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☆ Asian stocks make 7-month highs, Australian dollar gains on hot inflation
▼ + stars: | 2023-01-25 | by ( Anshuman Daga | ) www.reuters.com time to read: +3 min

SINGAPORE, Jan 25 (Reuters) - Asian equities scaled their highest levels in seven months on Wednesday after some regional markets reopened after holidays, and the Australian dollar hit multi-month highs as surging inflation made higher interest rates more likely. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.2% to a seven-month high but traded below the day's peak. Globally, stocks have posted strong gains this year after a torrid 2022, based on expectations that inflation is close to peaking and the rise in U.S. interest rates will taper off. Stronger-than-expected economic data in Europe eased market worries of a sharp recession there, but interest rates are still seen creeping higher despite declining energy prices reducing inflationary pressure. The New Zealand dollar slid after New Zealand reported annual inflation of 7.2% in the fourth quarter, below a central bank forecast of 7.5%.

European stocks have vastly outperformed their U.S. peers. The euro STOXX (.STOXXE) benchmark has beaten its U.S. peer, the S&P 500 (.SPX), by over 18 percentage points since September. "It's a very big move in European gas prices and that has dramatically improved the outlook. "Lower gas prices are surely a positive, but their rapid fall also tell us that they can rise just as fast should things go wrong. A closely watched index of European corporate credit (.MERER00) has seen its yield fall nearly 50 basis points this year.

NEW YORK, Jan 23 (Reuters) - The dollar edged lower against the euro on Monday, as the common currency found support from European Central Bank officials' comments signalling additional jumbo interest rate rises in Europe. The euro reached as high as $1.0927 , to trade at its highest level since April last year, before paring gains to trade up 0.1 % at $1.0865. A Reuters survey of analysts also favoured hikes of 50 basis points at the next two meetings and an eventual rate peak of 3.25%, from the current rate of 2%. "Really what's driving things is central bank policy divergence," said Joe Manimbo, senior market analyst at Convera in Washington. So when you weigh the outlook for central bank policy, it depicts the dollar at a disadvantage, given market bets on the Fed moving more slowly than its counterparts abroad," Manimbo said.

☆ Insurer ASR to consider sale of bank acquired in Aegon deal, source says
▼ + stars: | 2023-01-23 | by ( Pablo Mayo Cerqueiro | ) www.reuters.com time to read: +2 min

LONDON/AMSTERDAM, Jan 23(Reuters) - Dutch insurer ASR (ASRNL.AS) will consider a sale of its banking arm after completing its acquisition of rival Aegon's (AEGN.AS) domestic operations, a source close to the matter told Reuters. The lending business, however, is likely to be put up for sale, given ASR's previous stance on banking operations, the source said on condition of anonymity because the discussions are private. ASR labelled its original banking arm, ASR Bank, as "non-core" in 2018 and sold part of it to rival Achmea the following year. Aegon Bank had 16.2 billion euros ($17.6 billion) in assets on its balance sheet at the end of 2021, with 735.2 million euros of equity. ASR paid 2.5 billion euros in cash for Aegon's Dutch operations, with Aegon to retain a 30% stake in the enlarged group.

The euro reached as high as $1.0927 , breaking the recent peak of $1.08875, to trade at its highest level since April last year. The single currency was aided by European Central Bank (ECB) governing council members Klaas Knot and Peter Kazimir, who both advocated for two more 50 basis point hikes at meetings in February and March. A Reuters survey of analysts also favoured hikes of 50 basis points at the next two meetings and an eventual rate peak of 3.25%, from the current rate of 2%. Investors also have around 50 basis points of U.S. rate cuts priced in for the second half of the year, reflecting softer data on inflation, consumer spending and housing. The pound rose as high as $1.24475 , its highest in seven months, before turning 0.3% lower to $1.2355.

The euro reached as high as $1.0927 , breaking the recent peak of $1.08875, to trade at its highest level since April last year. It was aided by European Central Bank (ECB) governing council member Klaas Knot, who said interest rates would rise by 50 basis points in both February and March and continue climbing in the months after. A Reuters survey of analysts also favoured a hike of 50 basis points in March and an eventual top of 3.25% from the current rate of 2%. "Layered on top of that, it looks as if the ECB are going to carry on hiking interest rates fairly aggressively," Foley added. Investors also have around 50 basis points of U.S. rate cuts priced in for the second half of the year, reflecting softer data on inflation, consumer spending and housing.

☆ Fed to deliver two 25-basis-point hikes in Q1, followed by long pause
▼ + stars: | 2023-01-20 | by ( Prerana Bhat | ) www.reuters.com time to read: +4 min

Fed officials broadly agree the U.S. central bank should slow the pace of tightening to assess the impact of the rate hikes. The Fed raised its benchmark overnight interest rate by 425 basis points last year, with the bulk of the tightening coming in 75- and 50-basis-point moves. If realized, that would take the policy rate - the federal funds rate - to the 4.50%-4.75% range. The fed funds rate was expected to peak at 4.75%-5.00% in March, according to 61 of 90 economists. Reuters Poll- U.S. Federal Reserve outlookIn the meantime, the Fed is more likely to help push the economy into a recession than not.

Japan's Nikkei (.N225) fell 0.4% and the yen, which surged 2.7% against the dollar overnight, kept going and rose about 0.2% further to 128.65 per dollar. "No change in policy this month would be a setback for the yen," said Rabobank FX strategist Jane Foley. "However, we would look to buy the yen against the dollar on dips on anticipation of another (policy) move ... in the spring." INFLATION IN RETREATBeyond Japan, market sentiment was dominated by overnight U.S. December inflation data that landed more or less on consensus expectations. The U.S. dollar dropped 0.9% to a nine-month low of $1.0868 per euro and the risk-sensitive Australian dollar rose to a roughly five-month high at $0.6984.

Indonesia, producer of more than half of global palm oil supplies, also tightened trade rules this year, allowing exporters to ship just six times their domestic palm oil sales volume, less than a fourth-quarter 2022 ratio of eight times. "Indonesian palm oil export definitely will drop, as output will decline, domestic consumption will increase," Fadhil Hasan, an Indonesian Palm Oil Association (GAPKI) official, told Reuters. Indonesia produced 51.3 million tonnes of palm oil in 2022 and exported 33.7 million tonnes, GAPKI estimated. In 2023, palm oil output is expected at 50.82 million tonnes and exports at 26.42 million tonnes, it said. "But India's strong demand for palm oil will continue as it is still the cheapest edible oil."

☆ Food prices still stubbornly high but seeing some easing
▼ + stars: | 2023-01-12 | by ( Alicia Wallace | ) edition.cnn.com time to read: +4 min

In December, “food at home” prices increased 0.2% from the month before, according to data released Thursday by the Bureau of Labor Statistics. On an annual basis, however, grocery prices remain stubbornly high (and nearly double the rate of overall inflation) at 11.8% year over year. “Fertilizer costs have improved, but they still remain very high. Labor costs still remain a problem — and the list goes on.”In addition to those broader pressures, other factors, including weather and disease, are heavily affecting certain products’ prices. “It makes it extremely challenging for a mom-and-pop [business].”He added: “We’re just trying to stay alive and hope that things will come down.”The expectations are for food price increases to continue to moderate, Bailey said.

REUTERS/Eva Plevier/File PhotoWINNIPEG, Manitoba, Jan 11 (Reuters) - Netherlands-based Rabobank NA (RABOVR.UL) is aiming to grab 10-15% of the Canadian farm lending market within 15 years, as it aims to shake up a sector dominated by government and domestic banks, its new Canadian agricultural head told Reuters on Wednesday. It took Rabobank a decade before deciding to expand into Canadian farm lending, taking a methodical approach, Lieverse said. Rabobank expects Canadian farm lending to be profitable from the start and plans to announce hiring plans shortly, she said. Rabobank did not release its estimate of the value of the Canadian farm lending market, but government agency Statistics Canada pegged 2021 farm debt at a record-high C$129 billion ($96.1 billion), with chartered banks accounting for 37%. Farm Credit Canada, owned by the Canadian government, is the biggest agricultural lender, controlling a market share of about one-third, Lieverse said.

In a statement Tuesday, the agriculture ministry said 9.98 million animals had been killed this season, surpassing a previous record of 9.87 million that were slaughtered in fiscal 2020, during a previous bird flu crisis. The National Federation of Agricultural Cooperative Associations, known as Zen-Noh, gave a higher tally, saying approximately 10.9 million birds had been killed as of Tuesday night. “The market price is expected to soar.”The spread of bird flu has already pushed up egg costs around the world in recent months. In Japan, wholesale prices for eggs reached a record high last month as shipments dropped, according to public broadcaster NHK. Avian flu is caused by infections that occur naturally among wild aquatic birds, according to the Centers for Disease Control and Prevention.

☆ Analysis: As Bank of Japan switches gears, roaring dollar hits the skids
▼ + stars: | 2022-12-20 | by ( Amanda Cooper | ) www.reuters.com time to read: +5 min

Reuters GraphicsThe dollar has risen 9% this year, as the Federal Reserve has jacked up interest rates to combat inflation at 40-year highs. As other central banks, from the Bank of England, to the European Central Bank, and the Reserve Bank of Australia, have raised their own rates, dollar bulls have run out of puff. The close relationship between Japanese monetary policy and U.S. Treasuries adds another twist to the story. It all boils down to whether Japanese investors have hedged their Treasury exposure or not, he said. But the stress is on "at the margin", not least because of the sheer size of Japanese investors' holdings of U.S. debt, analysts said.

☆ Stocks steady, yields rise as rate risks cloud 2023 outlook
▼ + stars: | 2022-12-19 | by ( Danilo Masoni | ) www.reuters.com time to read: +5 min

By 1152 GMT, the index was broadly unchanged after a heavy week for rate increases on Friday sent it to its lowest point since Nov. 10. Long-term borrowing costs rose for a fourth straight session and short-dated yields remained not far off their highest levels in more than a decade. It wreaked havoc even on rate markets," said Carlo Franchini, head of institutional clients at Banca Ifigest in Milan. Ten-year Treasury yields rose 4 basis points (bps) to 3.522%. Gold inched 0.1% higher at $1,764 an ounce, as a softer dollar countered pressure from expectations of higher U.S. rates.

Summary Global stocks index up 0.1%Japan could tweak inflation target - sourceshttp://tmsnrt.rs/2yaDPgnhttp://tmsnrt.rs/2egbfVhMILAN, Dec 19 (Reuters) - World stocks inched higher on Monday but stayed near 6-week lows as investors started the year's last full trading week still mindful of interest rate hike risks to the economy in 2023. By 0902 GMT, the index rose 0.1% after a heavy week for interest rate increases on Friday sent it to its lowest point since Nov. 10. It wreaked havoc even on rate markets," said Carlo Franchini, head of institutional clients at Banca Ifigest in Milan. "Except for the BOJ and perhaps the Bank of England, there's little confidence in the other central banks. Japan's Nikkei (.N225) fell 1.05% to a six-week low and the yen rose 0.5% to 135.9 per dollar.

☆ A lettuce production problem cost Olive Garden owner millions
▼ + stars: | 2022-12-16 | by ( Danielle Wiener-Bronner | ) edition.cnn.com time to read: +2 min

New York CNN —High lettuce costs are coming for Olive Garden’s never-ending salad. Olive Garden's parent company said high lettuce costs had a $4-$5 million impact in the quarter ending November 27. But the lettuce prices were “a big surprise.”California crop diseaseCrop disease in California, where much of the country’s lettuce is grown, has hit lettuce supply and forced prices to rise. The crop virus in addition to the geographical shift “was the perfect recipe for really historically high prices,” he said. High lettuce prices are hitting consumers in the grocery store, as well.

☆ ECB delivers fourth straight increase but slows pace
▼ + stars: | 2022-12-15 | by ( Reuters Staff | ) www.reuters.com time to read: +5 min

COMMENTS:FLORIAN HENSE, SENIOR ECONOMIST, UNION INVESTMENT, FRANKFURT”This is probably the most hawkish 50 basis points they could come up with. Everything I read in the statement press release sounds hawkish and maybe even “very hawkish” to me. However, core inflation momentum remains firm and the labour market tight.”MARCHEL ALEXANDROVICH, EUROPEAN ECONOMIST, SALTMARSH ECONOMICS, LONDON:“It (the ECB statement) is very hawkish. “The 50 bps hike was expected and the pace of QT (quantitative tightening) was in the ballpark of what folks were expecting. “Even though the ECB is now going at it a bit slower, that doesn’t necessarily mean that they’re also going to target a lower terminal rate.

☆ FTSE 100 tracks glum global sentiment ahead of BoE rate decision
▼ + stars: | 2022-12-15 | by ( Johann M Cherian | ) www.reuters.com time to read: +2 min

SummarySummary Companies FTSE 100 down 0.7%, FTSE 250 off 0.6%Currys drops to bottom of FTMCHSBC slumps on shareholder's campaign for spinoffDec 15 (Reuters) - UK's export-driven FTSE 100 fell on Thursday, tracking glum global sentiment, while traders avoided bets on risky assets ahead of the Bank of England's monetary policy decision. The blue-chip FTSE 100 (.FTSE) fell 0.7%, while the FTSE 250 (.FTMC) shed 0.6% by 9:29 GMT. After the Fed's hawkish commentary on Wednesday, traders now await the BoE's monetary policy meeting at 1200 GMT. "The split within the Monetary Policy Committee could give a hawkish edge to the meeting. Besides the 50 basis point hike on Thursday, Koopman expects BoE's terminal rate to be 4.75% by mid-2023.

☆ Inflation may be easing, but grocery prices are still way up
▼ + stars: | 2022-12-13 | by ( Danielle Wiener-Bronner | ) edition.cnn.com time to read: +3 min

Flour prices jumped 24.9%, bread went up 15.7%, milk was 14.7% more expensive and coffee prices rose 14.6%. Uncooked beef roasts fell 8.1%, and uncooked beef steaks dropped 7.4%. In restaurants, where traffic has been slowing as consumers tighten their belts, menu prices went up, but not by much. At limited-service restaurants, menu prices rose 0.6%, while prices at full-service restaurants ticked up 0.4%. Uncooked beef roasts fell 1.3% and uncooked ground beef dropped 0.9%.

Technology stocks rose 3.1% as all sectors and major bourses climbed. The British pound and euro both gained around 1% against the dollar, with sterling hitting a six-month high of 1.242 against the greenback shortly after the announcement. The euro also reached a six-month high of 1.0659. U.S. stocks also moved higher and the 10-year Treasury yield fell below 3.5% after the reading came in. Thursday will also see monetary policy decisions from the Bank of England, European Central Bank and the Swiss National Bank.

☆ Stocks dip as growth fears offset China COVID shift
▼ + stars: | 2022-12-07 | by ( Danilo Masoni | ) www.reuters.com time to read: +5 min

"Now, concerns over economic growth seem to be overtaking those over inflation," he added. The darkening economic outlook initially drove safe-haven demand for the U.S. dollar and longer-dated bonds but these moves partially reversed by early afternoon in Europe. In foreign exchange markets, the U.S. dollar reversed initial gains, as traders weighed up an uncertain economic outlook. The U.S. dollar index fell 0.35% to 105.18 after hitting earlier in the session a near one-week high, trending closer to the June 2022 low of 104.10 hit on Monday. The Canadian dollar was steady at 1.365 per dollar ahead of an expected rate hike from the Bank of Canada later on Wednesday.

☆ Explainer: Europe set to import banned Russian diesel without knowing
▼ + stars: | 2022-12-07 | by ( Rowena Edwards | ) www.reuters.com time to read: +6 min

The European Union banned Russian crude imports from Dec. 5 and will ban Russian oil products from Feb. 5, as it attempts to deprive Russia of oil revenues. Blending Russian diesel elsewhere with a non-Russian equivalent would not change its origin, while refining Russian Urals crude into diesel elsewhere would. Russian diesel is likely to be delivered to and re-exported from countries such as India and Turkey, market sources said. Europe has already started to replace Russian diesel imports with refined product from the Middle East, but analysts also expect India to refine more Urals and increase diesel exports to Europe. Many of the larger oil companies, including BP (BP.L) and Shell have self-imposed sanctions on Russian oil and oil products.

☆ Dollar to rebound, accumulate safe-haven strength in 2023: Reuters poll
▼ + stars: | 2022-12-07 | by ( Indradip Ghosh | ) www.reuters.com time to read: +4 min

BENGALURU, Dec 7 (Reuters) - The dollar will rebound against most currencies over the coming months, with the growing threat of recession in the U.S. and elsewhere keeping it firm in 2023 through safe-haven flows, according to market strategists polled by Reuters. Nearly two-thirds or 33 of 51 strategists who answered an additional question said the greater dollar risk over the coming month was that it would rebound rather than falling further. "We foresee volatility levels remaining high in the coming months and expect it is too early for USD bulls to fully capitulate." Most major central banks, including the Fed, are expected to end their tightening campaigns in early 2023. An overwhelming 80% majority, or 42 of 51 respondents, said there was not much scope for dollar upside based on monetary policy.

☆ Deutsche bank, Rabobank hit with EU antitrust charge over bond cartel
▼ + stars: | 2022-12-06 | by ( Foo Yun Chee | ) www.reuters.com time to read: +2 min

[1/2] People are silhouetted next to the Deutsche Bank's logo prior to the bank's annual meeting in Frankfurt, Germany, May 24, 2018. REUTERS/Kai PfaffenbachBRUSSELS, Dec 6 (Reuters) - Deutsche Bank (DBKGn.DE) and Rabobank (RABO.UL) were charged by EU antitrust regulators on Tuesday of taking part in a government bond cartel, the latest move against a sector which has racked up millions of euros in fines for various competition violations. Deutsche Bank said it does not expect any sanction, suggesting that it may have alerted the cartel to the authorities. "Deutsche Bank has proactively cooperated with the European Commission in this matter and as a result has been granted conditional immunity. In accordance with the European Commission’s guidelines, Deutsche Bank does not expect a financial penalty," the German lender said.

☆ Dollar gains broadly as upbeat U.S. data muddles Fed rate hike views
▼ + stars: | 2022-12-05 | by ( John Mccrank | Seher Dareen | ) www.reuters.com time to read: +3 min

The survey followed on the heels of stronger-than-expected job and wage growth data for November released last Friday. "The ISM services PMI data highlighted a U.S. economy that's still showing some strength, despite tighter financial conditions," said Priscilla Thiagamoorthy, an economist at BMO Capital Markets. "While that's good news for the growth outlook, it's not so great for the Fed trying to dampen demand and ease inflation." Fed Chair Jerome Powell said last week the U.S. central bank could scale back the pace of its rate increases "as soon as December." "I think this issue about 'peak inflation, peak rates, peak dollar' - I think - is slowly turning into a 'persistence of inflation, a persistence of higher-for-longer interest rates," said Jane Foley, senior FX strategist at Rabobank.

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