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☆ Central banks are fighting a war on inflation. They're not done yet
▼ + stars: | 2023-01-31 | by ( Julia Horowitz | ) edition.cnn.com time to read: +6 min

London CNN —One of the main jobs of central banks is to keep prices under control, allowing households and businesses to plan for the future with some certainty on what things will cost. Tolga Akmen/EPA-EFE/ShutterstockPolicymakers face difficult questions about exactly when to pause interest rate hikes. The European Central Bank’s main rate is 2%, while the Bank of England’s is 3.5%. Still, investors are becoming increasingly confident that major central banks will change course soon. “Central banks are relatively close to the end,” Sels said.

☆ Insana says there’s more evidence of slowing inflation and other central banks are noticing
▼ + stars: | 2023-01-27 | by ( Ron Insana | ) www.cnbc.com time to read: +3 min

Federal Reserve Board Chairman Jerome Powell holds a news conference following the announcement that the Federal Reserve raised interest rates by half a percentage point, at the Federal Reserve Building in Washington, U.S., December 14, 2022. That should be good news for the Federal Reserve, as it watches the so-called core PCE, which excludes food and energy, quite closely. Many central banks around the world are beginning to dial back on their own rate hikes of late. That's a pattern emerging among central banks who hiked first and are now more likely to stop raising rates in the relatively near future. Central banks' realization

☆ Hopes of slowdown in rate hikes bolster shares ahead of U.S. GDP
▼ + stars: | 2023-01-26 | by ( Huw Jones | ) www.reuters.com time to read: +5 min

Oil prices were steady after U.S. crude stocks rose less than expected, while gold hit a 9-month peak. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) climbed 1.1% and was set for its fifth straight day of gains. The report could mark the last quarter of solid growth before the lagged effects of the Fed's jumbo rate hikes kick in. Oil prices were steady after U.S. crude stocks rose less than expected. Gold prices touched a nine-month high, with spot gold at $1,941 per ounce, after hitting $1,949.09 earlier in the day.

This meant the U.S. dollar index , which measures the greenback against a basket of currencies, fell as low as 101.5, its lowest since the end of May. Markets expect policymakers at the Bank of England and European Central Bank (ECB), which also meet next week, to deliver 50 bps rate hikes. The Canadian dollar traded at 1.3387 per U.S. dollar, after the Bank of Canada on Wednesday raised its key interest rate to 4.5% but became the first major central bank fighting global inflation to say it would likely hold off on further increases for now. He said the pullback in Fed rate hike expectations following the BoC’s policy decision had triggered a US dollar sell-off alongside Canadian dollar weakness, which "highlights that the US dollar remains vulnerable to a further dovish repricing of Fed rate hike expectations." Reporting by Rae Wee and Alun John; Editing by Bradley Perrett and Kim CoghillOur Standards: The Thomson Reuters Trust Principles.

☆ Shares in Asia hit fresh 7-month high, U.S. GDP data awaited
▼ + stars: | 2023-01-26 | by ( Ankur Banerjee | ) www.reuters.com time to read: +4 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) climbed 0.9% to 557.65 and was set for its fifth straight day of gains. Trading was thin on Thursday with Australia closed for a holiday and certain parts of Asia, including China, still away for the Lunar New Year. Investor attention will also be on the Bank of England and European Central Bank meetings due next week, with traders looking for clues as to when the central banks are likely to turn dovish. U.S. West Texas Intermediate (WTI) crude rose 0.09% to $80.22 per barrel, while Brent was at $86.05, down 0.08% on the day. Gold prices touched a nine-month high, with spot gold at $1,945.55 per ounce, after hitting $1,949.09 earlier in the day.

☆ Dollar wobbles near eight-month low ahead of c.bank meetings
▼ + stars: | 2023-01-26 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

SINGAPORE, Jan 26 (Reuters) - The dollar held close to an eight-month low against its peers on Thursday, as a gloomy U.S. corporate earnings season stoked recession fears and as traders stayed on guard ahead of a slew of central bank meetings next week. Trading was thin, with Australia out for a holiday and some parts of Asia still away for the Lunar New Year. "There are now signs the U.S. economy may be slowing in a more meaningful manner," said economists at Wells Fargo. Ahead of that, the Commerce Department is due to release advance estimates of U.S. fourth-quarter gross domestic product later on Thursday. Meanwhile, markets expect policymakers at the Bank of England and European Central Bank (ECB), which will also meet next week, to deliver 50 bps rate hikes.

☆ Morning Bid: Heading for a soft landing?
▼ + stars: | 2023-01-26 | by ( ) www.reuters.com time to read: +2 min

Things are not as bad as some had feared, with the region's prospects boosted by China's reopening, an unexpectedly mild winter and resilient activity data. These hopes have lifted the pan-European STOXX 600 index (.STOXX), which is up 6.4% for the month and is set for its best January performance since 2015. Investors' focus is on next week's set of central bank meetings as the U.S. Federal Reserve, European Central Bank and Bank of England decide on their rate-hike paths. Share price performance, earnings and sales for TeslaKey developments that could influence markets on Thursday:Economic events: Sweden's consumer confidence data for January, U.S. GDP data. Earnings: LVMH, Nokia, STMicroelectronics, Diageo and Volvo in Europe; Blackstone, Mastercard, Southwest Airlines, Intel, and Visa among others in United States.

☆ Asian shares scale fresh 7-month high as Hong Kong trade resumes
▼ + stars: | 2023-01-26 | by ( Ankur Banerjee | ) www.reuters.com time to read: +3 min

SINGAPORE, Jan 26 (Reuters) - Asian equities rose to a fresh seven-month high on Thursday, with Hong Kong shares playing catch-up to other markets' gains as trade resumed after its three-day Lunar New Holiday. read moreInvestor attention will also be on the Bank of England and European Central Bank meetings due next week, with traders looking for clues as to when the central banks are likely to turn dovish. The yield on 10-year Treasury notes was down 1.7 basis points at 3.445%, while the yield on the 30-year Treasury bond was down 2.2 basis points at 3.602%. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes , seen as an indicator of economic expectations, was at -68.8 basis points. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 0.6 basis points at 4.131%.

☆ Dollar near eight-month low ahead of c.bank meetings
▼ + stars: | 2023-01-26 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

SINGAPORE, Jan 26 (Reuters) - The dollar lolled near an eight-month low against its peers on Thursday, as a gloomy U.S. corporate earnings season stoked recession fears and as traders stayed on guard ahead of a slew of central bank meetings next week. The U.S. dollar index , which measures the greenback against a basket of currencies, last stood at 101.53, languishing near last week's eight-month trough of 101.51. "There are now signs the U.S. economy may be slowing in a more meaningful manner," said economists at Wells Fargo. "With the Fed no longer leading the charge on interest rate hikes and U.S. economic trends set to worsen, we now believe the U.S. dollar has entered a period of cyclical depreciation against most foreign currencies." Markets expect policymakers at the Bank of England and European Central Bank (ECB), who will also meet next week, to deliver 50 bp rate hikes.

☆ Morning bid: Parsing the peak, sidestepping a slump
▼ + stars: | 2023-01-26 | by ( ) www.reuters.com time to read: +4 min

"We are turning the corner on inflation," BoC Governor Tiff Macklem told reporters, while dismissing any thought of policy easing for now. Just how bad the underlying economy gets before the central banks are done is the other burning question. On the activity side, the prospect of reviving growth in China and the euro zone certainly changes the international picture. In Europe, STMicroelectronics jumped 8% after the chipmaker reported a sales beat and Finnish telecom equipment maker Nokia jumped 5% after its own beat. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Instant view: U.S. GDP grows in fourth quarter; weekly jobless claims fall
▼ + stars: | 2023-01-26 | by ( ) www.reuters.com time to read: +6 min

Gross domestic product increased at a 2.9% annualized rate last quarter, the Commerce Department said in its advance fourth-quarter GDP growth estimate on Thursday. The swing in inventories was the wildcard and that added 1.46 percentage points to GDP growth. "If you look at the GDP data it does seem like we left 2022 with a little bit more momentum than people had thought and with consumption we're also in a pretty good spot. “We have a GDP number that is well above trend, and the previous quarter’s number was well above trend. That suggests higher rates were starting to take a bigger toll, and sets the stage for weaker growth in the first quarter of this year."

☆ Dollar near eight-month low ahead of central bank meetings
▼ + stars: | 2023-01-26 | by ( ) www.cnbc.com time to read: +3 min

The dollar kept trade-sensitive currencies pinned near multi-year lows on Monday and the euro was under pressure as investors sought safety due to worries about slowing global growth. The dollar lolled near an eight-month low against its peers on Thursday, as a gloomy U.S. corporate earnings season stoked recession fears and as traders stayed on guard ahead of a slew of central bank meetings next week. The U.S. dollar index , which measures the greenback against a basket of currencies, last stood at 101.53, languishing near last week's eight-month trough of 101.51. Markets expect policymakers at the Bank of England and European Central Bank (ECB), who will also meet next week, to deliver 50-bp rate hikes. Elsewhere, the Canadian dollar last traded at 1.3393 per dollar, after the Bank of Canada on Wednesday raised its key interest rate to 4.5% but became the first major central bank fighting global inflation to say it would likely hold off on further increases for now.

☆ TSX ends lower for second day as industrials slide
▼ + stars: | 2023-01-25 | by ( Fergal Smith | ) www.reuters.com time to read: +2 min

The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) ended down 29.95 points, or 0.2%, at 20,599.60, adding to a small decline on Tuesday. "We expect them to be on pause for quite a while," said Tom O'Gorman, director of fixed income at Franklin Templeton Canada. Industrials fell 2.1%, with Canadian National Railway Co (CNR.TO) down 4.7% after the company forecast lower 2023 earnings. U.S. crude oil futures settled 2 cents higher at $80.15 a barrel after a smaller than expected build in U.S. crude inventories. Shopify Inc (SHOP.TO) was a bright spot, rising nearly 11% after the e-commerce company updated its pricing plan.

☆ Exclusive: -Bank of Canada's Macklem says he is 'not even thinking' of cutting rates
▼ + stars: | 2023-01-25 | by ( ) www.reuters.com time to read: +1 min

OTTAWA, Jan 25 (Reuters) - Bank of Canada Governor Tiff Macklem on Wednesday said he was focused on whether interest rates would need to go higher and is not even considering cutting them as part of the fight against inflation. Macklem made his remarks in an interview with Reuters after earlier announcing a rate hike and saying the central bank would pause to see how the economy was reacting to tightening. "As things start to get more back to normal, at some point, yes, we probably will be thinking about some modest cuts in interest rates," Macklem said. We're not even thinking about cuts ... the question really we're asking ourselves is, 'Have we done enough?' (Reporting by Steve Scherer and David Ljunggren)((Reuters Ottawa bureau, +1 647 480 7921; david.ljunggren@tr.com))Keywords: CANADA CENBANK/MACKLEM RATESOur Standards: The Thomson Reuters Trust Principles.

Jan 26 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever. Some gloomy signals from the latest U.S. earnings reports, a stream of tech sector layoffs and worries over global growth are overshadowing hopes that the Fed and other central banks will take their foot off the monetary tightening pedal. Some Asian central banks have done likewise in recent weeks. It may be due a correction, and if that comes on Thursday, it will be on greater volume than the three days of gains this week as some Asian markets re-open after the Lunar New Year holidays. Three key developments that could provide more direction to markets on Thursday:- South Korea GDP (Q4)- The Philippines GDP (Q4)- U.S. GDP (Q4 advance estimate)Reporting by Jamie McGeever in Orlando, Fla.; Editing by Josie KaoOur Standards: The Thomson Reuters Trust Principles.

☆ Dollar eases as traders look to central banks for cues
▼ + stars: | 2023-01-25 | by ( Saqib Iqbal Ahmed | ) www.reuters.com time to read: +4 min

REUTERS/Dado Ruvic/IllustrationNEW YORK, Jan 25 (Reuters) - The dollar slipped against the euro on Wednesday, but its losses were capped as traders were hesitant to make any big bets ahead of next week's central bank meetings, including the Federal Reserve and the European Central Bank. "Trading ranges remain remarkably compressed ahead of next week's central bank meetings," said Karl Schamotta, chief market strategist at Corpay. Data on Tuesday showed euro zone business activity made a surprise return to modest growth in January. In contrast, U.S. business activity contracted for the seventh straight month in January, data showed on Tuesday, though the downturn moderated across manufacturing and services for the first time since September. The dollar was down 0.42% against the yen , at 129.615 yen per dollar, having hit a near eight-month low of 127.215 on Jan. 16.

☆ Bank of Canada Raises Rates, Declares Pause to Assess Economic Impact
▼ + stars: | 2023-01-25 | by ( Paul Vieira | ) www.wsj.com time to read: 1 min

Bank of Canada is one of the first central banks among major developed-world economies to declare that it is done for now raising interest rates. OTTAWA—The Bank of Canada raised interest rates on Wednesday by a quarter point and said it would now pause to assess the economic impact from sharply higher borrowing costs. The Bank of Canada increased its target for the overnight rate to 4.50% from 4.25%, or the highest level in over 15 years. More important, the Bank of Canada is one of the first central banks among major developed-world economies to declare that it is done for now raising interest rates in the quest to bring inflation down from historically high levels. Central banks are trying to balance the risks between raising rates too aggressively and triggering a deep recession, and raising rates at too tepid a pace and allowing inflation expectations to remain elevated.

☆ Bank of Canada says growth to stall through the middle of 2023
▼ + stars: | 2023-01-25 | by ( ) www.reuters.com time to read: +1 min

OTTAWA, Jan 25 (Reuters) - The Bank of Canada on Wednesday said growth would stall through the middle of this year and predicted that while inflation would come down faster than previously forecast, it would not return to the bank's 2% target until next year. Inflation is seen on average at 3.6% this year, compared with the previous forecast of 4.1%. Stalling growth during the first half means "the likelihood of a couple of quarters with slightly negative growth is roughly the same as that of a couple of quarters with slightly positive growth," it said. In 2022, the economy likely expanded by 3.6%, compared with a previous forecast of 3.3%, and expanding 1.8% next year, lower than the 2% previously forecast. The bank separately increased its overnight policy rate by a quarter of a percentage point to 4.5% and indicated it would likely pause there to monitor the impact of previous rate hikes.

☆ Dollar edges down as traders look to central banks for cues
▼ + stars: | 2023-01-25 | by ( Saqib Iqbal Ahmed | ) www.reuters.com time to read: +4 min

REUTERS/Dado Ruvic/IllustrationNEW YORK, Jan 25 (Reuters) - The dollar edged down against the euro on Wednesday in subdued trading as investors were hesitant to make any big bets ahead of next week's central bank meetings, including the Federal Reserve and the European Central Bank. "Trading ranges remain remarkably compressed ahead of next week's central bank meetings," said Karl Schamotta, chief market strategist at Corpay. Data on Tuesday showed euro zone business activity made a surprise return to modest growth in January. Expectations of further rate increases by the European Central Bank have also supported the euro. In contrast, U.S. business activity contracted for the seventh-straight month in January, data showed on Tuesday, though the downturn moderated across manufacturing and services for the first time since September.

☆ Bank of Canada set for one more rate hike in historic tightening campaign
▼ + stars: | 2023-01-25 | by ( Fergal Smith | ) www.reuters.com time to read: +3 min

[1/2] A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. This week's meeting will be significant as the BoC will offer minutes from the policy-setting session for the first time. Money markets see a roughly 70% chance of a 25-basis-point move and expect the policy rate to peak at 4.50%. Economists expect the BoC to leave the door open to further tightening should upcoming data show price pressures persisting and push back against market expectations for interest rate cuts in the second half of the year. Better to err on the side of too much tightening with a 25-basis-point hike."

The euro was down 0.12% against the dollar at $1.088, just off the $1.093 level reached on Friday, which was the highest since early May. Meanwhile, the dollar was up 0.1% against the yen , at 130.28 yen per dollar, having hit an 8-month low of 127.22 on Jan. 16. Those expectations have caused the dollar index , which surged on the back of Fed rate hikes last year, to fall more than 11% from September's 20-year high of 114.78. Expectations of further rate increases by the European Central Bank have also aided sentiment and supported the euro. The U.S. dollar was little changed against its Canadian counterpart ahead of the Bank of Canada's latest rates decision on Wednesday, buying C$1.337.

[1/2] A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. "We are turning the corner on inflation," Bank of Canada Governor Tiff Macklem told reporters. If the economy evolves as forecast, the bank "expects to hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases," the statement announcing the rate hike said. "Governing Council is prepared to increase the policy rate further if needed to return inflation to the 2% target," the statement said. "The Bank of Canada is back to using forward guidance," said Royce Mendes, director and head of macro strategy at Desjardins.

☆ Morning bid: Cloudy outlook
▼ + stars: | 2023-01-25 | by ( ) www.reuters.com time to read: +4 min

And deep in the weeds of the fourth-quarter corporate earnings season, Microsoft's (MSFT.O) overnight rollercoaster probably defines the uncertainty. Microsoft stock surged almost 5% in after-hours trading on Tuesday after its bottom line beat the Street consensus. The mixed earnings picture dampened early week enthusiasm surrounding tech stocks and chipmakers. The chance it may force the Reserve Bank of Australia to lift interest rates again boosted the Aussie dollar. Key developments that may provide direction to U.S. markets later on Wednesday:* Bank of Canada policy decision.

[1/3] Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 7, 2022. Trade in European stocks was lacklustre, as signs of an improving economic outlook in the euro zone fed worries about further rate hikes. AUSSIE DOLLAR SURGEThe Australian dollar surged to $0.7123 after the latest inflation data. Germany's Ifo institute said its business climate index rose to 90.2, in line with the consensus, according to a Reuters poll of analysts, and up from 88.6 in December. U.S. crude futures recently rose 1.01% to $80.94 per barrel and Brent was at $86.68, up 0.64% on the day.

☆ Bank of Canada raises rates, says it is likely to pause for now
▼ + stars: | 2023-01-25 | by ( ) www.reuters.com time to read: +1 min

OTTAWA, Jan 25 (Reuters) - The Bank of Canada on Wednesday hiked its benchmark overnight interest rate by 25 basis points to 4.5%, its highest level in 15 years, and said it would likely pause to measure the cumulative effect of previous increases. Inflation will fall to about 3% around the middle of this year, and reach target next year. If the economy evolves as forecast, "Governing Council expects to hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases," according to a statement. "Governing Council is prepared to increase the policy rate further if needed to return inflation to the 2% target." (Reporting by Steve Scherer and David Ljunggren)((Reuters Ottawa bureau, +1 647 480 7921; david.ljunggren@tr.com))Keywords: CANADA CENBANK/RATESOur Standards: The Thomson Reuters Trust Principles.

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