, July 31 (Reuters) - Euro zone inflation fell further in July and most measures of underlying price growth also eased, in a largely comforting sign for the European Central Bank (ECB) as it considers ending its severe run of interest rate hikes. Consumer prices grew by 5.3% this month versus 5.5% in June, extending a downtrend that started in the autumn. "Services inflation is the area where monetary policy should have the greatest influence because it reflects domestic demand," Dirk Schumacher, an economist at Natixis said. Hawks could also point at hard data about growth, which showed the euro zone returned to growth in the second quarter of 2023 despite negative sentiment and activity polls. The weak survey data has continued to come in in recent days, fuelling talk of a recession in the euro area that the ECB is still hoping to avoid.

Persons: Frederik Ducrozet, Christine Lagarde, Dirk Schumacher, Natixis, Francesco Canepa, Peter Graff Organizations: European Central Bank, Pictet Wealth Management, ECB, Oxford, Thomson Locations: FRANKFURT

☆ Dollar slips as Fed's rate-hike cycle seen ending
▼ + stars: | 2023-07-27 | by ( ) www.cnbc.com time to read: +3 min

A foreign currency dealer counts US dollar notes at a currency market in Karachi on July 19, 2022. While Fed Chair Jerome Powell left the door open to another hike in September, traders were unconvinced, sending the U.S. dollar broadly lower. Sterling steadied at $1.2935, having eked out a slight gain against the dollar in the previous session. A dovish pivot from the Fed will likely exert a downward pressure on the U.S. dollar in the medium term." BOJ Governor Kazuo Ueda was quoted as saying at a key government meeting on Wednesday that the central bank will maintain accommodative monetary conditions for companies.

Persons: Jerome Powell, Sterling steadied, Emin Hajiyev, Nadia Gharbi, Kazuo Ueda, Jarrod Kerr Organizations: Federal Reserve, Fed, U.S, Insight Investment, ECB, Pictet Wealth Management, Bank, Australian, Reserve Bank of Australia, Communist Party Locations: Karachi, U.S

Still, money market traders are split on the odds of another increase later in the year.FEDWATCH"The 25 basis point rise is a done deal. "The risk is that the Fed, looking at market bullishness, may not want to sound too dovish - they may want to keep the door open for more rate hikes." The MSCI world equity index (.MIWD00000PUS), which tracks shares in 47 countries, was flat. In Hong Kong, the Hang Seng index (.HSI) was down 0.3% and China's blue chip CSI300 index (.CSI300) was off 0.2%. Positive sentiment had returned to China's market on Tuesday, when the CSI 300 Index snapped a six-day losing streak.

Persons: Luca Paolini, Alison Rose, Nigel Farage's, We're, David Chao, Tom Wilson, Scott Murdoch, Jamie Freed, Kim Coghill Organizations: Fed, Federal, Pictet Asset Management, NatWest, BBC, Lloyds, CSI, ECB, Brent, Thomson Locations: SYDNEY, U.S, Germany, France, Britain, CHINA, Asia, Pacific, Japan, Hong Kong, London, Sydney

The KraneShares CSI China Internet ETF is up 5.4% since Friday, while back home the CSI Overseas China Internet Index (.CSIH11136) is up nearly 3%. Yet China tech valuations have been gutted in the nearly 3 years since Ant was forced to shelve its initial share offering, and fund managers see plenty of headwinds, apart from just policy scrutiny. "The government has learned that the private sector - particularly the tech sector - is a critical partner in jump-starting growth. The government will continue to exert pressure on key tech companies even as they allow growth to resume," he said. For some sell-side analysts, though, China tech has turned a corner.

Persons: Jack Ma, Jon Withaar, Ant, Wong Kok Hoi, Wong, Kai Kong Chay, Derrick Irwin, Xi Jinping's, Alibaba's ADRs, Morgan Stanley, Min Lan Tan, Vidya Ranganathan, Kim Coghill Organizations: Group, Alibaba, HK, Pictet Asset Management, CSI China, CSI Overseas, CSI Overseas China Internet, Amazon Inc, APS Asset Management, Greater, Manulife Investment Management, UBS Global Wealth Management, Thomson Locations: HONG KONG, China, Asia, Hong Kong, Alibaba, CSI Overseas China, Singapore, Greater China, Boston

☆ Luxury spending recovery is the first wave of China’s multi-phased reopening: Pictet
▼ + stars: | 2023-07-11 | 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 EmailLuxury spending recovery is the first wave of China’s multi-phased reopening: PictetGillian Diesen of Pictet Asset Management discusses the revival of the luxury spending market in China multiple stages in China's re-opening.

Persons: Gillian Diesen, China's Organizations: Pictet, Management Locations: China

☆ Euro zone inflation falls again in June as energy prices tumble
▼ + stars: | 2023-06-30 | by ( ) www.reuters.com time to read: +3 min

FRANKFURT, June 30 (Reuters) - Inflation in the euro zone extended its decline in June as the cost of fuel tumbled, more than offsetting an acceleration in prices for services, a preliminary reading showed on Friday. The data, pointing to only the smallest drop in underlying inflation, was unlikely to sway the European Central Bank, which has pencilled in a ninth consecutive rate hike for July and is eyeing one in September too. "Inflation is still high and sticky but momentum is moderating," said Frederik Ducrozet, head of macroeconomic research at Pictet Wealth Management. The euro zone unemployment rate remained at an historic low of 6.5% in May, Eurostat reported separately on Friday. Big differences remain between euro zone countries, with June headline inflation falling to as little as 1.6% in Spain and Belgium and 1.0% in Luxembourg while staying in double digits in Slovakia (11.3%) and close to them in the Baltics.

Persons: chalking, Frederik Ducrozet, Ulrike Kastens, Christine Lagarde, Neil Shah, Francesco Canepa, Catherine Evans Organizations: European Central Bank, Pictet Wealth Management, ECB, DWS . Services, Eurostat, Edison Group, Thomson Locations: FRANKFURT, Germany, Europe, Italy, Portugal, Spain, Belgium, Luxembourg, Slovakia, Baltics

☆ Japan stocks are roaring back. This rally may be different from the 1990's 'bubble high'
▼ + stars: | 2023-06-27 | by ( Lim Hui Jie | ) www.cnbc.com time to read: +6 min

The bubble burst after the Bank of Japan tightened monetary policy at the start of 1990, triggering the collapse of equity and land prices. But analysts who spoke to CNBC said Japan is not headed for another crash like the one during the bubble. Furthermore, "current high inflation rates in Japan are due to higher import costs on the back of a weaker yen and high commodity prices. What led to Japan's bubble? Nikkei reported in March that share buybacks by Japanese companies was set to reach their highest level in 16 years.

Persons: Kazuhiro NOGI, KAZUHIRO NOGI, Nogi, Dong Chen, Ryota Abe, Abe, Japan's, Shinzo Abe, Chen, SMBC, Warren Buffet's Organizations: Nikkei, Getty, Afp, Bank of Japan, CNBC, Sumitomo Mitsui Banking Corporation, Tokyo Exchange, Billionaire, Global Locations: Tokyo, AFP, Japan, China

☆ Analysis: Investors shelve China assets before bigger stimulus
▼ + stars: | 2023-06-23 | by ( Summer Zhen | ) www.reuters.com time to read: +5 min

[1/2] A view of the city skyline, ahead of the annual National People's Congress (NPC), in Shanghai, China February 24, 2022. A global fund manager survey by BofA Securities showed shorting Chinese stocks was the second-most "crowded" trade in June, after going long on big tech. "I can't believe that there is anymore bad news to absorb," said Andy Maynard, head of equities at China Renaissance. Restoring confidence is looking increasingly like a long-term project and investors are positioning for a longer game and a slower rebound. "We are all looking for something a bit more decisive in helping to restore animal spirits, investor confidence and market confidence, and I think that hope may be still at risk of being disappointed."

Persons: Aly, Morgan Stanley, Hong, Dong Chen, Andy Maynard, Morgan, James Liu, Guan Yi, Summer Zhen, Jason Xue, Tom Westbrook, Jacqueline Wong Organizations: National People's Congress, REUTERS, BofA Securities, Pictet Wealth Management, China, Reuters, G Investments, Thomson Locations: Shanghai, China, HONG KONG, Beijing, Asia, Singapore, Hong Kong, Pacific

Hong Kong stocks such as Alibaba (9988.HK) and Tencent (0700.HK) are among the 24 stocks which will be priced and traded in both yuan and the Hong Kong dollar under the Dual Counter Model on the Hong Kong stock exchange (HKEX) from Monday. Offshore yuan deposits in Hong Kong alone are estimated at some 833 billion yuan ($117 billion). "Mainland investors, including mutual fund companies like us, have genuine incentives to trade Hong Kong stocks in yuan," said Ding of ChinaAMC. "There's lot of political uncertainty these days so you may want to hold yuan rather than U.S. dollars, or the Hong Kong dollar, which is pegged to the U.S. ($1 = 7.8217 Hong Kong dollars)Reporting by Samuel Shen and Georgina Lee; Editing by Vidya Ranganathan and Kim CoghillOur Standards: The Thomson Reuters Trust Principles.

Persons: Ding Wenjie, Ding, it's, Dong Chen, YUAN, Sun, Kai Properties, ChinaAMC, David Friedland, Samuel Shen, Georgina Lee, Vidya Ranganathan, Kim Coghill Organizations: HK, Hong Kong, Hong, China, Fund, U.S ., Global Capital Investment, China Asset Management, The U.S, Pictet Wealth Management, AIA, Hang Seng Bank Ltd, Interactive Brokers, Thomson Locations: SHANGHAI, HONG KONG, Hong, Hong Kong, China, Brazil, Russia, Beijing, Moscow, Ukraine, The, Pakistan, Asia, Asia Pacific

For some, the answer to exuberant markets lies in the ample cash still sloshing around the financial system. Total global liquidity, a measure of cash and credit in the world economy, has risen to almost $170 trillion in June, Crossborder calculates, from $158 trillion in October. Central banks have added a net $1.7 trillion into money markets since November, it also estimates, a move that correlates with a risk-taking trend. But an alternative scenario is that U.S. money market funds, stuffed with cash after depositors fled regional banks in March, buy enough newly issued Treasuries to keep rates stable. "Liquidity is not a force that reverberates immediately into financial markets," said JPMorgan global market strategist Nikolaos Panigirtzoglou.

Persons: Michael Howell, Crossborder, Richard Clarida, Georgina Taylor, Ken Taubes, reverberates, Nikolaos Panigirtzoglou, Morgan Stanley, Luca Paolini, Paolini, Naomi Rovnick, Harry Robertson, Dhara Ranasinghe, Kirsten Donovan Organizations: U.S . Treasury, Federal Reserve, European Central Bank, Crossborder Capital, U.S, Reuters, BNP, JPMorgan, Apple, Thomson Locations: Japan, U.S

☆ There's a 'structural change' going on in Japan's business environment, analyst says
▼ + stars: | 2023-06-14 | 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 EmailThere's a 'structural change' going on in Japan's business environment, analyst saysDong Chen of Pictet Wealth Management cites signs such as first-quarter gross domestic product numbers and improving domestic consumption.

Persons: Dong Chen Organizations: Pictet Wealth Management

☆ Eurozone slips into recession as revised data shows two quarters of falling output
▼ + stars: | 2023-06-08 | by ( Olesya Dmitracova | ) edition.cnn.com time to read: +3 min

In the first three months of the year, economic output in the eurozone dropped 0.1% compared with the previous quarter, according to revised official data published Thursday. Across the European Union, gross domestic product ticked up 0.1% in the first quarter after falling 0.2% late last year. Commenting on the eurozone data, Andrew Kenningham, chief Europe economist at Capital Economics, said consumption by households had been “hit hard” by high prices and rising interest rates. US economy out in frontBoth the eurozone and the whole of the EU are now lagging the US economy. Earlier official estimates of the eurozone’s economic output pointed to a slight increase in the first quarter.

Persons: Andrew Kenningham, Frederik Ducrozet, Russia’s, Claus Vistesen, ” Organizations: London CNN, European Union, Capital Economics, Pictet Wealth Management, Organisation for Economic Co, Pantheon Macroeconomics, European Central Bank Locations: Europe, Ukraine, United States, downgrades, Germany, Europe’s, Ireland

☆ Sterling strengthens against dollar as chances of Fed 'skip' rise
▼ + stars: | 2023-06-01 | by ( Amanda Cooper | ) www.reuters.com time to read: +3 min

Sterling was last up 0.2% against the dollar at $1.2467 and flat against the euro at 85.90 pence, close to its strongest in six months. The pound fell by 1% against the dollar in May, its largest monthly slide since February's 2.8% loss, but it's still up 3.1% so far in 2023. Against the euro, sterling gained 2% last month - the most in a month since last July. UK inflation fell to 8.7% in April from a peak of 11.1% in October, while U.S. inflation is down to 4.9%, from 9.1% last June - when UK inflation was at 9.4%. The Fed, meanwhile, took just seven months from that time to raise rates by the same amount and U.S. rates are at 5.25%.

Persons: BoE, Sterling, it's, Stephen Gallo, BoE policymaker Catherine Mann, Mann, Amanda Cooper, Mark Potter Organizations: Federal Reserve, Bank of England, Nationwide, BMO, Pictet, Thomson Locations: Britain, United States, U.S, Swiss

☆ Analysis: Germany leads big bond rally as inflation finally heads down
▼ + stars: | 2023-06-01 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +5 min

Borrowing costs, or bond yields, in the benchmark euro area issuer are down at least 20 basis points (bps) this week , . Yet this week's notable moves suggest investors are plumping with the view that easing inflation and recession risks are strong bond buy signals. Traders now expect the ECB hikes to peak at around 3.7% by September, suggesting two more hikes from 3.25% currently. COMPLICATEDInvestors cautioned that the European inflation outlook remained more complicated than in the United States, where inflation broadly is down sharply from peaks. This week's fall in borrowing costs followed sharp rises the previous two weeks on bets for more rate hikes.

Persons: Kaspar Hense, Flavio Carpenzano, It's, Cosimo Marasciulo, Marasciulo, BlueBay's Hense, Oliver Eichmann, DWS, Eichmann, Yoruk Bahceli, Harry Robertson, Dhara Ranasinghe, Susan Fenton Organizations: Bank, British, Thursday's, Traders, BlueBay Asset Management, Capital Group, ECB, U.S . Federal Reserve, General Investment Management, Bank of England, NatWest, Pictet Wealth Management, Thomson Locations: Germany, United States, Europe, Amundi, U.S, Britain, DWS

☆ Asian stocks inch up on US debt ceiling hopes, Nikkei hits 33-year high
▼ + stars: | 2023-05-19 | by ( Ankur Banerjee | ) www.reuters.com time to read: +5 min

Australia's S&P/ASX 200 index (.AXJO) rose 0.66%, while Japan's Nikkei (.N225) continued its ascent, rising to its highest since August 1990, during the country's so-called bubble era. Futures indicated European stocks were set to open higher, with Eurostoxx 50 futures up 0.44%, German DAX futures up 0.41% and FTSE futures up 0.23%. China's blue-chip CSI300 Index (.CSI300) rose 0.20%, while the Shanghai Composite Index (.SSEC) was up 0.13%, having reversed from earlier losses. Hawkish rhetoric from Fed speakers continued with Dallas Fed President Lorie Logan and St. Louis Fed President James Bullard saying inflation was not cooling fast enough to allow the Fed to pause its interest-rate hike campaign. Against a basket of currencies, the dollar rose 0.029% and was wedged near a two-month high.

☆ Asian shares mixed as China growth worries crimp U.S. debt ceiling optimism
▼ + stars: | 2023-05-19 | by ( Ankur Banerjee | ) www.reuters.com time to read: +3 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) eased 0.20% but was set to eke out a gain of 0.19% for the week. Data in the week underscored that China's economy lost momentum at the beginning of the second quarter, stoking worries over the wobbly post-COVID-19 recovery. Investor attention has been firmly on the negotiations over U.S. debt ceiling and increasing hopes that a deal could be reached sent U.S. shares higher overnight . Hawkish rhetoric from Fed speakers continued with Dallas Fed President Lorie Logan and St. Louis Fed President James Bullard saying inflation was not cooling fast enough to allow the Fed to pause its interest-rate hike campaign. U.S. crude fell 0.14% to $71.76 per barrel and Brent was at $75.78, down 0.11% on the day.

"We are not pausing - that is very clear," ECB President Christine Lagarde told a press conference. NOT FED DEPENDENTShe also dismissed the notion that the ECB would have to pause if its U.S. counterpart did so, saying the ECB was "not Fed-dependent". The German 10-year yield , the euro zone benchmark, fell as much as 7 basis points to a one-month low of 2.18%. "In a nod to the hawks, the ECB hinted at 'future decisions' in the plural," Holger Schmieding at Berenberg said. Firms in the services sector especially have complained of labour shortages, suggesting that more wage pressures could come this summer.

And an ECB survey of lending data for March revealed banks were tightening access to credit even as demand for it from borrowers collapsed, resulting in the slowest pace of growth in credit to households since 2018. And it was mirrored by March lending data, which showed growth in corporate credit slow to 5.2% year on year. "With the next big TLTRO expiring towards the end of June amid further key rate hikes, credit demand will be further dampened," Martin Wolburg, senior economist at Generali Investments, said. There was a smaller decrease in demand for consumer credit and other lending to households. Lending data also showed the annual increase in lending to households slowing to 2.9% from 3.2%.

That means portfolio managers are having to factor a stronger yen into global stock selection in way they have not for years, with some even anticipating mergers and acquisitions as the Japanese market revs up. "The trigger for the revaluation of the Japanese markets is higher rates and then a stronger yen. Japan's insurers and pension funds alone hold $1.84 trillion in foreign assets, Deutsche Bank calculates, greater than the size of South Korea's economy. "Policy normalisation could turn back the clock for Japanese investors," Deutsche Bank strategists said in a note. Carmignac, like many global investors, has maintained an underweight position towards Japanese stocks but, Leroux said, it was looking to raise this to neutral.

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