- 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.
* World stocks climb to highest since August. * Powell bolsters bets for 50 bps U.S. rate hike this month. * Bond markets rally on hopes of lower terminal rates. * Dollar sags to lowest since August. * China eases some COVID quarantine rules. * Wall Street expected to see slow start after Wednesday's surge. By Marc Jones.
Brazil's economic growth slowed more than expected in the third quarter as higher interest rates affected household spending, underscoring challenges facing President-elect Luiz Inacio Lula da Silva next year. Gross domestic product rose 0.4% in the three months to September, government statistics agency IBGE said on Thursday, below the 0.7% growth forecast by economists polled by Reuters.
The dollar weakened to three month-lows against the yen and the pound on Thursday, after comments by Fed Chair Jerome Powell that U.S. rate hikes could be scaled back "as soon as December", but the euro failed to climb past a major resistance level.
Brazil's economic growth slowed more than expected in the third quarter as higher interest rates affected household spending, underscoring challenges facing President-elect Luiz Inacio Lula da Silva next year. Gross domestic product rose 0.4% in the three months to September, government statistics agency IBGE said on Thursday, below the 0.7% growth forecast by economists polled by Reuters.
Brazil's economy rose 0.4% in the three months to September, government statistics agency IBGE said on Thursday, below the 0.7% growth expected by economists polled by Reuters. Latin America's largest economy expanded by 3.6% from the third quarter of 2021, while economists projected a 3.7% increase.
Royal Bank of Canada (RY): * ROYAL BANK OF CANADA TO APPOINT JACYNTHE C?T? AS CHAIR OF THE BOARD. * Royal Bank of Canada (RY) - KATHLEEN TAYLOR TO RETIRE AS CHAIR AT RBC'S 2023 MEETING OF SHAREHOLDERS Source text for Eikon: Further company coverage:
Botswana's central bank kept its monetary policy rate unchanged at 2.65% on Thursday, saying it saw inflation gradually falling back within its target range by 2024. Botswana's consumer inflation dipped to 13.1% year on year in October from 13.8% in September, but is still far above the central bank's 3%-6% preferred band.
Canada's TD Bank posted a surge in fourth-quarter profit on Thursday as gains from higher interest rates boosted its personal and commercial business and helped offset weakness in underwriting and capital markets. Net income, excluding one-off items, rose to C$4.07 billion, or C$2.18 per share, for the three months ended Oct. 31, from C$3.87 billion, or C$2.09 per share, a year earlier.
Chile's IMACEC economic activity index, a close proxy of gross domestic product, dropped 1.2% in October from the same month last year, the central bank said on Thursday. That was in line with market expectations, according to a Reuters poll of economists. When compared with the previous month, the IMACEC index rose 0.5%.
India's central bank has given conditional approval to U.S. private equity firms Carlyle
Group Inc (CG) and Advent International for their purchase of a combined 20% stake in Yes Bank, the private-sector lender said on Thursday.
A look at the day ahead in U.S. and global markets from Mike Dolan. Intended or not, investors clearly read Wednesday's keynote speech by the Federal Reserve chair as a green light for a yearend relief rally in beaten down assets.
A look at the day ahead in U.S. and global markets from Mike Dolan. Intended or not, investors clearly read Wednesday's keynote speech by the Federal Reserve chair as a green light for a yearend relief rally in beaten down assets.
* European PMI data suggests downturn may not be as bad. * China's private survey shows continued PMI contraction. * Factory activity shrinks in Japan, South Korea. * Surveys highlight darkening outlook for Asia next year. By Jonathan Cable and Leika Kihara.
Indian shares extended their rally for eighth straight session on Thursday, after U.S. Federal Reserve Chair Jerome Powell's remarks boosted bets of a slowdown in the pace of interest rate hikes. The S&P BSE Sensex rose 0.29% to close at 63,284.19. The NSE Nifty 50 index also gained 0.29% to settle at 18,812.50. Both benchmarks rose about 0.7% to fresh all-time highs during the session.
Greece's jobless rate eased to 11.6% in October from an upwardly revised 12% in September, data from statistics service ELSTAT showed on Thursday. The reading was the lowest recorded since March 2010 - at the start of Greece's decade-long economic crisis - following the revision of last month's figure.
* Focus on non-farm payrolls data due on Friday. * Traders see 91% chance of 50 bps rate hike in December. * Next resistance for gold at $1,788-$1,808 - analyst. By Arundhati Sarkar.
Private equity firms Carlyle Group Inc (CG) and Advent International have received conditional approvals from India's central bank to buy stakes in Yes Bank, the private-sector lender said on Thursday.
Greece's jobless rate eased to 11.6% in October from an upwardly revised 12% in September, data from statistics service ELSTAT showed on Thursday. Seasonally adjusted data showed 542,941 people were officially unemployed, with those under the age of 24 the hardest hit.
* World stocks climb to highest since August. * Powell bolsters bets for 50 bps U.S. rate hike this month. * Bond markets rally on hopes of lower terminal rates. * Dollar sags to lowest since August. * China eases some COVID quarantine rules. * By Marc Jones.
* STOXX 600 up 0.9%, scales highs last seen in August. * Tech stocks lead rally. * Energy stocks snap two-day rally. By Susan Mathew and Devik Jain. Europe's STOXX 600 index closed above a three-month high on Thursday, as investors cheered U.S. Federal Reserve Chair Jerome Powell's hints of smaller interest rate hikes and China's decision to soften its tone on strict COVID-19 restrictions.
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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