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☆ Asian equities rise, dollar sways as focus firmly on Fed minutes
▼ + stars: | 2023-01-04 | by ( Ankur Banerjee | ) www.reuters.com time to read: +3 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.91%, set for a third straight day of gains for the year. The index fell 20% in 2022. Japan's Nikkei (.N225) lost 1.12% in early trade, while Australia's S&P/ASX 200 index (.AXJO) rose 1.28%. The dollar index , which measures the greenback against six other currencies fell 0.162% after rising 1% overnight. The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 3.7 basis points at 4.368%.

☆ Analysis: As Bank of Japan switches gears, roaring dollar hits the skids
▼ + stars: | 2022-12-20 | by ( Amanda Cooper | ) www.reuters.com time to read: +5 min

Reuters GraphicsThe dollar has risen 9% this year, as the Federal Reserve has jacked up interest rates to combat inflation at 40-year highs. As other central banks, from the Bank of England, to the European Central Bank, and the Reserve Bank of Australia, have raised their own rates, dollar bulls have run out of puff. The close relationship between Japanese monetary policy and U.S. Treasuries adds another twist to the story. It all boils down to whether Japanese investors have hedged their Treasury exposure or not, he said. But the stress is on "at the margin", not least because of the sheer size of Japanese investors' holdings of U.S. debt, analysts said.

☆ Euro zone bond yields jump a day after hawkish ECB
▼ + stars: | 2022-12-16 | by ( Stefano Rebaudo | ) www.reuters.com time to read: +3 min

Dec 16 (Reuters) - Euro zone borrowing costs rose on Friday as investors revised their forecasts for bond yields after the European Central Bank pledged further monetary tightening to fight inflation. Germany's 10-year government bond yield , the benchmark of the bloc, touched 2.208% on Friday, its highest in a month, and was last up 8 basis points at 2.17%. The gap between 2-year and 10-year yields was at -28.5 bps after briefly hitting its lowest since 1992 at -41.9 bps. The yield spread was at 1 bp after falling into negative territory to as low as -15 bps. Rohan Khanna head of European and UK rates at UBS forecast the Italian-German yield spread in the 200-250 bps range in 2023.

☆ ECB will have to stay laggard in bond-buying exit
▼ + stars: | 2022-12-13 | by ( Francesco Guerrera | ) www.reuters.com time to read: +4 min

Rising yields and a still frail euro zone mean that Europe’s so-called quantitative tightening (QT) should be slow. If it stopped reinvesting all maturing debt from March, its bond portfolio would shrink by 287 billion euros next year. If bond yields do spike, the ECB can step in with an emergency bond-buying programme, called the Transmission Protection Instrument. The real dangers of a disorderly exit mean the ECB has little choice but to remove the punchbowl slowly. The shift is a reversal of nearly a decade of monetary stimulus by the ECB as the euro zone went through several crises.

REUTERS/Dado Ruvic/IllustrationWASHINGTON/LONDON, Nov 8 (Reuters) - The dollar slid on Tuesday as rising German bond yields strengthened the euro, but a strong reading of the consumer price index later this week could reverse the currency's slide. A steady climb in German bond yields weakened the dollar on expectations of further European Central Bank tightening, which cut the spread with Treasury yields, said Marc Chandler, chief market speculation at Bannockburn Global Forex. "What I'm focusing on today is a huge move in two-year German bunds. "Once we've fully priced in peak Fed tightening, then you'll see a major reversal. The euro rose 0.48% to $ 1.0067 , while the Japanese yen strengthened 0.72% against the dollar at 145.57 .

☆ Sovereign bond market turmoil to spill well into next year: Reuters poll
▼ + stars: | 2022-10-24 | by ( Hari Kishan | ) www.reuters.com time to read: +4 min

BENGALURU (Reuters) - Turmoil in global sovereign bond markets is set to persist for another six months to a year as central banks carry on raising interest rates to bring down inflation, according to a Reuters poll of market strategists. Since the Fed first moved, bond markets have been subjected to high levels of volatility and deep sell-offs, jolting many bond investors out of their complacency. Bond Market Option Volatility Estimate Index, which began rising late last year, hit its highest level since March 2020 last week. But those median forecasts were higher than in September’s poll, suggesting yields are still facing upside risks. The poll expected bund yields to drop slightly from their current levels to 2.10% by end-2022 and then rise slightly to stay around 2.20% in the following six months.

"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.

The BoE said it would temporarily buy long-dated bonds - linked most closely to workers' pensions and home loans - in light of a surge in 30-year UK bond yields above 5%, their highest since 2002. The pound briefly fell by as much as 1% after the BoE's announcement, while UK stocks cut losses, which in turn helped the broader European equity market avoid deeper falls. "The surge in bond yields threatens the housing market and broader economy. The IMF and the U.S. Treasury waded in yesterday in fear of global contagion from gilts to other markets," he said. European government bonds got a lift from the surge in the value of UK gilts.

☆ Stocks pull off 2020 lows, Bank of England steps in to calm UK bond market
▼ + stars: | 2022-09-28 | by ( Amanda Cooper | Harry Robertson | ) www.reuters.com time to read: +5 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. The BoE said it would temporarily buy long-dated bonds - linked most closely to workers' pensions and home loans - in light of a surge in 30-year bond yields above 5%, their highest since 2002. "The surge in bond yields threatens the housing market and broader economy. The MSCI All-World index was last down 0.5%, having pulled off a session trough that marked its lowest since November 2020. "The Bank of England is restoring some calm to the markets.

☆ Morning Bid: Unstable cable
▼ + stars: | 2022-09-26 | by ( ) www.reuters.com time to read: +5 min

Supercharging an already rampant U.S. dollar around the globe, the sterling/dollar rate - nicknamed 'cable' by traders - went into virtual freefall at one point early on Monday. The pound's plunge comes ahead big auctions of both long-term and inflation-linked British government bonds this week and increasing liquidity issues in the gilt markets. read moreThe scale of the pound's losses and fiscal fears has many traders speculating about emergency rate rises by the Bank of England. Rate futures now price in a three-quarters-of-a-point hike to 3% on or before the BoE's next meeting on Nov. 2. read moreChina also acted in a different way on Monday to rein in yuan ongoing slump against the dollar.

☆ Market reaction to Italy election outcome
▼ + stars: | 2022-09-26 | by ( ) www.reuters.com time to read: +6 min

Leader of Brothers of Italy Giorgia Meloni reacts at the party's election night headquarters, in Rome, Italy September 26, 2022. It last traded at 234 basis points. "Today's upward movement is a continuation of the market reaction seen on Friday after Britain's mini-budget and sounds like a warning to the eurozone countries as well." LUCA CAZZULANI, HEAD OF STRATEGY RESEARCH; LOREDANA MARIA FEDERICO, CHIEF ITALIAN ECONOMIST, UNICREDIT"We expect a rather muted market reaction in terms of BTPs credit spread in the short term, as the election outcome was broadly in line with expectations." We continue to expect the 10-year BTP-Bund spread to trade close to 250 basis points until year end."

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