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☆ Fed to lift rates by 50 basis points, but peak policy rate may be higher
▼ + stars: | 2022-11-18 | by ( Prerana Bhat | ) www.reuters.com time to read: +4 min

U.S. consumer price inflation unexpectedly fell below 8% last month, bolstering already well-established market expectations the Fed would go for smaller rate hikes going forward after four consecutive 75-basis-point increases. Peak rate forecasts ranged between 4.25%-4.50% and 5.75%-6.00%. But 16 of 28 respondents to an additional question said the bigger risk was that rates would peak higher and later than they expect now, with another four saying higher and earlier. "While markets are focused on peak inflation, underlying inflation trends are persistent. This could force the Fed to keep raising the federal funds rate well into next year and beyond levels currently anticipated," said Philip Marey, senior U.S. strategist at Rabobank.

☆ Mortgage rates plunge to 6.61% amid signs of easing inflation
▼ + stars: | 2022-11-17 | by ( Anna Bahney | ) edition.cnn.com time to read: +6 min

Mortgage rates dropped sharply last week following a series of economic reports that indicated inflation may finally be easing. Mortgage rates have risen throughout most of 2022, spurred by the Federal Reserve’s unprecedented campaign of hiking interest rates in order to tame soaring inflation. While the Fed does not set the interest rates borrowers pay on mortgages directly, its actions influence them. Mortgage rates tend to track the yield on 10-year US Treasury bonds. Mortgage rates are expected to remain volatile for the rest of the year.

☆ Orton: The market has been preoccupied with a Fed pivot, but the terminal rate hasn't changed
▼ + stars: | 2022-11-17 | 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 EmailOrton: The market has been preoccupied with a Fed pivot, but the terminal rate hasn't changedMatt Orton of Raymond James Investment Management discusses what a potential downshift from the Fed to a 50 basis point hike really means, and where investors should target for opportunities right now.

☆ Morning Bid: Bear Hunt
▼ + stars: | 2022-11-17 | by ( ) www.reuters.com time to read: +5 min

Long-term sovereign bond yields have been falling sharply all week in advance of finance minister Jeremy Hunt's new budget, dragged down largely by U.S. disinflation hopes. UK 10- and 30-year gilt yields outperformed, however, dropping to their lowest since early September before backing up slightly on Thursday. U.S. housing starts numbers out later will give another glimpse at the state of the ailing property sector. Reverberations continued around the world from this month's latest implosion in the crypto universe and the failure of the FTX exchange. Major crypto player Genesis Global Capital suspended customer redemptions in its lending business on Wednesday, citing the FTX collapse.

☆ Morning Bid: Detente and dollars
▼ + stars: | 2022-11-15 | by ( Nupur Anand | ) www.reuters.com time to read: +4 min

A look at the day ahead in U.S. and global markets from Mike Dolan. As investors closely monitor shifting economic sands, signs of some easing of this year's tense geopolitics adds a tailwind to the yearend market bounce. The dollar's ongoing retreat, amid hopes of a downshift in U.S. interest rate rises next month that Federal Reserve Vice Chair Lael Brainard encouraged late Monday, also riffs off a defusing of at least some extreme political risks. JPMorgan cut its full-year 2022 China growth forecast to 2.9% from 3.1% previously and its 2023 forecast to 4% from 4.5%. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Shares and bonds chastened as Fed, ECB urge care
▼ + stars: | 2022-11-14 | by ( Lawrence White | ) www.reuters.com time to read: +5 min

Meanwhile dovish comments from European Central Bank policymaker Fabio Panetta saw European bond yields ease, but short-dated rates remained within striking distance of multi-year highs. Panetta said the ECB needs to avoid overtightening as that could destroy productive capacity and deepen a recession. The benchmark European STOXX index rose 0.26% (.STOXX), and MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 0.6%, after jumping 7.7% last week. The dollar index was last seen on Monday at 106.86, still well short of last week's 111.280 top , while the euro eased a touch to $1.032 , after climbing 3.9% last week. The firming dollar also dragged down oil prices, despite the hopes of a demand boost from China's hints at reopening.

☆ Shares and bonds chastened as Fed urges caution
▼ + stars: | 2022-11-14 | by ( Lawrence White | ) www.reuters.com time to read: +5 min

The benchmark European STOXX index rose 0.15% (.STOXX), and MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 0.5%, after jumping 7.7% last week. EYES ON CHINAChinese stocks gained on reports that regulators have asked financial institutions to extend more support to stressed property developers. The support for China's property sector, which consumes a vast amount of metals, boosted copper towards a five-month high. The dollar index was last seen on Monday at 107.15, still well short of last week's 111.280 top , while the euro eased a touch to $1.02875 , after climbing 3.9% last week. The firming dollar also dragged down oil prices, despite the hopes of a demand boost from China's hints at reopening.

☆ Shares mixed on Fed warning, China acts on property
▼ + stars: | 2022-11-14 | by ( Wayne Cole | ) www.reuters.com time to read: +5 min

read moreWaller added the markets were well ahead of themselves on just one inflation print, though he did concede the Fed could now start thinking about hiking at a slower pace. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 1.1%, after jumping 7.7% last week. read moreThe news on COVID rules had stoked a short-covering bounce in the yuan, which added to broad pressure on the dollar as yields dived. The dollar index was up a fraction on Monday at 106.920 , but still well short of last week's 111.280 top. Reporting by Wayne Cole; Editing by Shri Navaratnam and Kenneth MaxwellOur Standards: The Thomson Reuters Trust Principles.

☆ Asia shares pause as Fed warns against exuberance
▼ + stars: | 2022-11-14 | by ( Wayne Cole | ) www.reuters.com time to read: +4 min

read moreWaller added the markets were well ahead of themselves on just one inflation print, though he did concede the Fed could now start thinking about hiking at a slower pace. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 0.2%, after jumping 7.7% last week. read moreThe news on COVID rules had stoked a short-covering bounce in the yuan last week, which added to broad pressure on the dollar as yields dived. The dollar's recent retreat provided a much-needed fillip to commodities, with gold up at $1,768 an ounce after jumping over $100 last week. Oil futures extended their gains with Brent up 86 cents at $96.85, while U.S. crude rose 80 cents to $89.76 per barrel.

☆ Asia shares mixed on Fed warning, China hopes
▼ + stars: | 2022-11-14 | by ( Wayne Cole | ) www.reuters.com time to read: +4 min

read moreWaller added the markets were well ahead of themselves on just one inflation print, though he did concede the Fed could now start thinking about hiking at a slower pace. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 0.8%, after jumping 7.7% last week. read moreThe news on COVID rules had stoked a short-covering bounce in the yuan last week, which added to broad pressure on the dollar as yields dived. The euro eased a touch to $1.0324 , after climbing 3.9% last week, while the dollar firmed to 139.27 yen following last week's 5.4% drubbing. The dollar's recent retreat provided a much-needed fillip to commodities, with gold holding at $1,763 an ounce after jumping over $100 last week.

The rupee is tipped to open at around 80.65-80.70 per dollar, up from the previous session's close of 80.7950. The local currency jumped 2% last week in its best gain in almost four years. The rupee has already corrected more than 3% from record lows and "then you have to consider oil prices", the trader said. Asian currencies began the week on a positive note, keeping up the momentum fuelled by softer-than-expected U.S. inflation data. The data has prompted traders to calibrate again the pace of Fed rate hikes.

☆ Dollar dives as investors cheer after U.S. inflation misses forecasts
▼ + stars: | 2022-11-11 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

Figures showed that the consumer price index rose 7.7% year-on-year in October, the smallest gain since January and below forecasts of an 8% increase. The dollar tumbled overnight after the release, and recorded its worst day against the Japanese yen since 2016, having fallen 3.7%. Against a basket of currencies, the U.S. dollar index slumped more than 2% overnight, the most in over a decade. "The overnight moves in the dollar were pretty sharp ... read moreFTX is scrambling to raise about $9.4 billion from investors and rivals, a source told Reuters.

But while the notion of a potential shift in Federal Reserve policy is perfectly reasonable and logical, the word "pivot" - like "transitory" and others before it - should be binned. Shorthand can easily morph into broad-brushed assumptions, leaving traders tied in knots over particular words without really understanding their meaning. When everyone's models are programmed to grab the same word, phrase, or signal, herding behavior and one-way markets can ensue. chartSimilarly, the current obsession on when the Fed will "pivot" away from its most aggressive rate-hiking campaign in 40 years has been perhaps the single biggest driver of financial markets in recent months. chartAvoiding talk of a pivot will reduce the risk of damaging the Fed's credibility in the eyes of some sections of the public and financial markets, as happened with "transitory."

☆ What's really behind the sudden tension-release rally and whether it can last
▼ + stars: | 2022-11-10 | by ( Michael Santoli | ) www.cnbc.com time to read: +4 min

This is the daily notebook of Mike Santoli, CNBC's senior markets commentator, with ideas about trends, stocks and market statistics. -A sudden tension-release rally as a benign inflation report collides with a market wound tight against further adverse surprises, driving a burst of short-covering and a grab for equity exposure and takes the S & P 500 directly to its next noteworthy test. Still, the S & P is merely up less than 1% for November, so it remains whippy within a range. -The crypto tumult is far from sorted out but the risk rally today taking some pressure off. -VIX down almost 3 under 24, ratifying the lift in indexes and expressing relief at having the big known catalysts (election, CPI) past for now.

☆ Inflation, Recession Fears Have Some Holiday Shoppers Trading Down
▼ + stars: | 2022-11-06 | by ( Suzanne Kapner | ) www.wsj.com time to read: 1 min

Many shoppers are trading down to less expensive clothing and accessories—swapping Lululemon leggings for Uniqlo and expensive lingerie for Target bras and panties—as inflation eats into their disposable income and a rocky stock market erodes their wealth. The downshift raises concerns about the coming holiday season, historically a time when many people splurge on designer handbags, fine jewelry and other extravagant purchases for themselves or loved ones. Investors will get updates on shopping attitudes this week when Ralph Lauren Corp., Michael Kors parent Capri Holdings Ltd. and Tapestry Inc., the owner of Coach, report their latest results.

☆ Thousands of workers were laid off this week as tech companies and startups brace for an economic crash. Investors, founders, and recruiters explain why this is just the beginning.
▼ + stars: | 2022-11-05 | by ( Rob Price | Samantha Stokes | ) www.businessinsider.com time to read: +10 min

Amid growing economic uncertainty, layoffs in the technology industry, both for public companies and for startups, have been escalating this Fall. While plenty of tech companies were still flying high in early 2022, Russia's invasion of Ukraine in February accelerated global economic turmoil. More than 17,000 tech workers lost their jobs in both May and June, while July and August saw another 29,000 cuts, according to layoff tracker Layoffs.fyi. Davis, the VC at Interplay, explained that cost-cutting and layoffs are happening across the board, not just in the tech industry. But public tech companies as well as early- and growth-stage startups will face additional challenges, he said.

☆ Dollar eyes weekly gain; sterling wobbles on lower rate bets, bleak outlook
▼ + stars: | 2022-11-04 | by ( Rae Wee | Michael S. Derby | ) www.reuters.com time to read: +3 min

Against a basket of currencies, the U.S. dollar index fell 0.23% to 112.71, away from a near two-week peak of 113.15 hit overnight. Nonetheless, it was on track for a weekly gain of nearly 2% -- its largest since September. Fed rate futures now point to a terminal rate of about 5.15% by mid-2023, after the Federal Reserve raised interest rates by three-quarters of a percentage point this week. It was headed for a weekly loss of more than 3%, the largest since September's market turmoil triggered by an economic plan that alarmed investors. Reporting by Rae Wee; Editing by Kim Coghill and Ana Nicolaci da CostaOur Standards: The Thomson Reuters Trust Principles.

☆ Dollar ascendant; sterling slumps on lower rate expectations, bleak outlook
▼ + stars: | 2022-11-04 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

It was headed for a weekly loss of nearly 4%, the largest since September's market turmoil triggered by an economic plan that alarmed investors. While the BoE raised interest rates by the most since 1989 on Thursday, it warned investors that the risk of Britain's longest recession in at least a century means borrowing costs are likely to rise less than they expect. "It's been sort of coming for some time that the Bank of England is a reluctant hiker ... in the current environment. Fed rate futures now point to a terminal rate of about 5.15% by June, with U.S. Treasury yields moving in step with the higher expectations. The two-year Treasury yield , which typically moves in step with interest rate expectations, last stood at 4.7243%, after hitting a 15-year peak of 4.745% the previous session.

☆ Fed's Evans says smaller rate hikes make sense, front-loading done
▼ + stars: | 2022-11-04 | by ( Ann Saphir | ) www.reuters.com time to read: +3 min

"From here on out, I don't think it's front-loading anymore, I think it's looking for the right level of restrictiveness," Evans told Reuters in an interview, referring to the U.S. central bank's string of supersized rate hikes. The Fed's preferred measure of inflation is running at more than three times the central bank's 2% target. But the Fed would also be in position to downshift from 50-basis-point to 25-basis-point hikes if it needed to, he said. You are looking for the point where you've got two-sided risks," Evans said. "I think most people would say at the moment it's not two-sided: inflation reports are likely to still be disappointing even if they begin to improve."

☆ Australia central bank cuts growth outlook, rates need to rise to cool red-hot inflation
▼ + stars: | 2022-11-04 | by ( ) www.cnbc.com time to read: +3 min

A man walking past the Reserve Bank of Australia in the central business district of Sydney on June 7, 2022. However, the silver lining, according to the bank, is medium-term inflation expectations and wages growth have remained consistent with the inflation target, and it is important that this remains the case. The central bank lifted its cash rate by 25 basis points on Tuesday to a nine-year peak of 2.85%, bringing its tightening to a steep 275 basis points since May. It also acknowledged that higher inflation is eroding real household incomes against the backdrop of a possible global recession. However, the bank reaffirmed its determination to bring inflation back to target, warning that rates will need to rise further.

☆ Banks raise Fed terminal rate forecasts after Powell's hawkish tone
▼ + stars: | 2022-11-03 | by ( Caroline Valetkevitch | ) www.reuters.com time to read: +3 min

That pushed its fed funds target range to 3.75%-4.00%. That terminal rate forecast came down to 4.96% after the release of the Fed's policy statement. Powell told reporters "it is very premature to be thinking about pausing" in the effort to lift the federal funds target rate. Economists at Nomura, meanwhile, raised their terminal rate forecast by 25 basis points to 5.50%-5.75%. "We have greater confidence in our expectations for a higher terminal fed funds level, with fed funds reaching 5.25% by Q1 of next year and holding that level through 2023," they wrote.

☆ Morning Bid: Slower, higher, longer
▼ + stars: | 2022-11-03 | by ( ) www.reuters.com time to read: +3 min

A look at the day ahead in U.S. and global markets from Mike Dolan. U.S. Treasury yields are on the rise again as Fed rate futures now expect a terminal rate as high as 5.15% by May, with pricing for end-2023 rates just shy of 5% too - half a point higher than where futures had priced the terminal rate just one month ago. European Central Bank President Christine Lagarde said the ECB must be "attentive" to Fed policy decisions as it influences global markets - but it cannot just mirror moves in Washington. In banking, Morgan Stanley is expected to start a new round of layoffs around the world over the coming weeks. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Traders scramble for protection after Fed spooks markets
▼ + stars: | 2022-11-03 | by ( Saqib Iqbal Ahmed | ) www.reuters.com time to read: +4 min

The index is down about 3% since Tuesday's close and is down around 22% so far in 2022. On Thursday afternoon, with the S&P 500 index-tracking SPDR S&P 500 ETF Trust's (SPY.P) shares down 0.6% to $372.56, the most heavily traded SPY contracts were those that would guard against the ETF's shares slipping below $370 by Friday. SPY puts expiring at the end of next week, struck at the $350 mark, just above the ETF's mid-October intra-day low of $348.11, were the fourth most actively traded SPY options on Thursday. "Recent 'Fed meeting volatility' has not necessarily been confined to the Fed day itself," Christopher Jacobson, a strategist at Susquehanna Financial Group, said in a note. "Over the six prior Fed meetings year-to-date, the SPY has seen an average move of +/- 2.8% from the close on Wednesday (Fed day) to Friday's close," he said.

☆ Markets expect Fed to lift policy rate above 5% by March
▼ + stars: | 2022-11-03 | by ( ) www.reuters.com time to read: +3 min

Nov 3 (Reuters) - The Federal Reserve will take its benchmark policy rate above 5% by March and keep it there for most of 2023 in a bid to squeeze inflation out of the world's biggest economy, traders of U.S. interest rate futures were betting on Thursday. The U.S. central bank on Wednesday delivered a fourth straight three-quarters-of-a-percentage-point interest rate increase. While Fed Chair Jerome Powell said a switch to smaller-sized rate hikes "may come as soon as the next meeting, or the one after that," he also said there is a still a "ways to go" in the rate-hiking cycle. The view is in sync with that of most analysts' notes following the Fed's policy meeting this week. HOT LABOR MARKETThe Fed's rate hikes - the most aggressive tightening of U.S. monetary policy in 40 years - are aimed at bringing down inflation running at more than three times the central bank's 2% target.

☆ European shares slide as Fed hints at tightening for longer
▼ + stars: | 2022-11-03 | by ( Shreyashi Sanyal | ) www.reuters.com time to read: +3 min

The pan-European STOXX 600 (.STOXX) dropped 0.9% by 0905 GMT, with rate-sensitive European technology stocks (.SX8P) falling nearly 2%. While most major European sector indexes slid, banks (.SX7P) edged 0.3% higher. European equity markets rose for three days out of four leading up to the Fed decision, helped by better-than-expected corporate earnings. Investors awaited an interest rate decision by the Bank of England later in the day, where it is expected to deliver its biggest rate hike since 1989. Among stocks, BMW (BMWG.DE) fell 2.9% as the German premium carmaker warned that rising inflation and interest rates would start to weigh on sales in the coming months.

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