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A view shows the logo of the European Central Bank (ECB) outside its headquarters in Frankfurt, Germany March 16, 2023. That was a relief to financial markets, roiled in recent weeks by a surge in government bond yields led by U.S. Treasuries. The central bank reiterated it would reinvest all the cash it receives from maturing bonds it holds under its 1.7 trillion euro pandemic-era bond scheme until the end of 2024. Instead, the ECB kept the emphasis on slowing inflation, raising investors' conviction that September's rate rise was the central bank's last. And inflation risks have not disappeared.

Persons: Heiko Becker, Christine Lagarde, Lagarde, Piet Christiansen, Gabriele Foa, reinvestments, Marcus Brookes, Sabrina Kanniche, Yoruk Bahceli, Naomi Rovnick, Amanda Cooper, Nick Zieminski Organizations: European Central Bank, REUTERS, ECB, U.S, Treasuries, Reuters, Danske Bank, The Bank of, Algebris, Quilter Investors, Asset Management, Thomson Locations: Frankfurt, Germany, Italy, Copenhagen, Israel, The Bank of Canada, wean, Ukraine

☆ Bargain hunters dig in to 'cheap' European banks
▼ + stars: | 2023-10-16 | by ( Naomi Rovnick | ) www.reuters.com time to read: +4 min

Just before earnings season kicks off, European bank shares are sporting a dividend yield of almost 8%, making them cheaper on this basis than during the 2008 global financial crisis. European banks, which struggled during 2014 to 2022 as the ECB kept rates below zero, have had a major boost from hiking their loan costs in line with central bank rates. Analyst forecasts collated by European asset manager Amundi show European banks are expected to grow adjusted earnings per share by 25% this year, followed by a 6% gain in 2024. Generali's Morganti said he has moved his position on European banks from negative to neutral and was likely to add more. He did not forecast quick gains for European banks ahead, however.

Persons: Guy de Blonay, Sebastiano Pirro, Roger Lee, Amundi, LSEG, Michele Morganti, Italy's Unicredit, Banks, Pirro, Generali's Morganti, Naomi Rovnick, Joice Alves, Dhara Ranasinghe, Hugh Lawson Organizations: Reuters Graphics Banks, Jupiter Asset Management, Algebris Investments, European Central Bank, Reuters, ECB, Bank, Generali Investments, Monetary Fund, Thomson

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 11, 2023. REUTERS/Brendan McDermid/File Photo Acquire Licensing RightsSummaryCompanies Coty gains on raising sales forecastFederal Reserve rate verdict due at 2 p.m. The U.S. central bank is expected to maintain its key rate in the range of 5.25%-5.50% as it concludes its meeting at 2 p.m. ET, with investors focused on economic projections and Chair Jerome Powell's comments for clues on the outlook for rates and inflation. Investors were also looking forward to the debut by marketing automation company Klaviyo on the New York Stock Exchange against the backdrop of some recent successful U.S. listings.

Persons: Brendan McDermid, Jerome Powell's, Gabriele Foà, Foà, Klaviyo, Morgan, Ankika Biswas, Shristi, Arun Koyyur Organizations: New York Stock Exchange, REUTERS, Companies Coty, Citigroup, Dow, Nasdaq, Algebris Investments, Financial, Arm Holdings, Dow e, Coty, Thomson Locations: New York City, U.S, Bengaluru

☆ Sergio Ermotti returns as UBS CEO to steer Credit Suisse takeover
▼ + stars: | 2023-03-29 | by ( John Revill | ) www.reuters.com time to read: +5 min

[1/5] Sergio Ermotti, newly rehired CEO of UBS Group AG attends a news conference in Zurich, Switzerland March 29, 2023. "Sergio has already reduced risk and made the investment bank serve its clients and not its investment bankers as Credit Suisse did. Reuters GraphicsErmotti had earlier described the task of integrating UBS and Credit Suisse as "urgent and challenging". The Dutch executive was a notable absentee from the announcement of UBS's takeover of Credit Suisse on March 19. The next day, Hamers looked bleary eyed as he described the end of Credit Suisse as a "sad day" that nobody wanted.

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☆ Ermotti returns to UBS to steer Credit Suisse takeover
▼ + stars: | 2023-03-29 | by ( John Revill | ) www.reuters.com time to read: +3 min

He takes charge weeks after UBS bought rival Swiss bank Credit Suisse in a shotgun merger engineered by Swiss authorities to stem turmoil after Credit Suisse ran aground. "Sergio has already reduced risk and made the investment bank serve its clients and not its investment bankers as Credit Suisse did. HAMERS HANDS OVER REINSErmotti said he was looking forward to integrating UBS and Credit Suisse. He was a notable absentee from the announcement of UBS's takeover of Credit Suisse on March 19. The next day, Hamers looked bleary eyed as he described the end of Credit Suisse as a "sad day" that nobody wanted.

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The U.S. central bank's two-day policy meeting will end at 2 p.m. ET (1800 GMT), with investors keenly awaiting Fed Chair Jerome Powell's conference at 2:30 p.m. ET to gauge the central bank’s rate-hike trajectory. While the central bank is likely to continue its hiking cycle with a 0.25% move, we think the guidance for future meetings will be considerably more open," said Gabriele Foà, co-portfolio manager at Algebris Investments. ET, Dow e-minis were up 24 points, or 0.07%, S&P 500 e-minis were up 1.5 points, or 0.04%, and Nasdaq 100 e-minis were down 12.75 points, or 0.1%.

☆ These 10 funds had over $100 million each in Credit Suisse bonds — which are now worth nothing
▼ + stars: | 2023-03-22 | by ( Ganesh Rao | ) www.cnbc.com time to read: +2 min

A number of funds could be facing over $100 million in losses on their Credit Suisse investments after the lender's forced merger with its rival UBS . The funds face losses on Credit Suisse's additional tier-1 bonds (AT1), according to CNBC Pro analysis, after Swiss regulators deemed them worthless as part of the emergency merger . The Swiss regulator FINMA saw the merger between Credit Suisse and UBS as a trigger event to write down 16 billion Swiss francs ($17 billion) worth of the bonds. The following table shows the funds that held AT1 bonds with a par amount of at least $100 million each as of Mar. About 80 funds run either directly by PIMCO or one of its affiliates, held Credit Suisse AT 1 bonds, according to CNBC's analysis.

In both the United States and Europe, the words of central bankers led investors to cut their estimates of the peak or "terminal" rate expected in the current tightening cycle. With financial conditions loosening despite rising policy rates, "central banks must...be resolute in their fight against inflation and ensure policy remains appropriately tight long enough to durably bring inflation back to target," Adrian and others wrote. The European Central Bank seems furthest from a likely stopping point. Combined, the statements mark the start of the endgame for central banks that were slow to recognize the onset of inflation last year before engaging in a record-setting round of rate increases. Central bankers long ago stopped using the word "transitory" in reference to inflation that proved faster and more persistent than any expected.

But it is unclear how many lenders are tapping the facility and whether pension funds are willing to shell out additional fees for what is a temporary solution, sources told Reuters. Banks are reluctant to increase their lending to LDI funds through the repo facility, according to one official at a European bank. BRIDGING THE GAPLDI is an investment strategy sold by asset managers like BlackRock, Legal & General Investment Management and Insight Investment to pension schemes to help them match their assets and liabilities. Governor Andrew Bailey has rejected calls to continue buying bonds from pension funds which say they still need support beyond Friday. "It's a bridging tool that they can still use to keep the dialogue with the market and the pension funds going."

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