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June 28 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. The MSCI World index climbed almost 1%, its best day in four weeks, while the MSCI Asia ex-Japan index snapped a six-day losing streak. Together with lower oil prices, falling market volatility and a generally weaker dollar, this augers well for Asian equity markets and risk appetite on Wednesday. Beijing may be better equipped to steer the yuan where it wants, as it already closely manages the currency. Rates traders see the RBA hiking rates by another 50 basis points to 4.55% by next March.

Persons: Jamie McGeever Organizations: Nasdaq, Reserve Bank of Australia, Thomson, Reuters Locations: Asia, Japan, Tokyo, China, Beijing, Australia, South Korea

June 27 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. Wall Street closed in the red on Monday - the Nasdaq shed more than 1% for the third trading day in four - and the U.S. yield curve inversion accelerated to near-historic levels. But inflation and policy concerns are driving sentiment more than geopolitical fears. The Bank for International Settlements on Sunday called for more rate hikes, warning the world economy is at a crucial juncture in the fight against inflation. The International Monetary Fund's Gita Gopinath said on Monday investors may be overly optimistic on the speed and cost of taming inflation.

Persons: Jamie McGeever, Gita Gopinath Organizations: Kremlin, Nasdaq, Swiss, Bank for International, U.S, JSR, Japan Investment Corp, ECB, Thomson, Reuters Locations: Russian, U.S, Japan, Canada, Sintra, Portugal

June 26 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. It is unclear what the immediate impact of Russian mercenaries' advance on Moscow, retreat and apparent deal with President Vladimir Putin will be on risk appetite and demand for traditional 'safe haven' assets like gold, Treasuries, the Japanese yen or the U.S. dollar. These assets would likely have attracted strong investor demand first thing on Monday morning had the Wagner group's march on Moscow continued. The S&P 500, Nasdaq, MSCI World Index, China's major indices and Japan's Nikkei 225 index all posted their biggest losses since March last week. The MSCI Asia ex-Japan index, a broad measure of Asian stocks, slumped 4.2%, its worst week since September.

Persons: Jamie McGeever, Vladimir Putin, Wagner, Antony Blinken, Diane Craft Organizations: U.S ., Investors, . Stock, Nasdaq, Nikkei, Thomson, Reuters Locations: Russia, Moscow, U.S, Beijing, Asia, Japan, Singapore, Taiwan, Germany

Not only are his current approval ratings historically low, they are particularly poor given that unemployment is at its lowest in more than half a century. As a result, Biden's approval ratings could reasonably be expected to rise if inflation continues to decline. Reuters analysis suggests presidential approval ratings are rarely below 40% when inflation is 6% or lower. What will have a greater impact on consumers' and voters' well-being - unemployment pain or inflation gain? Some economists say the 'Misery Index', the unemployment rate plus the inflation rate, is a decent proxy for people's happiness and even presidential approval ratings.

Persons: Joe Biden's, Biden, Harry Truman's, Joseph Macri, Bahram Adrangi, 3pp, Andy Schneider, Lina El, Robert MacCulloch, Hamed Shafiee, David Blanchflower, Jamie McGeever Organizations: Federal Reserve, Wall, Bank of America, Atlanta, Reuters, Presidents, BNP, Dartmouth College, Bank of England, Thomson Locations: ORLANDO, Florida, U.S, Iraq

June 21 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. The one-year loan prime rate (LPR) was cut to 3.55% and the five-year LPR was cut to 4.20%. The yuan has been trading through 7.00 per dollar every day since May 18, and is now approaching 7.20/dollar. On the Chinese corporate front, investors are digesting the news of changes at the top of e-commerce giant Alibaba Group (9988.HK). The main global event for markets on Wednesday is likely to be Fed Chair Powell's semi-annual testimony to the House Financial Affairs Committee.

Persons: Jamie McGeever, Jerome Powell, Kazuo Ueda, weren't, Daniel Zhang, Eddie Yongming Wu, Joseph Tsai, Deepa Babington Organizations: Federal, Bank of, The Bank of Japan, People's Bank of China, Investors, Alibaba, HK, House Financial, Committee, Thomson, Reuters Locations: Asia, Japan

The PBOC last week lowered short- and medium-term policy rates, paving the way for lower benchmark borrowing costs. Several major banks have cut their 2023 GDP growth forecasts for China to a 5.1% to 5.7% range from an earlier range of 5.5% to 6.3%. Chinese stocks on Monday posted their biggest fall in two weeks, but the weakness was not confined to China. The MSCI World index came off last week's 14-month high, Japan's Nikkei lost 1%, and Hong Kong tech and the MSCI Asia ex-Japan index both had their biggest falls in three weeks. Paramilitary police officers stand guard in front of the headquarters of the People's Bank of China, the central bank (PBOC), in Beijing, China September 30, 2022.

Persons: Jamie McGeever, Antony Blinken's, Tingshu Wang, Lisa Shumaker Organizations: People's Bank of China, Japan's Nikkei, REUTERS, State, Ukraine, Hong Kong, Thomson, Reuters Locations: U.S, Beijing, Malaysian, Hong Kong, China, Asia, Japan, Taiwan, Malaysia

A short position is essentially a wager an asset's price will fall, and a long position a bet it will rise. Funds expanded their already record net short two-year Treasuries futures position to more than 1 million contracts for the first time. The scale of the move lately is remarkable - the net short position has more than doubled in just two months. Notably, funds' net short two-year Treasuries position now exceeds their net short 10-year Treasuries position by some 354,000 contracts. Reuters ImageIf this is indeed hedge funds betting on an inverted 2s/10s yield curve, they are sitting pretty.

Persons: that's, Jamie McGeever, Tom Hogue Organizations: U.S, Futures Trading Commission, Reuters, Barclays, Thomson Locations: ORLANDO, Florida, U.S . Federal, U.S, York

June 19 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. Looking ahead and beyond China, investors have two other Asian monetary policy decisions this week to digest - Indonesia's Bank Indonesia (BI) and the Philippines Bangko Sentral ng Pilipinas (BSP) on Thursday. Both are likely to leave policy unchanged, with BI maintaining its benchmark lending rate at 5.75% and the BSP keeping its key policy rate at 6.25%. The broader market tone across Asia on Monday could be one of caution, with investors tempted to take some profits from the recent rally. The annual core CPI rate is expected to ease to 3.1% from 3.4% in April.

Persons: Jamie McGeever, Antony Blinken's, Bank of Korea Governor Rhee Chang, Antony Blinken, Leslie Adler Organizations: People's Bank of, Indonesia's Bank Indonesia, Sentral ng Pilipinas, BI, BSP, Bank of Japan, Bank of Korea, Thomson, Reuters Locations: U.S, People's Bank of China, Beijing, American, China, Philippines, Asia, Japan, Hong Kong

Nominal wage growth is the strongest in two years, economic growth is weak, and these stagflationary pressures are being sustained by persistently low productivity. This lifted the two-year yield some 43 basis points (bps) above the 10-year yield, the most inverted yield curve since 2008. The longer end of the UK yield curve is feeling the squeeze too, with the UK-German 10-year yield spread widening above 200 bps. But traders are now pricing in a peak BoE terminal rate of 5.75% early next year, above the implied Fed peak of around 5.375% later this year. That's another 125 bps of rate hikes on top of the 440 bps of tightening already delivered in the last 18 months.

Persons: BoE, Liz Truss, That's, Sterling, stagflation, Paul Johnson, Jamie McGeever, Jamie Freed Organizations: Bank of England's, Federal Reserve, Deutsche Bank, International Monetary Fund, Institute for Fiscal, HSBC, Reuters, Thomson Locations: ORLANDO, Florida, Britain, U.S, Canada, Japan, United States

June 16 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. The Bank of Japan, the most dovish major central bank in the world, announces its latest policy decision on Friday, with markets highly sensitive to signs of when and to what degree it will ditch its super-loose policy. The BOJ follows surprisingly aggressive interest rate increases and guidance recently from policymakers in Canada and Australia, and this week's hawkish signals from the European Central Bank and, to a lesser extent, the U.S. Federal Reserve. The BOJ remains the outlier among major central banks, promising to maintain its loose policy until it is sure inflation meets the 2% target. If Japanese assets are any indication, investors expect Ueda and his colleagues to err on the dovish side.

Persons: Jamie McGeever, Kazuo Ueda's, Ueda, Fed's Bullard, Waller, Barkin Organizations: The Bank of Japan, Nasdaq, European Central Bank, U.S . Federal Reserve, Bank of America, ECB, Nikkei, Thomson, Reuters Locations: Canada, Australia, Japan

That implied 'terminal' rate is lower than Fed officials' new year-end median projection of 5.60%. When set against the implied 2023 year-end SOFR rate of 5.20%, traders are pricing in almost 150 bps of rate cuts next year. Analysts at TD Securities reckon the Fed is done raising rates and will begin easing in December this year. This is the first time in more than a year no rate cuts have been priced into the 2023 SOFR futures curve. Just over a month ago, the curve implied around 100 bps of rate cuts in the second half of this year.

Persons: they're, Societe Generale's Stephen Gallagher, Jerome Powell's, Powell, Jamie McGeever, Paul Simao Organizations: Federal, Fed, Traders, Reuters, Securities, Societe, Thomson Locations: ORLANDO, Florida

June 14 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. A raft of economic data and a likely medium-term policy easing from China will give Asian markets direction on Thursday, but the main steer will probably come from investors' reaction to the Federal Reserve's 'hawkish skip' on interest rates. China's central bank, meanwhile, is expected to cut the borrowing cost of medium-term policy loans for the first time in 10 months on Thursday, after it lowered two key short-term policy rates earlier this week. The annual rate of growth in investment is seen slowing to 4.4% from 4.7%, industrial production to 3.6% from 5.6%, and retail sales to 13.6% from 18.4%. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Persons: Jamie McGeever, Dow, disinflation Organizations: Federal, Fed, Nasdaq, Nikkei, Wednesday, People's Bank of, Institute of International Finance, Thomson, Reuters Locations: China, U.S, Japan, People's Bank of China, outflows, Beijing

☆ Hopes for a Fed pause bolster risk rally
▼ + stars: | 2023-06-13 | by ( Jamie Mcgeever | ) www.reuters.com time to read: +3 min

(Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. Traders are putting a 95% probability on the Fed standing pat on Wednesday, a consensus so strong the Fed will almost certainly respect. The focus for investors will be on the statement and Fed Chair Jerome Powell’s press conference for signs on whether it will be a ‘hawkish’ or ‘dovish’ pause. The NYSE FANG+ index of mega tech stocks rose 0.9% for a fourth consecutive daily rise, bringing its year-to-date gains to 72%. One major headwind, particularly for Asian assets, could be the surge in U.S. Treasury yields, although that for now at least is being mitigated by the dollar’s slide to a three week low.

Persons: Jamie McGeever, Amit Dave, China’s, Jerome Powell’s, ’ Organizations: Reuters, REUTERS, Federal, Nasdaq, Traders, NYSE, Japan’s Nikkei, Treasury Locations: Ahmedabad, India, U.S, South Korea, Asia, Japan, New Zealand

June 14 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. This could be a precursor to lower benchmark interest rates in the coming weeks - yuan traders certainly seem to think so. Traders are putting a 95% probability on the Fed standing pat on Wednesday, a consensus so strong the Fed will almost certainly respect. The NYSE FANG+ index of mega tech stocks rose 0.9% for a fourth consecutive daily rise, bringing its year-to-date gains to 72%. One major headwind, particularly for Asian assets, could be the surge in U.S. Treasury yields, although that for now at least is being mitigated by the dollar's slide to a three week low.

Persons: Jamie McGeever, China's, Jerome Powell's, Jamie McGEever Organizations: Federal, Nasdaq, Traders, NYSE, Japan's Nikkei, Treasury, Thomson, Reuters Locations: U.S, South Korea, Asia, Japan, India, New Zealand

Any optimism could be punctured, however, by inflation data from China. April's CPI report showed inflation virtually evaporated, highlighting Beijing's challenge to stimulate enough economic activity and growth to kill the threat of deflation. The weak jobless claims figures torpedoed the dollar more broadly, sank Treasury yields, and cooled Fed rate hike expectations. Remarkably, the main measure of U.S. stock market volatility is at a pre-pandemic low, and implied global FX volatility is its lowest in over a year too. Here are three key developments that could provide more direction to markets on Friday:- China CPI inflation (May)- China PPI inflation (May)- South Korea current account (April)By Jamie McGeever; editing by Deepa BabingtonOur Standards: The Thomson Reuters Trust Principles.

Persons: Jamie McGeever, Deepa Babington Organizations: Nasdaq, Treasury, Wall, China PPI, Thomson, Reuters Locations: Asia, China, Japan, South Korea

The Reserve Bank of Australia seems to have executed a one-meeting 'skip', but perhaps more by accident than design. Leaving open the possibility in July of another 25-basis-point hike two months later could prevent financial conditions from loosening too much. The Fed wants policy to be restrictive, and financial markets to move accordingly. Philadelphia Fed President Patrick Harker and Fed Governors Christopher Waller and Philip Jefferson in recent weeks have introduced 'skip' and 'skipping' into Fed-watchers' lexicons. Until then, a pause was generally assumed to lay the ground for rate cuts, not a resumption of rate hikes.

Persons: Alan Greenspan, John Silvia, Silvia, Jerome Powell, Lorie Logan, Powell, Patrick Harker, Christopher Waller, Philip Jefferson, Price, Lou Crandall, Wrightson ICAP, Jamie McGeever, Paul Simao Organizations: Federal, Reserve Bank of Australia, Dynamic, Fed, Dallas, Philadelphia Fed, Consumer, Index, Reuters, Thomson Locations: ORLANDO, Florida

The Bank of Canada's decision to raise rates to a 22-year high of 4.75% was not widely expected. This followed an equally surprising rate hike from Australia the day before, a one-two hawkish punch from policymakers that investors had probably not braced for. The Reserve Bank of India is expected to leave its key interest rate unchanged at 6.50% and for the rest of 2023, according to a Reuters poll of economists. The Australian dollar, which hit a one-month high on Wednesday following the RBA's rate hike, could get a nudge from Australian trade data on Thursday. Here are three key developments that could provide more direction to markets on Thursday:- India interest rate decision- Japan GDP (Q1, revised)- Australia trade (April)By Jamie McGeever;Our Standards: The Thomson Reuters Trust Principles.

Persons: Jamie McGeever Organizations: Nasdaq, Mega Tech, Reserve Bank of, U.S, Thomson, Reuters Locations: India, Canada, Australia, Reserve Bank of India, Japan

Chinese trade data for May will be the main focus, especially imports, which have been sluggish for over a year. It was one of the main catalysts for investors turning bearish on Chinese assets and the economy in recent weeks. Further signs of a struggling economy will likely keep the yuan on the defensive, even if the overall trade surplus is relatively large. The CBOE volatility index - the so-called Wall Street fear index - closed below 14.0 for the first time since February 2020. Here are three key developments that could provide more direction to markets on Wednesday:- China trade balance (May)- Australia GDP (Q1)- FX reserves - China, Japan, IndonesiaBy Jamie McGeever;Our Standards: The Thomson Reuters Trust Principles.

Persons: Jamie McGeever Organizations: U.S . Securities, Exchange Commission, Aussie, Reuters, Thomson Locations: Asia, Pacific, Australia, China, Japan, Indonesia

The Reserve Bank of Australia delivers its latest interest rate decision on Tuesday, undoubtedly the centerpiece event for Asian and Pacific markets but potentially of interest to U.S. Fed watchers too. Interest rate futures markets currently attach a 66% chance the RBA pauses, and a one-in-three chance it raises the cash rate by a quarter point to 4.10%. Holders of Australian assets will be pay particularly close attention to policymakers' statement and RBA governor Philip Lowe's press conference after the decision for guidance. Here are three key developments that could provide more direction to markets on Tuesday:- Australia interest rate decision- Australia current account (Q1)- Japan household spending (April)By Jamie McGeever;Our Standards: The Thomson Reuters Trust Principles. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Persons: Jamie McGeever, Philip Lowe's Organizations: Reserve Bank of Australia, Fed, Reserve, Australian, Apple, Thomson, Reuters Locations: U.S, Australia, Japan

Regional and global markets on Friday chalked up solid gains and volatility measures slumped after the release of forecast-smashing U.S. jobs figures. It looks like the 'sell in May and go away' maxim won't apply this year - investors are bullish and they are buying. Looking ahead, investors in Asia have plenty of economic events and monetary policy decisions to get their teeth into this week. Inflation data from Indonesia, the Philippines, Thailand, Taiwan and China will be released, starting with Indonesia on Monday. Economists polled by Reuters expect annual CPI inflation eased in May to a one-year low of 4.22% from 4.33% in April.

Persons: Jamie McGeever, Diane Craft Organizations: Nikkei, Manufacturing, U.S . State Department, Indonesia, Reuters, Reserve Bank of Australia, Reserve Bank of, Indonesia CPI, Thomson Locations: U.S, Asia, Japan, China, India, Australia, Korea's, Beijing, Indonesia, Philippines, Thailand, Taiwan, Reserve Bank of India, Singapore

Right now though, the market has never been more top-heavy and the share of market constituents outperforming the broader index has never been lower. According to Ed Clissold at Ned Davis Research, the percentage of stocks outperforming the S&P 500 this year is just 24.5%. The percentage of S&P 500 stocks outperforming the index on a rolling three-month basis is just 20.3%, a record low. Clissold says that the S&P 500's one-year gain after periods of relative strength by a small group of large caps is an average 1.8%. These five stocks account for over a quarter of the S&P 500's $36.78 trillion market cap, and the top 10 account for a third of the total.

Persons: bode, Ed Clissold, Ned Davis, Meb Faber, Chuck Prince's, Cambria's Faber, Jamie McGeever, Andrea Ricci Organizations: NYSE, Barclays, Apple, Microsoft, Nvidia, Ned Davis Research, Reuters, Google, Cambria Investment Management, Citigroup, Thomson Locations: ORLANDO, Florida

As billions of dollars have flooded into Big Tech over the last six weeks, bitcoin trading volumes and demand have slumped. Since April 25, the NYSE FANG+TM index of big tech and growth stocks has surged 24%, nearly three times the broader Nasdaq. The AI boom has gathered momentum despite the rise in bond yields and discount rates. This has highlighted bitcoin's underperformance and strongly suggests that outside the rarified world of Big Tech, investors are much more discerning. Indeed, just seven U.S. tech stocks have driven all of the positive S&P 500 returns so far this year, according to analysts at Barclays.

Persons: Crypto, Matt Weller, Weller, bitcoin, Vanda, Vanda's Marco Iachini, cryptocurrencies, Jamie McGeever, Sam Holmes Organizations: Nasdaq, NYSE, Reuters, Big Tech, Microsoft, Barclays, Vanda Research, Thomson Locations: ORLANDO, Florida, U.S

If the PMI data on Thursday from Japan, Australia, India, South Korea and others are as gloomy as China's official PMI figures were on Wednesday, markets are in for a torrid start to the new month. The Caixin manufacturing PMI report on Thursday is also expected to show manufacturing activity shrank in May, but at the same pace as April. Barring a huge upside surprise, China's economy appears to be sputtering and the pressure on local assets is growing. Dovish remarks from Fed Governor Philip Jefferson and Philadelphia Fed President Patrick Harker on Wednesday helped lower U.S. bond yields and implied rate expectations. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Persons: Jamie McGeever, Elon Musk, Brent, Philip Jefferson, Patrick Harker Organizations: PMI, Twitter, Philadelphia Fed, Thomson, Reuters Locations: Asia, Pacific, Japan, Australia, India, South Korea, China, Shanghai, prelim

May 31 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever. Asian market focus on Wednesday turns to Chinese purchasing managers index figures, which will give the first insight into factory and service sector activity in the world's second largest economy in May. Asian markets on Wednesday might also get some relief from the dollar's slip on Tuesday in line with U.S. bond yields. China's PMI figures for May are expected to show another contraction in manufacturing activity. Service sector activity has been expanding since January, however, and it will be the extent to which that accelerates or slows that markets will be most attuned to.

Persons: Jamie McGeever, China PMIs Organizations: Congress, Relief, Nasdaq, Treasury, PMI, Service, Thomson, Reuters Locations: Washington, Hong Kong, China, Australia, Japan

Just where that notional 'R-star' lies has been clouded by the wild supply-side distortions of the COVID-19 pandemic and last year's energy shock. Raising R-star from recent low levels would probably increase uncertainty in markets about its longer-term level and direction too. On the other hand, if R-star is closer to zero, as Williams has suggested should be the case, current policy is too tight. Indeed, R-star is set to fall "slightly below zero," the New York Fed chief said, without giving a time frame. This suggests that the U.S. central bank's current policy rate target range of 5.00%-5.25% is already highly restrictive, and will soon need to come down.

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