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"Weakness continues to develop in commercial real estate office," Wells Fargo Chief Executive Charlie Scharf said on a call with analysts. Stress in the commercial real estate sector could have broad implications for banks and the economy, as losses emanating there can tighten credit availability and exacerbate a downturn. More than $1.4 trillion in U.S. CRE loans will mature by 2027, with some $270 billion coming due this year, according to real estate data provider Trepp. As the epicenter for the technology industry downturn, California's CRE market has been hit hard. Citigroup and Wells Fargo declined to comment for this article.

US inflation, Fed rates and marketsU.S. stocks ended sharply higher on optimism the Fed could be nearing the end of its aggressive rate hiking cycle. The yield on two-year Treasuries , which reflect the outlook on interest rates, rose 0.5 basis point to 3.977% and 3.3 basis points to 3.454% on 10-year notes . "That's why we do not have those dramatic moves in U.S. Treasuries on the back of better-than-expected inflation data." The dollar index fell 0.5% to its lowest level in more than two months, while the yen strengthened 0.29% to 132.74 per dollar. The Aussie dollar rose 1.0% on the back of surprise surges in both Chinese exports, which rose 14.8% compared with last March, and domestic Australian jobs.

[1/2] The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, March 10, 2023. Futures also showed expectations rose of the Fed cutting rates noticeably in September, and more deeper by December. "The way we've been trading over the last sessions indicates that the market is more positively positioned with regards to their exposure to Treasuries," Skiba said. The dollar index fell 0.48%, at its lowest in two months, while the yen strengthened 0.55% at 132.41 per dollar. The Aussie dollar rose 1.0% on the back of surprise surges in both Chinese exports, which rose 14.8% compared with last March, and domestic Australian jobs.

☆ Ukraine's Naftogaz says Russia told to pay $5 billion for seizing Crimea assets
▼ + stars: | 2023-04-13 | by ( ) www.reuters.com time to read: +2 min

[1/2] The logo of Ukraine's state energy company Naftogaz is seen outside the company's headquarters in central Kyiv, Ukraine October 18, 2021. REUTERS/Gleb Garanich/File PhotoKYIV, April 13 (Reuters) - Ukraine's state-owned gas company Naftogaz said on Thursday that Moscow had been ordered by an arbitration court in The Hague to pay $5 billion in compensation for unlawfully expropriating its assets in Russian-annexed Crimea in 2014. "Despite Russia's attempts to obstruct justice, the Arbitration Tribunal ordered Russia to compensate Naftogaz for losses of $5 billion," Naftogaz said. The company, whose assets in Crimea included Chornomornaftogaz which produced significant amounts of gas from the Black Sea, gave no further detail of which overseas Russian assets it could target. Naftogaz has been in talks with investors on a debt restructuring to bring the company out of a months-long default.

SummarySummary Companies European banks, bonds, CDS sell offDeutsche Bank CDS rise to highest since late 2018Confidence hurt, outlook dimsLONDON, March 24 (Reuters) - Confidence in European banks deteriorated further on Friday, with the cost of insuring against a debt default rising sharply as the profit outlook for the sector dimmed. Deutsche Bank's (DBKGn.DE) five-year credit default swaps (CDS) jumped 19 basis points (bps) from Thursday's close to 222 bps, rising to their highest since late 2018, data from S&P Global Market Intelligence showed. The prospect that interest rates may be close to peaking, as financial markets are signalling, would also curb banks' profit margins on lending. BOND WATCHEuropean banks' Additional Tier 1 (AT1) debt came under fresh selling pressure, with Deutsche AT1 prices down 6 cents, according to Tradeweb data. The selloff in AT1s highlighted concerns about rising funding costs for European banks and helped explain why the sector was facing renewed pressure on Friday, analysts said.

Separately, in a televised interview on Wednesday, Erdogan downplayed the significance of the meeting with Simsek, saying such meetings were ordinary. A senior government official told Reuters the AKP was somewhat divided with some members opposed to Simsek's return, and described the outcome of the Erdogan meeting as "undesirable". The party may now need to revise its economic platform ahead of the election campaign, he added. The AKP declined to comment on whether it was revising its economic strategy ahead of the vote. Two recent polls by MAK and Turkiye Raporu show the opposition presidential challenger Kemal Kilicdaroglu between 4 and 9 percentage points ahead of Erdogan.

☆ Nothing comes for free: What China hopes to gain in return for helping Russia
▼ + stars: | 2023-03-21 | by ( Holly Ellyatt | ) www.cnbc.com time to read: +5 min

Russian President Vladimir Putin and Chinese President Xi Jinping leave after a reception in honor of the Chinese leader's visit to Moscow, at the Kremlin in Moscow, Russia March 21, 2023. Unofficially, however, analysts say the presidents are also likely to discuss ways for China to assist Russia without it risking being hit with Western sanctions itself. For many close watchers of Russia and China's deepening relationship over the past decade, the big question then is this: What could China want in return for helping Moscow? China was diversifying its energy sources and turning to Russia, Bachulska noted, as well as looking to its neighbor for raw materials. "But still, in overall bigger-picture terms, China has an upper hand economically and if China supports Russia in a more substantial way this will continue even more," she added.

Commodity trading advisers (CTAs) - funds that try to profit by buying or selling when there is a clear direction in markets - slumped 4.3% in the three days to Monday, according to analysis from UBS. "We have seen certainly on (last) Friday and Monday capitulation trades from hedge funds, so all hedge funds have been short duration positioned and we have heard a lot of desks needed to shut down their risk," said Kaspar Hense, a senior portfolio manager at BlueBay Asset Management. Hedge funds felt this "brutally" in Japanese markets, Hense said, where positioning from hedge funds and CTAs had been particularly "one sided" in anticipation of an end to the Bank of Japan's yield curve control policy. British macro hedge fund manager Crispin Odey's main fund posted a minus 4.7% February performance and is down 3% so far this year, said a note from his hedge fund to clients. Very few macro economic funds tracked by bank research seen by Reuters have reported March numbers.

When bond yields fall, their price rises. But asset managers that run large government bond portfolios still expect bond yields to rise and say they are selling into the rally, expecting the European Central Bank and the U.S. Federal Reserve stay hawkish. Legal and General Investment Management (LGIM), the UK-based $1.6 trillion asset manager, is also reducing its exposure to government bonds, taking profits following the bond rally. As selling gripped bank shares on Wednesday, money market pricing suggested traders were leaning towards a 25 basis-point Fed rate increase next week. "We expect rates to rise," agreed Brian Nick, chief investment strategist at $1.1 trillion U.S. asset manager Nuveen.

☆ Instant View: Banking stocks tank again as Credit Suisse woes rock market
▼ + stars: | 2023-03-15 | by ( Reuters Staff | ) www.reuters.com time to read: +3 min

FILE PHOTO: A Credit Suisse logo is pictured on a the roof of a branch in Geneva, Switzerland, November 3, 2022. European banks shares slid over 6%, European stocks were down more 3% and U.S. stock futures pointed to a weak start for Wall Street shares. MARKET REACTION:STOCKS: Credit Suisse share trading was halted after heavy losses, last down over 20%, ING Group, ABN AMRO were4 down over 6%. “But in general, the balance sheet is in a much better position, with the European banks all highly regulated. So, it is important that the European regulator make clear that the underlying systemic risk, not only for deposits, but in the overall European banking market, is rather low.”

SVB's meltdown sparked a partisan battle in Washington on Monday, with Democrats arguing that a Trump-era change to bank oversight rules undermined the stability of regional banks. In the money markets, indicators of credit risk in the U.S. and euro zone banking systems edged up. [1/3] U.S. President Joe Biden delivers remarks on the banking crisis after the collapse of Silicon Valley Bank (SVB) and Signature Bank, in the Roosevelt Room at the White House in Washington, D.C., U.S. March 13, 2023. On Monday morning, U.S. bank regulators sought to reassure nervous customers who lined up outside SVB's Santa Clara, California, headquarters, offering coffee and donuts. A furious race to reprice interest rate expectations also sent waves through markets as investors bet the Fed will be reluctant to hike next week.

Biden said his administration's actions over the weekend meant "Americans can have confidence that the banking system is safe", while also promising stiffer regulation after the biggest U.S. bank failure since the 2008 financial crisis. Shares in U.S. banking giants JP Morgan Chase (JPM.N), Morgan Stanley (MS.N) and Bank of America (BAC.N) nevertheless weakened. But your second thought is, how big was that crisis, how big were the risks that this step had to be taken?" U.S. regulators stepped in on Sunday after the collapse of SVB, which had seen a run after a big bond portfolio hit. [1/3] U.S. President Joe Biden delivers remarks on the banking crisis after the collapse of Silicon Valley Bank (SVB) and Signature Bank, in the Roosevelt Room at the White House in Washington, D.C., U.S. March 13, 2023.

Germany's Commerzbank (CBKG.DE) fell as much as 12.7%, while Credit Suisse (CSGN.S) hit a new record low after falling 15%. Biden said his administration's rapid actions at the weekend should reassure Americans that the U.S. banking system is safe, and promised stiffer bank regulation after the country's biggest bank failure since the 2008 financial crisis. "Americans can have confidence that the banking system is safe. But big U.S. banks including JP Morgan Chase (JPM.N), Morgan Stanley (MS.N) and Bank of America (BAC.N) also weakened. In the money markets, a closely watched indicator of credit risk in the U.S. banking system edged up, as did other indicators of credit risk in the euro zone.

[1/3] U.S. President Joe Biden delivers remarks on the banking crisis after the collapse of Silicon Valley Bank (SVB) and Signature Bank, in the Roosevelt Room at the White House in Washington, D.C., U.S. March 13, 2023. Germany's Commerzbank (CBKG.DE) fell as much as 12.7%, while Credit Suisse (CSGN.S) hit a new record low after falling more than 15%. Dowding said he did not think that a lot of the issues affecting U.S. banks would be present in European lenders. It said Silicon Valley Bank UK had loans of around 5.5 billion pounds and deposits of around 6.7 billion pounds as of March 10. U.S. banks lost more than $100 billion in stock market value late last week following SVB's failure, while European banks have now lost a similar amount, a Reuters calculation showed.

Markets remained fragile, with European bank stocks tumbling over 5% on Monday and U.S. banks set to open lower (.SX7P). Markets also moderated their view on UK rates and were pricing in a roughly 75% chance of a 25 bps hike when the Bank of England meets next week. Goldman Sachs said on Sunday the banking stress meant it no longer expected the Fed to hike rates next week. "It's not going to want to go clattering in with another 50 (bps hike) and see some other financial institution getting hosed." A new Fed bank funding scheme aimed at addressing some of Silicon Valley Bank's apparent problems with losses in its bond portfolio is expected to further help with stability for banks and bonds.

☆ Hedge funds stand to lap up bearish profits from bank stock rout
▼ + stars: | 2023-03-13 | by ( Nell Mackenzie | ) www.reuters.com time to read: +2 min

LONDON, March 13 (Reuters) - Hedge funds ended last week positioned to scoop up winning profits from bearish positions on bank stock falls, according to a note by Goldman Sachs sent to clients late on Sunday. They sold financially themed shares and banks for nine straight weeks but rather than only exiting long positions, funds added bearish bets, according to the note seen by Reuters. Financials was the most net sold sector globally for Goldman Sachs's prime brokerage division, the part of the bank which serves hedge funds, the note said. Hedge funds not only exited bullish positions on bank themed equities, they added short positions as of Friday, betting bank shares would fall, the Goldman note said. Regional and smaller U.S. bank shares have slid on concerns of a broader fallout in the banking sector.

That has pushed 10-year bond yields across the euro area to levels last seen during the bloc's 2011-2012 debt crisis , . "Equity markets appear expensive when considering the possibility of prolonged higher rates." Patrick Saner, head of macro strategy at Swiss Re, added that rising government bond yields also made risk assets relatively less attractive. And while government bonds were seen vulnerable to further selling, higher yields are still viewed as a buying opportunity. "In sovereign markets now, 10-year German bond yields are north of 2.70%.

☆ A post-Erdogan Turkey could come in from the cold
▼ + stars: | 2023-02-27 | by ( Hugo Dixon | ) www.reuters.com time to read: +7 min

The six-party coalition challenging the ruling AK Party plans to stamp out inflation, which official figures put at 58%. The six-party coalition should probably do this pre-emptively to gain extra economic credibility, though it seems unlikely to do so. These have soared following Putin’s invasion of Ukraine, as some Western goods now go to Russia via Turkey. Nathalie Tocci, a former special adviser to two EU foreign policy supremos, shares this view. But it is not too early to think about how to bring Turkey in from the cold if he loses.

☆ Even a weak Russia is a problem for Europe
▼ + stars: | 2023-02-20 | by ( Hugo Dixon | ) www.reuters.com time to read: +7 min

TINOS, Greece, Feb 20 (Reuters Breakingviews) - Almost a year after Russia invaded Ukraine it is hard to see Vladimir Putin winning his war. After all, that would involve either Ukraine surrendering land, which it cannot accept, or Russia giving up all the territory it has occupied including Crimea, which Putin won’t do. Radoslaw Sikorski, a former Polish foreign minister who is now a member of the European Parliament, says Russia only reforms itself after military defeats like the Crimean War, the Russo-Japanese War, World War One and the Cold War. Europe, which was late to appreciate the danger posed by Putin, won’t quickly forget the lesson even if he goes. Yet even a Russia weakened by a year of war and sanctions remains a problem for Europe.

☆ Global investors losing appetite for Chinese government bonds
▼ + stars: | 2023-02-10 | by ( Summer Zhen | ) www.reuters.com time to read: +4 min

Signs of a peak in developed market rates are another reason why China's bonds, yielding roughly 3% on 10-year investments, are less appealing, given the potential greater capital gains elsewhere. "If investors are saying that I want to trade the China recovery, the answer is not Chinese government bonds (CGBs). "China bonds served as a very good type of diversifier, in particular over the past 3 years," said Pang. But as global rates hit a peak, it made sense to plough limited cash into better yielding markets, he said. ($1 = 6.7969 Chinese yuan renminbi)Reporting by Summer Zhen Additional reporting by Rae Wee in Singapore Editing by Vidya Ranganathan and Kim CoghillOur Standards: The Thomson Reuters Trust Principles.

☆ Analysis: Investors see Erdogan's earthquake response as pivotal
▼ + stars: | 2023-02-09 | by ( Marc Jones | ) www.reuters.com time to read: +4 min

Kopf was referring to Turkey's 2002 election which came three years after a 7.6 magnitude earthquake in Izmit near Istanbul that killed nearly 18,000 people. The southeast region hit by Monday's disaster accounts for a much smaller 9.3% of national GDP and a modest 8.5% of exports. Erik Meyersson, a senior economist at Handelsbanken, said it was that power that voters would now need to see working. "But if he bungles the response, perhaps this is the straw that breaks the camel's back." Magnitude 7.9 earthquake hit southern Turkey on Feb. 6Reporting by Marc Jones; Editing by Susan FentonOur Standards: The Thomson Reuters Trust Principles.

☆ A top fund that returned over 19% last year is betting global bond markets are about to get blindsided again
▼ + stars: | 2023-01-31 | by ( Brian Evans | ) www.businessinsider.com time to read: +2 min

A fund that bet correctly last year on surprise reversals in British and Japanese bonds has a new contrarian stance. BlueBay Asset Management believes bond markets have underestimated hawkishness from global central banks. The fund has a new contrarian bet as BlueBay believes bond markets have underestimated hawkishness from global central banks. More monetary tightening is also anticipated from the Bank of England and European Central Bank on Thursday. So far, central bank officials have committed themselves to remaining data-dependent to inform future rate hikes.

☆ Trying to bankrupt Russia could backfire
▼ + stars: | 2023-01-30 | by ( Hugo Dixon | ) www.reuters.com time to read: +7 min

Reuters GraphicsIn the initial aftermath of the invasion, Western allies mostly issued threats to stop buying Russian oil and gas. Russia could push up the global price by carrying out threats to reduce its oil exports. But if the global price rose enough, Russia might still earn similar amounts at lower volumes. But the global gas price would rise, and Russia could direct the liquefied natural gas it currently sells to Europe to other regions. With Kyiv benefiting from military support and the gains from tighter sanctions uncertain, trying to bankrupt Russia is not worth the risk.

☆ Right-wing Quran burning in Sweden enrages Turkey and throws a new wrench in Nordics’ NATO bid
▼ + stars: | 2023-01-24 | by ( Natasha Turak | ) www.cnbc.com time to read: +6 min

Rasmus Paludan holds a burning Koran outside of the Turkish embassy on January 21, 2023 in Stockholm, Sweden. Jonas Gratzer | Getty Images News | Getty ImagesOn Saturday, far-right demonstrators burned a Quran and chanted anti-Muslim slogans in front of Turkey's embassy in Stockholm, Sweden. Several media outlets and independent journalist gather to see Rasmus Paludan stage a Koran burning outside the Turkish embassy on January 21, 2023 in Stockholm, Sweden. Swedish Prime Minister Ulf Kristersson reportedly denounced the protest as an act of "sabotage" against the country's NATO membership bid. Nonetheless, he expressed confidence that Turkey would approve his country's NATO bid.

☆ Analysis: China's rapid reopening brings joy and woe for world markets
▼ + stars: | 2023-01-13 | by ( Yoruk Bahceli | ) www.reuters.com time to read: +6 min

The impact of the reopening of the world's second largest economy on financial markets, hit by double-digit losses last year as inflation and interest rates jumped, is critical. Being touted among the top buying bets on recovery hopes are emerging markets, commodity currencies, oil, travel and European luxury companies. The boost to world growth from China's reopening was expected to hurt the safe-haven dollar but benefit the euro. INFLATION CAUTIONBut a boost from China's reopening raises some concerns about inflation. China is the world's leading importer of oil and many other commodities -- oil prices have risen 10% since mid-December to almost $84 .

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