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☆ Tiffany: Not Just a Shopping Destination, But a World-Class Museum
▼ + stars: | 2023-04-20 | by ( Stephen Wallis | Photography Nagi Sakai For Wsj. Magazine | ) www.wsj.com time to read: +1 min

When Tiffany & Co. reopens its New York City flagship on the corner of Fifth Avenue and 57th Street this spring, following three years of work, visitors will hardly recognize the street-level sales floor famously featured in Breakfast at Tiffany’s. Where dark-green marble and teak columns once surrounded a bank of art deco elevators, a showstopping painting by Jean-Michel Basquiat now hangs. The canvas was chosen especially for the robin’s-egg-blue background that nearly matches Tiffany’s own trademarked blue. It’s an intentionally placed lure—inviting in those tourists who come to re-create Audrey Hepburn’s dreamy window-shopping scene. In the new-look Tiffany, splashy art abounds: A concave, faceted stainless-steel Anish Kapoor wall sculpture in the third-floor wedding and engagement area seems tailor-made for celebratory ring-shopping selfies.

☆ Morning Bid: Oil price relapse
▼ + stars: | 2023-04-20 | by ( ) www.reuters.com time to read: +4 min

Although oil prices have not yet reversed all their gains from OPEC move, Brent is down more than 5% over the past week and the year-on-year deflation in oil prices is running at 24%. And there's also signs oil loading from Russia's western ports this month is rising to the highest since 2019 -= despite Moscow's pledge to cut output. Tesla (TSLA.O) shares dropped 2% after the electric-vehicle maker's sixth U.S. price cut this year. Helped by the oil price retreat, 2-year U.S. Treasury yields fell back almost 10 basis points to 4.19%. VIX and bear marketsShare price performance, earnings and sales for TeslaReuters GraphicsReuters GraphicsBy Mike Dolan, <a href="mailto:mike.dolan@thomsonreuters.com" target="_blank">mike.dolan@thomsonreuters.com</a>.

☆ Morning Bid: Sterling's inflation test
▼ + stars: | 2023-04-19 | by ( ) www.reuters.com time to read: +2 min

A look at the day ahead in European and global markets from Tom WestbrookTraders are scaling back bets on U.S. rate cuts, but dialling up expectations for British hikes. On Tuesday, it was bigger-than-expected pay rises that strengthened expectations for the Bank of England to lift rates next month and to continue doing so thereafter. On Wednesday, British inflation data is in focus. On balance, the sheer size of the Bank of England's task of reining in inflation has been supportive for sterling, which hit a 10-month high last week. Implied volatility in the options market suggests traders don't expect sudden changes in the currency's slow grind higher.

☆ Morning Bid: Crowded bonds unnerved
▼ + stars: | 2023-04-19 | by ( ) www.reuters.com time to read: +5 min

This has some wondering if the recent dash for cash and top-rated bonds has become a bit crowded and how much more tightening central banks have to do. As we move into the weeds of the first-quarter U.S. earnings season, it's been a mixed bag so far. That clearly unnerved UK government bonds - where 10 year yields jumped 10bps - but it also jarred sovereign bonds around the world. Elsewhere, further signs of healing were evident in the global bank funding market. Japan's Sumitomo Mitsui Financial Group (8316.T) sold $1 billion of additional tier-1 debt, the first major global bank to sell the risky securities since similar bonds issued by Credit Suisse were wiped out last month.

☆ Explainer: Why European money market funds inflows are lagging behind the U.S. torrent?
▼ + stars: | 2023-04-11 | by ( Harry Robertson | ) www.reuters.com time to read: +6 min

[1/2] U.S. dollar and Euro bank notes are photographed in Frankfurt, Germany, in this illustration picture taken May 7, 2017. In Europe, investors put 17.7 billion euros ($19.35 billion) into euro-denominated money market funds in March, Refinitiv Lipper data shows, when the Credit Suisse crisis rocked markets. Other analysts said it was due to the fact that euro money market funds are underdeveloped relative to U.S. funds and are focused more on private sector, particularly bank, debt. WHAT IS A MONEY MARKET FUND? The European money market fund sector is far smaller than in the United States.

☆ ECB’s inflation battle has a 550 bln euro problem
▼ + stars: | 2023-03-31 | by ( Francesco Guerrera | ) www.reuters.com time to read: +3 min

LONDON, March 31 (Reuters Breakingviews) - Euro zone lenders have so far weathered the financial storms blowing in from the United States and Switzerland. That has allowed the European Central Bank to keep raising rates to combat inflation. Lagarde has said that euro zone banks are well capitalised and have plentiful liquidity. The MRO – the rate lenders pay for one-week loans from the ECB – is currently set at 3.5%, 50 basis points above the benchmark deposit rate. Follow @guerreraf72 on TwitterCONTEXT NEWSEuro zone banks have to repay 549 billion euros in emergency loans from the European Central Bank by June 28.

☆ Euro zone price rises cool significantly in March, but core inflation posts small uptick
▼ + stars: | 2023-03-31 | by ( Silvia Amaro | ) www.cnbc.com time to read: +2 min

Inflation in the euro zone dropped significantly in March as energy prices continued to fall. Headline inflation in the 20-member bloc came in at 6.9% in March, according to preliminary figures released by Eurostat Friday. By comparison, in February, headline inflation stood at 8.5%. ECB Member Isabel Schnabel said Thursday that headline inflation has started to decline, but core inflation is proving sticky. The ECB raised rates by 50 basis points in March, bringing its main benchmark rate to 3%.

☆ Morning Bid: As banking worries slowly slip into rear view, markets fret on Fed
▼ + stars: | 2023-03-30 | by ( ) www.reuters.com time to read: +2 min

But as we are at the 'no news = good news' stage of the recovery from the banking worries, investors are preparing to try again as Europe wakes up with futures indicating a higher open. In a call to discuss the plan to split into six units, Group CEO Daniel Zhang said on Thursday the company's breakup plan will allow its units to become more agile and eventually list on their own. Investors hope the plan will help unlock value for the internet behemoth. Alibaba US shares traders at 11x forward earningsWith fears of a widespread banking crisis easing, investor attention has switched to Fed vs inflation. Meanwhile, the U.S. banking system's top cop said the scope of blame for Silicon Valley Bank's failure stretches across bank executives, Federal Reserve supervisors and other regulators.

☆ German inflation eases less than expected in March
▼ + stars: | 2023-03-30 | by ( ) www.reuters.com time to read: +2 min

German consumer prices, harmonised to compare with other European Union countries, rose by a more-than-anticipated 7.8% on the year in March, preliminary data from the federal statistics office showed on Thursday. Analysts had expected harmonised data to increase by 0.8% on the previous month and grow by 7.5% on an annual basis. According to non-harmonised standards, German consumer prices rose 7.4% on the year in March and 0.8% on the month. This follows an inflation rate of 8.7% in February and January. The decline in the inflation rate was entirely driven by a slowdown in energy prices, which rose only 3.5% compared with March 2022, when energy prices soared following Russia's invasion of Ukraine.

☆ Morning Bid: Alibaba fires up market mood
▼ + stars: | 2023-03-29 | by ( ) www.reuters.com time to read: +2 min

An unprecedented revamp of Chinese tech conglomerate Alibaba Group, which analysts believe to have the blessings of local regulators, pushed up Alibaba's U.S.-listed stock, and then its Hong Kong shares on Wednesday. Companies in China's internet, private education and property sectors have lost billions of dollars in market value in recent years as the country's regulators cracked down on their operations. Reuters GraphicsAlthough a lacklustre 0.6% rise in Asia's main stock market gauge, led by Hong Kong tech names, shows that animal spirits haven't returned yet, there's hope for investors who have been left licking their wounds from recent market declines, especially in bank and tech stocks. Global investor confidence remains fragile, with the European Central Bank (ECB) saying that recent volatility highlights the need for greater regulatory scrutiny. Overnight, a survey showed that U.S. consumer confidence unexpectedly increased in March despite recent financial market turmoil, but Americans still expect inflation to remain elevated over the next year.

☆ Morning Bid: Bank calm, rates firm, Alibaba steals show
▼ + stars: | 2023-03-29 | by ( ) www.reuters.com time to read: +4 min

A semblance of calm has returned to world markets in the final week of the first quarter as the banking storm abates and the spotlight switched to a share-boosting six-way revamp of Chinese e-commerce giant Alibaba. Investors cheered the surprise move from Alibaba (9988.HK) as a sign Beijing's corporate crackdown may be nearing an end, sending shares of the Jack Ma-founded firm and peers soaring. The surprise move seeks to take advantage of Ermotti's experience rebuilding the bank after the global financial crisis 15 years ago. Broader stock markets were higher across the board, with Wall St futures up almost 1% ahead of the open. Futures markets now show a 50-50 chance of one more Fed rate hike in this cycle in May and half a point of easing by yearend.

☆ Euro zone underlying inflation sticky, ECB's Schnabel says in Washington
▼ + stars: | 2023-03-29 | by ( ) www.reuters.com time to read: +2 min

WASHINGTON, March 29 (Reuters) - Underlying inflation in the euro zone is proving sticky and the recent fall in energy costs may not pull it down as fast as some expect, European Central Bank board member Isabel Schnabel said on Wednesday, highlighting the bank's chief concern. Overall inflation in the 20 nations sharing the euro currency is falling quickly but core prices, which exclude volatile fuel and food costs, is still rising, suggesting rapid price growth could prove durable and difficult to break. Schnabel, head of the ECB's market operations, said last year's energy price spike seeped into the broader economy quickly but the reversal may take longer. Schnabel said the ECB has some flexibility in reaching its 2% target and did not want to create needless pain by acting too quickly. Conservative policymakers have said underlying inflation is now increasingly driven by domestic factors, particularly more expensive services, and they are wary of wage growth, which at 5-6% lags inflation but remains inconsistent with the ECB's 2% inflation target.

☆ Why big investors like Carlyle and Ares are zeroing in on Hollywood and sports deals — and driving private credit in media to new highs
▼ + stars: | 2023-03-28 | by ( Rebecca Ungarino | Reed Alexander | ) www.businessinsider.com time to read: +7 min

And Ares raised $3.7 billion for a fund last fall geared specifically toward sports, media, and entertainment investments across private debt and private equity. Unlike private equity investing, where managers take stakes in companies or buy them, private credit investors lend to businesses and make money on interest payments. (Private investment firm KKR's media, entertainment, and sports portfolio includes Insider parent company Axel Springer.) Carlyle's $146 billion credit arm has also provided capital to Clair, a media tech company that specializes in live production services and audio products. The strategists said driving that uptick are private credit defaults that include so-called softer forms of default, like breaching a loan's terms and conditions, along with private credit portfolio companies having generally lower ratings and less diversified businesses.

☆ Morning Bid: Calm returns: Investors switch to bank fundamentals
▼ + stars: | 2023-03-28 | by ( ) www.reuters.com time to read: +3 min

A look at the day ahead in European and global markets from Anshuman DagaTurbulence in global markets is gradually giving way to stability. A day after regional U.S. lender First Citizens BancShares moved to scoop up the assets of failed Silicon Valley Bank, brave investors can probably begin to ask, "Is the worst over?" A strong show of confidence is coming from U.S. authorities as bank regulators say the system is sound but rules need review. A recover in U.S. markets, especially in beaten-down bank shares, lifted Asian stocks on Monday while the safe-haven dollar declined. While the analysts expect a continuation of declining credit growth which is consistent with monetary tightening, they don't expect any credit crunch.

☆ Morning Bid: Brittle banks find a berth
▼ + stars: | 2023-03-27 | by ( ) www.reuters.com time to read: +4 min

With few fresh weekend developments on the European bank stock rigor late last week, European bourses and bank stocks found a level too. Deutsche Bank, whose stock lurched lower on Friday amid fears about rising bank funding costs, regained about 3% on Monday. Deposits at small banks fell by $120 billion in the week to March 15, while borrowing jumped $253 billion. Economists polled by Reuters expect the headline year-on-year inflation rate to have cooled to 7.2% from 8.5% in February. * U.S. Treasury auctions 2-year notes* U.S. corporate earnings: CarnivalReuters GraphicsReuters Graphics Reuters GraphicsReuters GraphicsReuters GraphicsBy Mike Dolan, editing by Ed Osmond, <a href="mailto:mike.dolan@thomsonreuters.com" target="_blank">mike.dolan@thomsonreuters.com</a>.

☆ ECB may copy Bank of England's way of steering rates: Schnabel
▼ + stars: | 2023-03-27 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, March 27 (Reuters) - The European Central Bank could take a leaf from the Bank of England's book as it looks for new ways of managing liquidity in the banking sector and steering short-term interest rates on the market, ECB board member Isabel Schnabel said on Monday. The ECB is now rapidly shrinking its balance sheet but this is unlikely to fall back to its level of before the 2008-2009 global financial crisis, so policymakers are now studying a new way to steer short-term interest rates in a new normal. Using the same rate for providing and remunerating reserves ensures that money market rates will trade closely to the policy rate, Schnabel argued. Another benefit of such a demand-driven framework is that it offers more flexibility on how the central bank provides reserves. "A third benefit is that the Bank of England’s approach may potentially lead to a leaner balance sheet depending on banks’ demand for reserves," Schnabel said.

☆ Morning Bid: Banks are leaking money
▼ + stars: | 2023-03-27 | by ( ) www.reuters.com time to read: +2 min

There is some relief that First Citizens BancShares Inc (FCNCA.O) is in advanced talks to acquire Silicon Valley Bank (SIVB.O). There was also some talk the Federal Reserve could expand its new lending programme for banks as another step to reassuring depositors. Money is clearly flowing out of smaller banks toward their bigger siblings and to money market funds, which have seen an inflow of more than $300 billion in the past month to a record $5.1 trillion. Capital Economics points out that deposits across all the banks have fallen by $663 billion in the past year as customers search for higher yield. Deutsche Bank's five-year CDS hit 222 bps on Friday, the highest since late 2018, while UBS CDS shot up to 139 bps.

Asia's economic data and policy calendar this week is light, which is perhaps just as well because investors' focus is firmly fixed elsewhere - the global banking crisis and what it means for growth, markets, and policy. Fears over deteriorating credit conditions are rising, despite the swift and bold action from U.S. and Swiss authorities. Fed and European Central Bank officials raised the warning flags on Sunday, echoing soundings from across the private sector last week. The turmoil and volatility across interest rates and fixed-income markets since Silicon Valley Bank was shuttered by California regulators on March 10 has been severe. Currency market volatility has been surprisingly subdued since the banking crisis flared up.

☆ Fed’s reluctance to go green will cost the Earth
▼ + stars: | 2023-03-07 | by ( Ben Winck | ) www.reuters.com time to read: +8 min

WASHINGTON, March 7 (Reuters Breakingviews) - Central banks don’t think they can do much about the environment. The U.S. Federal Reserve has done even less, arguing it should not tackle climate change without an explicit order from Congress. In a 2021 survey by Invesco, 63% of responding central banks said addressing climate change fell within their mandate. Central banks aren’t best equipped to lead the green transition, anyway. There’s also a valid concern that focusing on climate change could water down the Fed’s mission to fight inflation.

☆ Sticky inflation fuels some of ECB's worst fears
▼ + stars: | 2023-03-02 | by ( Balazs Koranyi | ) www.reuters.com time to read: +4 min

Overall inflation eased a touch to 8.5% last month from 8.6% in January, data on Thursday showed. But nearly all the drop came from lower energy costs, while prices for most other items - including food, services and durable goods - surged again, confirming the worst fears of some ECB policymakers. A jump in underlying inflation - to 5.6% from 5.3% - reinforces already copious evidence that past price rises are filtering down into the broader economy, including via wages. "Core inflation and other measures of underlying inflation were likely to be stickier, with only limited evidence of a stabilisation so far," the ECB said in the accounts of the Feb. 1-2 meeting. "In particular, we upgrade (the rate hike view in) May from 25bp to 50bp, which takes our terminal rate forecast to 3.75% in June."

☆ 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%.

"For energy, food and goods, there’s a lot of forward-looking indicators saying that inflation pressures in all of those categories should come down quite a bit." Other policymakers, including board member Isabel Schnabel and Dutch central bank chief Klaas Knot, have expressed concern core inflation could get stuck and perpetuate inflation. For the ECB to end rate hikes, Lane outlined three criteria. The bank needs lower inflation projections through its three-year forecasting horizon and to make progress in lowering actual underlying inflation. "Actual goods retail prices are still very strong, but the intermediate stage has been a good predictor of price pressures," Lane said.

☆ Euro zone inflation marginally higher in Jan; core also lifted
▼ + stars: | 2023-02-23 | by ( ) www.reuters.com time to read: +3 min

FRANKFURT, Feb 23 (Reuters) - Euro zone inflation was only a touch higher in January than earlier estimated, Eurostat said on Thursday, confirming that price growth is now well past its peak, even if underlying price pressures still show no signs of abating. Indeed, worries about underlying inflation have dominated public commentary from policymakers in recent weeks and some have argued that rate hikes should not stop until there is a clear turnaround in core price developments. Euro zone inflation slowing from Oct peakServices inflation, the biggest chunk of core inflation, was revised up to 4.4% from 4.2%, likely worrying some because services primarily reflect wage growth and employee earnings are now rising at their fastest pace in years, even if real or inflation-adjusted growth is still negative. Energy price inflation was revised to 18.9% in January from an initial 17.2%, but that is still down from 25.5% in December. Latvia had the highest inflation in the euro zone with a rate above 21%, while Luxembourg and Spain had the slowest at just under 6%.

☆ Goldman Sachs expects ECB to raise rates thrice this year
▼ + stars: | 2023-02-21 | by ( ) www.reuters.com time to read: 1 min

Feb 21 (Reuters) - Goldman Sachs said it was expecting the European Central Bank to raise interest rates thrice this year, taking the terminal rate to 3.5% from 3.25% estimated earlier. In a note dated late Monday, the brokerage said in addition to an increase of 50 basis points in March and 25 basis points in May, it was estimating a 25 basis-point hike in June. Goldman's change in expectations comes after hawkish commentary from ECB board member Isabel Schnabel and French central bank chief Francois Villeroy de Galhau, two influential policymakers from the 26-member Governing Council on Friday. Markets currently see ECB rates peaking at around 3.7% by the end of summer. Reporting by Reshma Rockie George; Editing by Anil D'SilvaOur Standards: The Thomson Reuters Trust Principles.

"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.

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