Global investors are preparing for more market mayhem after a monumental week that whipsawed asset prices around the world, as central banks and governments ramped up their fight against inflation. Signs of extraordinary times were everywhere. The Federal Reserve delivered its third straight seventy-five basis point rate hike while Japan intervened to shore up the yen for the first time since 1998. The British pound slid to a fresh 37-year trough against the dollar after the country’s new finance minister unleashed historic tax cuts and huge increases in borrowing. “It’s ...

Czech Republic: Rates should remain unchanged again Next Thursday, the second monetary policy meeting will be held under the leadership of the new CNB board. Nothing has changed in our forecast since the last meeting and we expect rates to remain unchanged this time, too. This is indicated by both the statements of the board members and the latest inflation numbers, which were well below the CNB’s forecasts in July and August. The same result can be expected from the September number (our preliminary forecast is for 17.6% year-on-year). On ...

Some U.S. companies with the best credit ratings are looking at shorter-term debt solutions as a bridge to a better funding environment in a year or two, slowing new bond issuance despite demand from investors. The shorter-term debt solutions include getting bank term loans, drawing down on bridge loans and issuing bonds with maturities of five years or less, debt capital market bankers and credit investors said. While loans can be cheaper than issuing bonds, shorter-term debt is currently more expensive than longer tenors. With the move, these companies are ...

Hedge funds around the world fled positions in energy stocks, bonds and futures last week just in time to miss this week’s whipsaw moves in oil, according to data from two banks. Funds dropped their long and short positions in energy stocks, bonds and futures in the week ending Sept. 16 “more than any other time in recent months”, and more than any other sector of the economy in the last 20 days, according to notes by Morgan Stanley (NYSE:MS) and JP Morgan respectively. It could be a sign that ...

Britain’s deputy finance minister on Saturday played down a historic collapse in the pound and government bonds in response to the country’s new economic growth plan, which sent international investors heading for the exit. The pound slumped 3.6% on Friday below $1.09, a new 37-year low against the dollar, while gilts suffered their worst day in decades as the market digested finance minister Kwasi Kwarteng’s announcement of a borrowing-funded drive for growth. “Let’s be clear, the interest rates payable on government gilts is about the same in the United Kingdom ...

US: Housing numbers in focus after Fed’s 75bp hike After the Federal Reserve’s 75bp rate hike this week and Jerome Powell’s commentary that the Fed is prepared to sacrifice growth and jobs to ensure inflation comes back to target, we will be hearing from many more officials over the coming week. Given the strong clustering of near-term forecasts for rates and the economy, the hawkish comments hinting at another 75bp hike in November are likely to come thick and fast. The data calendar is fairly light with housing numbers the ...

Southeast Asian startups are enjoying a boom in fundraising exercises by venture and buyout funds that are chasing bigger returns and turning away from regulatory turmoil in Chinese markets, even at the risk of slower growth. Firms such as Insignia Ventures Partners and SoftBank-backed East Ventures are among those that have raised a combined total of billions for startups over the past year as the region’s 650 million people take to digital platforms. “Some of the world’s largest institutions are coming up with strategies now to invest and deploy capital ...

A growing number of bond funds in China have suspended taking subscriptions or capped inflows, amid signs money is gushing into fixed income products as stocks wobble and banks cut deposit rates. On Friday (Sep 23) alone, more than a dozen bond funds announced measures to restrict new purchases, according to fund managers’ filings. Around 40 short-term bond funds made similar statements in the past 20 trading days, according to Chinese newspaper China Fund. Xia Haojie, bond analyst at Guosen Futures, said bond funds looked increasingly attractive for investors at ...

Global government bond losses are on course for the worst year since 1949 and investor sentiment has plummeted to its lowest since the financial crisis, BofA Global Research said in a note on Friday. This year’s dramatic bond tumble threatens credit events and a potential liquidation of the world’s most crowded trades, including bets on the dollar that have taken the greenback to multi-year highs against other currencies and bets on U.S. technology stocks, the bank said. Bond funds recorded outflows of $6.9 billion during the week to Wednesday, while ...

2022 mini-budget: blank cheques It was largely expected that the bill for the government’s energy price guarantee would run in the 12-digits (over £100bn) over its life and that most of this would be financed with extra issuance from the Debt Management Office (DMO). And yet, the mini-budget unveiled by the new chancellor added fuel to the fire already burning on the gilt market. The updated DMO remit for FY2022-23 includes an extra £72bn of borrowing, £10bn in T-bills and the balance in gilts. In our view, this is well ...

A week of heavy selling has rocked U.S. stocks and bonds, and many investors are bracing for more pain ahead. Wall Street banks are adjusting their forecasts to account for a Federal Reserve that shows no evidence of letting up, signaling more tightening ahead to fight inflation after another market-bruising rate hike this week. The S&P 500 is down more than 22% this year. On Friday, it briefly dipped below its mid-June closing low of 3,666, erasing a sharp summer rebound in U.S. stocks before paring losses and closing above ...

The yen is hogging the market spotlight after the Bank of Japan intervened to buy yen for the first time since 1998, while markets remain on watch for any signs of a ratcheting up in tensions between Russia and the West. Election results from Italy, euro area inflation numbers and U.S. and Chinese data also give investors plenty to chew over. Here’s a look at the week ahead in markets from Kevin Buckland in Tokyo, Tom Westbrook in Sydney, Lewis Krauskopf in New York, Danilo Masoni in Milan, and Dhara ...

Investors withdrew money from global bond and equity funds in the week ended September 21, with caution creeping in ahead of the U.S. Federal Reserve meeting in which further rate hikes were expected to tame soaring inflation. Investors exited a net $7.32 billion of global bond funds, marking their biggest weekly net selling since Aug. 31, data from Refinitiv Lipper showed. The Federal Reserve raised its benchmark rate by 75 basis points on Wednesday, the third such rise in a row, and officials project rates hitting 4.4% this year, which ...

U.S. growth funds are experiencing massive outflows this year due to rising interest rates, with the Federal Reserve’s resolve to keep hiking to tame inflation potentially spurring even more selling. According to Morningstar data, U.S. growth funds recorded net outflows of $12.3 billion in August, taking net sales for the year to $103.3 billion. At the same time, U.S. value funds, which invest in companies with cheaper valuations and stable growth, attracted $4.32 billion in August, the most in three months and taking total purchases this year to $49.5 billion. ...

NASDAQ-Adv: 942 Dec: 3,716 NYSE-Adv: 493 Dec: 3,892 (Source: Nasdaq)