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☆ 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.

REUTERS/Brendan McDermidNov 3 (Reuters) - Investors trying to navigate this year's relentless interest rate rises have more reasons to play it safe, after a pessimistic message from the U.S. Federal Reserve clouded the outlook for asset prices. Yet Chairman Jerome Powell’s message at Wednesday’s press conference – which followed its fourth straight 75 basis-point rate increase – did little to bolster the case for a less hawkish Fed. Investors are bracing for U.S. employment data on Friday for clues on whether the Fed’s rate hikes have begun to erode the economy’s strength. Signs that inflation is beginning to slow after the Fed’s barrage of rate hikes could bolster the case for a less aggressive monetary policy in coming months. Bartolini is becoming more bullish on mortgage-backed securities, which he expects to benefit from a decline in volatility sparked by smaller rate increases.

Yields on U.S. Treasury securities, which had dropped sharply after the Fed statement was released, turned higher. The 2-year note - the bond maturity most sensitive to Fed policy expectations - was up 6 basis points to about 4.61%. The document "implied that (the Fed) may be aiming for a higher medium-term level for the fed funds rate than currently expected," Nelson said. The language in the policy statement acknowledged the broad debate that has emerged around the Fed's policy tightening, and opened a new stage in that discussion. The Fed's statement "was a lot more definite about a possible downshift than I thought it would be.

☆ Morning Bid: Downbeat on the downshift
▼ + stars: | 2022-11-02 | by ( ) www.reuters.com time to read: +4 min

A look at the day ahead in U.S. and global markets from Mike Dolan. The recent burst of stock market optimism around the world still seems to be on shaky ground. Despite expectations the U.S. Federal Reserve will signal a much-vaunted 'downshift' in its rate rise campaign from next month - following a fourth straight 75 basis point rise on Wednesday - the incoming economic numbers won't play ball. The other slightly peculiar source of global market optimism this week has been unverified speculation over the past 48 hours that China will ease its draconian zero COVID rules in March. In Europe, markets awaited the Bank of England's latest interest rate decision on Thursday - with the bank's biggest rate rise in 33 years forecast.

☆ A Fed policy downshift will be guided by real-rate data and lead-lag considerations
▼ + stars: | 2022-11-02 | 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 EmailA Fed policy downshift will be guided by real-rate data and lead-lag considerationsFed Chair Jerome Powell delivers remarks after the Federal Reserve raises interest rates by 75 bps in an effort to get inflation back to its 2 percent target.

Bank of Japan Governor Haruhiko Kuroda, however, reiterated the central bank's resolve to keep interest rates ultra-low, indicating that the yen's broad downtrend could continue. The finance minister repeated his warning that authorities are closely watching market moves and will not tolerate "excessive currency moves driven by speculative trading". In September, when Japan conducted its first yen-buying intervention since 1998, authorities immediately confirmed they had stepped in. Since the Oct. 21 intervention, the yen has been moving in a range below the psychologically important threshold of 150 yen versus the dollar. As such, it's necessary to support the economy with acccomodative monetary policy," Kuroda told parliament on Tuesday.

☆ The Fed is about to 'downshift' and weaker earnings don't matter to stocks, says top Evercore strategist
▼ + stars: | 2022-11-01 | by ( Brian Evans | ) www.businessinsider.com time to read: +2 min

Julian Emanuel also told Bloomberg on Tuesday that earnings don't matter that much for stocks. "I don't want to call it 'pause' ... but we know the trajectory is gonna change, and the market is getting comfortable with that." "At the same time, just like the July earnings season, we know that the numbers are coming down," Emanuel said. "It didn't matter [for] stocks in July, and it doesn't matter now, because frankly people have been, for the most part, underinvested." That view contrasts with those of other Wall Street analysts, who have said earnings could lead stocks lower.

☆ Gold hovers near 1-week low as dollar steadies ahead of Fed decision
▼ + stars: | 2022-11-01 | by ( ) www.cnbc.com time to read: +1 min

Spot gold was listless at $1,633.69 per ounce, as of 0059 GMT, having earlier touched its lowest level since Oct. 21. The dollar index was steady after rising 0.8% overnight, hurting gold's appeal for overseas buyers. Gold is highly sensitive to rising U.S. interest rates, as that increase the opportunity cost of holding the non-yielding metal. Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.22% to 920.57 tons on Monday from 922.59 tons on Friday. Spot silver rose 0.2% to $19.18 per ounce, platinum dipped 0.1% to $924.51 and palladium gained 0.9% to $1,856.91.

☆ Morning Bid: Full of energy
▼ + stars: | 2022-11-01 | by ( ) www.reuters.com time to read: +3 min

Global stocks just won't lie down, doggedly clinging to hopes that central banks will ease off the policy brakes or that China might ease COVID curbs, just as energy firms reap massive windfall profits. Everything from central bank speculation, big rotations of equity sectors and talk of yearend seasonal flows in a U.S. election year are all cited. And after a downbeat start to the week, stocks jumped back yet again on Tuesday - even on some pretty thin reasoning. Underperforming Hong Kong and China stocks surged late in the day, with the former closing up more than 5%, after social media chatter that China was planning some reopening from strict COVID curbs in March. Energy sector earnings show clear winners from the year's Ukraine-related price shock.

☆ US stocks jump as investors look to continue October rally ahead of key Fed policy decision
▼ + stars: | 2022-11-01 | by ( Carla Mozée | ) www.businessinsider.com time to read: +2 min

US stocks advanced Tuesday with investors aiming to build on a strong October performance. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. Loading Something is loading. Investors were preparing for Wednesday's likely decision by the Federal Reserve to raise interest rates by another 75 basis points. Stocks found support Tuesday on speculation that China may be considering its strict zero-COVID policy that has sent businesses and residents under lockdowns to curb infections.

☆ Morning Bid: Trick or treat?
▼ + stars: | 2022-11-01 | by ( ) www.reuters.com time to read: +2 min

A look at the day ahead in European and global markets fromAnshuman DagaThere's a sense of cheer among investors before the Fed's mid-week rate decision as markets seem to be pricing in an expected treat from the U.S. central bank. Risk-on appetite is gradually coming back as global stocks flirt with their strongest levels in just over a month while the mighty dollar slips from a one-week high. The Fed is set to raise rates by 75 basis points for the fourth straight time, bringing the target overnight lending rate to a 3.75%-4.00% range. Analysts at BlackRock Investment Institute are, however, still underweight on stocks as they see central banks on a path to overtighten policy. Down Under, the Reserve Bank of Australia stuck with a 25 basis points rate hike as widely expected, while revising up its inflation outlook.

☆ Fed peak rate talk meets China curbs, grain strain
▼ + stars: | 2022-10-31 | by ( ) www.reuters.com time to read: +3 min

A look at the day ahead in U.S. and global markets from Mike Dolan. That lifted short and long-term Treasury yields on Monday , , with the dollar rising again across the board. China's factory and services activity unexpectedly fell in October, weighed by softening global demand and strict domestic COVID-19 curbs. In banking, Credit Suisse (CSGN.S) on Monday unveiled details of its plan to raise 4 billion Swiss francs ($4.01 billion) from investors to tackle the biggest crisis in its 166-year history. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Fed set to deliver another big rate hike, debate December downshift
▼ + stars: | 2022-10-31 | by ( Ann Saphir | ) www.reuters.com time to read: +5 min

Defining that point, or at least its parameters, will be the subject of intense discussion at this week's Federal Open Market Committee meeting. Reuters GraphicsAnd during that time, Fed policymakers, with the notable exception of Powell, have offered a range of views on where they stand on a possible slowdown or even pause to rate hikes. Fed Governor Michelle Bowman, for instance, said she'll look for signs that inflation is moving down before she would want to reduce the pace of rate hikes. Reuters Graphics'NEED TO BE CONVINCED'Bets in futures markets weigh heavily in favor of a slowdown in rate hikes starting in December, but ultimately a top Fed policy rate of 4.75%-5.00%, slightly higher than policymakers themselves have flagged, by early next year. Fed policymakers, Reinhart said, are also well aware that monetary policy typically goes too far.

☆ Morning Bid: Fed peak rate talk meets China curbs, grain strain
▼ + stars: | 2022-10-31 | by ( ) www.reuters.com time to read: +3 min

Freight companies are preparing for what executives are calling a muted peak season, as dimming shipping demand from overstocked retailers ripples across U.S. shipping markets. Several big operators say they are seeing freight demand drop off rather than pick up heading into what is typically their busiest period of the year. Clothing retailer Ministry of Supply Inc. stocked up on inventory for the peak season with orders that arrived too late for last year’s winter season and items that arrived early this year. DAT Solutions LLC, a load board that matches trucks to available loads, said its index for spot market demand fell sharply from August to September, to the lowest point since February. “If you’re a carrier exposed to the spot market, you’re hurting.

☆ Morning Bid: Tech melts, buck bounces
▼ + stars: | 2022-10-28 | by ( ) www.reuters.com time to read: +3 min

All of which raises some questions about the price at which Elon Musk eventually agreed to buy Twitter. But the dollar rallied on Friday as other central banks looked to more than match any easier Fed tilt. Eyes are shifting to another U.S. inflation update later, with European growth and inflation numbers surprising to the upside. Although spurred back higher on Friday by the inflation news, European bond markets had a dovish take on Thursday's doubling of European Central Bank interest rates to 1.5%. Key developments that should provide more direction to U.S. markets later on Friday:* U.S. September PCE price index, personal income and consumption.

The all-inclusive figure that forms the basis for the Fed's target is likely to come in around 6%. SUPPLY, DEMAND, COMPETITIONThere has been sharp rhetoric about high corporate profits driving inflation - and indeed businesses like auto dealers enjoyed large markups during the pandemic, when demand surged and supply was limited. Based on those and other metrics, shelter inflation already may be declining even if government data doesn't show it yet. While that may not be the source of inflation, Fed officials feel that more balance between labor demand and supply will help ease price increases. "This pattern supports our view that wage growth and price inflation will moderate without a recession," Briggs wrote.

☆ Bank of Canada downshift helps lift TSX to three-week high
▼ + stars: | 2022-10-26 | by ( Fergal Smith | ) www.reuters.com time to read: +1 min

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended up 182.75 points, or nearly 1%, at 19,279.76, its highest closing level since Oct. 4. The Toronto market's energy group rose 1.8% as U.S. crude oil futures settled 3% higher at $87.91 a barrel. The materials group, which includes precious and base metals miners and fertilizer companies, added 1.8%, while industrials ended 1.3% higher. Shares of Rogers Communications Inc jumped 5.8%, while Shaw Communications Inc (SJRb.TO) shares were up 7.2% as investors bet that Canada is likely to approve Rogers Communications' bid for Shaw. Reporting by Fergal Smith; Additional reporting by Shashwat Chauhan in Bengaluru; Editing by Cynthia OstermanOur Standards: The Thomson Reuters Trust Principles.

☆ Wall Street's fear gauge drops to a 4-week low as expectations for less-aggressive Fed rate hikes fuel stock gains
▼ + stars: | 2022-10-25 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

Wall Street's so-called fear gauge hit a one-month low Tuesday as stocks rose amid speculation the Fed will reduce the size of future rate hikes. The Cboe Volatility Index fell by more than 4% to its lowest level since September 23. Investors have latched onto signs the Fed may downshift rate hikes from the current size of 75 basis points. The Cboe Volatility Index, a widely watched track of the 30-day implied volatility of the S&P 500 index, fell 4.5% to 28.49, the lowest level for the VIX since September 23. The CME FedWatch tool on Tuesday showed expectations locked in for a rate hike of 75 basis points at the Fed's November 1-2 meeting.

☆ Sterling volatile ahead of BoE deadline, fragile yen tests 1998 low
▼ + stars: | 2022-10-13 | by ( Joice Alves | ) www.reuters.com time to read: +4 min

LONDON, Oct 13 (Reuters) - Sterling rose on Thursday in volatile trade as investors awaited the impending deadline for the Bank of England to end an emergency bond-buying programme. Sterling was up 0.44% at $1.1147 at 1054 GMT in a volatile week. "We can expect potential market take-up to continue to increase as market participants prepare for the BoE to exit the market. Sterling volatilityElsewhere, the yen struggled against the U.S. dollar trading 0.1% lower at 146.8. Investors were focusing on U.S. core inflation data due later today, which is projected to rise 6.5% year-on-year in September.

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