The dollar ceded some of its overnight gains on Wednesday while Asian stocks struggled as traders weighed the odds of a super-sized Federal Reserve interest rate cut later in the day. The U.S. currency dropped back sharply against the yen, handing back about half of its rally from Tuesday, when unexpectedly robust U.S. retail sales data was taken as weakening the case for aggressive Fed easing. However, short-term U.S. bond yields ticked slightly higher. The chances of the Fed kicking off its easing cycle with a super-sized cut of 50 ...

How stocks, bonds and the dollar perform after the Federal Reserve kicks off its rate-cutting cycle could depend on one factor more than most: the health of the U.S. economy. The Fed is expected to kick off a series of rate cuts on Wednesday, after raising borrowing costs to their highest level in nearly two decades. Markets are pricing in roughly 250 basis points of easing by the end of 2025, LSEG data showed. For investors, a key question may be whether the Fed will cut rates in time to ...

When U.S.-based construction material supplier Wilsonart issued a junk bond to raise $500 million to fund an acquisition this summer, a research firm warned potential investors that the terms of the deal offered them weak protections. The bond’s covenants would allow the company to potentially move valuable assets to a different entity later and raise even more money, putting the investors in the bond at a disadvantage, the research firm, Covenant Review, wrote in a review seen by Reuters. The warning came against the backdrop of growing worries in credit ...

Bond investors are more cautious and divided over prospects for recession in the world’s largest economy with the Federal Reserve poised to cut interest rates on Wednesday for the first time in more than four years. Proponents of a soft-landing scenario said recent weak U.S. data does not suggest the economy is falling off a cliff and might not even point to recession. Some hard landing believers, on the other hand, cited worrisome trends in the jobs market that could push the economy into a deep downturn and force the ...

Asian stocks gained on Tuesday while the dollar and U.S. Treasury yields came under pressure, with just a day to go before the expected start of the Federal Reserve’s easing cycle that could see policymakers deliver an outsized rate cut. Extended holidays in China and South Korea made for thin trading conditions, with investors focused on Wednesday’s Fed decision as odds have crept up in the past week in favour of a 50-basis-point rate cut. That kept the dollar languishing near its lowest level in over a year against the ...

When the Federal Reserve delivers a widely-anticipated interest rate cut on Wednesday, its first in four years, the move will resonate well beyond the United States. The size of a first move and the scale of overall easing remains open to debate, while a looming U.S. election is another complicating factor for global investors and ratesetters looking for a steer from the Fed and pinning hopes on an economic soft landing. “We don’t know yet what kind of cycle this is going to be – will it be like 1995 ...

Banks, insurance and trading firms returned to favour as hedge funds last week snapped up these company stocks at the fastest pace since June 2023, a Goldman Sachs GS.N note showed. After holding a net sold position in seven of the last eight weeks, financial sector stocks were the most sought after on Goldman Sachs’ prime brokerage trading desk, which lends to hedge funds and tracks their trades, the note released on Friday and seen by Reuters on Monday showed. These bets comprised almost entirely long positions, it said. A ...

Asian bonds attracted foreign inflows for a fourth successive month in August on optimism that the U.S. Federal Reserve will start easing interest rates in September. Overseas investors made substantial purchases of regional bonds in Indonesia, India, Malaysia, South Korea and Thailand, totalling a net $14.06 billion in August – the largest monthly net purchases since at least 2019, according to data from regulatory authorities and bond market associations. South Korean bonds saw their largest foreign inflow since May 2023, attracting $5.99 billion. Indonesian bonds also continued to draw interest, ...

Global stocks edged up for a sixth day on Monday,in a week that is almost certain to see the start of an easing cycle in the United States that investors believe may begin with an outsized move. Central banks in Japan and the UK also meet this week, with both expected to stand pat for now, while a packed data schedule includes U.S. retail sales and industrial production. Geopolitics loomed large with Republican presidential candidate Donald Trump the subject of a second assassination attempt on Sunday, according to the FBI. ...

Don’t go anywhere: an event-packed week is coming up with central banks from the United States to Brazil and from Europe to Japan meeting. The Federal Reserve should deliver its first interest rate cut in four years, Brazil could hike for the first time since 2022 and Japan will be mindful of volatile markets as it mulls when to lift rates again. But it is not allabout central banks, with UniCredit’s move on Commerzbank reviving M&A talk among European banks. Here is your week ahead primer in world markets from ...

Hotter-than-expected US inflation data has shifted the dial towards a smaller 25 basis point rate cut from the Federal Reserve this month. The Bank of England is likely to do nothing at all. But both may find themselves speeding up the pace of easing as the year wears on. Here’s our guide to the week ahead This week’s THINK Ahead is shorter than usual as James Smith is enjoying a well-deserved holiday. He will return next week. Week ahead in developed markets United States (James Knightley) Federal Reserve interest rate ...

Wall Street’s main indexes closed higher on Friday as investors honed in on the chance of a bigger interest rate cut by the Federal Reserve next week, with rate-sensitive small cap stocks outperforming. Bets on the size of the Fed’s cut have been volatile and were roughly even by late Friday. Expectations for a 50 basis point cut jumped to 49% from 28% on Thursday, according to CME’s Fed Watch Tool , which showed a 51% probability for a 25 basis point cut. Former New York Fed President Bill Dudley ...

China: Monthly data dump before mid-autumn Ahead of the mid-autumn festival next week, China publishes its August data dump on Saturday morning. We are generally looking for another month of sluggish growth data this month, with the three big economic activity indicators of industrial production (5.1% prior, 4.8% forecast), fixed asset investment (3.6% prior, 3.5% forecast), and retail sales (2.7% prior, 2.5% forecast) all expected to moderate. Once again, we will be watching the 70-city housing price data closely, looking for signs of stabilisation. Prices have declined at a slower ...

Global investors were net sellers of equity funds for a second successive week through Sept. 11, driven by concerns over the health of the U.S. economy and caution about the political climate in the run-up to the U.S. Presidential debate. However, optimism over central banks’ rate cuts trimmed down the outflows. According to LSEG data, investors withdrew $3.46 billion from global equity funds during the week, a reduction in sales volume compared to the $4.96 billion in net sales the prior week. U.S. data signalling economic slowdown sparked last week’s ...

The Federal Reserve is in focus next week, as uncertainty swirls over how much the U.S. central bank will cut interest ratesat its monetary policy meeting and the pace at which it will reduce borrowing costs in coming months. The S&P 500 index is just 1% shy of its July record high despite weeks of market swings sparked by worries over the economy and seesawing bets on the size of the cut at the Fed’sSept. 17-18 meeting. After fluctuating sharply throughout the week, Fed funds futures on Friday showed traders ...