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☆ HSBC expects Fed's final rate hike on Feb. 1, cuts next year
▼ + stars: | 2023-01-11 | by ( ) www.reuters.com time to read: +2 min

The bank also expects about 50 basis points in rate cuts from the U.S. central bank next year. The peak fed funds rate is seen hitting just under 5% at the June policy meeting. The Fed last year raised its benchmark overnight interest rate by 425 basis points from the near-zero level to the current 4.25%-4.50% range, the highest since late 2007. Last month, it projected at least an additional 75 basis points of increases in borrowing costs by the end of this year. In the research report, HSBC also said it anticipates the European Central Bank will deliver 50-basis-point rate increases in February and March, taking the deposit rate to 3% where it is expected to stay for the foreseeable future.

[1/3] A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 5, 2023. The U.S. consumer price index (CPI) is expected to show December's headline inflation at 6.5% versus 7.1% in November. "Inflation and what the Fed's response to it is still remains the number one focus and anxiety for the market," said Manulife's Theoret. "The risk going into Thursday is really that the market is more vulnerable to an upside surprise in inflation. U.S. crude settled up 0.66% at $75.12 per barrel and Brent finished at $80.10, up 0.56% on the day.

The euro edged up 0.01% against the greenback to $1.0733 at 10:30 a.m. EST (1530 GMT), just below its seven-month high of $1.07605 hit Monday. Investors now expect rates to peak just under 5% by June, before starting to come down later in the year. The pause in the dollar's decline comes as traders ready themselves for U.S. Consumer Price Index (CPI) inflation data on Thursday. The China-sensitive Australian dollar spiked at a more than four-month peak of $0.6950 in the previous session. The offshore yuan last traded at 6.7878 per dollar, after hitting its strongest in five months of 6.7590 earlier in the session.

☆ Dollar stabilises near seven-month lows
▼ + stars: | 2023-01-10 | by ( Alun John | ) www.reuters.com time to read: +3 min

The euro was at $1.0736, little changed on the day, trading just below its seven-month high of 1.07605 hit Monday. The China-sensitive Australian dollar spiked at a more than four-month peak of $0.6950 in the previous session. The offshore yuan last traded at 6.7889 per dollar, after hitting its strongest in five months of 6.7590 earlier in the session. The dollar also steadied against the yen trading up 0.2% at 132.2 yen. The Japanese currency has been broadly strengthening after the Bank of Japan's (BOJ) surprise tweak to its yield curve policy late last year.

☆ Futures edge lower ahead of Powell's speech
▼ + stars: | 2023-01-10 | by ( ) www.reuters.com time to read: +2 min

The highly awaited U.S. Labor Department's inflation report on Thursday is expected to show some moderation in year-on-year consumer prices in December. Money market bets pointed to a 77% chance of a 25-bps hike to 4.50%-4.75% in the Fed's upcoming policy meeting, with the terminal rate seen slightly below 5% by June. This is in contrast to the 5%-5.25% peak policy rate expected by San Francisco Fed President Mary Daly and Atlanta President Raphael Bostic. Along with economic data and comments from Fed officials, investors are also awaiting corporate earnings reports, with big U.S. banks expected to report lower fourth-quarter profits this week. Bed Bath & Beyond Inc (BBBY.O) was up 4.9% in premarket trading, ahead of its quarterly earnings report due later in the day.

The euro was at $1.0731, little changed on the day, trading just below its seven-month high of 1.07605 hit Monday. The China-sensitive Australian dollar spiked at a more than four-month peak of $0.6950 in the previous session. The offshore yuan last traded at 6.7878 per dollar, after hitting its strongest in five months of 6.7590 earlier in the session. The dollar also steadied against the Japanese yen at 131.7 yen. The currency has been broadly strengthening firm after the Bank of Japan's (BOJ) surprise tweak to its yield curve policy late last year.

☆ Asia shares dip on hawkish Fed remarks; recession risk weighs on commodities, oil
▼ + stars: | 2023-01-10 | by ( Selena Li | ) www.reuters.com time to read: +3 min

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was down 0.17%. "The main theme overnight was cautiousness in the equity space as stocks pared gains after hawkish comments from two Fed officials. read moreChina stocks on Tuesday snapped a six-session winning streak, while Hong Kong shares jumped to a six-month high. However, any optimism may be short-lived, said Trinh Nguyen, emerging Asia economist at Natixis in Hong Kong. "I think what would temper a lot of this optimism coming up is really the reality of this opening up.

☆ Asia shares dip on hawkish Fed remarks; commods rise on China reopening
▼ + stars: | 2023-01-10 | by ( Selena Li | ) www.reuters.com time to read: +3 min

"The main theme overnight was cautiousness in the equity space as stocks pared gains after hawkish comments from two Fed officials. The dollar index fell 0.068%. read moreChina's reopening buoyed sentiment with its stocks rising for a sixth consecutive session on Monday, while Hong Kong shares jumped to a six-month high. However, any optimism may be short-lived, said Trinh Nguyen, emerging Asia economist at Natixis in Hong Kong. Even in Hong Kong, although it is officially open, the visa issuance has been rather slow," Nguyen said.

☆ Morning bid: Obstacle course ahead
▼ + stars: | 2023-01-10 | by ( ) www.reuters.com time to read: +6 min

San Francisco Fed President Mary Daly and Atlanta Fed chief Raphael Bostic said they expect Fed rates - now at 4.25% to 4.5% - will need to rise to a 5% to 5.25% range to sap inflation. The other big market obstacle of the week is the onset of the U.S. corporate earnings season. Four American banking giants - JPMorgan (JPM.N), Bank of America (BAC.N), Citigroup (C.N) and Wells Fargo (WFC.N) - report earnings on Friday. Diaried events and data releases that may provide direction to U.S. and world markets later on Tuesday:* U.S. Dec NFIB small business survey. * U.S. Federal Reserve Chair Jerome Powell, Bank of Japan governor Haruhiko Kuroda, Bank of England Governor Andrew Bailey, Bank of Canada governor Tiff Macklem and European Central Bank board member Isabel Schnabel all speak at Swedish central bank event.

☆ Gold prices steady as focus shifts to Powell's speech
▼ + stars: | 2023-01-10 | by ( Ashitha Shivaprasad | ) www.reuters.com time to read: +2 min

SummarySummary Companies U.S. CPI report due on ThursdayHawkish tone from Fed could prompt profit-taking - analystJan 10 (Reuters) - Gold prices were steady on Tuesday, with cautious traders largely focusing on Federal Reserve Chair Jerome Powell's speech for insights into the U.S. central bank's rate-hike trajectory. Spot gold held its ground at $1,872.79 per ounce, as of 0333 GMT. Investors' focus is on Powell's speech at a central bank conference later in the day. "Gold prices are hitting a key resistance at the $1,875 level ... A hawkish tone in Fed Chair Powell's speech later today could prompt some near-term profit-taking in gold," said IG Market strategist Yeap Jun Rong. "However, market is on the watch for a downside surprise in the U.S. CPI to support the less-hawkish rate-hike expectations, which could translate to upside for gold prices."

☆ It's 'foolhardy' to think the Fed will cut interest rates at all in 2023, BlackRock's bond chief says
▼ + stars: | 2023-01-10 | by ( George Glover | ) www.businessinsider.com time to read: +4 min

It's "foolhardy" to expect Federal Reserve interest rate cuts this year, BlackRock's bond chief said. Meanwhile, the US economy added a better-than-expected 263,000 new payrolls last month, which suggests that the Fed still has scope to raise interest rates further without unemployment surging. "There's been a series of projections that in '23 they'll start tightening and then start easing again," he added. "I don't think you'll see that, because you need to see data really soften first and inflation come at target. Stocks traded mixed Monday after Daly and Bostic signaled the Fed will hold interest rates at above 5% for much of 2023.

☆ Fed could hike rates by 25 or 50 basis points on Feb. 1, Daly tells WSJ
▼ + stars: | 2023-01-09 | by ( Reuters Staff | ) www.reuters.com time to read: +1 min

Slideshow ( 2 images )(Reuters) - San Francisco Federal Reserve President Mary Daly on Monday said a half-percentage-point interest rate hike, or a quarter-percentage-point increase, are both possibilities for the U.S. central bank’s Jan. 31-Feb. 1 meeting. “I can give you arguments for either side,” Daly said in a webcast interview with the Wall Street Journal. The Fed should try to bring inflation down “as gently as we can,” but it also “absolutely” needs to make sure high inflation does not become embedded. Daly said she thinks the policy rate, now in a 4.25%-4.50% range, will ultimately need to go to 5.00%-5.25% and stay there to bring inflation back down to the Fed’s 2% target, but exactly how far it will need to rise will depend on the data. Getting inflation down faster than that would require “enormous” labor market pain that Daly said she is not willing to inflict.

"Eventually I want us to get to 25" basis point rate hikes, he said. Asked in a Wall Street Journal interview early on Monday about her preferred rate-hike size for the Jan. 31 to Feb.1 meeting, San Francisco Fed President Mary Daly said both 25 and 50 basis point rate hikes are "on the table" for her. She, like Bostic, expects the Fed policy rate - now at 4.25% to 4.5% - to need to rise to a 5% to 5.25% range to do the job on inflation. After nearly a year of aggressive rate hikes designed to slow the economy and bring soaring inflation to heel, Fed policymakers say they are encouraged by the recent slowing in jobs and wage growth that could signal cooler inflation ahead. But they are loathe to stop interest rate hikes or even downshift to smaller rate-hike increments too soon, for fear of entrenching high inflation and ultimately forcing the Fed to raise rates further.

☆ US stocks trade mixed as investors digest latest Fed comments on rate outlook
▼ + stars: | 2023-01-09 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +1 min

US stocks traded mixed as investors digested the latest Fed comments on the outlook for interest rates. Two regional Fed presidents see rates rising over 5% in order for the central bank to rein in inflation. Investors also have their eye on Thursday's December CPI report, a key inflation measure that will influence the Fed's next policy move. San Francisco Fed President Mary Daly and Atlanta Fed President Raphael Bostic said they expected the central bank to raise rates past 5% and hold them there to rein in inflation. Investors also have their eye on Thursday's December Consumer Price Index report, a key inflation measure that will influence central bankers in their next policy move.

☆ Smaller raises aid inflation fight
▼ + stars: | 2023-01-06 | by ( ) www.reuters.com time to read: +2 min

WASHINGTON, Jan 6 (Reuters Breakingviews) - All things being equal, strong job growth is a bad sign in the fight against inflation. While employment is rising, wage growth is not. The Fed’s rate-setting committee had forecast an unemployment rate of 3.7% by the end of 2022. San Francisco Fed President Mary Daly said in November that wage growth of 3.5% to 4% would be consistent with the Fed’s 2% inflation target. As long as Americans’ raises stay modest, the country can shed its inflation problem without shedding jobs.

☆ Asia-Pacific markets mixed as recession fears grow, China vows to stabilize economy
▼ + stars: | 2022-12-19 | by ( Jihye Lee | ) www.cnbc.com time to read: +1 min

San Francisco Federal Reserve President Mary Daly said Friday she sees the recent inflation news as welcome, but it's not enough to change her view on where policy needs to go. The October and November readings for the consumer price index amounted to "good news," but "we don't see anything right now but hope in the inflation data, and I get confidence in evidence, not hope. "We are far away from our price stability goal," she added. Daly, a nonvoter this year on the rate-setting Federal Open Market Committee, said her own expectations of where rates are headed is probably higher than current market pricing. Daly votes again in 2024.

ETMeta up on J.P. Morgan rating upgradeDigital World Acquisition down on CFO exitFutures down: Dow 1.16%, S&P 1.05%, Nasdaq 0.60%Dec 16 (Reuters) - Wall Street's main stock indexes were set to extend losses on Friday as fears of a looming recession, sparked by the Federal Reserve's relentless battle against inflation, hammered sentiment. The Bank of England and the European Central Bank were the latest ones to indicate an extended rate-hike cycle on Thursday. The simultaneous expiration of stock options, stock index futures and index options contracts later in the day, known as triple witching, could cause volatility through the trading session. ET, Dow e-minis were down 384 points, or 1.16%, S&P 500 e-minis were down 41.25 points, or 1.05%, and Nasdaq 100 e-minis were down 68.5 points, or 0.6%. Reporting by Shubham Batra, Ankika Biswas and Johann M Cherian in Bengaluru; Editing by Anil D'SilvaOur Standards: The Thomson Reuters Trust Principles.

Inflation by the Fed's preferred measure is currently running at 6%, three times its 2% target. Inflation has cooled in recent months, as supply chain problems eased and higher interest rates have restrained the housing market. Over the past several rate-hiking cycles, the Fed raised rates and kept them there for an average of 11 months before cutting them. She said her own forecast for rates is in line with the 5.1% peak rate expected by the majority of her colleagues. Fed policymakers this week forecast GDP growing about a half-a-percent next year.

☆ Morning Bid: Hanging tough
▼ + stars: | 2022-12-16 | by ( ) www.reuters.com time to read: +4 min

As the world's major central banks turned the interest rate screw this week and insisted on more tightening ahead, their economies showed more signs of buckling under the pressure. And while markets lurched lower on the potentially toxic combination of a higher peak for interest rates into a looming recession, there are reasonable questions over whether the central banks will act as tough as they are talking. U.S. manufacturing declined 0.6% last month and reports from the New York and Philadelphia Federal Reserve's showed business conditions in their regions remaining depressed in December. Even though after Wall St stocks plunged 2-3% on Thursday, futures remained deep in the red ahead of Friday's open. Led by the jump in euro zone sovereign borrowing rates after the ECB rethink, bond yields were higher across the board.

☆ Fed could hold rates at peak into 2024, Daly signals
▼ + stars: | 2022-12-16 | by ( ) www.reuters.com time to read: +1 min

Dec 16 (Reuters) - San Francisco Federal Reserve Bank President Mary Daly on Friday said it's a "reasonable" to think that once the Fed policy rate gets to its peak, it will stay there for nearly a year, and added she's prepared to keep it there longer if needed. Markets currently are pricing in rate cuts in the second half of 2023. Over the past several rate hiking cycles, the Fed has kept interest rates on hold for 11 months on average. "I think 11 months is a starting point, is a reasonable starting point. But I'm prepared to do more if more is required," she said, adding that it will be the data that determines exactly how long the Fed will keep rates restrictive.

☆ Stock futures are flat as investors look ahead to Federal Reserve speakers
▼ + stars: | 2022-12-15 | by ( Alex Harring | ) www.cnbc.com time to read: +2 min

Stock futures are flat Thursday evening as investors responded to data that elevated concerns of a looming recession and looked ahead to a slate of Federal Reserve speakers scheduled for Friday. They will also look for any hints on future Fed policy from speakers John Williams, Michelle Bowman and Mary Daly. Investors are trying to gauge the pace of future rate hikes and the central bank's view of the economy. There also will be data coming in the morning with December's purchasing managers' indexes within services and manufacturing. Manufacturing is expected to come in at the same rate as November, while services is expected to increase by 0.3 points.

Fed officials from San Francisco Fed President Mary Daly to St. Louis Fed President James Bullard, often at opposite ends of recent policy debates, have both discussed rates possibly rising above 5% next year. If there is concern about crossing that line, Fed officials have not voiced it. With the expected half-point increase at the next meeting, the policy rate will end the year in a range between 4.25% and 4.5%. The fed funds rate was seen ending 2023 at 4.6%. The upcoming projections will show that final destination perhaps coming into view, and give a better assessment of the possible cost as well.

Dow component (.DJI) Walgreens Boots Alliance Inc (WBA.O) rose 1.9% after Cowen & Co upgraded the drug distributor stock, citing its healthcare services business push. Best Buy Co Inc (BBY.N) soared 9.4%, rising the most among S&P 500 (.SPX) components after forecasting a smaller-than-expected drop in annual sales. Energy (.SPNY) led gains among the 11 major S&P 500 sector indexes, bouncing off four-week lows by adding 2%. Advancing issues outnumbered decliners by a 2.70-to-1 ratio on the NYSE and by a 1.12-to-1 ratio on the Nasdaq. The S&P index recorded 19 new 52-week highs and two new lows, while the Nasdaq recorded 49 new highs and 122 new lows.

SummarySummary Companies Best Buy up, sees smaller annual sales dropMedtronic down, lowers FY profit outlookTesla attempts to recoup losses post slumpFutures up: Dow 0.44%, S&P 0.49%, Nasdaq 0.40%Nov 22 (Reuters) - Wall Street's main indexes were set to open higher on Tuesday, with gains in shares of Walgreens and Best Buy helping investors assuage worries around the economic fallout of stricter COVID-19 curbs in China. Leading gains among S&P 500 (.SPX) components trading before the bell, Best Buy Co Inc (BBY.N) jumped 9.1% after forecasting a smaller-than-expected drop in annual sales ahead of the crucial holiday season. Dow component (.DJI) Walgreens Boots Alliance Inc (WBA.O) rose 1.7% after Cowen & Co upgraded the drug distributor stock, citing its healthcare services business push. ET, Dow e-minis were up 148 points, or 0.44%, S&P 500 e-minis were up 19.25 points, or 0.49%, and Nasdaq 100 e-minis were up 46 points, or 0.4%. Analysts expect thin trading volumes as markets will be shut on Thursday for Thanksgiving holiday and will remain open for half day on Friday.

Restrictions in Beijing and elsewhere tightened further on Tuesday, though currency traders seemed to think the previous day's moves were sufficient. In Europe on Tuesday, data from the European Central Bank showed the euro zone's current account deficit narrowed in September. In cryptocurrencies, bitcoin fell to a new two-year low of $15,479 on Monday, another victim of Monday's rush to the dollar, and also amid jitters about the health of crypto broker Genesis. The lending unit suspended redemptions last week, citing fallout from the collapse of FTX, which filed for bankruptcy on November 11. Reporting by Rae Wee and Alun John; editing by Kim Coghill, Jason Neely and Emelia Sithole-MatariseOur Standards: The Thomson Reuters Trust Principles.

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