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☆ Take Five: No time to COP out
▼ + stars: | 2022-11-04 | by ( ) www.reuters.com time to read: +5 min

Meanwhile, China will release a deluge of data as markets try to read the runes on how Beijing might shape its COVID policy in future. Investors will once again be looking for signs that price pressures are slowing after a barrage of rate hikes. Australia's central bank has already slowed the pace of its rate hikes and delivered a mere 25 bps hike on Tuesday. Data and central bank comments in days ahead will remain under scrutiny. The much-hoped for dovish pivot remains elusive and battered world markets may have to settle for more but less for now.

☆ Caution creeps into world stocks as Fed gets ready to hike big again
▼ + stars: | 2022-11-02 | by ( Dhara Ranasinghe | ) www.reuters.com time to read: +4 min

Another aggressive rate hike to contain hot inflation when the Fed conclides its two-day meeting later is anticipated. For markets, the key question is whether the Fed will also signal it could slow additional rate hikes, in a so-called dovish pivot. European stock markets opened higher, but moved lower as the day wore on. U.S. stock futures, which provide an indication of how Wall Street will open, also lost some of their strength and were mixed , . The robust dollar retreated in October on speculation the Fed might indicate a slowdown in its aggressive tightening campaign.

☆ World stocks upbeat, even as Fed gets ready to hike big again
▼ + stars: | 2022-11-02 | by ( Dhara Ranasinghe | ) www.reuters.com time to read: +4 min

For markets, the key question is whether the Fed will also signal it could slow additional rate hikes, in a so-called dovish pivot. European stock markets opened mostly firmer (.STOXX), Asian shares outside Japan rallied to a two-week high (.MIAPJ0000PUS) and U.S. equity futures pointed to a firm open for Wall Street , . Cummins expects the Fed to step down to a 50 bps hike in December. It fell 0.75% against the Japanese yen to 147.16 yen amid fears of intervention from authorities and thin liquidity. The robust dollar has pulled back in October on speculation the Fed might indicate a slowdown in its aggressive tightening campaign.

☆ Take Five: It's rate hike central
▼ + stars: | 2022-10-31 | by ( ) www.reuters.com time to read: +5 min

LONDON, Oct 28 (Reuters) - It's rate hike central with monetary policy meetings in the United States, Britain, Australia and Norway in the week ahead. Graphics by Vincent Flasseur and Sumanta Sen.1/ FOUR IN A ROWA fourth straight jumbo 75-basis point (bps) interest rate hike is widely expected when the Federal Reserve meets on Nov 1-2. Fed chair Jerome Powell has come under political pressure to be careful of putting U.S. jobs at risk by tightening policy too much. Inflation in the bloc hit 10.7%, accelerating from 9.9% last month and dashing hopes that peak inflation could be near. The European Central Bank just delivered its second 75 bps rate increase to control price pressures.

France, Spain and Finland said their rules are already structured to automatically take account of market tensions. The data tracked German, Italian, French, Spanish and Dutch bonds, markets which account for the vast majority of euro zone debt with nearly 8 trillion euros outstanding. So governments expect, and some formally require their primary dealers - banks that buy government debt at auctions and then sell to investors and manage its trading - to keep those tight. The euro zone is roughly 60% the size of the U.S. economy but it relies on Germany's 1.6 trillion euro bond market as a safe haven - a fraction of the $23-trillion U.S. Treasury market. Smaller governments pay premium over bigger rating peersEfforts by debt officials are welcomed by European primary dealers, whose numbers have dwindled in recent years because of shrinking profit margins and tougher regulation.

☆ Take Five: It's rate-hike central
▼ + stars: | 2022-10-28 | by ( ) www.reuters.com time to read: +4 min

LONDON, Oct 28 (Reuters) - It's rate-hike central with monetary policy meetings in the United States, Britain, Australia and Norway in the week ahead. Fed chair Jerome Powell has come under political pressure to be careful of putting U.S. jobs at risk by tightening policy too much. A consequential week for markets also includes Friday's October U.S. payrolls report, with economists polled by Reuters forecasting the economy created 200,000 new jobs. Inflation in the bloc is running at almost 10% and the European Central Bank just delivered its second 75 bps rate increase to control price pressures. Like other big central banks, the ECB is hoping for signs that peak inflation is coming.

☆ Aggressive rate hikes the name of the game for big central banks
▼ + stars: | 2022-10-27 | by ( ) www.reuters.com time to read: +5 min

LONDON, Oct 27 (Reuters) - The European Central Bank delivered a second straight 75-basis-point interest rate hike on Thursday, the latest sign that major central banks are serious about curbing hot inflation. Central banks in the 10 big developed economies have raised rates by a combined 2,165 basis points (bps) in this cycle to date, with Japan the holdout "dove." But the pace of these rate rises is starting to slow - Canada just delivered a smaller-than-anticipated rate hike. That would be the fourth straight rate increase of that magnitude, bringing the policy rate to the 3.75%-4.00% range as part of what has been the sharpest set of U.S. rate increases in about 40 years. Reuters Graphics7) SWEDENSweden's central bank raised its key rate on Sept. 20 by a larger-than-expected one percentage point to 1.75%.

The pound touched its highest level since Sept. 13, continuing its rally after Rishi Sunak became Britain's prime minister. U.S. new home sales decreased 10.9% and mortgage rates reached their highest level in 20 years last week, data showed. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rallied more than 1%, while Japan's Nikkei (.N225) hit its highest level since Sept. 20. Market participants became cautious after major state-owned banks were spotted selling the dollar on Tuesday to stabilize the market, traders said. U.S. Treasury yields fell, helped by a weaker dollar and Fed hopes.

The U.S. dollar index fell to a five-week low as the pound touched its highest since Sept. 13, continuing its rally after Rishi Sunak became Britain's prime minister. The Dow Jones Industrial Average (.DJI) rose 0.51%, the S&P 500 (.SPX) lost 0.13% and the Nasdaq Composite (.IXIC) dropped 0.97% at 10:37 a.m. EDT (1437 GMT)MSCI's World Stock Index (.MIWO00000PUS) was up 0.36% and touched a five-week high. Europe's Stoxx 600 (.STOXX) also touched a five-week high in choppy trade. Market participants became cautious after major state-owned banks were spotted selling the dollar on Tuesday to stabilize the market, traders said. Elsewhere in commodities, oil prices rose on the weaker dollar and supply concerns.

☆ World stocks at 5-week high, earnings in the spotlight
▼ + stars: | 2022-10-26 | by ( Dhara Ranasinghe | ) www.reuters.com time to read: +4 min

But European shares headed higher (.STOXX), having opened softer, drawing some comfort from upbeat bank earnings. Deutsche Bank (DBKGn.DE) posted a better-than-expected jump in third quarter profit, while British bank Barclays (BARC.L) too beat profit forecasts on a trading boom. MSCI's World Stock Index (.MIWO00000PUS) touched a five-week high, while Asian shares rallied. The Bank of Canada is widely expected to raise rates by another 75 bps later in the day to contain stubbornly high inflation. In Australia, inflation raced to a 32-year high last quarter as the cost of home building and gas surged.

Investors will also look to ECB boss Christine Lagarde for guidance on how the ECB views the trade-off between recession risks and inflation, and when it might pause tightening. Economists say it's too early to call a peak in inflation but the chances of one arriving soon are growing. While an inflation peak may be close if there are no additional shocks from the war in Ukraine, the retreat will be slow initially, ECB policymaker Bostjan Vasle believes. Reuters Graphics Reuters Graphics4/ Is the ECB giving away cash to banks and what will it do about it? Aggressive rate hikes from major central banks and a rout in British bonds have sparked concern about financial instability.

☆ Wall St ends red, Treasury yields climb on dour guidance and looming recession fears
▼ + stars: | 2022-10-20 | by ( Stephen Culp | ) www.reuters.com time to read: +4 min

All three major U.S. stock indexes lost ground, while the benchmark Treasury yield shot up to touch a new 14-year high. The pan-European STOXX 600 index (.STOXX) lost 0.53% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) shed 0.89%. Emerging market stocks lost 1.62%. A sell-off in U.S. government bonds pushed the benchmark Treasury yield to its highest level since mid-2008 on expectations of continued aggressive interest rate hikes from the Federal Reserve. 1/2 Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 14, 2022.

☆ Sterling weakens as Truss clings to power, markets dial back rate-hike bets
▼ + stars: | 2022-10-20 | by ( Lucy Raitano | ) www.reuters.com time to read: +3 min

British Prime Minister Liz Truss battled to retain her grip on power, a day after a second top minister quit and rowing and jostling broke out among her lawmakers in parliament. Analysts said a dialling back of aggressive rate hike bets following comments from the BoE's Ben Broadbent also weighed on sterling. Investors reined in further their bets of a full percentage-point interest rate increase by the BoE next month following the comments. "The dip in sterling is more driven by monetary policy than politics," said Colin Asher, senior economist at Mizuho Bank. "Broadbent noted that the policy rate may not need to go up as much as markets are pricing and short-term gilt yields and sterling both declined."

☆ Sterling rallies as pressure on UK PM Truss mounts
▼ + stars: | 2022-10-20 | by ( Lucy Raitano | ) www.reuters.com time to read: +3 min

British Prime Minister Liz Truss is meeting Graham Brady, the head of the 1922 Committee of Conservative lawmakers, a source in Truss's Downing Street office said. Register now for FREE unlimited access to Reuters.com RegisterAgainst this backdrop, the pound rose 0.5% to $1.1260 , having earlier traded 0.4% down. Analysts said a dialling back of aggressive rate hike bets following comments from the BoE's Ben Broadbent also weighed on sterling. Investors reined in further their bets of a full percentage-point interest rate increase by the BoE next month following the comments. Rating agencies S&P and Moody's review UK sovereign ratings on Friday, another potential headwind for British markets.

☆ Wall St oscillates, Treasury yields climb on cautious corporate guidance and recession worries
▼ + stars: | 2022-10-19 | by ( Stephen Culp | ) www.reuters.com time to read: +3 min

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 14, 2022. The three major U.S. stock indexes wavered between red and green out of the starting gate, while the benchmark Treasury yield shot up to touch a new 14-year high. Emerging market stocks lost 1.53%. A sell-off in U.S. government bonds pushed the benchmark Treasury yield to its highest level since mid-2008 on expectations of continued hawkish policy from the Federal Reserve. The dollar index rose 0.45%, with the euro down 0.64% to $0.9789.

Oct 18 (Reuters) - Austria raised 1 billion euros ($983.20 million) on Tuesday from the auction of the first ever green T-bill, a move aimed at attracting shorter-term investors to buy environmentally friendly assets. But with central banks and a wider group of investors interested in green investments to bolster their sustainability credentials, interest in shorter-term green debt is growing. Austria, rated AA, is the first government to issue a green T-bill - short-term government debt which usually matures in less than a year. Markus Stix, director of the Austrian Treasury, called short-term green securities the "missing link" in the green market. It was easier for Austria to shift expenditure for funding through green T-Bills, given its overall T-Bill programme was only launched in 2021 and it just started issuing green debt, the banker said.

☆ After U-turn, Britain's economy still paying for Truss's growth plan
▼ + stars: | 2022-10-17 | by ( ) www.reuters.com time to read: +4 min

With the economy still paying a price for the now-shelved plan, we take a look at some of the main pain points in markets. While those have come down significantly, Britain's 10-year yield remain 45 basis points above levels before Sept. 23 and 30-year yields are some 55 bps higher . This highlights that even with the U-turn in Truss's economic policy, investors still demand a higher premium for holding British government debt. 4/ MORTGAGE FIXBritain's mortgage market was plunged into chaos by the growth plan, as the money markets that lenders rely on to price home loans bet on higher interest rates. Reuters Graphics5/ SUNKEN STOCKSUK blue-chip stocks are still 3% below where they were traded prior to Truss's plan.

☆ British pound and gilts soar after Hunt rolls back tax cuts
▼ + stars: | 2022-10-17 | by ( ) www.reuters.com time to read: +9 min

Jeremy Hunt on Friday replaced Kwasi Kwarteng, who Prime Minister Liz Truss sacked following the so-called "mini-budget" on Sept. 23 that sent UK assets sliding. Hunt on Monday announced a series of tax changes that he said would raise 32 billion pounds ($36.19 billion) a year in extra revenues. STERLING: The pound rose against the dollar and the euro, gaining 1.1% and 0.7%, respectively , . So the UK is not the outlier when it comes to its monetary policy and its fiscal policy. STUART COLE, HEAD MACRO ECONOMIST, EQUITI CAPITAL, LONDON:"I think it would be a brave person to be buying sterling quite yet.

"It is really not the right time to experiment with fiscal policy," AXA chief economist Gilles Moec said about the UK's moves, assessing that Monday's U-turn may have appeased "the bond vigilantes for now". The term, bond vigilantes, refers to debt investors imposing fiscal discipline on profligate governments by forcing their borrowing costs higher. Ed Yardeni, who coined the bond vigilantes term in the early 1980s, penned a blog post saying "They're Baaaack!" Even U.S. President Joe Biden was speaking the bond vigilante's language at the weekend, noting he wasn't the only one that thought the UK plan was a "mistake". "This is probably the biggest example in practice of the bond vigilantes activity," said Antonio Cavarero, head of investments at Generali Insurance Asset Management.

☆ Reactions: UK's Truss fires Kwarteng, set to U-turn on tax cuts
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +5 min

LONDON, Oct 14 (Reuters) - British Prime Minister Liz Truss fired her finance minister Kwasi Kwarteng and news reports said she will scrap later on Friday parts of the economic programme of big, unfunded tax cuts that they delivered last month. Consequently, the scope for a rally in gilts (move lower in yields) and sterling would seem to be limited." BENJAMIN NABARRO, ECONOMIST, CITI"The key issue in the near term is the contradiction between monetary and fiscal policy. RACHEL REEVES, OPPOSITION LABOUR PARTY'S FINANCE CHIEF"This humiliating u-turn is necessary - but the real damage has already been done. We may well be through the worst of the volatility but I fear that the UK is nowhere near out of the woods."

As Truss spoke on Friday gains made in anticipation of the corporation tax U-turn faded. Ten-year gilt yields were 40 bps above session lows hit earlier on Friday, also pushed up by moves in bond yields globally. UNDERWHELMEDBritain's mini-budget three weeks ago triggered some of the biggest ever jumps in British bond yields, exposed vulnerabilities in the pensions sector -- undermining the country's financial stability. "How it impacts liquidity on the gilt market going forward is something we are monitoring closely." Rabobank's McGuire said pressure on UK assets could lead the BoE to re-intervene in the bond market or delay its quantitative tightening, bond-selling plans.

The ECB, which bought 5 trillion euros of bonds ($4.9 trillion) over the past decade to lift low inflation, now finds itself battling record high inflation at 10%. "This consideration also makes the practical implementation of ECB QT significantly harder," BofA said. That would reduce its balance sheet by a "manageable" 155 billion euros in 2023 and 300 billion euros in 2024, ING reckons. An eventual wind-down of PEPP holdings could add to balance sheet reductions in 2025 worth a total 388 billion euros, ING said. AllianceBernstein portfolio manager Nick Sanders said he was "sceptical" how the ECB could achieve QT with those protections in place.

☆ UK bond market chaos sends investors fleeing into into money-market funds-Fitch
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +3 min

Money market funds typically invest in high quality assets over a shorter-term horizon than other asset managers and, as such, are perceived to carry lower risk. Register now for FREE unlimited access to Reuters.com RegisterFitch warned that if the volatility in British gilts persisted or intensified, "liquidity pressure" could spread beyond pension funds. The agency noted that such a development could lead to sudden large redemptions of cash from money market funds (MMFs). Ten-year gilt yields were down 17 basis points on the day at 4.022% and 30-year yields - hardest hit by the sell-off since the mini-budget - were 14 bps lower at 4.41%. Still, 30-year gilt yields are up 60 bps this month, versus with a rise of 12 bps in U.S. and German peers , .

☆ Take Five: Calm or calamity?
▼ + stars: | 2022-10-14 | by ( ) www.reuters.com time to read: +5 min

Traders are back on Japanese yen intervention watch, while the U.S. earnings season and a congress of China's ruling Communist Party kick off. Growing expectations of a government u-turn on most of its unfunded tax cuts should end much of the pain. The carnage in British gilts has exposed vulnerabilities in the pensions sector, shining a light on financial stability risks. The IMF warns of "disorderly asset repricings" and "financial market contagion." A market slide has moderated stock valuations, but a downgrade in the earnings outlook could dampen equities' attractiveness.

Governor of the Bank of England, Andrew Bailey, speaks during the Bank of England's financial stability report news conference, at the Bank of England, London August 4, 2022. And what they can't allow is for the bond market to be overly volatile," said Iain Stealey, CIO of fixed income at JPMorgan Asset Management. U.S. and German 30-year borrowing costs are up just 16 and 33 bps respectively , this month and the contrast highlights the scale of selling gripping Britain's bond market. The unprecedented bond market moves triggered hefty collateral calls on hedging strategies that many funds are still struggling to meet. Bond market volatility has also raised doubts about whether the BoE can press ahead with its plan to sell some of its bond holdings, a process known as quantitative tightening (QT).

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