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High funding needs and central banks removing support are increasing pricing uncertainty for investors, Sophia Drossos, hedge fund Point72 Asset Management's chief economist, said. Spending plans lacking credibility were seen as most likely to spark market turmoil. I suspect not by default, but when markets start reflecting their worries in Treasury prices, by a political crisis and a potentially ugly adjustment," the former IMF chief economist said. Italy's 2.4 trillion-euro debt pile is the focus in Europe, where the IMF has said high debt leaves governments vulnerable to crisis. "We need more investment, not less," said King's College London professor Jonathan Portes, Britain's cabinet office chief economist during the financial crisis.

Persons: Andrew Kelly, Peter Praet, Praet, Sophia Drossos, Daniel Ivascyn, Claudio Borio, Olivier Blanchard, Ray Dalio, Janet Yellen's, Yellen, Jim Leaviss, Giancarlo Giorgetti, Daleep Singh, Joe Biden, Britain's, Yellen's, Jonathan Portes, Clare Lombardelli, Moritz Kraemer, Yoruk Bahceli, Maria Martinez, Leigh Thomas, Giuseppe Fonte, Nell Mackenzie, Naomi Rovnick, William Schomberg, Jan Strupczewski, Dan Burns, Elisa Martinuzzi, Riddhima Talwani, Jayaram, Emelia Sithole Organizations: Financial, of, REUTERS, Institute of International Finance, Reuters, European Central Bank, ECB, Bank for International, Peterson Institute for International Economics, Associates, U.S . Treasury, Wall, Economy, Britain's Treasury, Congressional, Britain's, Institution, Reuters Graphics ACT, King's College London, Labour Party, OECD, Graphics, Thomson Locations: of Manhattan , New York City, U.S, Italy, Britain, United States, Europe, Ukraine, Berlin, Paris, Rome, London, Brussels, Washington, Marrakech

High funding needs and central banks removing support are increasing pricing uncertainty for investors, Sophia Drossos, hedge fund Point72 Asset Management's chief economist, said. Spending plans lacking credibility were seen as most likely to spark market turmoil. I suspect not by default, but when markets start reflecting their worries in Treasury prices, by a political crisis and a potentially ugly adjustment," the former IMF chief economist said. "We need more investment, not less," said King's College London professor Jonathan Portes, Britain's cabinet office chief economist during the financial crisis. Not enough reforms are being implemented, OECD chief economist Clare Lombardelli warned.

☆ Investors manoeuvre, warily, for long-shot BOJ policy move
▼ + stars: | 2023-07-27 | by ( Kevin Buckland | ) www.reuters.com time to read: +5 min

SLOWLY, STEADILYBOJ sources say the central bank is leaning towards keeping its yield control policy unchanged as policymakers wait for data to affirm wages and inflation will keep rising. The benchmark 10-year JGB yield also retreated to 0.445% from as high as 0.485%. "We don't short the JGB market. In part, it's an expensive thing to do - as you know, the Bank of Japan owns 110% of the 10-year JGB market," he said. "Nobody's calling for them to hike aggressively, just bringing some function back to the JGB market, allowing themselves to step away because the data has given them an opportunity to do so.

Persons: Jimmy Lim, Lim, Kazuo Ueda, Nigel Foo, Haruhiko Kuroda, Jim Leaviss, Leaviss, Michael Michaelides, Ales Koutny, James Athey, Athey, Kevin Buckland, Ankur Banerjee, Summer Zhen, Alun John, Divya Chowdhury, Harry Robertson, Vidya Ranganathan, Edmund Klamann Organizations: Bank of Japan, Management, ING, Investors, G Investments, Vanguard, Thomson Locations: TOKYO, Singapore, FSI, abrdn

With some 1.6 million of those due to re-fix mostly 2-5 year fixed rate deals over the next 18 months - half of those by the end of this year - this super-hike will burn. Two-year fixed mortgage rates have doubled to 6% in just 10 months and were less than 1% two years ago. Fixed-rate deals were only introduced at all in 1989 and the vast majority were floating rates until just eight years ago. As Leaviss points out, five-year inflation expectations in the bond market are still stubbornly one percentage point above the 2% goal. In the end, the BoE has few good choices - but the days of fine tuning the economy with nudges and tweaks may be over.

Persons: BoE, that's, Moyeen, Jim Leaviss, Vivek Paul, Paul, Leaviss, Mike Dolan, Naomi Rovnick, Conor Humphries Organizations: Bank of England, National Institute of Economic, Social Research, Reuters Graphics Reuters, Reuters, Barclays, Bank, Investment, BlackRock Investment Institute, OECD, Twitter, Thomson Locations: United States, Germany

The rapid rise in gilt yields has consequences for the wider economy. To some investors, gilts now increasingly look a bargain as 6% BoE interest rates appear unrealistic. Two-year gilt yields have risen by 1.1 percentage points this year, compared with a 0.3 percentage point increase for German two-year yields and 0.2 percentage points for U.S. Treasuries . Raising interest rates to 6% would "succeed in destroying demand" in the wider economy, he said. Ten-year gilt yields now pay an interest rate nearly 2 percentage points higher than the equivalent German government bond .

Persons: BoE, Liz, Britain's, Jim Leaviss, BoE Governor Andrew Bailey, gilts, We've, Mike Riddell, Riddell, Moyeen, There's, Islam, Naomi Rovnick, David Milliken, Toby Chopra Organizations: Labour Party, Bank of England, Bank of, Italy, Reuters Graphics, Allianz Global Investors, U.S, Barclays, Thomson Locations: Bank of England, Britain, British, gilts

Nov 21 (Reuters) - Investors are increasingly eyeing U.S. corporate credit offering attractive valuations and yields after steep declines in 2022, fund managers told the Reuters Global Markets Forum (GMF). "We are at the beginning of a rotation as investors come back into credit. iShares iBoxx Investment Grade Corporate Bond ETF (LQD.P) and iShares High Yield Corporate Bond ETF (HYG.P) are on track for quarterly gains of more than 3% in the fourth quarter after falling 20% and 14% respectively this year. "If we're at this turning point then the entry level you get by buying investment-grade credit in the (United) States looks really attractive." The jump in bond yields, which move inversely to prices, has also made corporate credit more attractive to investors looking for income after years of low interest rates, Ramji said.

LONDON, Nov 11 (Reuters) - Defusing this year's single biggest shock to the world economy could catalyze a rebound in global markets many investors feel is overdue - but may also raise other uncomfortable conundrums. Murmurs about some endgame in the 9-month-old Russian invasion of Ukraine - suggestions of anything from 'talks about talks' to some negotiated ceasefire - have swirled in media over the past week. All were watched as intently by global investors as much as politicians or military strategists. Western sanctions slapped on Moscow seeded an energy and food price explosion that compounded and elongated the post-pandemic inflation spike around the world. US Geopolitical RiskUS inflation, Fed rates and marketsThe opinions expressed here are those of the author, a columnist for Reuters.

Banks are finding the home loan market stacked in their favour after years of low mortgage rates, but are also aware that bigger mortgage bills could spell trouble for cash-strapped customers. But the higher rates will hit borrowers hard. Mortgage payments as a proportion of gross household income were on average around 20% in June, according to BuiltPlace, a property market consultancy. They could rise to around 27% - the highest since the early 1990s - if mortgage rates were to rise to 6%, the consultancy said. The rise in mortgage rates will be a blow for millions of households' finances, Sue Anderson, head of media at debt charity StepChange said.

REUTERS/Dado Ruvic/IllustrationLONDON, Sept 28 (Reuters) - Borrowing costs for UK firms are soaring, with sterling corporate bond prices headed for their biggest monthly fall since the 1990s as fallout from the British government's "mini-Budget" grows. That, according to Vanguard credit portfolio manager Sarang Kulkarni, in turn helped ease conditions slightly in the investment grade bond market. Yields and bond prices move inversely. The sterling corporate bond market, much smaller and less liquid than the equivalent euro or U.S. dollar markets, is driven largely by moves in UK gilts, which have slid in value in recent days. He said that liquidity in the corporate sterling market - not great at the best of times - was looking "almost non-existent" right now.

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