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LONDON, Oct 24 (Reuters) - Investors welcomed Rishi Sunak as Britain's new prime minister on Monday, but they're likely to give him little leeway to diverge from spending restraint and tax rises after his predecessor shook their faith in the Conservative party's management of the economy. Register now for FREE unlimited access to Reuters.com RegisterOutgoing Prime Minister Liz Truss's month and a half in power caused chaos in British financial markets. Yet Donovan said the mayhem of the last month means Sunak will have next to no room to make bold choices, lest he risk the market's wrath. And I don't think that the incoming prime minister has that." "The settling down of the situation in the UK means what is happening in politics is now more of an idiosyncratic thing just affecting UK markets, and in the UK too what global markets are doing will become more and more important."

☆ BOJ, BoJo, Beijing and bond bounce
▼ + stars: | 2022-10-24 | by ( ) www.reuters.com time to read: +5 min

A surge in Japan's ailing yen from 32-year lows later on Friday, amid reports of out-of-hours Bank of Japan intervention in New York, saw a peak-to-trough drop in dollar/yen of almost 4%. There were wild swings again on Monday amid suspicion of further BoJ sales, even though officials refused to confirm the action. A weekend of political twists from Beijing to London only added to edgy market on Monday. China leadership China's Xi Jinping secured a precedent-breaking third leadership term on Sunday and introduced a top governing body stacked with loyalists. Hong Kong's Hang Seng index (.HSI) has now underperformed MSCI's broadest global stock index by almost 50% over two years.

Like Truss, Sunak promised a tough approach to illegal immigration and vowed to expand the government’s controversial Rwanda immigration policy. At the time Johnson was running to lead Britain's Conservative Party and Sunak was a member of Parliament. Danny Lawson/PA Images/Getty Images Sunak speaks during a general election debate in Cardiff, Wales, in November 2019. Danny Lawson/PA/Getty Images Sunak delivers a speech during the annual Conservative Party Conference in Manchester in October 2021. Hollie Adams/Bloomberg/Getty Images Sunak and Murty are seen with their daughters, Krishna and Anoushka, while campaigning in Grantham, England, in July 2022.

☆ Rishi Sunak will be Britain’s next prime minister after seeing off rivals in race to replace Truss
▼ + stars: | 2022-10-24 | by ( Ivana Kottasová | ) edition.cnn.com time to read: +6 min

London CNN —Former finance minister Rishi Sunak will be the United Kingdom’s next prime minister after seeing off his lone remaining rival in the fast-tracked race to become Conservative party leader on Monday. Sunak is set to replace Liz Truss, who will become the shortest-serving prime minister in UK history. Sunak will become prime minister once he is officially appointed by King Charles III and will be the first prime minister appointed by the new King following the death of Queen Elizabeth II in September. His campaign got a big boost when his former boss and rival, former Prime Minister Boris Johnson, withdrew from the race on Sunday night. He criticized Truss’ economic plan which ultimately sparked panic in the financial markets and led to her demise.

☆ Cost of insuring UK debt against default drops as Sunak becomes PM
▼ + stars: | 2022-10-24 | by ( ) www.reuters.com time to read: +1 min

LONDON, Oct 24 (Reuters) - The cost of insuring Britain's debt against default fell to its lowest since last month's "mini budget", according to data from S&P Global Market Intelligence on Monday, after Rishi Sunak won the race to become Britain's next prime minister. Five-year sovereign credit default swaps (CDS) on UK government debt fell to 30 basis points, from 35 bps at Friday's close. This was their lowest since Sept. 23, when outgoing Prime Minister Liz Truss and her then-finance minister Kwasi Kwarteng unveiled a fiscal plan that contained billions of pounds in unfunded tax cuts. Sunak, who served as finance minster under Boris Johnson, said on Monday Britain faced serious economic challenges and needed stability and unity. Register now for FREE unlimited access to Reuters.com RegisterReporting by Amanda Cooper; Editing by Karin StroheckerOur Standards: The Thomson Reuters Trust Principles.

☆ Markets are losing retail traders, that's bad for stock prices
▼ + stars: | 2022-10-21 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +8 min

Daily average trades at companies like TD Ameritrade (AMTD) and Charles Schwab (SCHW) spiked to new highs in March 2020 and again in January 2021 and February 2021. The number of daily retail trades at Morgan Stanley fell more than 15% over the third quarter from a year earlier, to 805,000 trades a day. In Februrary 2021, Interactive Brokers registered an average of 3.7 million daily retail trades. Recent search trends on Google also show a drop in interest in the stock market. The Investor Movement Index (IMX), created by TD Ameritrade to indicate the sentiment of retail investors, fell by 7.26% during the September period.

But Broadbent's concentration on the likely peak terminal rate next year is what matters most. For context, that UK terminal rate, now pencilled in for around the middle of 2023, rocketed almost two full percentage points from just prior to the botched mini-budget to as high as 6.25%. Fed terminal rates, now targeted about March next year, have jumped 150 bps to 5% over the past two months. And Morgan Stanley, for example, see a UK terminal rate as low as 4% - a huge drop from current market pricing. The stubborn refusal of terminal rate pricing to return to where it was last month reflects the extent of those jitters.

☆ Twitter is bowing down to Larry the Cat, Downing Street's Chief Mouser, for outlasting 4 prime ministers
▼ + stars: | 2022-10-21 | by ( Cheryl Teh | ) www.businessinsider.com time to read: +2 min

Larry the cat is Downing Street's Chief Mouser, and has worked there since February 15, 2011. When Truss leaves office, Larry the Cat will have outlasted four prime ministers. Larry, the official cat at the British prime minister's 10 Downing Street residence, holds the title of Chief Mouser. "The King has asked me to become Prime Minister because this nonsense has gone on long enough," read a tweet from the account on Thursday. One Twitter user posted a photoshopped image of Larry in front of a crowd holding signs that reads: "Larry for Leader."

☆ Why the market crisis that ousted the UK's prime minister would never happen in the US
▼ + stars: | 2022-10-21 | by ( Ben Winck | ) www.businessinsider.com time to read: +9 min

UK Prime Minister Liz Truss' tax plan sparked immediate market backlash and, eventually, her resignation. Prime Minister Liz Truss, just 22 days into her leadership role, unveiled a mini-budget that proposed tax cuts that primarily benefited the wealthy. The prime minister announced her resignation on Thursday, just 45 days after taking office. The prime minister was dealt a less-than-ideal hand when she entered office. The checks and balances throughout the US government also stand in the way of such rapid-fire economic policy.

☆ The urgent search for the perfect inflation hedge
▼ + stars: | 2022-10-20 | by ( Edward Chancellor | ) www.reuters.com time to read: +7 min

But when inflation takes off, stocks and bonds become positively correlated, rising and falling together. The failure of bonds and stocks to deliver protection when inflation spikes has forced investors to seek other hedges. “Each attempted inflation hedge has its particular attractions, risks, and shortcomings,” wrote the journalist Henry Hazlitt in 1978. Hazlitt wrote that the only reliable inflation hedge is to end inflation. If the Fed loses its battle against rising prices, more people will come to appreciate the insurance they provide.

☆ Viral video shows Tory MP eviscerating Liz Truss, capturing the political fury that forced her from office
▼ + stars: | 2022-10-20 | by ( Joshua Zitser | ) www.businessinsider.com time to read: +3 min

UK Prime Minister Liz Truss announced her resignation on Thursday. A video of a Tory MP tearing apart Truss captures the political fury that led to her quitting. Charles Walker told BBC News he was "livid" and took aim at MPs who put Truss in power. It shows the longtime Conservative MP Charles Walker tearing apart Truss and her supporters, whom he blamed for trashing the party's reputation. The vote was marred by accusations that Conservative MPs were bullied and "manhandled" into voting in support of the government.

☆ Tesla and Truss, 5% and 150
▼ + stars: | 2022-10-20 | by ( ) www.reuters.com time to read: +4 min

A Tesla model 3 car is seen in their showroom in Singapore October 22, 2021. read more The latest European tech sector earnings on Thursday were downbeat, too. Bank of England Deputy Governor Ben Broadbent said the BoE would respond to changes in Truss's tax and spending policies. read moreKey developments that should provide more direction to U.S. markets later on Thursday:* European Union summit in Brussels* U.S. Oct Philadelphia business index. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ These 3 charts show the chaos that ran through markets during the 45 days that Liz Truss was UK prime minister
▼ + stars: | 2022-10-20 | by ( George Glover | ) www.businessinsider.com time to read: +4 min

Liz Truss resigned as UK prime minister on Thursday after just 45 days in the role. Truss quit as UK prime minister after just 45 days in the role Thursday, becoming the shortest-serving leader in the country's history. "First her policies went up in flames, then her brief career as prime minister," IG's chief market analyst Chris Beauchamp said. "The great political gamble of Liz Truss has spectacularly backfired but not before wreaking significant damage to the UK economy." Read more: UK Prime Minister Liz Truss resigned after the market rebelled against her aggressive economic growth plan.

☆ UK gilts rise but week of uncertainty beckons as Truss quits
▼ + stars: | 2022-10-20 | by ( ) www.reuters.com time to read: +1 min

Investors further scaled back their bets on an outsized 1% point interest rate hike next month by the Bank of England. Deputy Governor Ben Broadbent questioned aggressive pricing in markets of future rate hikes in a speech earlier on Thursday. Twenty- and 30-year gilt yields , which had fallen as much as 13 basis points (bps) earlier in the day, were down 7 bps as of 1442 GMT. "UK financial market reaction to Liz Truss's resignation today has been fairly sanguine," said Daniel Mahoney, an economist at Handelsbanken. Register now for FREE unlimited access to Reuters.com RegisterReporting by Andy Bruce Editing by William SchombergOur Standards: The Thomson Reuters Trust Principles.

☆ Reactions to UK PM Liz Truss's resignation
▼ + stars: | 2022-10-20 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 20 (Reuters) - Following are reactions from senior figures around the world to the resignation of Liz Truss, who said on Thursday that she was resigning as Britain's prime minister just six weeks after she was appointed. I thank Prime Minister Liz Truss for her partnership on a range of issues including holding Russia accountable for its war against Ukraine. RUSSIAN FOREIGN MINISTRY SPOKESWOMAN MARIA ZAKHAROVA"Britain has never known such a .... prime minister. LONDON MAYOR SADIQ KHAN, SPEAKING IN BUENOS AIRES"This morning I heard the news that my political opponent, the Conservative Prime Minister of the UK, has resigned. Had I known that organising the summit could lead to the resignation of the UK PM I'd have organised it sooner."

☆ Bank of Ireland offers menopause leave
▼ + stars: | 2022-10-19 | by ( Anna Cooban | ) edition.cnn.com time to read: +2 min

London CNN Business —Bank of Ireland Group is offering paid leave for women employees going through menopause, joining a growing list of companies trying to prevent women from exiting the workforce. Employees will be able to take up to 10 days off a year if they experience physical or psychological symptoms related to menopause, the bank announced Wednesday. The bank, which employs around 9,800 people worldwide, will also train managers on how to support colleagues going through menopause. The announcement was made during Ireland’s first ever Menopause Awareness Week and comes as a growing number of companies in Britain and Europe, including Danske Bank and Deloitte, introduce policies targeting menopause. A separate survey by Standard Chartered Bank and Britain’s Financial Services Skills Commission found that a quarter of women are more likely to retire early because of menopause.

☆ BoE's Hauser: Mini-budget caused 'full-scale liquidation event' for pension funds
▼ + stars: | 2022-10-19 | by ( ) www.reuters.com time to read: +1 min

LONDON, Oct 19 (Reuters) - The fallout in gilt markets from the British government's mini-budget was a "full-scale liquidation event" for pension funds, whose managers were calling the Bank of England with increasing alarm, the central bank's Executive Director for Markets said. "This was a situation that went from 'we're ringing you to let you know' to shouting on the phone to us, within two days," Andrew Hauser told lawmakers on parliament's Treasury committee on Wednesday. "This was a full-scale liquidation event." Pension funds were forced to offload billions of pounds of UK government bonds, or gilts, at distressed prices last month after the government's announcement of tax cuts sent yields soaring, triggering margin calls on derivatives designed to protect the funds against movements in rates. Register now for FREE unlimited access to Reuters.com RegisterReporting by William Schomberg, writing by Sachin Ravikumar, Editing by Kylie MacLellanOur Standards: The Thomson Reuters Trust Principles.

☆ UK government wins vote in parliament on fracking
▼ + stars: | 2022-10-19 | by ( ) www.reuters.com time to read: 1 min

LONDON, Oct 19 (Reuters) - The British government on Wednesday won a vote in parliament on fracking it had earlier told Conservative lawmakers it was treating as a confidence vote. Members of parliament voted by 326 to 230 against introducing a ban on fracking for shale gas. Register now for FREE unlimited access to Reuters.com RegisterReporting by Kylie MacLellan; Editing by Alistair SmoutOur Standards: The Thomson Reuters Trust Principles.

☆ Goldman says stay defensive and overweight cash
▼ + stars: | 2022-10-19 | by ( Carmen Reinicke | ) www.cnbc.com time to read: +3 min

Investors should be defensively positioned in their portfolios and holding cash on the sidelines through the end of the year, according to Goldman Sachs. The firm is specifically overweight cash and commodities, neutral on credit and bonds and underweight equities for the next few months. Not near the market bottom The view comes as global monetary policy continues to tighten in response to persistently high inflation. 60/40 drawdown, has deepened," wrote Mueller-Glissmann, adding that growth stocks have also deteriorated further amid high inflation. "We are looking for peaks in inflation, hawkishness, recession risk, risk premia and investor bearishness."

☆ UK government's party discipline enforcer has resigned - Sun reporter
▼ + stars: | 2022-10-19 | by ( ) www.reuters.com time to read: 1 min

UK fraud office investigates COVID-related cases, article with imageUnited Kingdom · October 19, 2022 · 5:31 PM UTCThe UK Serious Fraud Office (SFO) is investigating a small number of COVID-related fraud cases, although director Lisa Osofsky cautioned on Wednesday that the inquiries were at an early stage.

☆ European shares at near two-week high amid UK fiscal plan optimism
▼ + stars: | 2022-10-18 | by ( Amruta Khandekar | ) www.reuters.com time to read: +2 min

The region-wide STOXX 600 index (.STOXX) was up 0.9% by 0826 GMT, hitting a near two-week high, as investors snapped up beaten-down tech (.SX8P) and bank (.SX7P) stocks. Shares of chipmakers, including ASML Holdings (ASML.AS) and BE Semiconductor (BESI.AS), rose between 0.9% and 4% amid a risk-on sentiment in markets. "If you make that U-turn too extreme and basically embark on a trajectory of significant fiscal tightening, that could also do more more harm. Investors also took comfort from a recent pullback in natural gas prices in Europe, which is battling an energy crisis amid growing risks of a recession. Rio Tinto (RIO.L) slipped 0.7% after it projected annual iron ore shipments at the lower end of its forecast amid weak global demand.

REUTERS/StaffLONDON, Oct 18 (Reuters) - European stock indexes opened higher on Tuesday, in a revival of risk appetite which analysts attributed to the turnaround in UK fiscal policy. Britain's new finance minister Jeremy Hunt scrapped Prime Minister Liz Truss's economic plan on Monday, which had sapped investor confidence in the UK in recent weeks. MSCI's main European Index (.MSER) was up 1.5%, near its highest in 13 days. The STOXX 600 was up 1%, having also touched a 13-day high, and London's FTSE 100 was up 1.3% (.FTSE). At 0822 GMT, the U.S. dollar index was flat on the day, at 112.05 .

☆ BT pensions scheme lost $12 bln in assets after UK 'mini-budget' -annual report
▼ + stars: | 2022-10-18 | by ( ) www.reuters.com time to read: +2 min

LONDON, Oct 18 (Reuters) - The British Telecom (BT.L) pension scheme, one of Britain's largest, lost around 11 billion pounds ($12.44 billion) in assets in recent weeks, it said in its annual report on Tuesday, as bond yields soared following the UK government's botched 'mini-budget'. "Prior to the Bank of England's gilt market intervention, there was an estimated 11 billion pound fall in the value of the scheme's assets." Register now for FREE unlimited access to Reuters.com RegisterThe hit to the scheme's assets underscores how dramatic the moves in financial markets were for pension fund users of so-called liability-driven investment. The Bank of England had to intervene to stabilise the bond market on Sept. 28 and stop some pension funds from running out of short-term cash. The BT pension scheme had already lost 10.4 billion pounds in assets to 46.9 billion pounds over its 2021/22 financial year, "largely driven by the performance of our liability hedging investments", it said in the annual report.

☆ There's a serious risk the US is headed for a prolonged period of high inflation and low growth, Deutsche Bank says. An era of negative returns for stocks and bonds may be the result.
▼ + stars: | 2022-10-18 | by ( Max Adams | ) www.businessinsider.com time to read: +5 min

Today we're looking at what Deutsche Bank analysts say is a deeply underappreciated risk to markets, one that threatens to produce an era of negative returns. According to Deutsche Bank analysts writing in a note on Monday, a 70s-style dynamic of high inflation and low growth is a big underappreciated risk in markets right now. First, this sort of thing can become a self-fulfilling cycle, wherein a period of difficult inflation like we're in now leads to further expectations for high inflation. What are the risks that the US economy sees a period of low growth and high inflation in coming years? Wall Street is underestimating these 12 stocks, according to Goldman Sachs.

☆ Meta says it will sell Giphy to comply with UK breakup order
▼ + stars: | 2022-10-18 | by ( Brian Fung | ) edition.cnn.com time to read: +2 min

Washington CNN Business —Facebook-parent Meta plans to sell off Giphy, an online search tool for animated images, after the UK government said it would force the tech giant to unwind its acquisition of the service. For years, critics have accused the tech industry’s biggest players of seeking out “killer acquisitions” of smaller companies. In the United States, the alleged “buy-or-bury” strategy is at the center of a federal lawsuit aimed at forcing Meta to spin off WhatsApp and Instagram. The breakup attempt by the Federal Trade Commission could go to trial in 2024. The FTC has also sued to block Meta’s acquisition of a virtual reality technology company known as Within Unlimited, arguing that the deal could give Meta further power to establish a “virtual reality empire.”Meta is fighting both lawsuits.

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