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Yet a sharp drawdown in the excess savings created by COVID-19 could be a curve ball that slams into bullish sentiment. U.S. excess savings have fallen to around $500 billion from around $2.1 trillion in August 2021, the San Francisco Federal Reserve estimates. In Europe, Deutsche Bank reckons excess savings in Sweden, struggling to contain a property slump, have dwindled. Reuters GraphicsRUNNING OUTDefinitions for excess savings differ, but economists generally agree that this means savings that went beyond trend levels during the pandemic. Cardano chief economist Shweta Singh said U.S. pandemic excess savings are likely to be depleted by year-end.

Persons: Rachel Adams, Janus Henderson, Oliver Blackbourn, Shweta Singh, Guy Miller, Jamie Dimon, Ben, Eren Osman, Arbuthnot Latham, Janus Henderson's Blackbourn, U.S . Russell, Russell, Goldman Sachs, Blackbourn, Zurich's Miller, Simon Bell, Guilluame Paillat, Paillat, Naomi Rovnick, Sharon Singleton Organizations: Oxford, REUTERS, San Francisco Federal, Deutsche Bank, Reuters, Insurance Group, Ryanair, JPMorgan, Unilever, U.S ., London's, Bank of, Aviva, Thomson Locations: Britain, London, China, Europe, U.S, Sweden, United States, downturns, Australia

☆ Big central banks hike again with end in sight
▼ + stars: | 2023-07-27 | by ( ) www.reuters.com time to read: +5 min

To date, nine developed economies have raised rates by a combined 3,840 basis points (bps) in this cycle. Expectations for a big rate increase have eased after latest data showed inflation fell to a softer-than-expected 7.9% in June. Markets think there's a 50% chance of a 25 bps increase in September, and an equal chance of a hold. Reuters Graphics10) JAPANThe Bank of Japan, the world's most dovish major central bank, concludes a two-day meeting on Friday. The central bank is leaning towards keeping the dial set to dovish, Reuters reported last week.

Persons: Jerome Powell, BoE, Philip Lowe's, Michele Bullock, Riksbank, Kazuo Ueda, Nell Mackenzie, Alun John, Naomi Rovnick, Harry Robertson, Chiara Elisei, Vincent Flasseur, Sumanta Sen, Pasit, Sharon Singleton Organizations: UNITED, Federal Reserve, ZEALAND, Reserve Bank of New, Reuters, BRITAIN, Bank of England, Bank of Canada, BoC, European Central Bank, Norges Bank, bps, Swiss National Bank, Markets, Bank of Japan, Thomson Locations: Japan, Reserve Bank of New Zealand, AUSTRALIA, NORWAY, Norway, SWEDEN, SWITZERLAND, JAPAN

Euro zone interest rates have risen 400 basis points in the last year to 3.5%, their highest in 22 years, and are now close to peaking as headline inflation cools and the economy weakens. 1/ How much will the ECB hike rates? "The ECB will hike again and anything else would be a major surprise," said RBC Capital Markets global macro strategist Peter Schaffrik. Reuters Graphics Reuters Graphics3/ When does the ECB expect core inflation to fall? Euro zone business activity stalled in June as a manufacturing recession deepened and a previously resilient services sector barely grew.

Persons: Silvia Ardagna, Peter Schaffrik, Christine, Lagarde, Massimiliano Maxia, Reinhard Cluse, Ruben Segura, BofA, Philip Lane, BofA's Segura, Naomi Rovnick, Stefano Rebaudo, Vincent Flasseur, Sumanta Sen, Pasit, Kripa Jayaram, Catherine Evans Organizations: European Central Bank, Barclays, ECB, Capital, Reuters, Allianz Global Investors, U.S . Federal, Reuters Graphics Reuters, UBS, Bank, Thomson Locations: Cayuela, Europe, London, Milan

☆ Global shares slip, dollar soars vs yen on BoJ policy expectations
▼ + stars: | 2023-07-21 | by ( Herbert Lash | ) www.reuters.com time to read: +5 min

[1/3] Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 19, 2023. The yen weakened 1.19% to 141.77 per dollar, while the dollar index , a measure of the greenback against major trading currencies, rose 0.31%. "None of them are happening with massive severity, but the longer we go on with higher rates, more and more that's going to come through," he said. BOJ policymakers prefer to scrutinize more data to ensure wages and inflation keep rising before changing yield control policy, five sources familiar with the matter said. "Markets were building up expectations which now look unlikely to play out," said Guillaume Paillat, a multi-asset manager at Aviva Investors.

Persons: Brendan McDermid, BoJ, Dow, Garrett Melson, Mullarkey, Patrick Spencer, Guillaume Paillat, Brent, Herbert Lash, Naomi Rovnick, Stella Qiu, Conor Humphries, David Holmes, Marguerita Choy, Cynthia Osterman Organizations: New York Stock Exchange, REUTERS, Fed, ECB, Reuters, Bank of Japan, U.S . Federal Reserve, European Central Bank, Nasdaq, Investment, Microsoft Corp, Apple Inc, SLC Management, Baird, Microsoft, Apple, NYSE, Aviva Investors, Treasury, Thomson Locations: New York City, U.S, Boston, London, MSCI's U.S, Europe, China, Sydney

Gold prices slipped as the dollar rebounded to its highest level in more than a week as investors prepare for next week's big central bank policy meetings, including the BoJ, the U.S. Federal Reserve and the European Central Bank. The yen weakened 1.13% to 141.68 per dollar, while the dollar index , a measure of the greenback against major trading currencies, rose 0.36%. BoJ policymakers prefer to scrutinize more data to ensure wages and inflation keep rising before changing yield control policy, five sources familiar with the matter said. The report added there was no consensus within the central bank and the decision could still be a close call. As Japanese inflation has stayed above the BoJ's target, traders have bet on the central bank ditching its yield curve control program, a move likely to cause the yen to strengthen.

Persons: Brendan McDermid, BoJ, Garrett Melson, Patrick Spencer, Spencer, you've, Guillaume Paillat, Brent, Herbert Lash, Naomi Rovnick, Stella Qiu, Conor Humphries, David Holmes, Marguerita Choy Organizations: New York Stock Exchange, REUTERS, Fed, ECB, Reuters, Bank of Japan, U.S . Federal Reserve, European Central Bank, Investment, Nasdaq, Baird, Microsoft Corp, Apple Inc, NYSE, Aviva Investors, Treasury, Thomson Locations: New York City, U.S, Boston, Europe, China, London

☆ Take Five: School's (not) out for summer
▼ + stars: | 2023-07-21 | by ( ) www.reuters.com time to read: +5 min

LONDON, July 21 (Reuters) - The peak holiday season is gearing up, but school's not quite out for summer in financial markets. Also in focus are earnings from some of the massive tech and growth stocks that have led markets higher this year. Reuters Graphics2/ SUMMER READINGBefore they go on their summer break, ECB policymakers have a well-flagged rate hike to deliver. Rate-setters' summer reading list just got longer. Second-quarter earnings are expected to decrease 9.2% from a year earlier, according to I/B/E/S data from Refinitiv, with aggregate earnings likely to be weighed down by poor performance from energy companies.

Persons: school's, Ira Iosebashvili, Kevin Buckland, Naomi Rovnick, Alun John, Dhara, Jerome Powell, Christine Lagarde, Kazuo Ueda's, Shinichi Uchida, Uchida, Ueda, Stocks, it's, Dhara Ranasinghe, Muralikumar Organizations: U.S . Federal Reserve, European Central Bank and Bank of Japan, Reserve, Microsoft, Reuters, ECB, Bank of Japan, Barclays, People's Party, Socialist Workers ' Party, Thomson Locations: Spanish, Ira, New York, Tokyo, London, Europe, SPAIN, Spain

☆ Wall Street on ice ahead of big tech earnings, UK shines
▼ + stars: | 2023-07-19 | by ( Naomi Rovnick | ) www.reuters.com time to read: +3 min

Tech stocks have been boosted by exuberance about artificial intelligence as well as hopes the Federal Reserve will soon end the aggressive interest rate rises that bludgeoned valuations of more speculative businesses in 2022. Owning big tech is also the "most crowded" trade in global markets, Bank of America strategist Michael Hartnett warned in a note to clients this week. This was just the latest downside surprise on prices for a major economy after more than 18 months of central banks cranking interest rates higher. Sterling lost 0.96% to trade at $1.291 as market bets that the Bank of England would raise interest rates as high as 6%, from the current 5%, faded out. London's blue-chip FTSE 100 (.FTSE) added 1.6% and the domestically focused FTSE 250 (.FTMC) rose 3.2%, on track for its best daily performance since February 2.

Persons: Sterling, Michael Hartnett, Hartnett, BofA, Stuart Kaiser, Eren Osman, Arbuthnot Latham, BoE, Samuel Tombs, Kenneth Broux, Germany's, Tom Westbrook, Bernadette Baum, Kim Coghill, Chizu Organizations: Stock, Wall, Tesla, Netflix, Nasdaq, Tech, Reserve, Bank of America, Citi, Bank of England, Macroeconomics, Sterling, . Federal, Societe Generale, Thomson Locations: London, Sydney

Headline British consumer price inflation fell to 7.9% year-on-year in June, against expectations for 8.2%, in the latest downside surprise for a major economy after more than 18 months of central banks cranking interest rates higher. The BoE now had "the green light" for a 25 basis point (bps) rate rise next month, Pantheon Macroeconomics chief UK economist Samuel Tombs said, after markets had previously priced a further 50 bps hike. "Profit taking in sterling should not be a surprise," added Kenneth Broux, head of FX and rates corporate research at Societe Generale in London. The 10-year yield, a benchmark for debt costs in the Euro-zone, fell 5 bps to 2.35% . Futures trading indicated Wall Street's S&P 500 and Nasdaq 100 share indices would open steady later in the day.

Persons: Sterling, BoE, Samuel Tombs, Kenneth Broux, Germany's, Klaas, Chris Weston, Sam Holmes, Bernadette Baum Organizations: LONDON, Headline, Sterling, . Federal, Bank of England, Macroeconomics, Societe Generale, European Central Bank, ECB, Pepperstone, Nasdaq, Bank of, Thomson Locations: SYDNEY, London ., disinflation, Europe, Melbourne

Data suggests recession risks remain high, but wages and U.S. and European interest rates are also still rising - so stick or twist? Here are five big calls investors are now making. Principal Global Investors chief global strategist Seema Shah said she maintained her view that government bonds would do well with recession still likely by year-end. Reuters Graphics4/ FRAGILE CHINASpluttering data, property market woes and meek economic stimulus have also busted new year bets of a Chinese mini-boom. Principal Global Investors' Shah said she still expected commodities to continue to struggle "because a combination of U.S. slowdown plus China slowdown should mean weak demand."

Persons: Bonds, Francesco Sandrini, Seema Shah, JP Morgan, Trevor Greetham, Florian Ielpo, Athanasios Vamvakidis, Morgan Stanley, Shah, Naomi Rovnick, Marc Jones, Alun John, Dhara Ranasinghe, Mark Potter Organizations: Treasury, Investors, Reuters, Global Investors, Royal London Asset Management, Lombard, Swiss, Bank of America, Fed, FX, JPMorgan, Thomson Locations: bitcoin, Europe's, British, tatters, Japan, CHINA

☆ Global stocks index flat, Dollar falls on mixed U.S. jobs data
▼ + stars: | 2023-07-07 | by ( Sinéad Carew | ) www.reuters.com time to read: +4 min

Still, the unemployment rate fell to 3.6% in June from 3.7% in May and average hourly earnings rose 0.4%, the same as May. On Thursday, private payroll provider ADP's strong U.S. labor market data had sparked an equities sell-off and boosted Treasury yields. While Friday's government data was initially met with a more muted market reaction, stocks gained some ground during the session before losing ground again in afternoon trading. The dollar slumped after the labor market data as some traders were betting that the Fed could cut rates sooner than previously expected. The dollar index fell 0.795%, with the euro up 0.73% to $1.0965.

Persons: Mike Segar, nonfarm payrolls, Quincy Krosby, payrolls, Sam Stovall, Stovall, Sterling, Brent, Sinéad Carew, Caroline Valetkevitch, Nell Mackenzie, Naomi Rovnick, Tom Westbrook, Andrew Heavens, David Holmes, Will Dunham, David Evans Organizations: Wall, New York Stock Exchange, REUTERS, Federal, U.S, CFRA Research, Dow Jones, Nasdaq, Fed, Treasury, Thomson Locations: Manhattan, New York City , New York, U.S, Charlotte , North Carolina, New York, London, Sydney

☆ Bonds whipsaw, world stocks barely higher after mixed U.S. jobs data
▼ + stars: | 2023-07-07 | by ( Sinéad Carew | ) www.reuters.com time to read: +4 min

On Thursday, private payroll provider ADP's strong U.S. labour market data had sent equities lower and boosted Treasury yields. But Friday's government data prompted a more muted market reaction and barely changed expectations for the Federal Reserve's rate hiking cycle. The pan-European STOXX 600 index (.STOXX) rose 0.11% and MSCI's gauge of stocks across the globe (.MIWD00000PUS) gained 0.16%. Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) closed 0.71% lower, while Japan's Nikkei (.N225) lost 1.17%. In commodities, oil prices were higher even as U.S. jobs data did little to allay fears of further interest rate hikes.

Persons: Mike Segar, nonfarm payrolls, Peter Cardillo, Brent, Sinéad Carew, Caroline Valetkevitch, Nell Mackenzie, Naomi Rovnick, Tom Westbrook, Andrew Heavens, David Holmes, David Evans Organizations: Wall, New York Stock Exchange, REUTERS, U.S, Federal, Spartan Capital Securities, Fed, Traders, Treasury, Dow Jones, Nasdaq, Japan's Nikkei, Thomson Locations: Manhattan, New York City , New York, U.S, Asia, Pacific, Japan, New York, London, Sydney

Specialist asset managers minted CLOs worth more than half a trillion dollars in 2021, a year of heavy post-pandemic monetary stimulus. S&P Global estimates that more than one in 25 U.S. businesses and almost one in 25 European companies will default by March 2024. That has squeezed equity returns, and without equity investors, CLOs cannot be put together. S&P calculates that while CLO equity investors were able to get a 15% annual return before 2022, deals priced now would offer about 7%. "The (CLO) equity doesn't make enough money to justify buying it."

Persons: Florence Lo, CLOs, Morgan, Rob Shrekgast, KopenTech, Neha Khoda, It's, Marta Stojanova, You've, Aza Teeuwen, Laila Kollmorgen, Kollmorgen, tranches, BoFA, Naomi Rovnick, Chiara Elisei, Dhara Ranasinghe, Alexandra Hudson Organizations: REUTERS, Bank of America, Casino, Bed, TwentyFour, PineBridge Investments, Alexandra Hudson Our, Thomson Locations: CLOs, U.S

LONDON/HONG KONG, July 4 (Reuters) - Global stocks held steady on Tuesday, as investors balanced the inflationary force of rising oil prices with hopes that central banks would not over-tighten monetary policy into a potential recession. Earlier in the session, Australia's central bank held interest rates steady at 4.1%, saying it needed time to assess the economic impact of its rate hikes so far. Complicating the outlook for inflation, oil prices rose on Tuesday as markets weighed supply cuts for August by top producers Saudi Arabia and Russia. Brent crude futures climbed 0.6% to $75.09 a barrel, with West Texas Intermediate crude adding the same amount to $70.23. "At least the improved supply-demand imbalance seems to be having an effect on price pressures," Capital Economics global economist Ariane Curtis said.

Persons: Europe's, Brent, Ariane Curtis, Curtis, Manishi Raychaudhuri, Raychaudhuri, Schatz, Paul Volcker, Ankur Banerjee, Sam Holmes, Himani Sarkar, Alex Richardson Organizations: U.S . Federal Reserve, Wall, West Texas, Institute of Supply Management, Economics, Asia, BNP Paribas, Treasury, Independence, U.S, Fed, Thomson Locations: HONG KONG, Saudi Arabia, Russia, U.S, Singapore

☆ Take Five: Summer strife
▼ + stars: | 2023-06-30 | by ( ) www.reuters.com time to read: +5 min

1/ TIME FOR SOME NON-FARMInvestors betting on resiliency of the U.S. economy have found solace in the solid labor market. Economists polled by Reuters expect 200,000 new jobs were created in June, a slowdown from recent monthly growth. The jobs report comes after the Federal Reserve skipped raising rates in June after lifting them at 10 straight meetings. No doubt central banks have had some success in quelling inflation with rate rises. Still with the inflation fight far from over, expect companies to now face greater scrutiny from policymakers and consumers alike.

Persons: Lewis Krauskopf, Kevin Buckland, Naomi Rovnick, Amanda Cooper, Karin Strohecker, Jerome Powell, Tuesday's, Wagner, Vladimir Putin's, Dhara Organizations: Reuters, Federal Reserve, CHINA BLUES, Societe Generale, The Reserve Bank of Australia, Aussie, Reuters Graphics Reuters, IMF, Thomson Locations: United States, China, Japan, Lewis, New York, Tokyo, London, U.S, Beijing, Ukraine, Russia

☆ What could break as interest rates rise?
▼ + stars: | 2023-06-29 | by ( ) www.reuters.com time to read: +5 min

Sweden, where rates rose again on Thursday, is one to watch with most homeowners' mortgages moving in lockstep with rates. Reuters Graphics2/ REAL ESTATE: PART 2Having taken advantage of the low rates era to borrow aplenty and buy up property assets, the commercial real estate sector is grappling with higher debt refinancing costs as rates rise. "The single most important thing is interest rates. But not just interest rates; what it is equally important is the predictability of rates," said Thomas Mundy, EMEA head of capital markets strategy at real estate firm JLL. "If we were settled on an interest rate, real estate prices could adjust.

Persons: Richard Portes, Thomas Mundy, Banks, Florian, Ielpo, Jerome Powell, Markus Allenspach, Julius Baer, Nick Kraemer, Wagner, Vladimir Putin's, Putin, Tina Fordham, Chiara Elisei, Naomi Rovnick, Nell Mackenzie, Karin Strohecker, Vincent Flasseur, Kripa Jayaram, Sumanta Sen, Pasit, Dhara Ranasinghe, Alison Williams Organizations: International Monetary Fund, Reuters, Federal, Finance, London Business School, Lombard, Federal Reserve, Casino, Sweden's SBB, Fordham Global Foresight, Thomson Locations: Britain, Norway, Russia, Sweden, lockstep, London's, City, RUSSIA, Ukraine

With some 1.6 million of those due to re-fix mostly 2-5 year fixed rate deals over the next 18 months - half of those by the end of this year - this super-hike will burn. Two-year fixed mortgage rates have doubled to 6% in just 10 months and were less than 1% two years ago. Fixed-rate deals were only introduced at all in 1989 and the vast majority were floating rates until just eight years ago. As Leaviss points out, five-year inflation expectations in the bond market are still stubbornly one percentage point above the 2% goal. In the end, the BoE has few good choices - but the days of fine tuning the economy with nudges and tweaks may be over.

Persons: BoE, that's, Moyeen, Jim Leaviss, Vivek Paul, Paul, Leaviss, Mike Dolan, Naomi Rovnick, Conor Humphries Organizations: Bank of England, National Institute of Economic, Social Research, Reuters Graphics Reuters, Reuters, Barclays, Bank, Investment, BlackRock Investment Institute, OECD, Twitter, Thomson Locations: United States, Germany

☆ Take Five: The only way is up
▼ + stars: | 2023-06-23 | by ( ) www.reuters.com time to read: +6 min

June 23 (Reuters) - It's been a turbulent week or two for markets, with one central bank after another making it very clear the only way for rates right now is up as inflation tightens its grip on the global economy. Bad news could be taken as a positive, if traders see it as a way of pushing authorities to offer more support to the economy - as long as it eventually arrives. Make your way to the foothills of Portugal's Sintra mountains from Monday through Wednesday. The agenda is, of course, inflation, inflation, inflation. Many expect initial attempts to talk the currency higher - "jawboning", in central bank jargon - before considering whether direct intervention is needed.

Persons: It's, Yoruk, Lewis Krauskopf, Naomi Rovnick, Amanda Cooper, it's, Big Tech's, CHRISTINE, Christine Lagarde, Yannis Stournaras, Jan Harvey Organizations: Investors, Federal, Credit Suisse, Big Tech, Federal Reserve, European Central Bank, Traders, ECB, Reuters Graphics Reuters, Analysts, Thomson Locations: Portugal, Rae Wee, Singapore, Amsterdam, New York, London, U.S, Beijing, China, Portugal's Sintra, SWEDEN, Swedish

The MSCI's broad gauge of world stocks ticked 0.2% higher, (.MIWD00000PUS), with Wall Street markets closed for the Juneteenth holiday. After a week in which the stock market cheered the Fed's decision to skip a rate increase in June, Powell is scheduled to deliver congressional testimony on Wednesday and Thursday. Billions of dollars have flowed into big tech in recent weeks, with analysts citing the productivity-improving potential of artificial intelligence for the rally. "The obvious narrative of AI has dominated this rally in tech stocks," said Dan Cartridge, portfolio manager at Hawksmoor. The 10-year British gilt yield stood at 4.462%, in an inverted yield curve pattern that can precede recessions.

Persons: BoE, Jerome Powell, Powell, Hawksmoor, Hong, HSI, Goldman Sachs, Brent, Naomi Rovnick, Stella Qiu, Tom Hogue, Gerry Doyle, Emma Rumney Organizations: Nikkei, Global, . Federal, Wall, Bank of England, Japan's Nikkei, People's Bank of, Friday's dovish Bank of Japan, European Central Bank, Thomson Locations: China, SYDNEY, Europe, U.S, Asia, Beijing, People's Bank of China

The MSCI's broad gauge of world stocks was steady (.MIWD00000PUS), with Wall Street markets closed for the Juneteenth holiday. After a week in which the stock market cheered the Fed's decision to skip a rate increase in June, Powell is scheduled to deliver congressional testimony on Wednesday and Thursday. "The obvious narrative of AI has dominated this rally in tech stocks," said Dan Cartridge, portfolio manager at Hawksmoor. "But a lot of it is also to do with interest rate expectations," he added, warning that the Fed staying hawkish would mean "we quite quickly see valuation compression again." Two-year British government bond yields , which reflect rate expectations, added 6 basis points (bps) to around 4.94% - near last week's 15-year high.

Persons: 25bps, Jerome Powell, Powell, Hawksmoor, Hong, HSI, Goldman Sachs, Brent, Naomi Rovnick, Stella Qiu, Christopher Cushing, Tom Hogue, Gerry Doyle Organizations: of England, Nikkei, Global, . Federal, Wall, Bank of England, Japan's Nikkei, People's Bank of, Friday's dovish Bank of Japan, European Central Bank, Thomson Locations: China, SYDNEY, Europe, U.S, Asia, Beijing, People's Bank of China

☆ Morning Bid: US Stocks fight the Fed as markets still not listening
▼ + stars: | 2023-06-16 | by ( Naomi Rovnick | ) www.reuters.com time to read: +3 min

LONDON, June 16 (Reuters) - If you looked at red-hot stock markets without following central banks, you could well assume interest rates are being cut. The European Central Bank hiked again on Thursday and the Bank of England is widely predicted to follow suit next week. But while central bankers remain as worried about inflation as they have been since late 2021, markets seem to be worrying about nothing at all. Rather than hearing this cue, markets are listening selectively, focusing on the growth narrative while continuing to push back against hawkish guidance. The market rally is also feeding on itself, pulling off the sidelines investors who were underweight equities previously.

Persons: Jay Powell, Naomi Rovnick, Toby Chopra Organizations: U.S . Federal Reserve, European Central Bank, Bank of England, Treasury, Equity, Bank of America, University of Michigan, Thomson, Reuters Locations: U.S

The rapid rise in gilt yields has consequences for the wider economy. To some investors, gilts now increasingly look a bargain as 6% BoE interest rates appear unrealistic. Two-year gilt yields have risen by 1.1 percentage points this year, compared with a 0.3 percentage point increase for German two-year yields and 0.2 percentage points for U.S. Treasuries . Raising interest rates to 6% would "succeed in destroying demand" in the wider economy, he said. Ten-year gilt yields now pay an interest rate nearly 2 percentage points higher than the equivalent German government bond .

Persons: BoE, Liz, Britain's, Jim Leaviss, BoE Governor Andrew Bailey, gilts, We've, Mike Riddell, Riddell, Moyeen, There's, Islam, Naomi Rovnick, David Milliken, Toby Chopra Organizations: Labour Party, Bank of England, Bank of, Italy, Reuters Graphics, Allianz Global Investors, U.S, Barclays, Thomson Locations: Bank of England, Britain, British, gilts

☆ Major central banks not done with rate hikes just yet
▼ + stars: | 2023-06-15 | by ( ) www.reuters.com time to read: +6 min

[1/2] A view shows the logo of the European Central Bank (ECB) outside its headquarters in Frankfurt, Germany March 16, 2023. Fed policymakers paused on its rate hikes since March 2022, and kept the federal funds target rate unchanged at 5.25%, its highest level since August 2007. Reuters Graphics5) AUSTRALIAAustralia's central bank raised its benchmark rate by a quarter-point on June 6 to an 11-year high of 4.1%. It expects inflation to stay above its 2% target through 2025 and hinted at more rate hikes ahead. Reuters Graphics10) JAPANThe Bank of Japan remains the world's most dovish major central bank under new Governor Kazuo Ueda.

Persons: Heiko Becker, Jerome Powell, BoE, Christine Lagarde, Thomas Jordan, Kazuo Ueda, Samuel Indyk, Nell Mackenzie, Alun John, Naomi Rovnick, Harry Robertson, Chiara Elisei, Vincent Flasseur, Sumanta Sen, Pasit, Dhara Ransinghe, Jonathan Oatis Organizations: European Central Bank, REUTERS, Heiko Becker LONDON, U.S . Federal Reserve, Bank of England, Reuters, Reserve Bank of New, UNITED, Fed, Bank of Canada, BRITAIN, Bank of, ECB, Norges Bank, Reuters Graphics Reuters, Swiss National Bank, Bank of Japan, Thomson Locations: Frankfurt, Germany, Canada, Japan, dovish, Reserve Bank of New Zealand, U.S, Bank of England, AUSTRALIA, SWEDEN, NORWAY, SWITZERLAND, JAPAN

LONDON, June 15 (Reuters) - Hawkish central banks have sent a resounding "no" to markets betting recession would force rate cuts soon, leaving money managers scrambling for direction as the second half of the year approaches. "Markets have been wrong not only in their interpretation of the data but of the central bank reaction," he added. "Even though inflation is coming down, you are still getting that phase were the central banks think they need to talk hawkishly about this." Canada last week restarted rate hikes, Australia has come off a pause and Norway may have to accelerate hikes next week. BofA now expects two 25 bps interest rate hikes from the Fed this year, JPMorgan sees only one more and Morgan Stanley sees none.

Persons: Jason Simpson, Shorter, BofA, Morgan Stanley, Mark Nash, Nash, Kaspar Hense, Michael Michaelides, Shamik, BoE, they're, Dhar, Naomi Rovnick, Dhara Ranasinghe, Conor Humphries Organizations: U.S . Federal Reserve, European Central Bank, Bank of England, State, Bank of Japan, Treasury, JPMorgan, BlueBay Asset Management, BNY Mellon Investment Management, Thomson Locations: U.S, Canada, Australia, Norway, Shamik Dhar

For some, the answer to exuberant markets lies in the ample cash still sloshing around the financial system. Total global liquidity, a measure of cash and credit in the world economy, has risen to almost $170 trillion in June, Crossborder calculates, from $158 trillion in October. Central banks have added a net $1.7 trillion into money markets since November, it also estimates, a move that correlates with a risk-taking trend. But an alternative scenario is that U.S. money market funds, stuffed with cash after depositors fled regional banks in March, buy enough newly issued Treasuries to keep rates stable. "Liquidity is not a force that reverberates immediately into financial markets," said JPMorgan global market strategist Nikolaos Panigirtzoglou.

Persons: Michael Howell, Crossborder, Richard Clarida, Georgina Taylor, Ken Taubes, reverberates, Nikolaos Panigirtzoglou, Morgan Stanley, Luca Paolini, Paolini, Naomi Rovnick, Harry Robertson, Dhara Ranasinghe, Kirsten Donovan Organizations: U.S . Treasury, Federal Reserve, European Central Bank, Crossborder Capital, U.S, Reuters, BNP, JPMorgan, Apple, Thomson Locations: Japan, U.S

Odey Asset Management "does not recognise the picture of the firm that has been painted" by the allegations, it told investors in a letter seen by Reuters. Within hours of the report being published, Wall Street firms including Goldman Sachs (GS.N), JPMorgan (JPM.N) and Morgan Stanley (MS.N) began reviewing their prime broking ties with Odey Asset Management, sources familiar with the matter told Reuters. "We are confident our service providers will continue to work with us," an Odey Asset Management letter said later. Industry experts consulted by Reuters said that did not necessarily indicate a major change in culture in the City, however. A London employment tribunal last month awarded a former Algebris employee over 32,000 pounds in a sex harassment claim against the asset management company.

Persons: Crispin Odey, Odey, Goldman Sachs, Morgan Stanley, MS.N, Schroders, Evan Nierman, Megan Tobias Neely, Neely, retrained, Daniel Beunza, Davide Serra, Serra, Algebris, Yasmine Chinwala, Nell Mackenzie, Sinead Cruise, Naomi Rovnick, Dhara Ranasinghe, Rosalba O'Brien Organizations: Odey Asset Management, Financial Times, Tortoise Media, Reuters, Odey, Wall, JPMorgan, FT, Financial, Bayes Business, Labour Party, New, Thomson Locations: City, London, Britain, New York

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