DIRS.INFO The most relevant business & tech news

☆ Dollar slips as Fed outlook shifts
▼ + stars: | 2023-03-23 | by ( Tom Westbrook | ) www.reuters.com time to read: +3 min

That's a contrast to Europe where markets see another 50 bp or so to go, and the gap sent the euro surging. Dollar/yen fell 0.7% overnight and was edging lower in the Asian morning at 131.19. "From the foreign exchange perspective, we think that argues for further dollar weakness as the ceiling for the Fed cycle has clearly come down." The risk-sensitive Australian dollar recoiled sharply from a two-week high of $0.6759 to be back at $0.6707 on Thursday morning. The New Zealand dollar also gave up overnight gains, but was firm in morning trade at $0.6238.

☆ Wall Street sees the Fed starting to signal toward a recession ahead
▼ + stars: | 2023-03-23 | by ( Jeff Cox | ) www.cnbc.com time to read: +4 min

The Wall Street consensus after the Federal Open Market Committee meeting concluded Wednesday was equally cautious. "We took the broad signals from this meeting as lifting perceptions of recession risks within the Fed," wrote Matthew Luzzetti, chief U.S. economist at Deutsche Bank. "Powell noted that recent events will certainly not reduce recession risks, even if how much they heighten those risks remains uncertain." The risk from rates Worries remain that more Fed rate hikes will exacerbate banking problems by creating more duration risk. "We expect the FOMC to hike another 25bp in May, bringing the funds rate target range to 5.00-5.25%," wrote Barclays chief U.S. economist Marc Giannoni.

☆ Asia hopes for best on banks, much rests with Fed
▼ + stars: | 2023-03-22 | by ( Wayne Cole | ) www.reuters.com time to read: +4 min

Efforts by U.S. Treasury Secretary Janet Yellen to calm nerves seemed to be working with bank shares rallying overnight. The unease left both S&P 500 futures and Nasdaq futures barely changed. EUROSTOXX 50 futures edged up 0.2%, while FTSE futures rose 0.1%. All of which puts the Fed in a tough position as it decides whether to raise interest rates later today. Two-year Treasury yields were hesitating at 4.13%, having made a remarkable round-trip from 5.085% to 3.635% in just nine sessions.

☆ Asia shares hope for best as Fed decides on rates
▼ + stars: | 2023-03-22 | by ( Wayne Cole | ) www.reuters.com time to read: +4 min

Efforts by U.S. Treasury Secretary Janet Yellen to calm nerves seemed to be working with bank shares rallying overnight. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) added 0.9%, with Chinese blue chips (.CSI300) up 0.3%. All of which puts the Fed in a tough position as it decides whether to raise interest rates later today. Two-year Treasury yields were hesitating at 4.14%, having made a remarkable round-trip from 5.085% to 3.635% in just nine sessions. German two-year yields overnight recording the biggest daily jump since 2008 as markets went back to pricing in more ECB hikes.

☆ Morning Bid: Investors adopt the brace position as banks topple
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: +3 min

That pretty much sums up the reaction in Asian markets to the extraordinary government-engineered takeover of the storied Credit Suisse by UBS, along with a U.S. dollar supply operation by a Fed-led posse of major central banks. Investors seem torn between relief that Credit Suisse was not allowed to collapse or worries that it had to be saved in such a way in the first place. It's not helping that Credit Suisse shareholders are taking a nasty haircut in the deal, though not as painful as AT1 bond holders who seemingly won't get their $17 billion back. That's a break with convention that could threaten the future of the entire $275 billion CoCo market. Likewise, Fed fund futures fell, rose, then fell again as investors dared to divine what all this might mean for interest rates.

☆ Silicon Valley Bank collapse throws up uncertainty for a European Central Bank hoping to hike rates
▼ + stars: | 2023-03-15 | by ( Annette Weisbach | ) www.cnbc.com time to read: +1 min

Christine Lagarde, president of the European Central Bank (ECB). Bloomberg | Bloomberg | Getty Imageswatch nowCore inflation — the key focus right now for policymakers — accelerated to 5.6% from 5.3%. That is reinforcing expectations that the European Central Bank will have to push borrowing costs ever higher. The ECB's key rate currently stands at 2.5%. Elsewhere, ECB watchers are also monitoring a lack of unity at the Frankfurt institution when it comes to what level its benchmark rate will peak at.

By May the benchmark rate is seen rising further to a range of 5.00%-5.25%. Until late last week financial markets had been pricing in a bigger half-point rate hike to stem persistently high inflation. Meanwhile the Labor Department's inflation report showed a 6% rise in the consumer price index last month from a year earlier. "The recent string of regional bank failures likely closed the door on a 50 (basis point) rate hike, but today's data suggests that the Fed is going to remain on-track for a 25 (basis point) hike on March 22." Fed policymakers will publish their own rate path expectations next week.

☆ The Fed wants higher unemployment because it would bring down inflation
▼ + stars: | 2023-03-10 | by ( Phil Rosen | ) www.businessinsider.com time to read: +7 min

Powell testified abou the Federal Reserve's semi-annual monetary policy report to Congress and the state of the economy Chip Somodevilla/Getty1. A reading of 200,000 or more jobs added in February means we're getting a bigger rate hike this month. Fed Chair Jerome Powell said this week that the trajectory of monetary policy doesn't hinge solely on today's jobs report, but markets are still bracing for impact. Remember, the Fed's stated goal is a 2% inflation rate. Meanwhile, Wharton's Jeremy Siegel said Thursday that the Fed is taking a flawed policy approach, and it shouldn't be so focused on jobs.

☆ Morning Bid: The perils of not keeping up with Powell
▼ + stars: | 2023-03-08 | by ( Wayne Cole | ) www.reuters.com time to read: +3 min

That's been Asia's market reaction to the Fed chief's warning on faster hikes and higher rates. Fed fund futures took Powell at his hawkish word and now imply a 70% chance the Fed will hike by 50bp this month, up from just 9% a month ago. JPMorgan noted Powell's focus on the "totality" of data places a lot of weight on Friday's payrolls figures and next week's CPI. Essentially, the cost of not keeping up with the Fed can be a much weaker currency and a greater risk of imported inflation. ADP employment and trade figures- Bank of Canada announcement at 1500 GMTEditing by Sam HolmesOur Standards: The Thomson Reuters Trust Principles.

☆ INDIA RUPEE Rupee declines but ends off day's low, premiums fall
▼ + stars: | 2023-03-08 | by ( ) www.reuters.com time to read: +2 min

The rupee closed at 82.0550 to the U.S. dollar, down from 81.91 in the previous session. The dollar offers in the "cluster" of 82.20-82.30 ensured that the opening upside momentum (on USD/INR) "subsided", a spot trader at a private sector bank said. The "best guess" for the offers will forward dollar sales by exporters and new positions, he said. In line with past rallies in the dollar, the rupee's losses were lesser than its Asian peers, traders pointed out. The bank raised its forecast of the peak rate by 25 bps to 5.5-5.75%.

☆ A reading of more than 200,000 jobs added in February would be the Fed's trigger for a big March rate hike, Barclays says
▼ + stars: | 2023-03-08 | by ( Carla Mozée | ) www.businessinsider.com time to read: +4 min

The Fed will likely upsize its March rate hike if the February jobs report shows 200,00 or more jobs added, Barclays said. Investors on Tuesday quickly pushed up the odds the Fed deliver a rate hike of a half-percentage point after downsizing the pace to 25 basis points last month. The February jobs report due Friday is expected to show the world's largest economy added 203,000 jobs, with a steady unemployment rate of 3.4%. The January jobs report trounced expectations with growth of 517,000 jobs. Such moves would put the peak of the Fed's benchmark interest rate at 5.5%-5.75% assuming that after June, the Fed sees sufficient evidence that slowing in employment and wages warrant a pause in rate hikes, Barclays said.

☆ Sticky inflation fuels some of ECB's worst fears
▼ + stars: | 2023-03-02 | by ( Balazs Koranyi | ) www.reuters.com time to read: +4 min

Overall inflation eased a touch to 8.5% last month from 8.6% in January, data on Thursday showed. But nearly all the drop came from lower energy costs, while prices for most other items - including food, services and durable goods - surged again, confirming the worst fears of some ECB policymakers. A jump in underlying inflation - to 5.6% from 5.3% - reinforces already copious evidence that past price rises are filtering down into the broader economy, including via wages. "Core inflation and other measures of underlying inflation were likely to be stickier, with only limited evidence of a stabilisation so far," the ECB said in the accounts of the Feb. 1-2 meeting. "In particular, we upgrade (the rate hike view in) May from 25bp to 50bp, which takes our terminal rate forecast to 3.75% in June."

Despite relief measures, energy prices in February were 19.1% higher on the year, while food prices were 21.8% higher, it said. The first one was driven by energy prices and the second one by material inputs, which are not ebbing. While energy prices were keeping headline inflation high, wage growth will show its impact in core inflation, which will remain stubbornly high, Brzeski said. "Hence, a stepdown to a 25bp pace of hikes could be delayed, which would also push the terminal rate higher." "The interest rate step announced for March will not be the last," Nagel said in a speech.

☆ Dollar firms as investors brace for higher-for-longer rates scenario
▼ + stars: | 2023-02-23 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

However, they also indicated curbing unacceptably high inflation would be the "key factor" in how much further rates need to rise. The dollar paused its ascent on Thursday after gaining broadly on the back of the release. "The meeting minutes were pretty much within expectations ... the markets are now pricing for higher-for-longer rates," said Tina Teng, market analyst at CMC Markets. "The resilience (of the U.S. economy) prompts the Fed to keep raising interest rates ... pushing up the U.S. Against a basket of currencies, the U.S. dollar index stood at 104.50, and was attempting to break a more than one-month peak of 104.67 hit last week.

☆ Deutsche bank lifts forecasts for ECB terminal rate to 3.75%
▼ + stars: | 2023-02-22 | by ( ) www.reuters.com time to read: 1 min

LONDON, Feb 22 (Reuters) - Deutsche Bank has lifted its forecast for where the European Central Bank's key rate will rise to in this tightening cycle to 3.75% from 3.25%, the German bank said in a note on Wednesday. Deutsche economists now expect the ECB to raise interest rates by 50 basis points (bps) at its March and May meetings, followed by a final hike of 25bp in June. They had previously expected a 50 bps hike in March and a final 25 bps rise in May. A more resilient economy and jobs market alongside hawkish central bank rhetoric was behind the forecast change, the note said. The ECB hike rates by 50 bps to 2.5% earlier this month.

☆ Disasters lower outlook for New Zealand interest rate rise
▼ + stars: | 2023-02-20 | by ( Lucy Craymer | ) www.reuters.com time to read: +3 min

Then on Feb. 12 to 15 a cyclone hit the North Island, which includes Auckland. When Cyclone Gabrielle hit, picking had just begun on pip-fruit farms, whose production is worth about NZ$1 billion a year. That would normally be a reason for a central bank to lift interest rates further, but some economists expect the RBNZ to look past the sudden rise as being temporary. Still, Kiwibank chief economist Jarrod Kerr said the central bank should pause hikes until the effect of the cyclone can be understood. After the Christchurch earthquake, the central bank cut its policy rate due to concerns about the economy.

Meanwhile, money markets are currently pricing in a terminal rate of 5.3% by July. BofA Global Research also expects a 25bps hike in the Fed's June meeting, pushing the terminal rate up to a 5.25%-5.5% range. It had earlier pencilled in two rate hikes of 25 bps each in the March and May meetings. "Resurgent inflation and solid employment gains mean the risks to this (only two interest rate hikes) outlook are too one-sided for our liking," BofA wrote in a client note. Before the recent U.S. data, J.P. Morgan had forecast the terminal rate at 5.1% by the end of June.

☆ Dollar climbs as central banks see inflation risks unwind
▼ + stars: | 2023-02-03 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

Elsewhere, the greenback broadly advanced on the back of its Atlantic counterparts' decline, reversing its losses earlier in the week. On Thursday, the ECB and BoE each raised interest rates by 50 basis points as expected, with the latter signalling the tide was turning in its battle against high inflation. The comments from policymakers following a slew of central bank meetings this week have markets seizing on signs that interest rates could be close to peaking in most major economies. "We're starting to see central banks converging to a pattern now ... the major central banks are definitely approaching the end of their tightening cycles," said CBA's Kong. An imminent peak in U.S. rates has provided some relief for the Japanese yen , which last year crumbled under pressure from rising interest rate differentials against Japan's low interest rate environment.

☆ Morning bid: Markets go all in for disinflation
▼ + stars: | 2023-02-02 | by ( Wayne Cole | ) www.reuters.com time to read: +3 min

SYDNEY, Feb 2 (Reuters) - A look at the day ahead in European and global markets from Wayne Cole. The very first question in the new conference invited him to scold markets, and he notes conditions had tightened a lot last year. A pdf search of the conference shows disinflation or disinflationary was used 13 times, compared to twice at his December event. Key developments that could influence markets on Thursday:- BoE rate decision is at 1200 GMT and the ECB at 1315 GMT. BoE Gov Bailey speaks to reporters at 1230 GMT and ECB President Lagarde at 1345 GMT.

☆ Major central banks set to signal interest rate glide path in crucial week for monetary policy
▼ + stars: | 2023-02-01 | by ( Elliot Smith | ) www.cnbc.com time to read: +7 min

A screen displays the Fed rate announcement as a trader works on the floor of the New York Stock Exchange (NYSE), November 2, 2022. Brendan McDermid | ReutersThe U.S. Federal Reserve, European Central Bank and Bank of England are all expected to hike interest rates once again this week, as they make their first policy announcements of 2023. Economists will be watching policymakers' rhetoric closely for clues on the path of future rate hikes this year, as the three major central banks try to engineer a soft landing for their respective economies without allowing inflation to regain momentum. The market is now pricing in this eventuality, but the key question is what the FOMC will indicate about further rate hikes in 2023. "Fewer hikes might be needed if the recent weakening in business confidence captured by the survey data depresses hiring and investment more than we think, substituting for additional rate hikes," Mericle said.

Fed Chair Jerome Powell is scheduled to hold a news conference half an hour later to elaborate on the decision. Caught flat-footed last year as inflation accelerated and threatened to prove far more persistent than anticipated, the Fed approved the fastest interest rate hikes since the 1980s. New data last week showed a key inflation measure slowed faster than expected in December, continuing a six-month downward trend. The expected move to 25-basis-point rate increases will be a "hawkish downshift," BNP Paribas economists wrote ahead of this week's policy meeting. Traders of futures that settle to the Fed's policy rate see the path somewhat differently, with the benchmark rate peaking in the 4.75%-5.00% range, and the central bank cutting that rate to around 4.4% by December.

☆ Dollar set for fourth monthly drop as Fed meeting looms
▼ + stars: | 2023-01-31 | by ( Tom Westbrook | ) www.reuters.com time to read: +3 min

SINGAPORE, Jan 31 (Reuters) - The dollar was eyeing a fourth monthly loss on Tuesday as investors reckon a peak in U.S. interest rates could swing into view as soon as this week's Federal Reserve meeting. The U.S. dollar index is down 1.3% for January so far, though it rose 0.3% to 102.19 overnight. The Japanese yen fell 0.4% overnight but is set for its third monthly gain as markets anticipate shifts in monetary policy. Sterling and the Australian, New Zealand and Canadian dollars also made overnight losses but are set for monthly gains. Interest-rate futures indicate market expectations for a 25 basis point (bp) hike from the Federal Reserve to take the Fed funds rate window to 4.5%-4.75%.

☆ Asia shares brace for rate hikes, earnings rush
▼ + stars: | 2023-01-30 | by ( Wayne Cole | ) www.reuters.com time to read: +4 min

Asia has been no slouch either as China's swift reopening bolsters the economic outlook, with MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) up 11% in January at a nine-month high. "We also look for him to continue to push back against market pricing of rate cuts later this year." "Based on our recent Asia supply chain checks we believe iPhone 14 Pro demand is holding up firmer than expected," they added. Market pricing of early Fed easing has been a burden for the dollar, which has lost 1.5% so far this month against a basket of major currencies. read moreEarly Monday, Brent was up 79 cents at $87.45 a barrel, while U.S. crude rose 66 cents to $80.34.

☆ Morning bid: Cloudy outlook
▼ + stars: | 2023-01-25 | by ( ) www.reuters.com time to read: +4 min

And deep in the weeds of the fourth-quarter corporate earnings season, Microsoft's (MSFT.O) overnight rollercoaster probably defines the uncertainty. Microsoft stock surged almost 5% in after-hours trading on Tuesday after its bottom line beat the Street consensus. The mixed earnings picture dampened early week enthusiasm surrounding tech stocks and chipmakers. The chance it may force the Reserve Bank of Australia to lift interest rates again boosted the Aussie dollar. Key developments that may provide direction to U.S. markets later on Wednesday:* Bank of Canada policy decision.

Annual headline inflation in the first half of the month reached 7.94%, beating both the 7.77% recorded in the month of December and economists' forecasts of 7.86%, though still below the two-decade high of 8.70% registered in August and September. That means annual inflation remains far above the Bank of Mexico's target rate of 3%, plus or minus one percentage point. It is unlikely that the bank will make any cuts to the interest rate in the next six months, Bank of Mexico board member Jonathan Heath said in an interview last week. In the first half of January, according to statistics agency INEGI, consumer prices rose 0.46% compared to the previous two-week period, while the core index rose 0.44%, both also exceeding market estimates. Mexico's Latin American peer Brazil, where monetary tightening is on pause, also released mid-month inflation data on Tuesday, with prices slightly beating market forecasts.

Search resuls for: "25bp"

25 mentions found