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☆ Euro-dollar parity is back in focus as Trump win sparks trade jitters
▼ + stars: | 2024-11-20 | by ( Jenni Reid | ) www.cnbc.com time to read: +4 min

The euro has declined rapidly, meanwhile, briefly dipping below $1.05 on Nov. 14 for the first time since October 2023. Modeling by Barclays' economists shows the euro hitting dollar parity with a 10% tariff on European products and subsequent retaliation. The bank said the prospect of Trump tariffs and fiscal reforms had caused it to revise its view that the dollar would gradually decline through the year, instead seeing the U.S. currency "stronger for longer." Since hitting a low in September 2022, the euro has been comfortably back above parity even if below its long-range average. One of those 2022 factors roared back into focus this week, weighing broadly on European assets: the threat of escalating tensions with Russia.

Persons: Donald Trump, James Reilly, Reilly, George Saravelos, Trump, Saravelos, Goldman Sachs, Goldman Organizations: U.S, Republican, China —, Federal Reserve, Capital Economics, Federal, European Central Bank, FX Research, Deutsche Bank, Trump, Barclays, ECB, Fed Locations: Congress, China, U.S, Europe, Russia, Ukraine

☆ Why rate cuts this year could disappoint markets, Deutsche Bank says
▼ + stars: | 2024-02-02 | by ( Filip De Mott | ) www.businessinsider.com time to read: +2 min

Market hopes for big cuts this year are unlikely to pan out, Deutsche Bank wrote. AdvertisementMarkets may find that the anticipated rate-cutting cycle falls short of expectations, Deutsche Bank's George Saravelos wrote on Friday. Futures markets forecast five to six cuts this year, slashing the fed fund rate by over 100 basis points by the year's end. That year, the central bank cut rates by 75 basis points, below hopes for a 200 basis point reduction. We have also written about the US economy's dramatically reduced interest rate sensitivity," Saravelos wrote.

Persons: —, George Saravelos, That's, Saravelos Organizations: Deutsche Bank, Service, Deutsche, Futures, Federal, Intelligence, Fed

A banknote of Japanese yen is seen in this illustration picture taken June 15, 2022. REUTERS/Florence Lo/Illustration Acquire Licensing RightsNov 14 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. The policy pressures facing Japanese authorities are intense, and the potential risks to financial markets if policymakers misstep are growing. After battling against deflation for decades, the Bank of Japan is moving away from ultra-loose policy. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Persons: Florence Lo, Jamie McGeever, Xi Jinping's, Joe Biden, Shunichi Suzuki, Goldman Sachs, Deutsche Bank's George Saravelos, Xi Jinping, Fed's Jefferson, Barr, Mester, Josie Kao Organizations: REUTERS, Economic Cooperation, U.S, Japanese Finance, Bank of, Deutsche Bank's, Mitsubishi UFJ, Sumitomo Mitsui Financial Group, Thomson, Reuters Locations: Tokyo, San Francisco, Asia, Bank of Japan, Japan, India

☆ Asia stocks snap winning streak, await RBA
▼ + stars: | 2023-11-07 | by ( Tom Westbrook | ) www.reuters.com time to read: +3 min

REUTERS/Kim Kyung-Hoon/File Photo Acquire Licensing RightsSINGAPORE, Nov 7 (Reuters) - Asian stocks snapped a three-day winning streak on Tuesday, slipping as the bond market's rally paused and investors reined in enthusiasm about a possible peak in global interest rates. Focus is on whether Australia's central bank turns odd man out and raises rates, with a policy decision due at 0330 GMT. Overnight the dollar had rallied with a rise in U.S. Treasury yields, leaving the Australian dollar under gentle pressure at $0.6495 in morning trade in Asia. Aussie government bond futures fell slightly and the ASX200 (.AXJO), which had gained five sessions in a row, slipped 0.4%. Ten year yields rose 10 bps on Monday, but had fallen almost 30 bps last week.

Persons: Kim Kyung, Ben Bennett, Alan Ruskin, George Saravelos, Commonwealth Bank analyst Carol Kong, Gold, bitcoin, Ankur Banerjee Organizations: Tokyo Stock Exchange, REUTERS, Rights, Reserve Bank of Australia, Treasury, Japan's Nikkei, U.S . Federal Reserve, Nasdaq, Legal, General Investment Management, U.S, Deutsche Bank, Commonwealth Bank analyst, Brent, Thomson Locations: Tokyo, Japan, Rights SINGAPORE, U.S, Asia, Pacific, Taiwan, East, Russia, Australia, Saudi Arabia, Singapore

☆ Asia stocks snap winning streak, Aussie slips
▼ + stars: | 2023-11-07 | by ( Tom Westbrook | ) www.reuters.com time to read: +3 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 1.2% following a three-day rally that lifted the benchmark by nearly 6%. South Korean shares (.KS11) fell 3% as traders unwound some of Monday's surge on the reimposition of a short-selling ban. Treasuries were broadly steady in Asia, having unwound a little of last week's rally on Monday. Ten-year yields hovered at 4.92% - about 10 basis points above where they closed on Friday, but below where they were a week earlier. "It was a dovish hike...it's not pointing to any immediate need for a follow-up," said RBC Capital Markets rates strategist Rob Thompson on the phone from Sydney.

Persons: Kim Kyung, Nicholas Chia, it's, Rob Thompson, Alan Ruskin, George Saravelos, Gold, bitcoin, Ankur Banerjee, Lincoln Organizations: Tokyo Stock Exchange, REUTERS, Rights, Reserve Bank of Australia, South, Japan's Nikkei, Shanghai, Nasdaq, Standard Chartered, Fed, Capital Markets, U.S, Deutsche Bank, Brent, Thomson Locations: Tokyo, Japan, Rights SINGAPORE, Australia, Asia, Pacific, Sydney, Taiwan, East, Russia, Saudi Arabia, Singapore

☆ The Japanese yen's underlying forces are so weak the currency is in the 'same league' as the Argentine peso and Turkish lira, Deutsche Bank says
▼ + stars: | 2023-11-01 | by ( Filip De Mott | ) www.businessinsider.com time to read: +3 min

The yen's key drivers are so weak the currency is comparable to the Turkish lira and Argentine peso, Deutsche Bank said. The country's balance of payments are also weak as the Bank of Japan has triggered capital flight. AdvertisementAdvertisementThe Japanese yen's fundamentals are so weak the currency is comparable to some of the world's worst performing tenders, a Deutsche Bank note said on Wednesday. "A simple glance of the yen's drivers - yields and external accounts - puts the Japanese yen in the same league as the Turkish lira and Argentine peso," George Saravelos, the bank's global head of foreign exchange research, wrote in the report. Intervention by the Bank of Japan in currency markets won't help the yen, and may actually backfire.

Persons: —, George Saravelos, Saravelos Organizations: Argentine, Deutsche Bank, Bank of, Service, Bank of Japan Locations: Japan, Bank of Japan

☆ Euro area bond yields tumble as SVB collapse scares investors
▼ + stars: | 2023-03-13 | by ( Stefano Rebaudo | ) www.reuters.com time to read: +3 min

March 13 (Reuters) - Government bond yields fell on Monday as investors rushed into safe-haven assets while assessing the possible fallout from Silicon Valley Bank's (SVB) collapse amid bets on less aggressive tightening from the U.S. Federal Reserve. The European Central Bank is not planning an emergency meeting of its banking supervisory board on Monday after the collapse of SVB, a senior source told Reuters. European stocks fell on Monday and were on course for their worst day in almost three months, as the region's banking shares continued to tumble. Fed funds futures showed traders scaled back their projections for the Fed's next rate rise, but markets still bet on a less than 50% chance of a 25 bps rate hike next week. ESTR forwards currently imply an 80% chance of a 50 bps rate hike next week.

☆ Dollar sluggish as Fed rate hike fears ebb; China reopening boosts optimism
▼ + stars: | 2023-01-10 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

The euro was last 0.07% higher at $1.0739, holding near the previous session's seven-month peak of $1.07605 that came on the back of the dollar's decline. Sterling slid 0.08% to $1.21705, after similarly hitting a three-week top of $1.2209 on Monday and ending the session 0.73% higher. Against a basket of currencies, the U.S. dollar index fell 0.03% to 103.14, after tumbling 0.7% and touching a seven-month low of 102.93 in the previous session. The offshore yuan last bought 6.7755 per dollar, after hitting a near five-month top of 6.7590 earlier in the session. Brazil's real snapped its three-day winning run in the previous session and last stood at 5.2546 per dollar after supporters of former President Jair Bolsonaro stormed the capital.

☆ Dollar languishes as Fed rate hike fears recede; China reopening boosts optimism
▼ + stars: | 2023-01-10 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

The dollar's decline pushed the euro to a seven-month peak of $1.07605 in the previous session. Sterling slipped 0.03% to $1.2177, after similarly hitting a three-week top of $1.2209 on Monday and ending the session 0.73% higher. Against a basket of currencies, the U.S. dollar index edged 0.04% higher to 103.21, after tumbling 0.7% and touching a seven-month low of 102.93 in the previous session. The offshore yuan last bought 6.7757 per dollar, and was edging towards the previous session's near five-month top of 6.7665 per dollar. "Hedge funds managers have turned slightly bearish USD following the full reopening in China," said Tareck Horchani, head of head of prime brokerage dealing at Maybank Securities.

The MSCI Asia ex-Japan index rose on Wednesday for the first day in five, snapping its longest losing streak since October. On the data front South Korean producer price inflation, Thai trade balance and Taiwanese unemployment and industrial production figures are all scheduled for release. Bank Indonesia is expected to follow the U.S. Fed's example and slow the pace of interest rate hikes while stressing that the battle against inflation is far from over. chartLooking at the broader market picture, the U.S. yield curve continues to retrace its recent historic inversion, with spillovers from the Bank of Japan's yield curve control shock on Tuesday playing a part. The U.S. 2s/10s curve is on course to steepen for a third consecutive week, something not seen since October last year.

☆ Central banks around the world have now given the markets a clear message — tighter policy is here to stay
▼ + stars: | 2022-12-16 | by ( Elliot Smith | ) www.cnbc.com time to read: +3 min

A screen displays the Fed rate announcement as a trader works on the floor of the New York Stock Exchange (NYSE), November 2, 2022. Brendan McDermid | Reuterswatch nowGeorge Saravelos, head of FX research at Deutsche Bank, said the major central banks had given the markets a "clear message" that "financial conditions need to stay tight." Now that central banks have achieved this, the 2023 theme is different: preventing the market from doing the opposite," Saravelos said. "The overall message for 2023 seems clear: central banks will push back on higher risky assets until the labour market starts to turn," Saravelos concluded. Berenberg added a further 50 basis point move on March 16 to its existing anticipation of 50 basis points on Feb. 2.

And economic policy is only gradually being taped back together before the BoE meets again. It's also pulled the implied peak Bank rate next year some 150bp lower to 4.75% over the same period - back below the assumed 'terminal rate' at the U.S. Federal Reserve. "We see the risks skewed towards the BoE sounding dovish this week and ultimately "underdelivering" versus current pricing," the Deutsche analyst wrote. Central bank rate hikes and SterlingReuters Graphics Reuters GraphicsThe opinions expressed here are those of the author, a columnist for Reuters. by Mike Dolan, Twitter: @reutersMikeD; Editing by Josie KaoOur Standards: The Thomson Reuters Trust Principles.

☆ Sterling slips after IMF and Moody's rebuke Britain over tax plans
▼ + stars: | 2022-09-28 | by ( Harry Robertson | ) www.reuters.com time to read: +3 min

LONDON, Sept 28 (Reuters) - Sterling resumed its fall on Wednesday after the International Monetary Fund (IMF) and ratings agency Moody's scolded Britain over its new spending plans. The pound was down 0.56% to $1.068 with renewed dollar strength also weighing on the currency. Sterling tumbled to an all-time low against the dollar of $1.0327 on Monday as investors dumped UK assets after finance minister Kwasi Kwarteng unveiled plans to slash taxes and ramp up borrowing. Ratings agency Moody's said the unfunded tax cuts were "credit negative" and were likely to weigh on growth. UK pound coins plunge into water coloured with the European Union flag colours in this illustration picture, October 26, 2017.

☆ UK's mini budget slashes taxes and borrows heavily as recession hits
▼ + stars: | 2022-09-23 | by ( Anna Cooban | ) edition.cnn.com time to read: +4 min

London CNN Business —A huge gamble by the UK government aimed at rescuing the economy from recession and boosting long-term growth sent the pound plunging on Friday. Paul Johnson, director of the Institute for Fiscal Studies, an independent think tank, called the government’s plans “extraordinary.”“It’s half a century since we’ve seen tax cuts announced on this scale,” he said in a tweet. The pound sank almost 2% to $1.10 on Friday after Kwarteng’s announcement to its lowest level since 1985. The measures come a day after the Bank of England warned that the country was already likely in a recession. ‘Unfunded giveaways’News of the heavy additional government borrowing rattled investors already concerned that the country is spending beyond its means.

☆ Analysis: Japan is chasing its tail on yen intervention
▼ + stars: | 2022-09-23 | by ( Vidya Ranganathan | ) www.reuters.com time to read: +4 min

Banknotes of Japanese yen are seen in this illustration picture taken September 22, 2022. Thursday's sudden burst of yen-buying intervention by Japanese authorities -- the first instance since 1998 - caused a large 6 yen move between 140 and 146 in the dollar-yen exchange rate . U.S. policy rates are now 3 percentage points higher than Japan's. Governor Haruhiko Kuroda made clear that policy won't change, and even the yen the BOJ is buying as part of intervention will be replaced. while the boj intervened heavily between april and june 1998, the yen didn't trough until September.

☆ Bank of England needs to hike rates next week to calm markets, Deutsche Bank analyst says
▼ + stars: | 2022-09-23 | by ( ) www.reuters.com time to read: +1 min

A general view of the Bank of England (BoE) building, the BoE confirmed to raise interest rates to 1.75%, in London, Britain, August 4, 2022. REUTERS/Maja SmiejkowskaLONDON, Sept 23 (Reuters) - Britain's central bank needs to make a big inter-meeting interest rate hike as early as next week to calm markets and restore credibility, a Deutsche Bank analyst said on Friday. In a research note, Deutsche Bank's George Saravelos said the required policy response was clear: "A large, inter-meeting rate hike from the Bank of England as soon as next week to regain credibility with the market." A decision by the BoE to reverse its planned sale of UK government bonds would make matters worse, he said. Register now for FREE unlimited access to Reuters.com RegisterReporting by Dhara Ranasinghe Editing by Tommy Reggiori WilkesOur Standards: The Thomson Reuters Trust Principles.

☆ Markets hate Liz Truss’ plan for the UK. Just look at these charts
▼ + stars: | 2022-09-23 | by ( Julia Horowitz | ) edition.cnn.com time to read: +3 min

London CNN Business —When the UK government, led by new Prime Minister Liz Truss, unveiled its plan to rescue the British economy on Friday, the reaction from investors was instantaneous: They hated it. UK stocks, as measured by the FTSE 100 (UKX) in London, hit their lowest level since March. The Bank of England on Thursday pushed its key rate to its highest level since 2008. “It makes me very sorry to say, but I think the UK is behaving a bit like an emerging market turning itself into a submerging market,” Summers said. “We think the market may be underpricing the chances of parity.”

☆ Bank of England faces pivotal policy decision with pound at multi-decade lows
▼ + stars: | 2022-09-21 | by ( Elliot Smith | ) www.cnbc.com time to read: +5 min

Bank of England Governor Andrew Bailey has reiterated his commitment to reining in inflation, but the Bank faces a difficult balancing act as growth slows and the labor market tightens. On Tuesday, Sweden's Riksbank hiked interest rates by 100 basis points, warning that inflation was "undermining households' purchasing power." The U.S. Federal Reserve is expected on Wednesday to lift its benchmark borrowing rate by 75 basis points, the third consecutive hike of that magnitude. Meanwhile the European Central Bank earlier this month announced a 75 basis point increase to its benchmark deposit rate. It would really be quite a tone deaf performance from the Bank of England if they don't go for 75 basis points at this week's meeting."

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