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Register now for FREE unlimited access to Reuters.com Register"We have announced that we will be out by the end of this week. "My message to the funds involved and all the firms involved managing those funds: You've got three days left now. Investors are nervous that Friday's halt to the BoE's bond-buying might come too soon for some pension funds. But a BoE spokesperson said it had been made "absolutely clear in contact with the banks at senior levels" that the Friday deadline would hold. On Wednesday, it said it was "closely monitoring" liability-driven investment (LDI) funds, which are key to pension funds, ahead of Friday's deadline.

REUTERS/Brendan McDermid/File PhotoOct 12 (Reuters) - Signs of stress are growing in the global financial system, sparking worries over everything from contagion between markets to ruptures in financial products. This week alone, a gloomy report from the International Monetary Fund flagged risks of “disorderly asset repricings” and “financial market contagions” while JPMorgan chief Jamie Dimon predicted a looming recession. Global financial conditions, which reflect the availability of funding, touched their tightest since 2009 in late September, an index compiled by Goldman Sachs showed, lifted by surging interest rates, falling equities and a soaring dollar. “There are dollar funding shortages.”The IMF's Global Financial Stability Report, released Tuesday, also highlighted specific risks in open-end investment funds and the leveraged loan market. U.S. Treasury Secretary Janet Yellen on Tuesday said she has not seen signs of financial instability in U.S. financial markets despite high volatility.

Earlier in the day the British central bank said it would continue to buy bonds this week. The pan-European STOXX 600 index (.STOXX) lost 0.56% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) shed 0.97%. Emerging market stocks (.MSCIEF) lost 2.28% after hitting an April 2020 low and were set for a near-30% tumble year-to-date, their biggest decline since 2008. read moreGILT RESPITEBonds globally have been sideswiped by the rout in UK government bonds, known as gilts, pushing yields on U.S. Treasuries up sharply. Bond market trading was volatile with longer-dated U.S. Treasury yields hitting multi-year highs.

Investors were also digesting the latest moves by the Bank of England, which continued to support its bond market. read moreIn addition, the International Monetary Fund on Tuesday warned of a disorderly repricing in markets, saying global financial stability risks have increased. "Nothing has happened," to cause the rebound said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. The pan-European STOXX 600 index (.STOXX) lost 0.56% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) shed 0.79%. 1/5 A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 11, 2022.

The EU issues joint bonds for an up-to 800 billion euro ($879 bln) post-COVID recovery fund, on top of 92 billion euros sold for its SURE unemployment scheme. 3/ How would joint issuance be funded? EU officials calling for joint borrowing said it could resemble the SURE work programme. Since October 2020, the EU has raised just 260 billion euros for the recovery fund and SURE. That means recovery fund issuance may end up lower than 800 billion euros without changes to that programme, denting the EU's ambitions of becoming a top borrower.

☆ World stocks head back towards 2-year lows as mood sours
▼ + stars: | 2022-10-11 | by ( Dhara Ranasinghe | ) www.reuters.com time to read: +4 min

There was a modest respite for Britain's battered bond market after the Bank of England said it would start purchasing inflation-linked debt. And MSCI's world stock index was down 0.5% -- moving back towards roughly two-year lows hit last week (.MIWD00000PUS). Emerging market stocks hit their lowest level since April 2020 and are on track for a near-30% tumble year-to-date, its worst year since the 2008 global financial crisis. GILT RESPITEBritish government bond or gilt yields edged lower, having soared on Monday, following the BoE's latest efforts to shore up the battered bond market. The Aussie dollar fell to a 2-1/2-year low of around $0.6248 and the kiwi dollar hit a low of $0.5536.

LONDON, Sept 28 (Reuters) - The Federal Reserve is raising interest rates expeditiously to address very high, persistent inflation, and will likely get U.S. short-term borrowing costs to where they need to be by early next year, Federal Reserve Bank of Chicago President Charles Evans said Wednesday. Benchmark U.S. 10-year Treasury yields rose to their highest level in about 12-1/2 years on Tuesday as investors girded for higher interest rates that could possibly remain for longer than anticipated as Federal Reserve officials held firm in their hawkish stance. The Federal Reserve has aggressively hiked interest rates by 3 percentage points this year, taking its target range to 3.00%-3.25%. It carried out its third consecutive 75 basis point increase last week and signaled that rates are likely to rise to the 4.25%-4.5% range by the end of the year. Register now for FREE unlimited access to Reuters.com RegisterReporting by Dhara Ranasinghe, Jorgelina Do Rosario and Ann Saphir; Editing by Andrea RicciOur Standards: The Thomson Reuters Trust Principles.

"Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability," the BoE warned. One source at the Treasury said Kwarteng would not resign, and the government would not reverse its policy. A second person familiar with the situation said Truss still backed Kwarteng and they would announce further economic reforms soon. One source at the meeting said Kwarteng had asked the assembled finance bosses what they could do to calm markets. U.S. bond giant PIMCO said it would have less confidence in sterling than it did before last Friday's announcement.

"There will be impacts, there’s correlations ... some market volatility, and then how it weighs in the global growth picture," said Paul Malloy, head of municipals at Vanguard. The wild swings in the pound have ricocheted across currency markets, where volatility was already climbing. According to the widely watched Deutsche Bank Currency Volatility Index , volatility across currencies on Wednesday hit its highest level since the March 2020 COVID-19- induced market meltdown, jumping more than 20% from levels last week. Closely followed indicators of financial stress remain contained. U.S. stock market volatility as measured by the "fear index," the VIX (.VIX), has also climbed in recent days but remains below its 2022 highs.

"Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability," the British central bank said. By 2:48pm (1348 GMT) it was trading down 0.5% at $1.0679, a fall of 12% in the last three months. The BoE said it would return to its plan to sell bonds and its launch was only postponed until the end of October. RESTORE ORDEROn Monday the BoE said it would not hesitate to raise interest rates and was monitoring markets "very closely". But the slide in bond prices continued unabated on Wednesday, prompting the BoE to make its move.

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.

☆ Bank of England to buy 65 billion pounds of UK bonds to stem rout
▼ + stars: | 2022-09-28 | by ( David Milliken | ) www.reuters.com time to read: +4 min

Citing potential risks to UK financial stability, the BoE also said it would delay the start of a programme to sell down its 838 billion pounds ($891 billion) of government bond holdings, which had been due to begin next week. "Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability," the BoE said. "This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy." "There are schemes running out of cash at the moment," one pensions consultant said before the BoE intervention. The BoE's intervention reduced long-dated bond yields back to their level at the end of Friday - after the initial negative reaction to Kwarteng's statement - but shorter-dated yields were still higher.

LONDON, Sept 28 (Reuters) - Federal Reserve Bank of Chicago President Charles Evans said on Wednesday that volatility in markets can create additional restrictiveness in financial conditions. "It is a case that financial market volatility can add to additional financial restrictiveness. So anything around the world in terms of policy or developments like Russia's invasion of Ukraine can add to additional restrictiveness." "We just really need to get inflation in check," Evans said. Relief on inflation could also come from improvements in supply, he said, and giving him some comfort is the fact that inflation expectations are "relatively consistent" with the Fed's 2% inflation goal.

"Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability," the central bank said in a statement that immediately eased pressures on soaring British government bond yields. The Bank of England said on Monday it would not hesitate to raise interest rates and was monitoring markets "very closely". Earlier on Wednesday 30-year British government bond yields rose above 5% for the first time since 2002. "An irresponsible, destructive fiscal policy." In his remarks on Tuesday, BoE Chief Economist Pill said financial market upheaval would have a big impact on the economy and would be factored into the Bank's next forecasts.

British Pound Sterling and U.S. Dollar notes are seen in this June 22, 2017 illustration photo. Deutsche Bank's Currency Volatility Index – the historical volatility index of the major G7 currencies - jumped to a two-and-a-half year high of 13.55 on Monday. While Sterling and the yen have fared extremely poorly against the dollar, the greenback's meteoric rise has spared no major currency. Reuters GraphicsMoves have surprised long-time currency traders and investors. "Our team is working around the clock from multiple global locations," said Kamboj, adding he is not trading sterling because the pound's direction now depends entirely on how the Bank of England reacts.

☆ Sterling crumbles to all-time low, euro at 20-year low
▼ + stars: | 2022-09-26 | by ( Dhara Ranasinghe | ) www.reuters.com time to read: +4 min

Register now for FREE unlimited access to Reuters.com RegisterBut it was sterling's slide that rippled across markets, down as much as 4.9% to an all-time low of $1.0327 . Sterling was also down 1% against the euro, having hit its lowest since September 2020 at 92.60 pence . The euro also touched a fresh 20-year trough at $0.9528 and was last down 0.5%. And the dollar index - where the basket includes sterling, the euro and the yen - reached 114.58 for the first time since May 2002, reflecting the greenback's broad strength. The risk-sensitive Australian dollar dropped to $0.64845, its lowest since May 2020, and the Canadian dollar touched 1.3638 to its U.S. counterpart, its weakest since July 2020.

☆ Sterling crumbles to all-time nadir, euro at 20-year low
▼ + stars: | 2022-09-26 | by ( Dhara Ranasinghe | ) www.reuters.com time to read: +3 min

Sterling also tumbled 1.3% against the euro, having hit its lowest since September 2020 at 92.60 pence . Kit Juckes, head of currency strategy Societe Generale in London, said markets had a tendency to overshoot but noted two points on sterling's slide. "The second is that the mini budget has allowed sterling to be the short of choice against the dollar." The euro also touched a fresh 20-year trough at $0.9528 , as the pound's slide rippled across markets. China's offshore yuan slid to a new low of 7.1728 per dollar, its weakest since May 2020.

An employee is seen walking over a mosaic of pound sterling symbols set in the floor of the front hall of the Bank of England in London, in this March 25, 2008 file photograph. Yet the rapid rise in yields investors now receive for owning UK bonds hasn't helped sterling much. Pound slumps and UK borrowing costs surgePredicting the short-term direction of currencies is notoriously hard. Against the euro the pound is only at two-year lows, although it is down 3% since Friday. "People will look at the UK and think that that's not a market that is stable," said Payne at Janus Henderson.

☆ Italy's right-wing bloc wins election: five questions for markets
▼ + stars: | 2022-09-26 | by ( ) www.reuters.com time to read: +6 min

REUTERS/Guglielmo MangiapaneMILAN/LONDON, Sept 26 (Reuters) - Italy's right-wing bloc should have a solid majority in both houses of parliament following Sunday's election, potentially giving the country a rare chance of political stability after years of upheaval and fragile coalitions. The absence of the anti-euro rhetoric seen in the 2018 election had reassured investors in the run-up to the vote. With markets watching closely, we take a look at five key questions on the radar. Reuters Graphics2/ Could Italy's EU funding plan be modified? The Brothers of Italy sees room to amend Italy's EU-backed recovery fund programme to account for the energy shock.

REUTERS/Kim Kyung-Hoon/File PhotoNEW YORK/LONDON, Sept 25 (Reuters) - Global investors are preparing for more market mayhem after a monumental week that whipsawed asset prices around the world, as central banks and governments ramped up their fight against inflation. "It's hard to know what will break where, and when," said Mike Kelly, head of multi-asset at PineBridge Investments (US). "Currency exchange rates ... are now violent in their moves," said David Kotok, chairman and chief investment officer at Cumberland Advisors. But the murky outlook meant that they were still not cheap enough for some investors. "We are of the view that markets are still massively underestimating the global economic growth hit that is coming," he said.

REUTERS/Kim Kyung-Hoon/File PhotoNEW YORK/LONDON, Sept 25 (Reuters) - Global investors are preparing for more market mayhem after a monumental week that whipsawed asset prices around the world, as central banks and governments ramped up their fight against inflation. "It's hard to know what will break where, and when," said Mike Kelly, head of multi-asset at PineBridge Investments (US). "Currency exchange rates ... are now violent in their moves," said David Kotok, chairman and chief investment officer at Cumberland Advisors. The fallout from the hectic week exacerbated trends for stocks and bonds that have been in place all year, pushing down prices for both asset classes. "We are of the view that markets are still massively underestimating the global economic growth hit that is coming," he said.

Finance minister Kwasi Kwarteng's plans will require an extra 72 billion pounds ($79 billion) of government borrowing over the next six months alone, and - a particular concern for investors - cement permanent tax cuts costing 45 billion pounds a year. But to bond investors, they bring the prospect of more persistent inflationary pressures - at a time when inflation is already near a 40-year high - as well as tighter Bank of England (BoE) policy. Government borrowing is likely to total 218 billion pounds this financial year and 229 billion pounds in 2023/24, Citi predicted, and it expects benchmark 10-year British government bond yields to rise to 4.25%. Adding to the pressure, on Thursday the BoE confirmed it planned to reduce its own 838 billion pounds of gilt holdings by 80 billion pounds over the coming year. "That is a strong indication that domestic and overseas investors are losing confidence in the UK's inflation-fighting credibility," he said.

☆ Credit Suisse shares hit record low after report bank is looking to raise cash
▼ + stars: | 2022-09-23 | by ( ) www.reuters.com time to read: +1 min

Register now for FREE unlimited access to Reuters.com RegisterSwitzerland's national flag flies in front of the headquarters of Swiss bank Credit Suisse in Zurich, Switzerland July 27, 2022. REUTERS/Arnd Wiegmann/File PhotoLONDON, Sept 23 (Reuters) - Credit Suisse (CSGN.S) shares dropped to a record low on Friday after a Reuters report said the company is looking to raise fresh cash. Shares in Credit Suisse (CSGN.S) fell over 7% in early trade to a record low of 4.26 francs. Including Friday's move, shares are down over 50% this year and are on track for their worst yearly performance since 2008. Register now for FREE unlimited access to Reuters.com RegisterReporting by Samuel Indyk; Editing by Dhara RanasingheOur Standards: The Thomson Reuters Trust Principles.

☆ 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.

☆ Reactions: Britain's finance minister unveils "mini budget"
▼ + stars: | 2022-09-23 | by ( ) www.reuters.com time to read: +5 min

Britain's blue-chip stocks (.FTSE)remained mired in the red, in line with a broader equity-market decline. FOREX: Sterling extended losses, falling 1.9% on the day to around $1.1047, having hit a new 37-year low earlier on. British homebuilders and household goods makers hit session highs, buoyed by the prospect of consumers getting tax breaks. The tax-cutting budget and ‘go for broke’ growth aims are unlikely to change the longer-term bearish GBP trend." If you get more fiscal stimulus and less monetary stimulus, that’s something that’s buoyant for the currency.

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