What many people saw as an open goal for the Federal Reserve chair on Wednesday, it seems Jerome Powell saw as a potential own goal. Nearly everyone expected him to use his eagerly awaited speech on the economic outlook and the labor market at the Brookings Institution think tank to push back on the significant easing of U.S. financial conditions in recent weeks.
Copper prices traded within a narrow range on Friday, but were set for weekly gains as traders assessed bets of a slower pace of U.S. interest rate hikes and China's re-opening. Three-month copper on the London Metal Exchange held its ground at $8,332 a tonne, as of 0532 GMT, having gained 4% so far this week.
The dollar held firm on Friday but was pinned near 16-week lows against a basket of major currencies as data showing increased U.S. consumer spending emboldened investors' hopes that the peak in interest rates was in sight.
A look at the day ahead in European and global markets from Tom Westbrook: Having just closed out its worst month since 2010, the dollar's bull run may be ending. Federal Reserve Chair Jerome Powell green-lit selling this week, surprising traders by not pushing back against markets' shifting financial conditions looser in the last few weeks.
A look at the day ahead in European and global markets from Tom Westbrook: Having just closed out its worst month since 2010, the dollar's bull run may be ending. Federal Reserve Chair Jerome Powell green-lit selling this week, surprising traders by not pushing back against markets' shifting financial conditions looser in the last few weeks.
U.S. employers hired more workers than expected in November and increased wages, shrugging off mounting worries of a recession, but that will probably not stop the Federal Reserve from slowing the pace of its interest rate hikes starting this month.
* Nonfarm payrolls forecast increasing 200,000 in November. * Unemployment rate seen unchanged at 3.7% * Average hourly earnings forecast gaining 0.3%; up 4.6% y/y. By Lucia Mutikani.
European Central Bank President Christine Lagarde warned on Friday that some European governments' fiscal policies could lead to excess demand, and that fiscal and monetary policies need to work in synch for sustainable, balanced economic growth.
China's central bank will focus on supporting the slowing economy, People's Bank of China Governor Yi Gang said on Friday, adding that domestic consumer inflation is likely to stay moderate in 2023. The central bank's accommodative policy will help support China's economic recovery and employment, Yi said in a video speech to the Bank of Thailand-BIS conference in Bangkok.
China's central bank will focus on supporting the slowing economy, People's Bank of China Governor Yi Gang said on Friday, adding that domestic consumer inflation is likely to stay moderate in 2023. The central bank's accommodative policy will help support China's economic recovery and employment, Yi said in a video speech to the Bank of Thailand-BIS conference in Bangkok.
* U.S. non-farm payrolls data due at 1330 GMT. * Dollar index down about 1% for week. By Ashitha Shivaprasad. Gold prices eased on Friday ahead of a key U.S. jobs report, but were set for their best week in three as the dollar weakened on prospects of slower U.S. interest rate hikes.
European Central Bank President Christine Lagarde said on Friday that fiscal and monetary policies need to act in concert to ensure sustainable economic growth. "Fiscal policies that create excess demand in a supply constrained economy might force monetary policy to tighten more than would otherwise be necessary," Lagarde said at a conference in Bangkok.
Copper retreated on Friday after data showed a fall in global industrial output, but the benchmark contract was set for a weekly gain on expectations of slower pace of U.S. interest rate hikes and of strengthening demand prospects in China. Three-month copper on the London Metal Exchange was down 0.2% at $8,318 a tonne by 0206 GMT, having gained 3.9% so far this week.
Japan's Nikkei share average tumbled as much as 2% to a three-week low on Friday as a sharply higher yen hurt autos and other exporter stocks. Investors were also cautious ahead of key U.S. monthly jobs data expected to inform the path of further Federal Reserve interest rate hikes.
The dollar dipped on Friday as a Federal Reserve official said rate hikes are likely to slow and as investors took profits from earlier gains after jobs data and wage inflation were surprisingly strong in November and muddied the outlook for how hawkish the U.S. central bank will be.
U.S. Treasury yields were lower and Wall Street's benchmark S&P 500 ended down but well above the day's lows on Friday as investors digested a stronger than expected jobs report, which had raised concerns about the Federal Reserve's ability to slow rate hikes.
The dollar held firm on Friday but was pinned down near 16-week lows against a basket of major currencies as data showing increased U.S. consumer spending in October emboldened investor hopes that the peak in interest rates was on the horizon.
* MOODY'S SAYS RISKS TO CHINA'S FINANCIAL SYSTEM TO RISE AS PROPERTY DOWNTURN PERSISTS AND BUFFERS WEAKEN. * MOODY'S SAYS DESPITE THE BANKING SYSTEM'S OVERALL STRENGTH, SMALLER BANKS ARE MOST VULNERABLE TO RISING RISKS FROM THE PROPERTY SECTOR IN CHINA. * MOODY'S- WEAKNESS IN CHINA'S PROPERTY SECTOR HAS LED TO MOODY'S DOWNWARD REVISION OF THE COUNTRY'S GDP GROWTH FORECASTS FOR 2022 AND 2023.
Gold prices were flat on Friday but set for their best week in three ahead of the U.S. jobs report, helped by the dollar's retreat on expectations that the U.S. Federal Reserve will slow the pace of interest rate hikes. FUNDAMENTALS. * Spot gold was little changed at $1,800.78 per ounce as of 0037 GMT, after hitting its highest level since Aug. 10 earlier in the session.
With central banks ratcheting up their response to a global inflation shock, debate is shifting from when they'll win the war to whether faster rising prices are here to stay in a supply-constrained world.
With central banks ratcheting up their response to a global inflation shock, debate is shifting from when they'll win the war to whether faster rising prices are here to stay in a supply-constrained world.
- Federal Reserve interest rate policy has moved beyond the level called for by commonly followed monetary policy rules, according to a report released on Thursday by the Cleveland Fed, pointing to how hawkish the central bank has become in its inflation battle.
- Federal Reserve Vice Chair of Supervision Michael Barr on Thursday signaled that he is among U.S. central bankers backing a slowdown in the pace of interest rate hikes as soon as the Fed's Dec. 13-14 meeting. "Now we're at a point, since I believe we're in restrictive territory, that we can get to a sufficiently restrictive rate at a slower pace," Barr said at the American Enterprise Institute.
With central banks ratcheting up their response to a global inflation shock, debate is shifting from when they'll win the war to whether faster rising prices are here to stay in a supply-constrained world.
* Canadian dollar weakens 0.2% against the greenback. * Canadian manufacturing PMI rises to 49.6 in November. * Investors cut Bank of Canada rate hike bets. * 10-year yield falls to lowest since Aug. 18. By Fergal Smith.
With central banks ratcheting up their response to a global inflation shock, debate is shifting from when they'll win the war to whether faster rising prices are here to stay in a supply-constrained world.
- The U.S. Federal Reserve's regulatory chief said on Thursday the central bank is exploring adjustments to bank capital requirements, noting the inability of supervisors to predict unexpected shocks would argue for higher overall capital levels.
The U.S. Federal Reserve's regulatory chief said on Thursday the central bank is exploring adjustments to bank capital requirements, noting the inability of supervisors to predict unexpected shocks would argue for higher overall capital levels.
Moderating inflation in October pushed
U.S. Treasury yields down further on Thursday after a strong rally the day
before when Federal Reserve Chairman Jerome Powell said the U.S. central bank
could ...
-Austan Goolsbee, a former economic advisor to the Obama White House, will take over as the president of the Federal Reserve Bank of Chicago when its current chief Charles Evans exits in January under the central bank's age-based mandatory retirement rules. Goolsbee, 53, chaired the Council of Economic Advisors under Democratic President Barack Obama.
-New York Federal Reserve President John Williams reiterated on Thursday in a television interview his belief that more interest rate rises will be needed to bring down overly high levels of price pressures.
Brazil posted a trade surplus of $6.7 billion in November, official data showed on Thursday, beating a $5 billion surplus expected by economists in a Reuters poll. Exports totaled $28.2 billion in the month, while imports reached $21.5 billion, according to Economy Ministry figures.
What many people saw as an open goal for the Federal Reserve chair on Wednesday, it seems Jerome Powell saw as a potential own goal. Nearly everyone expected him to use his eagerly awaited speech on the economic outlook and the labor market at the Brookings Institution think tank to push back on the significant easing of U.S. financial conditions in recent weeks.
Credit rating firm S&P Global has warned that speculative-grade U.S. and European corporate default rates are likely to double and might even treble next year as rising borrowing costs take their toll. The firm estimated that the "trailing-12-month default rates" in the U.S. and Europe would reach 3.75% and 3.25% respectively by September, more than double the 1.6% and 1.4% in September 2022.
Credit rating firm S&P Global has warned that speculative-grade U.S. and European corporate default rates are likely to double and might even treble next year as rising borrowing costs take their toll. The firm estimated that the "trailing-12-month default rates" in the U.S. and Europe would reach 3.75% and 3.25% respectively by September, more than double the 1.6% and 1.4% in September 2022.
Euro zone yields dropped on Thursday, following U.S. Treasuries, after Federal Reserve chair Jerome Powell signalled the central bank could slow its pace of policy tightening as soon as its December meeting.
* Consumer spending increases 0.8% in October. * Personal income rises 0.7%; saving rate falls to 2.3% * Core PCE price index gains 0.2%; up 5.0% year-on-year. * Weekly jobless claims fall 16,000 to 225,000. By Lucia Mutikani.
-The Federal Reserve should slow the pace of its rate increases in order to assess the impact of its hiking cycle but inflation remains far too high and the central bank's policy will need to be sufficiently restrictive for some time to bring it down, Fed Governor Michelle Bowman said on Thursday.
* Canadian dollar weakens 0.3% against the greenback. * Price of U.S. oil rises 2.9% * Canadian manufacturing PMI rises to 49.6 in November. * Canadian bond yields ease across curve.
* Gold highest since early August, futures surge over 3% * Silver climbs more than 2% to highest since May. * Dollar drops to near four-month low. * Focus on U.S. non-farm payrolls data due on Friday. By Seher Dareen.
U.S. construction spending fell in October, pulled down by continued weakness in single-family homebuilding amid higher mortgage rates. The Commerce Department said on Thursday that construction spending dropped 0.3% in October after gaining 0.1% in September. Spending on private construction projects dropped 0.5% after being unchanged in September.
U.S. manufacturing activity contracted for the first time in 2-1/2 years in November as higher borrowing costs weighed on demand for goods, but a measure of prices paid by factories for inputs fell for a second straight month, supporting views that inflation could continue trending lower. The Institute for Supply Management said on Thursday that its manufacturing PMI fell to 49.0 last month.
BlackRock Investment Institute is not "chasing" the stock rally triggered by Federal Reserve chief Jerome Powell's latest comments because U.S. interest rates are still likely to stay elevated, its global chief investment strategist said on Thursday.
International Monetary Fund Managing Director Kristalina Georgieva said on Thursday the chance of global growth falling below 2% next year was increasing due to continued effects of the war in Ukraine and simultaneous slowdowns in Europe, China and the United States.
Canadian manufacturing activity weakened for a fourth straight month in November as worries that the economy would slip into recession undercut demand, but the pace of contraction and a measure of inflation pressures eased, data showed on Thursday. The S&P Global Canada Manufacturing Purchasing Managers' Index rose to a seasonally adjusted 49.6 in November from 48.8 in October.
Canadian manufacturing activity weakened for a fourth straight month in November as worries that the economy would slip into recession undercut demand, but the pace of contraction and a measure of inflation pressures eased, data showed on Thursday. The S&P Global Canada Manufacturing Purchasing Managers' Index rose to a seasonally adjusted 49.6 in November from 48.8 in October.
Brazil's central bank intervened in the foreign exchange market on Thursday, selling $2 billion in the spot market with a repurchase agreement, it said in a statement on its website.
U.S. consumer spending increased solidly in October, while inflation moderated, giving the economy a powerful boost at the start of the fourth quarter as it faces rising headwinds from the Federal Reserve's aggressive monetary policy tightening. The labor market, the economy's other pillar of support, continues to show resilience.
U.S. consumer spending increased solidly in October, while inflation moderated, giving the economy a powerful boost at the start of the fourth quarter as it navigates a high interest rate environment. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, jumped 0.8% after an unrevised 0.6% increase in September, the Commerce Department said on Thursday.
The Bank of Canada will hike its key interest rate by another 50 basis points to 4.25% on Dec. 7, according to a slim majority of economists in a Reuters poll that suggests the central bank will then hit pause on a nine-month tightening campaign.
In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.
Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.
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