Germany is leading the biggest rally in global bond markets since March’s banking rout as cooling inflation and a weakening economy suggest European Central Bank rate hikes are nearing an end. Borrowing costs, or bond yields, in the benchmark euro area issuer are down at least 20 basis points (bps) this week. Alongside British and U.S. peers, yields – which move inversely to bond prices – were set for their biggest weekly declines since mid-March when banking turmoil sparked a dash to safe-havens. Certainly, government bonds remain hostage to data ...

Shares in some Chinese temple operators and lottery sellers surged for a second day on Thursday amid a weak post-COVID recovery, as despondent young people rush to pray or gamble amid greater economic uncertainty. Data showed Chinese temple visits more than quadrupled this year compared with 2022, while sales of lottery tickets jumped in April to their highest in a decade. In stark contrast, the youth unemployment rate hit a record 20.4% in April, and multiple indicators showed economic recovery is losing steam following an initial bounce after China lifted ...

Global stocks and commodities rose on Friday while the dollar headed for its biggest weekly drop since January, as sentiment was buoyed by signs the Fed will skip a rate hike at its next meeting and the approval of U.S. debt ceiling legislation. Markets are now focused on U.S. jobs data due 0830 EST (1230 GMT), the most significant macro economic release of the week, for more cues on the Federal Reserve’s rate hike path. The U.S. Labor Department’s employment report is likely to show nonfarm payrolls increased by 190,000 ...

Persistent inflation could prompt RBA to hike again The June Reserve Bank of Australia (RBA) meeting is a tough one to call. The RBA recently confused markets with its reversion to a more hawkish stance, even as inflation was weakening, and now the fall in inflation has reversed, there is a reasonable argument for it to hike again this month. However, the quarterly CPI data still seem to carry more weight than the monthly series at the moment, so some forecasters expect the RBA to wait until the August meeting ...

Foreign investors’ selling of Chinese shares gained some momentum in May, as flagging domestic demand and expectations for weak corporate earnings led to steep falls on mainland and Hong Kong stock markets. Refinitiv data shows foreigners sold $1.71 billion worth of mainland shares this month via Stock Connect, a key cross-border link between the mainland and Hong Kong exchanges, after selling $659 million in April. The selling marks a slow reversal of their heavy investment totaling $20.92 billion in January when China reopened its economy after three years of COVID ...

A bill backed by debt justice campaigners and civil society groups advocating on behalf of economically distressed countries could alter past and future sovereign debt restructurings covered by New York state law – and Wall Street is watching. These are some key points about the bill. WHAT DOES THE BILL PROPOSE? Senate Bill S4747, the NY Taxpayer and International Debt Crises Protection Act, “relates to New York state’s support of international debt relief initiatives for certain developing countries.” The bill includes limits to state investments into foreign entities and would ...

Global shares rose on Thursday amid receding bets for a U.S. rate hike this month and relief over the passage through the U.S. House of Representatives of a bill to suspend the federal debt ceiling. A divided House passed a bill to suspend the $31.4 trillion debt ceiling – and avert a catastrophic default – with majority support from both Democrats and Republicans, stoking optimism that it can move through the Senate before the weekend. The Euro STOXX 600 index rose 0.8% after closing at a two-month low in the ...

“We’ve been saying since the end of 2022 that rate cuts this year would be unlikely as inflation sticks around. Markets are waking up to our view as a look under the hood reveals signs of weaker growth in major economies and market weakness due to rate hikes.” This is one of the main conclusions of BlackRock’s (NYSE:BLK) latest weekly market report. “Debt ceiling talks and the U.S. Treasury potentially being unable to pay its bills by early June have added to recent market volatility,” they add. “We like quality ...

Investors have poured $756 billion into cash funds this year, Bank of America said in a note on Friday, attracted by juicy yields and driven by concerns about banks. The rush into money market funds continued in the week to Wednesday, with $23.1 billion flowing into the cash-like instruments, according to BofA, which cited figures from financial data company EPFR. Rising interest rates have pushed up the yields available on money market funds, which are mutual funds that invest in highly liquid short-term debt, such as that issued by governments. ...

Good news of a tentative deal for the U.S. debt ceiling impasse may quickly turn out to be bad news for financial markets. U.S. President Joe Biden and top congressional Republican Kevin McCarthy on Saturday reached a tentative deal to raise the federal government’s $31.4 trillion debt ceiling, two sources familiar with the negotiations said, potentially averting an economically destabilizing default. But the deal still faces a difficult path to pass through Congress before the government runs out of money to pay its debts in early June. “This will be ...

The top policymaker picks of Turkey’s re-elected president Tayyip Erdogan are taking centre stage as markets try to gauge whether he will change course towards economic orthodoxy or double down on policies widely viewed as unsustainable. Erdogan is widely expected to use his victory in Sunday’s election to embark on a wide cabinet reshuffle, potentially changing the finance and economy portfolios as well as the central bank leadership, as his rule embarks on a third decade. Foreign investors have swerved Turkish bonds and equities in recent years as the economy ...

Global shares fell on Wednesday ahead of a crucial vote in Washington on the U.S. debt ceiling, while commodities and the Chinese yuan came under pressure after data highlighted faltering growth in the world’s second-largest economy. The MSCI All-World Index of global shares, which is heading for its first monthly decline since February, was down 0.4% in mid-morning trade in Europe, largely due to declines across Asian markets. U.S. stock index futures and fell by 0.3-0.4%. Data showed China’s manufacturing activity fell more than expected in May, while services growth ...

Global investors are gaming out how a tentative deal to raise the United States debt ceiling could ripple through markets, as lawmakers strive to pass the agreement through Congress before a June 5 deadline. A deal to lift the $31.4 trillion debt limit announced by the White House and House Republicans late Saturday would avert a catastrophic U.S. default and boost overall appetite for risk, while also buoying some of the sectors that have been left behind in this year’s tech-led equity rally, such as cyclical stocks and small caps, ...

The U.S. dollar steadied after climbing to a two-month high and European stocks flattened on Tuesday as relief that a possible default by the U.S. government had been averted gave way to concern that the deal could face a rocky path through Congress. The U.S. dollar index and longer-dated U.S. Treasuries rallied as traders welcomed the deal to suspend Washington’s borrowing limit until January 2025 in exchange for caps on spending and cuts in government programmes. But European stocks steadied after slipping in early trading, dented by uncertainty on whether ...

Having navigated the financial crisis of 2008, Neel Kashkari worries about systemic risks. But now, as a U.S. monetary policymaker, he worries even more about inflation. “I think if I had to err, I would err on being a little bit too aggressive in terms of bringing inflation down,” the president of the Federal Reserve Bank of Minneapolis told Reuters last week. Surprised by the persistence of inflation in the face of the fastest rate hike cycle since the 1980s, Kashkari and some other Fed officials have turned up the ...