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☆ Take Five: The grand 2022 central bank finale
▼ + stars: | 2022-12-09 | by ( ) www.reuters.com time to read: +5 min

1/TWICE THE FUNInvestors will be fed a huge helping of year-end U.S. news when Tuesday's release of November consumer inflation data is followed by the Federal Reserve's last rate decision of 2022 on Wednesday. Reuters Graphics2/ SUPER THURSDAYIt's super Thursday in Europe, where central banks in the euro area, Britain, Switzerland and Norway all meet. The pace of aggressive rate hikes from big central banks is slowing but the fight against inflation is not over yet. Surging energy and food costs propelled consumer price inflation to a 41-year high of 11.1% in the year to October. Wednesday's UK inflation data may hint at price rises having peaked, following trends in the eurozone and the U.S.

Headline inflation slowed in November for the first time in 1-1/2 years, to 10%, raising hopes that sky-high price growth has passed. ECB President Christine Lagarde will likely be careful about calling a peak after last year's "big mistake" of insisting surging prices were "transitory," said Pictet's Ducrozet. ECB Chief Economist Philip Lane reckons wages would be a "primary driver" of price inflation even after energy price shocks fade. Closely-watched business activity data points to a mild recession and latest forecasts should show how the ECB views the coming slowdown. Lane believes record price growth will start to subside next year.

Blackstone (BX.N) limited withdrawals from its $69 billion unlisted REIT on Thursday after redemption requests hit pre-set limits amid investor concerns it was slow to adjust valuations as interest rate surged, a source close to the fund said. The development is yet another reminder of the risks facing not just sectors that are sensitive to higher interest rates but also broader financial markets, which have rallied sharply on hopes that interest rate hikes will slow. "REITS had a fantastic performance for a couple of months but when you have that outperformance, investors don't react to traditional fundamental signals such as rising rates," she said. But in recent weeks expectations have risen that the Fed will "pivot" from aggressive tightening, prompting investors to price in lower peak interest rates. Blackstone has reported a 9.3% year-to-date net return for the REIT, while the publicly traded Dow Jones U.S.

☆ Take Five: Ready for that Santa rally?
▼ + stars: | 2022-12-02 | by ( ) www.reuters.com time to read: +5 min

1/FRANC DISCUSSIONCredit Suisse executives may need to sit down for an honest chat about whether the bank's latest strategic plan is enough to rally investors. And with the Federal Reserve, European Central Bank and Bank of England meeting in coming weeks, the drama isn't over. For some, the notion of peak rates, peak inflation and China's reopening is reason enough for cheer. After months of pain inflicted by high inflation and aggressive rate increases, perhaps it's time to bring on the Santa rally. That wouldn't necessarily cut short a rally in Aussie dollar, which recently has been driven more by China's re-opening hopes and a retreating greenback than the RBA.

☆ Equity funds suffer biggest weekly outflow in three months - BofA
▼ + stars: | 2022-12-02 | by ( ) www.reuters.com time to read: +1 min

LONDON, Dec 2 (Reuters) - Equity funds suffered a $14.1 billion outflow in the week to Wednesday in the largest exit in three months, BofA Global Research said in a note on Friday. U.S. equity funds saw an $16.2 billion outflow, the biggest since April, the latest flow data from BofA also showed. Bond funds also saw outflows, to the tune of $2.4 billion, while cash funds attracted $31.1 billion inflows and gold funds added $59 million, BofA said citing EPFR data. In its weekly note, BofA noted that outflows from credit funds in 2022 of $316 billion have unwound all the inflows of 2021. It added that while equity funds have seen inflows this year of some $207 billion, this was down from the "euphoric inflows" seen last year.

LONDON, Dec 2 (Reuters) - Investors have withdrawn $316 billion from credit funds this year, unwinding all of the previous year's inflows, BofA Global Research said in a note on Friday. In its latest note on fund flows, BofA said equities funds had seen inflows of $207 billion in 2022, below the "euphoric inflows" of the previous year. Equity funds suffered a $14.1 billion outflow in the largest exit in three months, BofA said, citing EPFR data. Cash funds attracted $31.1 billion of inflows and gold funds added $59 million, BofA added. In emerging markets, BofA said bonds had a 15th week of outflows, losing $500 million, while equities attracted $1.1 billion of inflows.

☆ Morning Bid: Why payrolls might not matter to markets
▼ + stars: | 2022-12-02 | by ( ) www.reuters.com time to read: +4 min

It's payrolls Friday, yet the most keenly awaited U.S. economic data point may not hold much sway over markets that are already behaving as if the U.S. tightening cycle is over. If it holds at current levels, this would mark one of the biggest weekly drops in the last two years . One line of argument goes that to justify the move seen in government bond markets, the Fed needs to be more or less done in December. So, where does this all leave the November non-farm payrolls report out at 1330 GMT? In the light of that data, markets may be anticipating a lower number later on.

☆ Sterling at fresh 16-week high as dollar takes a beating
▼ + stars: | 2022-12-01 | by ( ) www.reuters.com time to read: +2 min

LONDON, Dec 1 (Reuters) - Sterling rose to a near 16-week high against a broadly-soft dollar on Thursday, with currency traders looking past gloomy British manufacturing data for now. The pound was last up 0.8% against the dollar at $1.2157, its highest level since Aug. 12, breaching the previous high of $1.2153 touched on Nov. 24. Sterling was also 0.6% higher versus the euro at 85.865 pence per euro. Inflation in the UK is still running at a four-decade high as households grapple with a cost-of-living crisis. Money markets are fully pricing in a 50-basis-point rate hike at the BoE's Dec. 15 meeting .

☆ World stocks in upbeat spirits, Fed's Powell in the spotlight
▼ + stars: | 2022-11-30 | by ( Dhara Ranasinghe | Foo Yun Chee | ) www.reuters.com time to read: +4 min

[1/2] The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, November 29, 2022. REUTERS/StaffLONDON, Nov 30 (Reuters) - World equity markets rallied on Wednesday and focus turned to Jerome Powell, who speaks later in the day in what will be the U.S. Federal Reserve chief's last opportunity to steer sentiment ahead of the Fed's December meeting. European stock markets rallied (.STOXX) and U.S. equity futures pointed to a firm start for Wall Street , . MSCI's broadest gauge of Asia Pacific stocks outside Japan (.MIAPJ0000PUS) rallied more than 1% to its highest since September. Hong Kong's Hang Seng Index rallied more than 2% (.HSI), although Japan's blue-chip Nikkei fell 0.2% (.N225).

"While we have been cautious, there is an important shift going on with the COVID reopening." The protests were the strongest public defiance during Xi's political career, China analysts said. If protests were to continue, this would add to the risk premium, said Sean Taylor, chief investment officer for Asia-Pacific at DWS Group. Social discontent stemming from the zero-COVID policy added to risks in executing and implementing government policies, said Mark Haefele, global wealth management CIO at UBS in Zurich. We also view China’s sluggish recovery as a risk for the global economy and markets."

"Protests are a concern in the short-term," Seema Shah, chief strategist at $500 billion asset manager Principal Global Investors told Reuters, adding that latest events supported the view that winds were changing. "While we have been cautious, there is an important shift going on with the COVID reopening." If protests were to continue, this would add to the risk premium, said Sean Taylor, chief investment officer for Asia-Pacific at DWS Group. "We believe this divergence in view will drive an outperformance in A shares over H shares," Tang said. We also view China’s sluggish recovery as a risk for the global economy and markets."

☆ Market watchers' comments on COVID-19 protests in China
▼ + stars: | 2022-11-28 | by ( ) www.reuters.com time to read: +6 min

Here's what market watchers are saying about the unrest:ALLAN VON MEHREN, CHIEF ANALYST, DANSKE BANK, COPENHAGEN:"Normally protests in China are aimed at local governments but a crowd in Shanghai directed their protest against the Communist Party and Xi Jinping." "The protests come as the recent tweaks in the zero-Covid policy seem to have backfired as they led to rising cases across the country that subsequently triggered new restrictions being implemented. MARK HAEFELE, GLOBAL WEALTH MANAGEMENT CIO, UBS, ZURICH:"We do not expect economic or market headwinds in China to abate significantly over the coming months. KEN CHEUNG, CHIEF ASIA FX STRATEGIST, MIZUHO, HONG KONG:"The China economy is heading to the direction of reopening but the road to the reopening could be a bumpy one. GARY NG, ECONOMIST, NATIXIS, HONG KONG:"The market does not like uncertainties that are difficult to price and the China protests clearly fall into this category.

☆ Take Five: Everything to play for
▼ + stars: | 2022-11-25 | by ( ) www.reuters.com time to read: +5 min

Markets are hopeful the Federal Reserve will soon slow the pace of its aggressive rate hikes. The U.S. economy likely created 200,000 new jobs, a Reuters poll of economists forecasts found, in what would be the smallest gain since December 2020. Manufacturing indicators, mainly PMIs, due next week might attest to the weakness already seen across the economy. Inflation in the euro zone was 10.6% in October, more than five times the European Central Bank's 2% target. Indeed, the Fed may be getting ready to slow the pace of its rate hikes, but the ECB is not there yet.

☆ European companies are tapping bond markets again as investors return
▼ + stars: | 2022-11-22 | by ( Chiara Elisei | ) www.reuters.com time to read: +4 min

German housing giant Vonovia (VNAn.DE) last week raised 1.5 billion euros ($1.54 billion) amid strong investor demand in primary markets, a bright spark for a beleaguered property sector. Also noteworthy was a 750 million euro hybrid bond sale from Spanish telecoms firm Telefonica (TEF.MC), the first offering of its kind in Europe in two months. There were no hybrid bond deals in June and July, and only one transaction in September before Telefonica's offering. New hybrid bond sales total just over 10 billion euros so far this year, compared with 30 billion euros for the whole of 2021. In the broader market, investment grade corporate issuers have raised 258 billion euros so far this year compared with 322 billion euros in 2021, according to Refinitiv data.

☆ Take Five: Black Friday test
▼ + stars: | 2022-11-18 | by ( ) www.reuters.com time to read: +5 min

1/GOING SHOPPINGWith concerns that the U.S. economy may be on the verge of a recession, a key test of consumer demand arrives on Nov. 25, when retailers launch "Black Friday" sales - a day traditionally marked by long lines of shoppers eager to pounce on discounts. Soaring inflation and surging interest rates could test buying appetite. The dollar index, meanwhile, peaked at a 20-year high of 114.78 in September and has been falling ever since. Reuters Graphics3/BLEAK OUT THEREThe International Monetary Fund says the global economic outlook is even gloomier than it was a month ago. Preliminary readings of business activity in November from a number of economies could answer the question in the coming days.

☆ Instant View: UK finance minister Jeremy Hunt outlines budget
▼ + stars: | 2022-11-17 | by ( ) www.reuters.com time to read: +5 min

Much of Hunt's budget had been widely expected, meaning markets offered a muted reaction. Sterling fell against the dollar, while UK government bond prices also eased, but remained clear of the day's lows. FOREX: Sterling fell 0.9% against the dollar to $1.1809 from $1.1845 prior to the budget. MARCUS BROOKES, CHIEF INVESTMENT OFFICER AT QUILTER INVESTORS, LONDON:"Today’s Autumn Statement has painted a bleak picture for the UK... Markets originally reacted well to the steady hand of Jeremy Hunt. SIMON HARVEY, HEAD OF FX ANALYSIS, MONEX EUROPE, LONDON:"The austerity’s going to be welcome (to the Bank of England) purely because there’s going to be less support for UK consumers.

☆ Analysis: Investors face expensive quest for year-end cash and safe assets
▼ + stars: | 2022-11-14 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +6 min

Money markets too suggest securing cash and quality assets investors need to make a smooth transition into 2023 will be expensive. But analysts noted year-end is still 1-1/2 months away and the spread tends to widen in late November as demand for cash rises. The risk is any unexpected news emerging as liquidity thins further in December, requiring investors to reconsider positioning. BofA said it now sees year-end German repo 6 percentage points below the overnight rate, which it said would still make it the most expensive on record for investors borrowing bonds then. "It's still early days, but (last year's repo pricing) would probably be the best case already in terms of year-end pricing," Commerzbank's Leister said.

☆ Take Five: A UK budget and trouble in crypto land
▼ + stars: | 2022-11-11 | by ( ) www.reuters.com time to read: +5 min

LONDON, Nov 11 (Reuters) - The long-awaited UK fiscal plan is (almost) here and after the ructions unleashed by September's mini-budget, markets are paying close attention. UK markets have recouped most of the maxi-losses from the mini-budget, but the outlook is grim. Reuters Graphics2/ CRYPTO CHAOSThe crypto world has been thrown into fresh chaos by a meltdown at FTX. Big banks too are starting to pare back staffing levels. September data showed a measure of underlying retail sales rising thanks to strong wage gains and savings, even as the broader number came in flat.

☆ Dollar slides, CPI data suggests Fed could slow pace of rate hikes
▼ + stars: | 2022-11-10 | by ( Herbert Lash | ) www.reuters.com time to read: +5 min

"Inflation is clearly moving in the right direction, and that keeps a more hawkish Fed at bay," he said. The spike higher in the yen versus the dollar stirred speculation the Bank of Japan intervened, which analysts doubted. Fed funds futures priced in a drop in expectations for the U.S. central bank's peak target rate, which fell below 5%. The likelihood of a 50-basis-point rate hike by the Fed instead of a 75-basis-point increase in December rose to 71.5%. CPI rose 7.7% in October on a year-over-year basis, down from 8.2% in the prior month, as headline inflation fell below 8% for the first time since February.

☆ Dollar on track for biggest plunge since 2015 as investors exit crowded positions
▼ + stars: | 2022-11-10 | by ( Saqib Iqbal Ahmed | ) www.reuters.com time to read: +3 min

[1/3] U.S. dollar banknotes are seen in this illustration taken July 17, 2022. The scope of the dollar's moves against many currencies on Thursday has been breathtaking, as investors pull back from what has been seen as an extremely crowded trade in foreign exchange markets. Against a basket of currencies , the dollar was off about 1.9%, on pace for its worst day in nearly seven years. The reversal of these trades could fuel further dollar weakness, analysts said, if further signs of economic softening lead investors to bet on a less hawkish Fed. Daniel Wood, portfolio manager on the emerging markets debt team at William Blair, has increased bets on emerging market currencies rising against the dollar.

European stock markets were lower (.STOXX), U.S. equity futures , were mixed and Asian shares (.MIAPJ0000PUS) edged up as the U.S. midterm election results rolled in. This all left MSCI's World Stock Index (.MIWD00000PUS) stuck just below Tuesday's seven-week peak. "U.S. stock futures are pushing higher on the idea of political gridlock being favourable for stocks, as it has been historically." Stuart Cole, head macro economist at Equiti Capital said potential political gridlock in Washington likely meant the end of tax rises on corporations and the well-off proposed by President Joe Biden. Reuters GraphicsIn Asia, Japan's blue-chip Nikkei stock index (.N225) retreated from a two-month high as poor results from videogame maker Nintendo weighed.

☆ Credit Suisse launches $2 bln, 11-year bond issue - source
▼ + stars: | 2022-11-09 | by ( ) www.reuters.com time to read: 1 min

LONDON, Nov 9 (Reuters) - Credit Suisse (CSGN.S) has launched a $2 billion, 11-year bond issue, a source familiar with the matter told Reuters on Wednesday. The new bond was set to be priced at a spread of 485 basis points over Treasuries, the source said, adding that the deal would be finalised later in the day. Earlier, Credit Suisse raised three billion euros from the sale of a bond due in March 2029 by its holding company. This bond had a final price at a of 495 basis points over the mid-swap level, the source said. Reporting by Chiara Elisei; Ediing by Dhara RanasingheOur Standards: The Thomson Reuters Trust Principles.

☆ Credit Suisse set to raise 3 bln euros from new debt issue
▼ + stars: | 2022-11-09 | by ( ) www.reuters.com time to read: +1 min

LONDON, Nov 9 (Reuters) - Credit Suisse (CSGN.S) was on Wednesday set to raise three billion euros from the sale of a bond due in March 2029 by its holding company, Refinitiv's capital markets news service IFR reported. Investor orders for the bond, callable in March 2028, exceeded 7.5 billion euros and it was set to be priced at a spread of 495 basis points over the mid-swap level, IFR said. Credit Suisse was the sole bookrunner for the bond, expected to be rated Baa2/BBB-/BBB by Moody's, S&P and Fitch, IFR said. Last week S&P Global Ratings downgraded Credit Suisse Group's long-term credit rating to one step above junk bond status, citing "material execution risks" in the bank's efforts to get back on solid ground after a series of scandals and losses. Reporting by Dhara Ranasinghe and Yoruk Bahceli; editing by Yoruk Bahceli and Louise HeavensOur Standards: The Thomson Reuters Trust Principles.

☆ Investors pile into cash at fastest rate since COVID crisis-BofA
▼ + stars: | 2022-11-04 | by ( ) www.reuters.com time to read: +1 min

Equity funds posted $6.3 billion in inflows, with emerging markets funds recording their second straight weekly inflow, with $4.3 billion, and European equity funds posting their 38th weekly outflow, down $900 million, BofA added. Stocks got a boost last week from a belief among investors that the Federal Reserve could shift the pace of rate hikes down a gear, as the economy shows signs of slowing. Fed Chair Jerome Powell has since poured cold water over such speculation, given stubbornly high inflation and a resilient labour market. Much harder to pivot when inflation is 8% & unemployment is 3%," BofA investment strategist Michael Hartnett wrote. The S&P 500 (.SPX) gained almost 4% last week, buoyed by optimism over quarterly earnings and the prospect of slower rate hikes from the Fed.

☆ HSBC cuts UK terminal rate forecast to 3.75% from 4.25%
▼ + stars: | 2022-11-04 | by ( ) www.reuters.com time to read: +1 min

LONDON, Nov 4 (Reuters) - HSBC said on Friday that it had revised down its forecasts for UK interest rates in the current tightening cycle, and now sees just two more increases. In a note, HSBC said it now forecasts a 50 basis point increase in December and then a 25 basis point rise in February, taking Bank Rate to 3.75%. "Whether or not the BoE is ultimately proved right, less tightening is likely in the near term," HSBC analysts said in a note. Previously, the bank had forecast increases of 50bps in December, then a further 50bps in February and then 25bps in March, which would have taken Bank Rate to 4.25%. Reporting by Dhara Ranasinghe; Editing by Amanda CooperOur Standards: The Thomson Reuters Trust Principles.

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