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☆ Shares rise, dollar drops vs yen after BOJ hint of shift in policy
▼ + stars: | 2023-09-11 | by ( Amanda Cooper | ) www.reuters.com time to read: +4 min

The yen surged after BOJ Governor Kazuo Ueda said the central bank could end its policy of negative interest rates when the achievement of its 2% inflation target is in sight. Global shares, as reflected by the MSCI All-World index (.MIWD00000PUS), rose 0.1%, supported by a bounce in stocks in Europe, where the STOXX 600 (.STOXX) gained 0.3%. Last week, the STOXX posted its longest stretch of losses in 5-1/2 years. Economists polled by Reuters expect consumer prices to have risen by 3.6% from last year, up from July's 3.2% reading. The ECB meets on Thursday to set interest rates and markets have all but priced out any chance of a hike.

Persons: Kazuo Ueda, Fiona Cincotta, Marcella Chow, Scott Murdoch, Simon Cameron, Moore, Mark Heinrich, Chizu Organizations: Bank of Japan, Global, European Central Bank, Reuters, JPMorgan Asset Management, Brent, ECB, Thomson Locations: China, Europe, U.S, Asia, Sydney

☆ Should I Ditch Bonds for Money-Market Funds or CDs?
▼ + stars: | 2023-09-11 | by ( Steve Garmhausen | ) www.wsj.com time to read: +5 min

By Steve GarmhausenIs it reasonable or even wise to shift some of your bond allocation to money-market funds paying over 5%? The broad bond market had its worst year ever in 2022, as reflected by the AGG—the iShares Core U.S. Bonds vs. money-market fundsSo should you really sell bonds and use the proceeds to buy these products? Bonds have also performed better historically than the “cash” category, which includes money-market funds. Money-market funds are considered a low-risk investment, and one that’s easy to sell if you need cash.

Persons: Steve Garmhausen, Bonds, Amita Desai, ”, Adrianne Yamaki, Brent Weiss, Aswath Damodaran, Weiss, you’ve, Yamaki Organizations: Aggregate, Federal Reserve, Money Market Fund, Treasury, New York University Locations: Demarest, N.J, San Francisco, Baltimore, “, New Jersey

Canada created 39,900 jobs, Statistics Canada said, compared with a median forecast for a gain of 15,000. The labor market has been resilient even as the Bank of Canada (BoC) raised its key overnight rate 10 times since March 2022 to cool the economy. Money markets see a 44% chance of another BoC rate hike by year-end, up from 36% before the data were published. "This report alone won't make the Bank of Canada regret holding rates steady earlier this week. Derek Holt, vice president of capital markets economics at Scotiabank, noted a gain of 49,500 people in self-employed jobs.

Persons: Carlos Osorio, Andrew Kelvin, Royce Mendes, Derek Holt, Dale Smith, Fergal Smith, Andrea Ricci, Nick Macfie Organizations: Queen, West, REUTERS, Rights, Statistics, Bank of Canada, BoC, TD Securities, Desjardins Group, Canadian, Scotiabank, Thomson Locations: Toronto Ontario, Canada, Statistics Canada, Canadian, Ottawa, Toronto

☆ Canadian dollar rallies as jobs data rekindles rate hike bets
▼ + stars: | 2023-09-08 | by ( Fergal Smith | ) www.reuters.com time to read: +2 min

File photo: A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto, January 23, 2015. The loonie was trading 0.4% higher at 1.3620 to the greenback, or 73.42 U.S. cents, after moving in a range of 1.3609 to 1.3689. Money markets see a 44% chance of another BoC rate hike by year-end, up from 36% before the data. The jobs data is "not strong enough to prompt an immediate rethink on the pause, but it's also certainly not soft enough to rule out further hikes", Doug Porter, chief economist at BMO Capital Markets, said in a note. The Canadian 2-year yield rose 3.3 basis points to 4.643%, while the gap between it and its U.S. equivalent narrowed by 5 basis points to 29.5 basis points in favor of the U.S. note.

Persons: Mark Blinch, it's, Doug Porter, Fergal Smith, Mark Heinrich Our Organizations: REUTERS, greenback, Canadian, U.S, Bank of Canada, BoC, BMO Capital Markets, U.S ., Thomson Locations: Toronto, Canada, TORONTO

☆ Bank of Canada says interest rates may not be high enough
▼ + stars: | 2023-09-07 | by ( ) www.reuters.com time to read: +3 min

Bank of Canada Governor Tiff Macklem takes part in a news conference after announcing an interest rate decision in Ottawa, Ontario, Canada April 12, 2023. REUTERS/Blair Gable/File Photo Acquire Licensing RightsBy Steve Scherer and David LjunggrenOTTAWA, Sept 7 (Reuters) - Bank of Canada Governor Tiff Macklem on Thursday said interest rates may not be high enough to bring inflation back down to target, sending a hawkish message after holding borrowing costs at a 22-year high a day earlier. The central bank hiked rates by a quarter point in both June and July in a bid to tame stubbornly high inflation. "We don't want to raise our policy rate more than we have to," Macklem said, adding that persistently high inflation would be worse for Canadians than high borrowing costs. (Reporting by Steve Scherer, editing by David Ljunggren)((Reuters Ottawa bureau, david.ljunggren@tr.com))Keywords: CANADA CENBANK/Our Standards: The Thomson Reuters Trust Principles.

Persons: Blair Gable, Steve Scherer, David Ljunggren OTTAWA, Macklem, Chrystia Freeland, David Ljunggren Organizations: Canada, REUTERS, Bank of Canada, BoC, federal, Reuters, Thomson Locations: Ottawa , Ontario, Canada, Calgary , Alberta, Reuters Ottawa

☆ Bank of Canada holds rates, says it could hike further if inflation persists
▼ + stars: | 2023-09-06 | by ( ) www.reuters.com time to read: +2 min

Bank of Canada Governor Tiff Macklem takes part in a news conference after announcing an interest rate decision in Ottawa, Ontario, Canada April 12, 2023. The central bank hiked rates by a quarter point in both June and July in a bid to tame stubbornly high inflation, which has remained above the bank's 2% target for 27 months. "Governing Council remains concerned about the persistence of underlying inflationary pressures, and is prepared to increase the policy interest rate further if needed." Liberal Prime Minister Justin Trudeau's support has sagged amid high inflation as his Conservative rival, Pierre Poilievre, hammered him for fueling inflation with government spending and driving up rates during a housing crisis. Bank of Canada Governor Tiff Macklem will deliver a speech and hold a press conference to discuss the decision on Thursday.

Persons: Blair Gable, Steve Scherer, David Ljunggren OTTAWA, Justin Trudeau's, Pierre Poilievre, David Ljunggren Organizations: Canada, REUTERS, Bank of Canada, Wednesday, Governing, of Canada, BoC, Liberal, Conservative, Reuters, Thomson Locations: Ottawa , Ontario, Canada, Reuters Ottawa

Bank of Canada Governor Tiff Macklem takes part in a news conference after announcing an interest rate decision in Ottawa, Ontario, Canada April 12, 2023. REUTERS/Blair Gable/File Photo Acquire Licensing RightsOTTAWA, Sept 6 (Reuters) - The Bank of Canada on Wednesday is expected to keep rates on hold at a 22-year high of 5% after the economy unexpectedly shrank in the second quarter, analysts said. While the economy turned negative in the second quarter, inflation has been stubborn, unexpectedly rising to 3.3% in July as core measures remained well above 3%. Canada's Liberal Prime Minister Justin Trudeau's support has sagged amid high inflation as his Conservative rival, Pierre Poilievre, hammered him for feeding inflation with government spending and driving up rates during a housing crisis. But core inflation measures are inching down slowly, and a wealth of data is due out before the bank next meets to discuss rates in October.

Persons: Blair Gable, Derek Holt, Justin Trudeau's, Pierre Poilievre, Tiago Figueiredo, Holt, Steve Scherer, Mark Porter Organizations: Canada, REUTERS, Rights, Bank of Canada, of Canada, Scotiabank, Canada's Liberal, Conservative, Bank of Canada's, Desjardins Group, Reuters, BoC, Thomson Locations: Ottawa , Ontario, Canada

Bank of Canada Governor Tiff Macklem takes part in a news conference after announcing an interest rate decision in Ottawa, Ontario, Canada April 12, 2023. The central bank hiked rates by a quarter point in both June and July in a bid to tame stubbornly high inflation, which has remained above the bank's 2% target for 27 months. Bank of Canada Governor Tiff Macklem will deliver a speech and hold a press conference to discuss the decision on Thursday. Reuters GraphicsLiberal Prime Minister Justin Trudeau's support has sagged amid high inflation as his Conservative rival, Pierre Poilievre, hammered him for fueling inflation with government spending and driving up rates during a housing crisis. "The Bank of Canada's decision to maintain its overnight interest rate is welcome relief for Canadians," Finance Minister Chrystia Freeland said in a statement.

Persons: Blair Gable, Doug Porter, Andrew Kelvin, Justin Trudeau's, Pierre Poilievre, Chrystia Freeland, Steve Scherer, David Ljunggren, Fergal Smith, Ismail Shakil, Divya Rajagopal, Nivedita Balu, Mark Porter Organizations: Canada, REUTERS, Rights, Bank of Canada, Wednesday, Governing, BoC, BMO Capital Markets, Canadian, Reuters, TD Securities, Reuters Graphics Liberal, Conservative, Finance, Thomson Locations: Ottawa , Ontario, Canada

Overall U.S. banks' cash assets were $3.26 trillion as of Aug. 23, up 5.4% from the end of 2022. The SVB failure triggered a sudden dash for cash at banks, which within two weeks had bulked up cash assets to $3.49 trillion, the highest level since April 2022. It has $420 billion in cash and $990 billionof what it calls high quality liquidity assets and other unencumbered securities, it said. "The good news is for some of these banks re-investing cash is that we have pretty high short-term rates," said Mac Sykes, portfolio manager at Gabelli Funds. "It's definitely opportunistic and advantageous to be investing short-term securities."

Persons: Carlo Allegri, David Fanger, Moody's, Brendan Browne, Manan Gosalia, Morgan Stanley, Peter Marshall, Mac Sykes, Saeed Azhar, Ann Saphir, Niket, Megan Davies, Nick Zieminski, Richard Chang Organizations: Bank of America, REUTERS, FRANCISCO, Silicon Valley Bank, Signature Bank, Federal, Graphics, Reuters, JPMorgan, Federal Reserve, Regulators, FDIC, Gabelli, Thomson Locations: Manhattan, New York City , New York, U.S, Silicon

☆ 'The vast bulk of companies are in big trouble': A renowned bear who called the dot-com bubble warns a recession is still on the way as bankruptcies rise — threatening to sink even the mega-cap stocks
▼ + stars: | 2023-09-02 | by ( William Edwards | ) www.businessinsider.com time to read: +5 min

While big firms have survived high rates, Edwards said a recession would eventually hurt them too. Here are the effective interest rates for a few cohorts of the S&P 1500. The Federal Reserve's Senior Loan Officer Opinion Survey shows 49% of banks are tightening lending standards for small companies. They weren't able to lock into long-term loans at almost zero interest rates and pile it high in the money markets at variable rates," Edwards said. "In our view, the current savings rate is unsustainably low, and the main downside risk to growth is that the savings rate will suddenly move higher."

Persons: Societe Generale's Albert Edwards, Edwards, haven't, Louis, that's, we'll, Brian Rose, Rose, Piper Sandler, it's Organizations: Societe Generale's, Societe Generale, American Bankruptcy Institute, Generale, Federal, Federal Reserve Bank of St, Institute, Supply Management's, UBS Americas, UBS Companies

Specifically, she outlined puzzlement at why the inflation-adjusted risk-free rates priced by markets - real Overnight Index Swap yields from one to 10 years - had subsided again since the last ECB rate hike in July - back to where they were in February when ECB policy rates were just 2.5%. Long-term real yields from benchmark German government bond markets are positive again this year for the first time in almost a decade. But they have fallen almost 20bp from just before the last ECB rate hike to just above 0.1% now. Minutes released today from the last ECB meeting suggest the council is still undecided about its next step this month, but many market analysts see the tension building. ECB chart from Isabel Schnabel speech on rising market inflation premiaReuters GraphicsReuters GraphicsThe opinions expressed here are those of the author, a columnist for Reuters.

Persons: Isabel Schnabel, It's, Carsten Brzeski, Josie Kao Organizations: Central Bank, disinflation, ECB, Reuters Graphics Reuters, ING, Reuters, Thomson Locations: Frankfurt, U.S

The second-quarter reading was far lower than the Bank of Canada's (BoC's) forecast for a 1.5% annualized GDP growth as well as the 1.2% gain expected by analysts. The quarterly slowdown was largely due to declines in housing investment and smaller inventory accumulation as well as slower international exports and household spending, Statistics Canada said. The central bank hiked its benchmark overnight rate to a 22-year-high of 5.0% in July, the tenth increase since March of last year. The high interest rate environment has coincided with falling housing investment, which recorded its fifth consecutive quarterly decrease in the three months ended in June. The housing investment decline was led by a sharp drop in new construction as well as a fall in renovation activities, Statscan said.

Persons: Stephen Brown, Andrew Kelvin, Statscan, downwardly, Doug Porter, Ismail Shakil, Steve Scherer, Dale Smith, Fergal Smith, Nivedita Balu, Mark Porter Organizations: Bank of Canada's, North, Capital Economics, Bank of Canada, Statistics, BoC, Reuters, TD Securities, Money, Canadian, BMO Capital Markets, Thomson Locations: OTTAWA, North American, Statistics Canada, Canada

☆ Canadian dollar posts biggest loss in 1 month as economy shrinks
▼ + stars: | 2023-09-01 | by ( Fergal Smith | ) www.reuters.com time to read: +2 min

[1/2] A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. The loonie was trading 0.6% lower at 1.3595 to the U.S. dollar, or 73.56 U.S. cents, its biggest decline since Aug. 1. "The Bank of Canada's job is done," said Adam Button, chief currency analyst at ForexLive. "The Canadian dollar is selling off because the debate will quickly shift to when rate cuts are coming. Separate data showed that the contraction in Canada's manufacturing sector gathered pace in August.

Persons: Mark Blinch, Adam Button, It's, Fergal Smith, Frances Kerry, Alison Williams Organizations: REUTERS, greenback, Canadian, U.S, of Canada, U.S ., Thomson Locations: Toronto, TORONTO, Canada

☆ Dollar gains on solid data, euro drops on cautious ECB comments
▼ + stars: | 2023-08-31 | by ( Karen Brettell | ) www.reuters.com time to read: +4 min

U.S. Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. U.S. consumer spending increased by the most in six months in July, with an 0.8% increase, but slowing inflation strengthened expectations that the Federal Reserve would keep interest rates unchanged next month. “The dollar is faring better as today’s data suggests America’s economic glass remains half full,” said Joe Manimbo, senior market analyst at Convera in Washington. Money markets are now pricing in a 69% probability that the ECB will leave rates unchanged at its September meeting. The dollar was last 7.2595 against the onshore yuan , after reaching 7.2485, the lowest level since Aug. 14.

Persons: Dado Ruvic, ”, Joe Manimbo, Raphael Bostic, ’, Isabel Schnabel, “ We've, Michael Brown, Karen Brettell, Samuel Indyk, Jonathan Oatis Organizations: REUTERS, European Central Bank, Federal Reserve, Atlanta Fed, Reuters, ECB, Trader, People's Bank of, Thomson Locations: Washington, U.S, People's Bank of China, London

☆ Analysis-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. Another inflation hawk, Austrian central bank chief Robert Holzmann, said the ECB could deliver “another hike or two”. 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.

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

☆ 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

☆ Euro steadies as markets raise bets of ECB hike after inflation data
▼ + stars: | 2023-08-30 | by ( Joice Alves | ) www.reuters.com time to read: +4 min

[1/2] Euro and U.S. dollar banknotes are seen in this illustration taken March 10, 2023. Money markets raised their bets on a September rate hike from the ECB, pricing in a 60% chance of a 25 basis-point move. "One key input to arrive at a final assessment is the inflation data this week," he added. The dollar index - which measures the currency against six major peers including the yen and euro - slipped 0.1% to 103.47. INTERVENTION TERRITORYThe dollar rose 0.35% to 146.38 yen .

Persons: Dado Ruvic, Benjamin Schroeder, pare, Charu, Jerome Powell, Naoki Tamura, bitcoin, cryptocurrency, Joice Alves, Kevin Buckland, Tom Westbrook, Miral Fahmy, Alex Richardson Organizations: U.S, REUTERS, European Central Bank, Federal, Reuters, Money, ECB, ING, Fed, Saxo . Money, Bank of Japan, Reserve Bank of Australia, People's Bank of, Thomson Locations: Germany, Spain, North Rhine, Westphalia, NRW, People's Bank of China, London, Tokyo

Passersby are reflected on an electric stock quotation board outside a brokerage in Tokyo, Japan April 18, 2023. "They almost certainly have to hike again this year because today's inflation data shows there's still more work to do." INFLATION WATCHGovernment bond yields in the euro zone rose broadly after inflation data suggested the ECB may still have to hike rates again. Germany's two-year bond yields rose 7 bps to 3.09% . Spanish inflation rose 2.6% in August, as economists polled by Reuters had expected.

Persons: Issei Kato, Patrick Armstrong, there's, SEB, Elisabet Kopelman, Jerome Powell's, Naomi Rovnick, Shashwat Chauhan, Mark Potter, Chizu Organizations: REUTERS, European Central Bank, ECB, Nasdaq, Wall, SEB Group, Fed, Reuters, Bank's, U.S, Treasury, Brent, Thomson Locations: Tokyo, Japan, Asia, Spain, North Rhine Westphalia, Germany's, United States, Gulf, Mexico, Bengaluru

REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing RightsLONDON/TOKYO, Aug 30 (Reuters) - The euro eased against the dollar on Wednesday as investors looked to more labour market data in the U.S. and inflation data in the euro zone to provide clues on the path for central banks policies. "One key input to arrive at a final assessment is the inflation data this week," he added. The euro eased 0.2% to $1.0856. The dollar index - which measures the currency against six major peers including the yen and euro - edged 0.1% higher at 103.67. INTERVENTION TERRITORYThe dollar rose 0.38% to 146.43 yen .

Persons: Dado Ruvic, Benjamin Schroeder, pare, Matt Simpson, Jerome Powell, Naoki Tamura, bitcoin, cryptocurrency, Joice Alves, Kevin Buckland, Tom Westbrook, Miral Organizations: REUTERS, Reuters, Money, ECB, ING, Index, Fed, Bank of Japan, Reserve Bank of Australia, People's Bank of, Thomson Locations: TOKYO, U.S, Spain, Germany, Westphalia, NRW, People's Bank of China, London, Tokyo

☆ Morgan Stanley's Slimmon says the S&P 500 will near 5,000 by year-end — and names 3 stocks to buy
▼ + stars: | 2023-08-30 | by ( Weizhen Tan | ) www.cnbc.com time to read: +2 min

Morgan Stanley Investment Management's Andrew Slimmon believes markets are set for a "strong rally" by the end of the year. He told CNBC's " Street Signs Asia " on Tuesday that he believes the S & P 500 will be "closer" to 5,000 by then. Stock picks Slimmon is positive on three stocks to buy right now: Alphabet , industrial equipment rental firm United Rentals , and building materials firm CRH . As for United Rentals and CRH, Slimmon said they're set to benefit from the increased spending on public works. Analysts covering United Rentals and CRH give them potential average upside of 10% and nearly 18%, respectively, according to FactSet.

Persons: Morgan Stanley, Andrew Slimmon, CNBC's, Slimmon, It's, haven't, Stock, they've, they're, –, — CNBC's Michael Bloom Organizations: Morgan Stanley Investment, United Rentals, Apple, Microsoft, Nvidia, Tesla Locations: Monday's

REUTERS/Loren Elliott Acquire Licensing RightsAug 30 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. Australian inflation, Japanese consumer confidence and German inflation figures later in the day are the main data points on Wednesday's economic calendar that could move Asian markets, which have started the week on a roll. A series of measures from China aimed at boosting domestic stock markets have had an immediate effect - China's benchmark index of blue chip stocks on Tuesday posted back-to-back gains of 1% or more for the first time since January. Money markets quickly swiped off the table expectations of another rate hike this year, short-dated yields plunged and stocks boomed. Put all that together and there is every reason to believe Asian markets will open in the green on Wednesday.

Persons: Loren Elliott, Jamie McGeever, Cryptocurrencies, Gina Raimondo, Michele Bullock, Josie Kao Organizations: REUTERS, Money, Nasdaq, Securities and Exchange, Stock Connect, U.S . Commerce, Bank of China, Incoming, Thomson, Reuters Locations: Sydney, Australia, China, U.S, Japan, Germany

☆ Powell signals no retreat, no surrender
▼ + stars: | 2023-08-28 | by ( ) www.reuters.com time to read: +4 min

Federal Reserve Chair Jerome Powell walks in Teton National Park where financial leaders from around the world gathered for the Jackson Hole economic symposium outside Jackson, Wyoming, U.S., August 26, 2022. There's no doubt that the U.S. central bank is nearing the end of its mission to wrestle down inflation. Headline consumer price pressures are rapidly abating, thanks to a wholesale retreat in food and energy prices. "It is the Fed's job to bring inflation down to our 2% goal, and we will do so," he said. This week, investors get a dose of top-tier data to help shape their view on the Fed's next move.

Persons: Jerome Powell, Jackson, Jim Urquhart, Amanda Cooper, it's, Mohammed El, Erian, payrolls, Kirsten Donovan Organizations: REUTERS, Federal Reserve, Futures Trading, Reuters Graphics Reuters, Reuters, Dallas Fed, Thomson Locations: Teton, Jackson , Wyoming, U.S

☆ Canadian economy set to show marked slowdown in second quarter, giving central bank cause to pause
▼ + stars: | 2023-08-27 | by ( Fergal Smith | ) www.reuters.com time to read: +3 min

[1/2] Condominium and office towers are seen on the mountain-backed skyline of Vancouver, British Columbia, Canada September 30, 2020. The GDP report will be the last major piece of domestic data before the Canadian central bank makes its next policy decision on Sept. 6. The central bank has said it would study economic data closely before determining whether it raises interest rates further. The BoC has projected 1.5% growth for the third quarter, matching its second-quarter estimate. Some argue that the composition of growth in the second-quarter data, including the split between internal and external demand, could also be a consideration.

Persons: Jennifer Gauthier, Carlos Capistran, Bank of America Merrill Lynch, Benjamin Reitzes, we've, Stephen Brown, Andrew Grantham, Fergal Smith, Denny Thomas, Jonathan Oatis Organizations: REUTERS, Rights, Bank of Canada, BoC, Bank of America, BMO Capital Markets, Money, North, Capital Economics, CIBC Capital Markets, Thomson Locations: Vancouver , British Columbia, Canada, Canadian, Mexico, North America

☆ Morning Bid: 'Flash' business funk and AI buzz
▼ + stars: | 2023-08-23 | by ( ) www.reuters.com time to read: +4 min

Raindrops hang on a sign for Wall Street outside the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. Euro zone government bond yields and the euro tumbled as traders bet the European Central Bank may soon pause its interest-rate hike campaign, with money markets now pricing less than a 50% chance of further tightening. The dollar (.DXY) hit its highest since early June as both the euro and sterling took a hit. Existing home sales dropped to a six-month low in July, with new home sales numbers due later today. European and Japanese shares were up smartly too, but mainland Chinese stocks (.CSI300) underperformed yet again and dropped another 1%-plus.

Persons: Mike Segar, Mike Dolan, Wednesday's, John Stonestreet Organizations: Wall, New York Stock Exchange, REUTERS, Micron Technology, European Central Bank, Treasury, Federal, Jackson, Nvidia, Apple, Microsoft, Devices, Autodesk, Advance, Thomson, Reuters Locations: Manhattan, New York City , New York, U.S, Europe, Philadelphia, United States, Johannesburg

NEW YORK, Aug 23 (Reuters) - A recent spike in U.S. bond yields has come alongside muted expectations for inflation, a sign to some bond fund managers that economic resilience and high bond supply are now playing a larger role than second-guessing the Federal Reserve. Bond yields, which move inversely to prices, tend to rise in an inflationary environment because inflation erodes the value of a future bond payout. But while higher moves in bond yields in the last several months were often driven by investors pricing in higher interest rates as the Fed sought to tame rising inflation, expectations on the pace of price rises have moved lower in recent weeks. Long-term Treasury yields account for factors such as inflation expectations and term premiums, or what investors demand to be compensated for the risk of holding long-term paper. A recent string of strong economic data despite higher interest rates has strengthened investor beliefs that interest rates will remain higher for longer, even if inflation is tamed.

Persons: Jerome Powell, Jackson, Bond, ”, Calvin Norris, John Madziyire, Anthony Woodside, “, Aegon's Norris, Davide Barbuscia, Megan Davies, Anna Driver Organizations: Federal Reserve, Federal, Aegon Asset Management, Investors, Bank of Japan, BMO Capital Markets, Treasury, Securities, Reuters, Fed, Thomson Locations: U.S, America

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