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☆ Sterling ticks up as UK inflation hits 41-year high
▼ + stars: | 2022-11-16 | by ( ) www.reuters.com time to read: +2 min

LONDON, Nov 16 Reuters) - Sterling rose against the U.S. dollar on Wednesday following UK inflation data that topped expectations and raised the chances of yet more interest rate hikes by the Bank of England (BoE). Despite sterling ticking up, the currency had traded flat in the hours after the inflation data was published, suggesting a muted reaction from traders. Earlier this week, data showed Britain's unemployment rate rose to 3.6% in the three months to September, above expectations for 3.5%. Quarterly GDP figures last week showed Britain's economy shrank by a less severe than-expected 0.2% in the three months to September. October retail sales data due on Friday will give further insight into consumer spending, which is a major pillar of the UK economy.

☆ VIEW Bank of England lifts UK rates to 3% in historic hike
▼ + stars: | 2022-11-03 | by ( ) www.reuters.com time to read: +5 min

REUTERS/Toby MelvilleLONDON, Nov 3 (Reuters) - The Bank of England raised UK interest rates to 3% on Thursday in its largest rate hike since 1989 and warned of a "very challenging outlook" for the economy. Money markets showed traders now expect UK rates to peak at 4.6% by next September, compared to expectations of 4.8% just two days ago. UK bank stocks (.FTNMX301010) fell 0.8%BONDS: Yields on the two-year gilt were last up 1 basis points at 3.041%, compared with 3.064% before the BoE announced its decision. Rates markets are pricing another 50bps hike at each of the December and February meetings, although still reflect a lower terminal rate than just a week ago. ANDREW ALDRIDGE, PARTNER AT DEEPBRIDGE CAPITAL, LONDON"Quelling rampant inflation and kickstarting a slowing economy left the Bank facing a difficult balancing act, with today's interest rate hike to 3% hardly surprising in this context.

☆ Sterling pauses after UK fiscal U-turn rally, yen scrabbles off 32-year low
▼ + stars: | 2022-10-18 | by ( Joice Alves | ) www.reuters.com time to read: +4 min

British pound banknote is displayed on U.S. Dollar banknotes in this illustration taken, February 14, 2022. Register now for FREE unlimited access to Reuters.com RegisterAfter Monday's almost 2% rally, sterling was down 0.1% against the U.S. dollar to $1.1340 at 0815 GMT. Improved risk sentiment has bolstered the euro to $0.9872, its highest since Oct. 6, with a fall in energy prices also supporting the single currency. "Euro/dollar went under parity in late August largely driven by the negative terms of trade shock of higher energy prices. The UK news saw the risk-sensitive New Zealand dollar , already lifted by hotter-than-expected consumer inflation data, extend its surge, up 1% to $0.5691.

☆ Central banks get sucked into financial black hole
▼ + stars: | 2022-10-14 | by ( Edward Chancellor | ) www.reuters.com time to read: +7 min

Central bankers around the world want to bring inflation down by returning interest rates to “normal” levels. As a result, the average UK mortgage has grown to 3.4 times average income, up from 1.5 times in the early 1980s, according to housing analyst Neal Hudson. But it’s left many homeowners extremely vulnerable to higher interest rates. As a result, the government’s fiscal position is more exposed to interest rate fluctuations. As a financial black hole opens up, central banks will be forced to stop tightening.

☆ Qantas shareholders take cautiously to the skies
▼ + stars: | 2022-10-13 | by ( ) www.reuters.com time to read: +2 min

MELBOURNE, Oct 13 (Reuters Breakingviews) - Shareholders have become accustomed to bad news from airlines. So it’s only fitting that Qantas Airways’ (QAN.AX)prediction on Thursday of bumper earnings prompted a somewhat muted response. The $6 billion Australian carrier reckons its underlying pretax profit for the six months to the end of December will be between A$1.2 billion and A$1.3 billion ($753 million and $815 million). But it implies investors are factoring in just A$130 million of additional earnings on an annual basis, after applying the stock’s almost 10 times forward earnings multiple and assuming a constant tax rate. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ China's soy sauce star suffers a premium downgrade
▼ + stars: | 2022-10-12 | by ( ) www.reuters.com time to read: +2 min

Haitian, which with a 20% share of China’s market for cooking's brown gold, dismissed the accusations as a smear campaign. It says it complies with relevant food safety rules and stressed that food additives are common and don’t imply inferior quality. Even after the selloff, Haitian still trades at a mouth-watering 41 times forecast earnings for the next 12 months, per Refinitiv. But it’s now much closer to the 36 times fetched by Japanese peer Kikkoman (2801.T). They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Anti-woke ETF adopts progressive cause
▼ + stars: | 2022-10-11 | by ( ) www.reuters.com time to read: +2 min

Keeping tabs on such corporate actions is a tall order, especially when the ETF plans to mimic the make-up of the S&P 500 Index and avoid skewing investment toward anti-woke darlings such as the oil sector. Subjects like job creation and fair pay are topics that advocates such as the Congressional Progressive Caucus are advancing. So too is BlackRock (BLK.N) boss Larry Fink, who noted how companies manage their employees is material to investors’ interests. Typically those issues fall under the "S" in the environmental, social, and governance mandates that YALL is fighting against. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Lab tie-up would have multiple ailments
▼ + stars: | 2022-10-11 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 11 (Reuters Breakingviews) - Qiagen (QIA.DE) may once again find itself at the centre of an M&A drama. The $10 billion German lab tester is in talks with $10 billion U.S. life-science company Bio-Rad (BIO.N), the Wall Street Journal reported on Monday. Any deal would follow Thermo Fisher Scientific’s (TMO.N) failed attempt to buy Qiagen for 11.3 billion euros ($11 billion) back in 2020. Regulators in the United States and Europe have been increasingly wary of tie-ups that could lead to higher prices. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Art Laboe, beloved California DJ who popularized ‘oldies but goodies,’ dies at 97
▼ + stars: | 2022-10-11 | by ( Scottie Andrew | ) edition.cnn.com time to read: +5 min

Laboe died on Friday after a short bout of pneumonia, his spokesperson Joanna Morones confirmed to CNN. Laboe helped desegregate Southern CaliforniaLaboe, born Arthur Egnoian, started DJing in 1943 as a teenager, he said in an interview with the Orange County Register. Most recently, he hosted “The Art Laboe Connection” on station KDAY. In September, the 79th anniversary of Laboe’s radio debut, the nonprofit station dublab flipped the script on Laboe and sent dedications to him. Over an hour and a half, fans called in to give Laboe songs (and kisses): One requested “18 With a Bullet” because Laboe played it for her when she turned 18.

☆ BoE’s insurance policy raises question of next act
▼ + stars: | 2022-10-10 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 10 (Reuters Breakingviews) - The Bank of England is taking out insurance against a market meltdown. On Monday, the central bank said it was ready to double the daily limit of its bond-buying programme from 5 billion pounds to 10 billion pounds. This will cost users just 15 basis points above the base rate, although they face haircuts of up to 42%. (By Aimee Donnellan)Register now for FREE unlimited access to Reuters.com RegisterFollow @Breakingviews on Twitter(The author is a Reuters Breakingviews columnist. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Trustbusters’ metaverse gambit
▼ + stars: | 2022-10-10 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, Oct 10 (Reuters Breakingviews) - Mark Zuckerberg isn’t the only one making risky gambits in the metaverse. On Friday, trustbusters at the Federal Trade Commission pared back their arguments against Meta Platforms’ (META.O) acquisition of virtual reality app maker Within. The agency run by Lina Khan stepped back from initial arguments that Meta’s Beat Saber game competes directly against Within’s Supernatural fitness app. That was always an odd stretching of definitions that both limited the market to a thin slice of virtual reality and at the same time included wildly disparate apps. That resembles arguments against the 2015 merger of sterilization companies Steris and Synergy – a case the FTC lost.

Yet the government’s unfunded mini-budget on Sept. 23 stoked fears of runaway inflation, causing gilt yields to soar. The mess left pension funds scrambling to raise margin, and they wound up doing so by selling their most liquid asset – gilts. And the more the pension funds sold, the more gilt prices fell, causing a vicious spiral and fears the funds could run out of cash. By the time Governor Andrew Bailey intervened, certain pension funds had been hit with margin calls as high as 100 million pounds. Ahead of the BoE’s announcement, strategists said the 2.1 trillion pound gilt market was seizing up, with very poor liquidity and pricing quality being a clear sign of market dysfunction.

☆ Breakingviews: BoE’s bond-buying U-turn is worth the risk
▼ + stars: | 2022-09-28 | by ( Neil Unmack | ) www.reuters.com time to read: +5 min

The fallout makes it even harder for Governor Andrew Bailey to convince markets he can tighten monetary policy. His decision on Wednesday to buy UK government debt and delay plans to sell down its 857 billion pound ($915 billion) bond portfolio carries big risks. Bailey’s goal is to cut holdings by 80 billion pounds over the next year. UBS analysts reckon issuance of gilts, after factoring in sales and redemptions from QT, will reach 355 billion pounds in the year ending March 2024. If Bailey can now tighten monetary policy without freaking out investors, his U-turn will have been worth the risk.

☆ UK swaps one cost-of-living crisis for another
▼ + stars: | 2022-09-27 | by ( Liam Proud | ) www.reuters.com time to read: +3 min

But the budget plans of new Prime Minister Liz Truss and her Chancellor Kwasi Kwarteng may cause a world of pain for mortgage borrowers. Surging interest rates will crimp spending and hurt the housing market, further undermining Truss and Kwarteng’s growth plans. Capital Economics reckons at Monday’s implied levels, mortgage costs could reach their highest level relative to borrowers’ income since 1990. Rather than having to bail them out, regulators and politicians may push lenders to offer repayment holidays or cut interest rates. It will find it equally difficult to let mortgage borrowers suffer alone.

☆ Inflation is a global problem. Here’s how central banks are addressing it
▼ + stars: | 2022-09-21 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

In Turkey and Argentina, annual inflation rates are forecast to clock in at a whopping 80%. At least 75 have lifted their benchmark interest rates in the past year, increasing the price of credit across the world. In July, it instituted its second consecutive 0.75 percentage point interest rate increase, taking its benchmark rate to a range of 2.25% to 2.5%. The country is struggling with rampant inflation rate that rose to a 20-year high of nearly 80% in August. The country’s annual inflation rate slowed to 7% in August, below analyst forecasts of 7.3% and down from 7.6% in July.

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