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☆ Asia stocks slide as investors lose risk appetite, yields rise
▼ + stars: | 2022-10-20 | by ( Ankur Banerjee | ) www.reuters.com time to read: +3 min

Japan's yen crept close to the psychological barrier of 150 per dollar after earlier marking a fresh 32-year low of 149.93. The yield on the 10-year U.S. Treasury US10YT=RR note touched a fresh 14-year high, brushing off a weak housing report. U.S. 10-year yields were last up at 4.139%, beyond the 4.136% high it touched earlier. China's stock market (.SSEC) opened 0.5% lower as the ruling Communist Party's twice-a-decade congress remains in session this week. The rise in the dollar and yields pushed gold lower, with prices lingering at a three-week trough on Thursday.

☆ US Treasury yields hit post-crisis highs as expectations for more aggressive Fed rate hikes ramp up
▼ + stars: | 2022-10-20 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

US treasury yields touched their highest levels since the Great Recession on Thursday. The rise is fueled by expectations of big rate hikes at the next two Fed policy meetings. Minneapolis Fed President Neel Kashkari warned the terminal fed funds rate could be even higher than expected this week, putting investors on edge. Fed officials will convene on November 1-2 at the next Federal Open Market Committee meeting, where they are widely expected to issue another 75 basis point rate hike. That would be the fourth jumbo increase this year, and would bring the fed funds rate to a range of 3.75%-4.00%.

☆ INDIA RUPEE Rupee hits record low on worries of aggressive U.S. rate hikes
▼ + stars: | 2022-10-20 | by ( Anushka Trivedi | ) www.reuters.com time to read: +3 min

read moreThe partially convertible rupee was trading at 83.16/17 per dollar by 0436 GMT, compared to its close of 83.02 on Wednesday. Register now for FREE unlimited access to Reuters.com Register"We can expect the dollar to continue strengthening as long as the Fed maintains its super hawkish stance. read moreTraders said the falling interest rate differential between India and the U.S. could continue to pressure the rupee. Shilan Shah, India economist at Capital Economics, said in a recent note that 50 bps rate hikes may be off-the-table at the RBI's meeting in early December. "We think other MPC members will have seen enough evidence of growth coming off the boil and price pressures peaking.

☆ Fed may have to slow or stop balance sheet trimming in 2023, Barclays says
▼ + stars: | 2022-10-20 | by ( Michael S. Derby | ) www.reuters.com time to read: +3 min

NEW YORK, Oct 20 (Reuters) - The Federal Reserve may have to slow or stop shrinking its nearly $9 trillion balance sheet sooner than many now expect, according to a report from Barclays. "I don't know what the final end point is of our balance sheet," Minneapolis Fed President Neel Kashkari said on Wednesday, but "we have a ways to go." But the biggest uncertainty is that it is unclear when the financial system moves from ample levels of bank reserves to one where they are scarce. Withdrawing stimulus has also meant shrinking the size of the Fed's balance sheet. But those sorts of things only offer a temporary respite, which makes altering the pace of the balance sheet drawdown the more valuable tool.

☆ Asia stocks slip as risk appetite wanes on rate-hike fears
▼ + stars: | 2022-10-20 | by ( Ankur Banerjee | ) www.reuters.com time to read: +4 min

European stock futures indicated stocks were set to decline, with Eurostoxx 50 futures down 0.43%, German DAX futures down 0.45% and FTSE futures down 0.25%. "Yields rose to fresh cycle highs and risk appetite soured," said Taylor Nugent, a markets economist at National Australia Bank in Sydney. China's stock market (.SSEC) fell on Thursday while Hong Kong stocks (.HSI) hit levels last seen during the 2008-09 global financial crisis. Sterling fell 0.2% to $1.12005 even as the inflation data showed food prices have jumped the most since 1980. /FRX"I think the risk of another intervention continues to be very high," said Commonwealth Bank of Australia strategist Carol Kong.

☆ Tesla and Truss, 5% and 150
▼ + stars: | 2022-10-20 | by ( ) www.reuters.com time to read: +4 min

A Tesla model 3 car is seen in their showroom in Singapore October 22, 2021. read more The latest European tech sector earnings on Thursday were downbeat, too. Bank of England Deputy Governor Ben Broadbent said the BoE would respond to changes in Truss's tax and spending policies. read moreKey developments that should provide more direction to U.S. markets later on Thursday:* European Union summit in Brussels* U.S. Oct Philadelphia business index. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Fed's Kashkari says labor shortages still a big issue for business
▼ + stars: | 2022-10-19 | by ( Michael S. Derby | ) www.reuters.com time to read: +2 min

“I’ve seen very little evidence in my region that the labor market is softening,” Kashkari said in a virtual appearance. On the inflation front, Kashkari said the surge in overall prices may have hit its high point but underlying pressures are a different story. Kashkari is one of the Fed's most steadfast supporters of raising short-term rates to help lower very high levels of inflation. Kashkari has said it's possible the Fed will need to raise rates above that level to bring down inflation. "I'm looking for some evidence" that the factors that drive underlying inflation "have in fact stopped climbing.

☆ US stocks snap 2-day win streak as investors digest surging bond yields ahead of more high-profile earnings
▼ + stars: | 2022-10-19 | by ( Matthew Fox | ) www.businessinsider.com time to read: +2 min

US stocks snapped a two-day win streak on Wednesday despite solid corporate earnings reports. The decline came as bond yields surged, with the 10-year US Treasury yield jumping to its highest level since 2007. Third-quarter corporate earnings from Netflix, United Airlines, and Intuitive Surgical beat analyst estimates. Bond yields surged to a new cycle high, with the 10-year US Treasury yield hitting a daily high of 4.13%, representing its highest level since 2007. The country saw inflation clock in at 10.1% in September, matching the 40-year high seen in July.

☆ BNP sees Fed terminal rate of 5.25% in Q1, U.S. recession in Q2
▼ + stars: | 2022-10-19 | by ( ) www.reuters.com time to read: +1 min

The French bank is forecasting the U.S. economy to go into recession in the second quarter of 2023. "We expect a more aggressive Fed response to stickier, more pervasive inflation to push the economy into recession," BNP (BNPP.PA) said. Fed funds futures have priced in a peak fed funds rate of 4.97% hitting in May 2023. The futures market has also priced in a 91% chance of a 75 bps rate rise in November, and a roughly 75% probability of another 75 bps increase in December. Register now for FREE unlimited access to Reuters.com RegisterReporting by Gertrude Chavez-Dreyfuss; Editing by Sandra MalerOur Standards: The Thomson Reuters Trust Principles.

☆ Gold dips as steady U.S. dollar, looming rate hikes dim appeal
▼ + stars: | 2022-10-19 | by ( ) www.cnbc.com time to read: +1 min

Gold inched lower on Wednesday as the dollar gained some ground, while the U.S. Federal Reserve's commitment to tightening its monetary policy also weighed on zero-yield bullion's appeal. Spot gold was down 0.1% at $1,650.02 per ounce, as of 0317 GMT, while U.S. gold futures were flat at $1,654.80. "Market participants may want to see a clearer end to Fed's rate hikes before restoring some confidence in gold prices," IG market strategist Yeap Jun Rong said, adding given upside risks to inflation, monetary tightening seems far from over. "That will keep gold prices locked in an overall downward trend for now, with any rallies running the risks of being eventually sold into." The Fed is widely expected to deliver a fourth straight 75-basis point rate hike when it meets in November, and traders of futures contracts tied to the policy rate are betting on another oversized hike in December as well.

☆ Morning Bid: Earnings vs Rates
▼ + stars: | 2022-10-19 | by ( ) www.reuters.com time to read: +5 min

Oct 19 (Reuters) - A look at the day ahead in U.S. and global markets from Mike Dolan. Market tension is building between surprising positivity still coming from the unfolding corporate earnings season and the anxiety in interest rate markets and macro gloom. But earnings may be just a rearview mirror of the economy and the inflation and interest rate backdrop showed little sign of improvement across the western economies. U.S. 10- and 30-year bond yields were now both above 4% this week for the first time in 12 years. Oil prices steadied after Tuesday's slide amid reports U.S. President Joe Biden plans to release more of the Strategic Petroleum Reserve.

☆ Fed may need to push policy rate above 4.75% -Kashkari
▼ + stars: | 2022-10-18 | by ( Ann Saphir | ) www.reuters.com time to read: +2 min

Oct 18 (Reuters) - The Federal Reserve may need to push its benchmark policy rate above 4.75% if underlying inflation does not stop rising, Minneapolis Federal Reserve Bank President Neel Kashkari said on Tuesday. "But if we don't see progress in underlying inflation or core inflation, I don't see why I would advocate stopping at 4.5%, or 4.75% or something like that. We need to see actual progress in core inflation and services inflation and we are not seeing it yet." "That number that I offered is predicated on a flattening out of that underlying inflation," Kashkari said. So far, data suggests underlying inflation is rising, not falling, despite the Fed's aggressive rate hikes this year.

Johnson & Johnson (JNJ.N) rose 1.5% in premarket trading after the healthcare conglomerate beat Wall Street expectations for third-quarter sales, helped by strong demand for its cancer drug Darzalex and Crohn's disease drug Stelara. read moreGoldman Sachs Group Inc (GS.N) gained 0.9%, while Netflix (NFLX.O) added 1.6% ahead of earnings later in the day. read moreThe reversal of parts of a controversial UK fiscal plan that had roiled bond markets also aided sentiment. read more"Initial Q3 company reports have been positive, and you've had some stabilization in the United Kingdom with its government. ET, Dow e-minis were up 340 points, or 1.12%, S&P 500 e-minis were up 50.25 points, or 1.36%, and Nasdaq 100 e-minis were up 179.75 points, or 1.62%.

☆ October's wild trading could give way to a new stock rally, as earnings roll out in the week ahead
▼ + stars: | 2022-10-14 | by ( Patti Domm | In | ) www.cnbc.com time to read: +8 min

But Emanuel sees the chance for a 17% to 20% rally in the S & P 500. The S & P 500 was down about 0.9% for the week, as of Friday afternoon, and it was hovering just above 3,600. S & P 500 earnings are expected to grow by 3.6% for the third quarter, based on actual reports and estimates, according to Refinitiv. Without the boost from more than doubling profits from energy companies, S & P earnings would decline by 3.1%. Week ahead calendar Monday Earnings: Bank of America , Bank of NY Mellon, Charles Schwab 8:30 a.m.

The Labor Department's producer prices index rose 8.5% in the 12 months through September, slightly higher than an estimated 8.4% rise. Register now for FREE unlimited access to Reuters.com Register"It is not going to be that way. That's what the Fed has been looking at and that's why they're raising rates the way they are. Persistent inflation has sparked worries about the Fed's aggressive monetary action tipping the world's largest economy into a recession. ET, Dow e-minis were up 46 points, or 0.16%, S&P 500 e-minis were up 10.25 points, or 0.28%, and Nasdaq 100 e-minis were up 41.25 points, or 0.38%.

The bounce follows five straight days of declines in the Nasdaq (.IXIC) and the benchmark S&P 500 (.SPX) as recent economic data nearly sealed a case for a fourth consecutive 75-basis-point hike by the Fed. The Labor Department's producer prices index data due at 8:30 a.m. ET is expected to have risen 8.4% in the 12 months through September, after advancing 8.7% in August. Register now for FREE unlimited access to Reuters.com RegisterStubborn inflation has sparked worries about the Fed's aggressive monetary action tipping the world's largest economy into a recession. ET, Dow e-minis were up 118 points, or 0.4%, S&P 500 e-minis were up 20.5 points, or 0.57%, and Nasdaq 100 e-minis were up 85.25 points, or 0.79%.

The Labor Department's producer prices index rose 8.5% in the 12 months through September, slightly higher than an estimated 8.4% rise. read morePersistent inflation has increased concerns about the Fed's aggressive monetary action tipping the world's largest economy into a recession. That's what the Fed has been looking at and that's why they're raising rates the way they are. Declining issues outnumbered advancers for a 1.74-to-1 ratio on the NYSE and for a 1.47-to-1 ratio on the Nasdaq. The S&P index recorded no new 52-week high and 41 new lows, while the Nasdaq recorded 7 new highs and 201 new lows.

☆ Morning Bid: Confusion reigns
▼ + stars: | 2022-10-12 | by ( ) www.reuters.com time to read: +4 min

Then BoE chief Andrew Bailey said late Tuesday: "You've got three days left now. You've got to get this done" - even as the Financial Times reported the central bank might extend the support. The tension built with Britain's economy looking set to go into recession as data showed it unexpectedly shrank in August. "The worst is yet to come, and for many people, 2023 will feel like a recession," said IMF chief economist Pierre-Olivier Gourinchas. * G20 finance ministers and central bankers meet at annual IMF/World Bank meeting in Washington* Bank of England Financial Policy Committee publishes summary of latest meeting.

☆ Friday's jobs report could be a case where good news isn't really good
▼ + stars: | 2022-10-06 | by ( Jeff Cox | ) www.cnbc.com time to read: +7 min

Al Drago | Bloomberg | Getty ImagesInvestors are closely watching the nonfarm payrolls report due out Friday, but not for the usual reasons. In normal times, strong job gains and rising wages would be considered a good thing. When they get bad news on the economy, that means the Fed is going to tighten less." In real terms, Swiber said that likely means no change until the economy is actually losing jobs. Next week's CPI reading is likely to be more consequential when it comes to any shift in Fed attitudes, she added.

☆ Kashkari Says Fed Needs to Keep Tightening Until There’s Compelling Evidence of Declining Inflation
▼ + stars: | 2022-09-27 | by ( Harriet Torry | ) www.wsj.com time to read: 1 min

Federal Reserve Bank of Minneapolis President Neel Kashkari said the U.S. central bank needs to tighten monetary policy until underlying inflation is declining, and then wait to see whether it has done enough. “The one mistake that I’m acutely aware of—that I want to avoid repeating from the 1970s—is when policy makers saw the economy weakening, saw inflation start to tick down, and then they cut rates, thinking they had done the job. And then inflation flared back up again—that, I believe, is a mistake we cannot make and will not make,” Mr. Kashkari said Tuesday during an online event hosted by The Wall Street Journal.

☆ Fed 'united,' moving at 'appropriately aggressive' pace -Kashkari
▼ + stars: | 2022-09-27 | by ( ) www.reuters.com time to read: +2 min

Sept 27 (Reuters) - Minneapolis Federal Reserve Bank President Neel Kashkari on Tuesday said U.S. central bankers are united in their determination to do what is needed to bring inflation down, and financial markets understand that. "We are committed to restoring price stability, but we also recognize, given these lags, there is the risk of overdoing it on the front end, and so I think we are moving at an appropriately aggressive pace," he said. Kashkari said he believes markets have digested the Fed's intent to bring inflation down and that while monetary policy now is tight, it will need to be tighter still. "The economy is sending us a lot of mixed signals right now," Kashkari said. Register now for FREE unlimited access to Reuters.com RegisterReporting by Ann Saphir; Editing by Leslie AdlerOur Standards: The Thomson Reuters Trust Principles.

☆ US stocks mixed with S&P 500 hitting a new low in 2022 as Fed officials defend hawkish policy
▼ + stars: | 2022-09-27 | by ( Matthew Fox | ) www.businessinsider.com time to read: +2 min

US stocks ended mixed on Tuesday with the S&P 500 falling to a new 2022 low intraday as Fed officials defended their hawkish stance. Tuesday's decline marked the sixth consecutive fall for the the S&P 500 and Dow Jones Industrial Average. Fed President Neel Kashkari said the central bank's current pace of hiking interest rates to tame inflation is "appropriate." During the trading session, the S&P 500 dipped below its mid-June low of 3,636 before paring losses. Tuesday's decline reversed early morning gains and came as Fed officials defended their hawkish stance as they continue to see further interest rate hikes in the future.

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