A rainbow is seen over apartments in Wandsworth on the River Thames as UK house prices continue to fall, in London, Britain, August 26, 2023. REUTERS/Kevin Coombs/File Photo Acquire Licensing Rights
LONDON, Dec 1 (Reuters) – British house prices rose unexpectedly in monthly terms for the third time running in November, adding to signs that the housing market downturn has abated, mortgage lender Nationwide said on Friday.
House prices rose by 0.2% on the month in November, after a 0.9% increase in October. A Reuters poll of economists had pointed to a fall of 0.4%.
Compared with a year ago, house prices were 2% lower – the smallest such drop in nine months.
Britain’s housing market, which boomed during the COVID-19 pandemic, had been hit by higher borrowing costs as the Bank of England battles the highest rate of inflation among large advanced economies.
“There has been a significant change in market expectations for the future path of Bank Rate in recent months which, if sustained, could provide much needed support for housing market activity,” said Robert Gardner, chief economist at Nationwide.
Reporting by Andy Bruce; editing by Sarah Young
Our Standards: The Thomson Reuters Trust Principles.
A man works at a computer on a standing desk in an office in the financial district of Canary Wharf in London, Britain, February 8, 2023. REUTERS/Kevin Coombs/File Photo Acquire Licensing Rights
LONDON, Nov 24 (Reuters) – British investment managers have got the go-ahead to develop tokenised funds, in which assets are split into smaller tokens backed by blockchain technology, the industry’s trade body said on Friday.
Tokenisation, or fractionalisation, of funds will enable a fund’s assets to trade more cheaply and transparently and investors to buy into a wider range of assets, industry proponents say.
Funds authorised by Britain’s Financial Conduct Authority can take the first steps towards offering tokenised funds, provided the investments are in mainstream assets and valuation and settlement arrangements don’t change, the Investment Association said in a statement.
“Fund tokenisation has great potential to revolutionise how our industry operates, by enabling greater efficiency and liquidity, enhanced risk management and the creation of more bespoke portfolios,” said Michelle Scrimgeour, chief executive of Legal & General Investment Management .
Scrimgeour is chair of a working group which is working with the FCA and Britain’s finance ministry to open up opportunities for tokenised funds. Other members of the working group include BlackRock (BLK.N), M&G (MNG.L) and Schroders (SDR.L)
Blockchain is a digital ledger that records ownership of tokens. So far, its main use has been for cryptocurrencies, which remain a relatively small part of the global financial system.
Britain is looking to bolster liquidity in its asset management sector in a revamp of its rules following Brexit.
Investment managers and exchanges in the United States, Europe and Asia have already taken tentative steps in offering tokenised funds.
Reporting by Carolyn Cohn and Elizabeth Howcroft; Editing by Sharon Singleton
Our Standards: The Thomson Reuters Trust Principles.
A telecom antenna of Spain?s telecom infrastructure company Cellnex is seen in Madrid, Spain, April 27, 2022. REUTERS/Susana Vera/File Photo Acquire Licensing Rights
LONDON, Nov 22 (Reuters) – Mobile phone tower operator Cellnex (CLNX.MC) will accelerate asset sales in a bid to get an investment grade credit rating by the middle of next year and is preparing for a wave of consolidation in the sector, CEO Marco Patuano told Reuters.
The Spanish company, which has grown through acquisitions since listing in 2015, changed direction last year when rising interest rates forced it to re-focus on cutting debt by selling non-core assets and simplifying the business.
Patuano said he expected cash generation at the company would accelerate drastically in two or three years, when capital expenditure (capex) commitments reduce and assets are mature enough to generate higher returns.
“Capex is (now) absorbing all the cash generating. 2024, big capex. 2025, big capex, and then there is a cliff. In 2027, you’re generating a lot of cash. You can’t imagine, a lot of cash,” Patuano said.
At that time, Cellnex envisages consolidation among the six largest European tower operators, provided market conditions are favourable.
“(In) Europe (what) will happen is that there are six tower operators today. And tomorrow, I think there will be less than six,” Patuano said.
Patuano raised the possibility of reviving his predecessor’s 2022 bid for Deutsche Telekom’s towers business – now known as GD Towers. “When the time will be mature, (it) could be a very appropriate use of resources,” he said.
CAPITAL MARKETS DAY IN MARCH
In March, Cellnex plans to announce a new strategy to take it through to 2026, incorporating longer-term capital allocation targets.
Since taking the helm in June, Patuano has conducted a review of the company’s portfolio to identify core assets and potential disposals.
“In Ireland and Austria we are considering the possibility of a full disposal,” said Patuano, who already agreed the sale of a minority stake in Cellnex Nordics operations in September.
According to a report published in October by Kepler Cheuvreux, Cellnex’s units in Ireland and Austria have enterprise values of 1.05 billion euros ($1.15 billion) and 1.41 billion euros respectively.
Cellnex aims to reduce its leverage ratio below six times its core earnings in 2024 to try to improve its credit rating.
The Spanish company is also planning to invest about 150 million euros in acquiring the land where its towers sit.
“In the next couple of years, we should improve even more the cash from operations,” said Patuano, adding land acquisition was one of the ways to achieve that.
The company is committed to increasing shareholder remuneration in coming years, through dividend payments and share buybacks.
“If you invest in infrastructure, you’re not looking for growth without yield, you’re looking at yield with a decent growth, which is better than the inflation,” Patuano said.
($1 = 0.9168 euros)
Reporting by Andres Gonzalez and Amy-Jo Crowley
Editing by Anousha Sakoui and Mark Potter
Our Standards: The Thomson Reuters Trust Principles.
A worker assembles a new bike frame at the Pashley bicycle factory in Stratford-upon-Avon, Britain, June 30, 2022. REUTERS/Phil Noble/File Photo Acquire Licensing Rights
LONDON, Nov 17 (Reuters) – Britain announced a 4.5 billion-pound ($5.59 billion) investment programme for key manufacturing industries on Friday, with the automotive sector taking up a large chunk of the funds to support the move to zero emission vehicles.
The finance ministry said the funds will be available from 2025 over the course of five years, with 2 billion pounds earmarked for the car industry, 975 million pounds for aerospace and 960 million for clean energy.
The plans form part of the Autumn Statement that finance minister Jeremy Hunt will present on Nov. 22, hoping to revive the fortunes of both a stagnant British economy and the governing Conservatives ahead of an election expected next year.
“Our 4.5 billion pounds of funding will leverage many times that from the private sector, and in turn will grow our economy, create more skilled, higher-paid jobs in new industries that will be built to last,” Hunt said in a statement.
Hunt separately told reporters the commitment was “new money”, rather than a reallocation of previously announced spending, and that Britain favoured targeted support over blanket subsidies.
“We’re not getting into a global subsidy race,” he said.
As of the third quarter, British business investment stood 4% higher than its pre-pandemic level – a better performance than Germany, but some way behind France and the United States, according to a Reuters analysis of OECD data.
Earlier on Friday the IPPR think tank, which describes itself as an advocate for progressive policy, published a report that showed years of incoherent industrial strategy had badly hurt business investment in Britain.
“It’s time to be clear about the UK’s strategic objectives, like growing the green manufacturing and services we need for the future, and then to use every tool in the box to get us there,” said George Dibb, head of the Centre for Economic Justice at IPPR.
Hunt is considering making permanent a time-limited tax incentive that is designed to spur corporate investment, according to the boss of telecoms giant BT (BT.L), who said any such move would be a “game-changer”.
($1 = 0.8056 pounds)
Reporting by Andy Bruce, Editing by Kylie MacLellan
Our Standards: The Thomson Reuters Trust Principles.
LONDON, Nov 16 (Reuters) – World stocks fell for the first time in five sessions, oil slipped and the dollar saw a slight lift on Thursday, as markets continued to acclimatize to falling borrowing costs after nearly two years of relentless gains.
Europe’s moves saw the STOXX 600 (.STOXX) slip from a more than one-month high, Wall Street look set for an early dip, and Taiwan’s dollar rise after China’s President Xi Jinping and U.S. counterpart Joe Biden agreed to reopen key military communications channels between the two superpowers.
Xi also underscored the point by saying China would not “fight a cold war or a hot war with anyone”.
Global markets have rallied sharply this month as inflation data out of the United States and parts of Europe, such as Britain, have reinforced hopes that major central banks are now done raising borrowing costs.
Robust U.S. retail sales figures on Wednesday were a reminder that it might not be a straight line move, however, with the focus now squarely on weekly U.S. jobless claims data later and a monthly euro zone inflation print on Friday.
“If you don’t get confirmation of the slowing economic direction from every single piece of data every single day we risk running out of momentum on the big trades,” Societe Generale FX strategist, Kit Juckes, said.
“Until we get to the point where rate cuts are just around the corner, everything is going to be very stop-start. The dollar sell-off is stop-start, the bond market rally is really stop-start and the equity market is all over the place.”
Key government bond market borrowing costs resumed their broad downward trend on Thursday, driven by increasing confidence that rate cuts are coming next year.
Germany’s 10-year bond yield dipped to 2.62% but held above the previous day’s two-month low of 2.568%, while sterling sank to a six-month low against the euro as dealers in London inched closer their predictions on when the Bank of England (BoE) will start cutting rates. EUR/GVD
Many now think it might be as soon as May although BoE policymaker Meg Greene warned on Thursday that investors are missing the message that central banks have been pushing recently that interest rates will remain higher for longer.
“I think markets globally haven’t really clocked on to this,” Greene told Bloomberg Television, adding that the BoE was not talking about cutting rates.
CHINA PROPERTY
Asian stocks fell overnight as new Chinese data showed continued weakness in its problem-hit property sector which dented recent optimism about a recovery in the world’s second-largest economy.
While data this week showed China’s industrial and retail sectors are now making a comeback, figures have also shown a sharp drop in property investment and weak home prices, underscoring the ongoing drag the sector is having.
There was mixed news from Japan too, where exports grew for a second straight month in October but at a sharply slower pace due to slumping China-bound shipments of chips and steel.
“The weak economic data from both countries indicate the fact that the global economy is slowing down, highlighting ongoing macro headwinds that businesses face,” said Tina Teng, market analyst at CMC Markets.
XI AND BIDEN
Australian shares (.AXJO) ended their day down 0.7% as strong wage data indicated that inflationary pressures there are still running high.
Japan’s Nikkei (.N225) dipped 0.3%, moving into reverse after it, along with the main MSCI Asian and emerging market indexes, all posted their biggest gains in a year on Wednesday.
Chinese stocks showed some disappointment at Xi and Biden’s first meeting in years, with Shanghai’s blue-chip CSI300 index (.CSI300) closing down 1% and Hong Kong’s Hang Seng index (.HSI) ending 1.3% lower.
While the two leaders agreed to resume military-to-military communications and cooperate on anti-drug policies, a sign ties are improving, some investors were disappointed at a lack of other breakthroughs in the talks.
The MSCI main 47-country global stocks index (.MIWD00000PUS) was down for the first time in five sessions after a near 8% surge this month.
Wall Street futures pointed to a slightly weaker start there too, although there was modest relief that the Senate had overwhelmingly approved a temporary funding measure to avert another U.S. government shutdown for now.
Money market traders have now fully priced in that the Federal Reserve will keep U.S. interest rates steady in December. They see the first rate cut of the cycle in May.
The yield on benchmark 10-year Treasury notes was back under 4.5% compared with its U.S. close of 4.537% on Wednesday. The two-year yield hovered at 4.88% compared with a U.S. close of 4.916%.
In currencies, the euro was flat at $1.0848, having gained 2.5% in a month, while the dollar index , which tracks the greenback against a basket of currencies of other major trading partners, was fractionally higher.
Oil traders, meanwhile, nudged U.S. crude down 0.3% to $76.55 a barrel. Brent crude was at $80.90 per barrel while safe-haven gold was slightly higher at $1,965 per ounce .
Additional reporting by Julie Zhu in Hong Kong; Editing by Christina Fincher and Mark Potter
Our Standards: The Thomson Reuters Trust Principles.
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, October 30, 2023. REUTERS/Staff/File Photo Acquire Licensing Rights
A look at the day ahead in European and global markets from Kevin Buckland
Chip stocks gave Asian equity investors some small bit of cheer to start the week, picking up where Wall Street left off while U.S. yields stayed subdued, which kept a lid on the dollar, too.
But elsewhere, bears were firmly in control.
A lot of that can likely be traced to China, rather than to the Moody’s downgrade to the outlook for the U.S. sovereign debt rating, which investors have taken in stride.
The Chinese consumer has so far refused to ride to the rescue of the world’s second-largest economy. Monthly retail sales data is due on Wednesday but the country’s Singles Day shopping extraganza over the weekend – equivalent to Black Friday sales elsewhere – recorded only meagre growth.
Looking across the region, Japan’s tech-heavy Nikkei managed to keep its head above water, buoyed by gains for its two biggest chip-related shares; Taiwan’s benchmark advanced 0.8%.
But Hong Kong flipped from early gains to a loss of about 0.15%. A sub-index of tech shares remained firmly positive but another of mainland property developers slumped more than 1%.
China’s blue chips fell 0.5%.
U.S. retail sales data is also due on Wednesday, preceded by CPI a day earlier. The figures could be key in helping the Federal Reserve to plot the path ahead for interest rates, including whether another hike is needed.
The Fed’s rhetoric has taken a hawkish turn recently, but markets so far are more focused on the data, particularly the soft non-farm payrolls numbers at the start of this month.
ECB President Christine Lagarde last week said that rates will stay restrictive at least for several quarters. Lagarde deputy Luis de Guindos has his say a little later today, giving the keynote speech to kick off Euro Finance Week.
Elswhere, Bank of England board member Catherine L. Mann will take the podium, after the bank’s chief economist, Huw Pill, said last week its projection that monetary policy will need to remain restrictive for an extended period should not be taken as a promise.
Key developments that could influence markets on Monday:
-ECB’s de Guindos, BoE’s Mann speak
-UK Rightmove house prices
-Sweden SEB housing
-New York Fed consumer expectations survey
Reporting by Kevin Buckland; Editing by Edmund Klamann
Our Standards: The Thomson Reuters Trust Principles.
Nov 13 (Reuters) – The cyber hack of Industrial and Commercial Bank of China’s U.S. broker-dealer was so extensive on Wednesday, even the corporate email stopped working and forced employees to switch to Google mail, according to two people familiar with the situation.
The blackout left the brokerage temporarily owing BNY Mellon BK.N $9 billion, an amount many times larger than its net capital, a measure of resources at hand to promptly satisfy claims.
Those details and what happened next, some of which are reported here for the first time, show how the ransomware attack pushed the firm owned by China’s largest bank close to the brink. And they serve as a wakeup call for the financial sector and raise some concerns about the resilience of the $26 trillion Treasury market.
ICBC’s (601398.SS) New York-based unit, called ICBC Financial Services, got a cash injection from its Chinese parent to help pay back BNY, and it manually processed trades with the custody bank’s help, Reuters reported on Friday.
ICBC told market participants on an industry call on Friday afternoon that it was working with a cybersecurity firm, called MoxFive, to set up secure systems that would allow it to resume normal business on Wall Street, according to the sources. But ICBC expected that process to take at least until Monday, they said.
In the interim, the firm had asked its clients to temporarily suspend business and clear trades elsewhere, the sources said. Other market participants, meanwhile, looked through their own books to see whether they had any exposure and sought to reroute trades, one of the sources said.
ICBC Financial Services could not be reached for comment. ICBC did not respond to a request for comment.
On a notice on its website, the brokerage said it has been “progressing its recovery efforts with the support of its professional team of information security experts.” It said it had cleared Treasury trades executed on Wednesday and repo financing trades done on Thursday.
Moxfive executives did not respond to requests for comment.
The ransomware attack, claimed by cybercrime gang Lockbit, comes at a time of heightened worries about the resiliency of the Treasury market, which is essential to the plumbing of global finance. After upheavals there – most recently during the pandemic in March 2020 – threatened financial stability, U.S. authorities launched a broad review of its functioning.
While market participants and officials have said the impact of the ICBC hack on Treasury market functioning was limited, the full extent of it is not yet understood. There is some debate, for example, about whether it had affected a major auction of Treasury bonds on Thursday.
Nevertheless, market participants said the attack is likely to add a new aspect to the regulatory review, as it brings cyber threats into sharper focus. It could also boost a Securities and Exchange Commission’s push to have more Treasury trades go through central clearing, where a third-party acts as a seller to every buyer, and buyer to every seller.
Darrell Duffie, a Stanford finance professor who has studied the market in depth and consults with regulators, said other firms in ICBC’s situation might not have enough capital readily available to meet a large shortfall and default.
“Any default that could follow an event like this, if not centrally cleared, could propagate into a chain reaction of default events,” Duffie said. “This hack makes even more evident the important financial stability benefits of broader central clearing.”
The hack is likely to become a key topic of conversation at a major Treasury market conference on Nov. 16.
MID-SIZE BROKER
ICBC Financial Services is not huge by Wall Street’s standards. The company had about $24.5 billion in assets as of June 30, with $480.7 million of net capital, according to financial information posted on its website. It also had credit lines from affiliates of $450 million as well as the ability to borrow overnight funds from an affiliate.
It mainly offers settlement and financing services for fixed-income securities, such as repurchase agreement (repo), where assets such as Treasuries are used as collateral to raise short-term cash.
It told market participants on Friday’s call that its clients include four independent brokers and half a dozen algorithmic traders, according to the sources. Reuters could not learn the identity of its clients.
One of the sources described the business as mid-sized, explaining that “the biggest players in Treasuries are not clearing at a firm like that.”
Even so, the attack that paralyzed its systems threw a wrench in the market’s gears when word of the hack spread through Wall Street. One of the sources said some market participants scrambled to sort out whether they had any exposure and rerouted their trades to other firms.
$9 BLN OVERDRAFT
When ICBC’s trades got stuck, it became BNY Mellon’s issue, too, since it is the sole settlement agent for Treasury securities. The bank played a crucial role in helping sort through the mess, deploying a manual process to clear trades one by one, the market participants said.
ICBC’s inability to access its systems meant securities from the Chinese firm’s repo trades were getting delivered to BNY for settlement, but no cash was coming in from the broker-dealer, one of the sources said.
That effectively meant BNY was loaning ICBC the cash, secured by Treasuries, according to the source. That’s when ICBC’s parent injected capital into the unit, allowing BNY to be paid, the source said.
ICBC told market participants on the call, which was organized by the industry group SIFMA, that the transfer had been more than what they expected was needed for current trading volumes, the source said.
SIFMA declined to comment.
Once the firm gets its new system up and running, others on the Street are likely to do their own review to make sure it is safe, which might add time for the business to return to normal, the sources said.
ICBC told market participants Friday that they were also hoping to have a secondary email system set up soon.
Reporting by Paritosh Bansal; editing by Edward Tobin
Our Standards: The Thomson Reuters Trust Principles.
The Arm Ltd logo and a rising stock graph are seen in this illustration taken March 6, 2023. REUTERS/Dado Ruvic/Illustration Acquire Licensing Rights
Nov 8 (Reuters) – Semiconductor company Arm Holdings (O9Ty.F), on Wednesday gave a fiscal third-quarter sales outlook below Wall Street estimates, with the company attributing the forecast to a large deal that will likely land later than expected.
Arm’s shares dove 8% to $50 in extended trading after the news.
But the company, which sells designs and other intellectual property for creating computing chips that power most of the world’s mobile phones, also forecast fiscal full-year sales that beat Wall Street expectations, powered by a wave of companies designing new chips amid a boom in artificial intelligence applications.
Arm became publicly listed again in September after Japan’s SoftBank Group (9984.T), which still owns more than 90% of Arm, sold off some of its shares. One issue that the company is grappling with is new accounting rules that affect how it must recognize revenue from large, multi-year license deals.
In a shareholder letter, Arm’s top executives said that “revenue recognition profiles for future agreements are subject
to change.”
Analysts said that the unpredictability raises questions about Arm’s valuation, which, at more than $65 billion after its initial public offering, was far higher relative to its anticipated annual revenue than any other chip company.
“There are still questions about whether there is a sustainable growth narrative for this company,” said Ben Bajarin, chief executive and principal analyst at Creative Strategies. “The quarter looked good, but the guidance didn’t look good – we don’t really understand what the customer cycle looks like.”
‘STRONG DEMAND’
Arm Chief Financial Officer Jason Child told Reuters that the below-expectations guidance for the current fiscal third quarter but higher full-year forecast was because the company now expects a major licensing deal to land a quarter later than initially expected.
“These are very, very large deals that require lots of complicated approvals that go to the highest levels and it’s organizations that can take a while and that’s hard for us to predict,” Child said in the conference call Wednesday.
Arm said it forecast a fiscal 2024 revenue range with a midpoint of $3.02 billion, above analyst expectations of $2.95 billion, according to data from LSEG. For the current fiscal third quarter, Arm expects a revenue range with a midpoint of $760 million, below analyst estimates of $767.84 million, according to LSEG data.
For Arm’s second fiscal quarter ended in September, revenue jumped 28% to $806 million, ahead of an average estimate of $744.31 million, according to LSEG data. Adjusted profit of 36 cents per share beat expectations of 26 cents per share.
Arm has been working to expand from its stronghold of mobile phone chips into other areas such as data center servers and personal computer chips. Reuters last month reported that Nvidia plans to use technology from Arm in a major new challenge to Intel (INTC.O) in the personal computer market.
Arm has two primary revenue streams: the upfront licensing fees it charges for access to its chip designs and other intellectual property, and a royalty that it collects on each chip sold that was made with its intellectual property. Arm has said it aims to increase its royalty revenues by moving into parts of the chip market where chips sell for higher average prices.
Arm said that royalty revenue for the fiscal second quarter declined to $418 million, below analyst expectations of $420.3 million, according to data from Visible Alpha. Licensing and other revenue for the second quarter was $388 million, above expectations of $326.9 million, according to data from Visible Alpha.
Child told Reuters that Arm’s second quarter royalty revenues still reflected a chip glut that affected the chip industry broadly.
“We expect our royalty numbers to flip to positive (growth) this quarter,” Child told Reuters.
It reported a net loss of $509 million in the quarter, driven by employee stock compensation costs. The company said its initial public offering generated a large one-time expense for previously granted shares and that future employee stock compensation costs are expected to be between $150 million to $200 million per quarter.
Reporting by Stephen Nellis and Max A. Cherney in San Francisco; Additional reporting by Yuvraj Malik in Bengaluru; Editing by Aurora Ellis and Lisa Shumaker
Our Standards: The Thomson Reuters Trust Principles.
[1/2]The branch of Credit Agricole bank is seen in Warsaw, Poland, July 3, 2018. Picture taken July 3, 2018. REUTERS/Marcin Goclowski/File photo Acquire Licensing Rights
PARIS, Nov 8 (Reuters) – Credit Agricole (CAGR.PA), France’s second-largest listed bank, beat third-quarter earnings expectations on Wednesday driven by a strong performance by its investment bank and retail activities.
Its net income jumped 33% to 1.75 billion euros ($1.87 billion), above the 1.37 billion expected by analysts in a company-compiled poll.
Group revenue rose 19% to 6.34 billion euros, topping the 5.99 billion expected by analysts.
It reported lower-than-expected provisions of 429 million euros, helping its bottom line.
Analysts at JP Morgan saluted a “solid Q3”, noting the lower-than-expected provisions and higher revenue in investment banking, in particular from capital markets and securities services.
Credit Agricole’s shares were up by 0.4% at 0816 GMT while France’s benchmark CAC 40 (.FCHI) stock index was down 0.3%.
The listed entity of Credit Agricole Group, controlled by 39 French mutual banks, said revenue from its corporate and investment bank division rose by more than 9% propelled notably by a 25.6% jump in trading in fixed income, currencies and commodities (FICC).
Credit Agricole’s performance on that front was better than that of its two French rivals, Societe Generale (SOGN.PA) and BNP Paribas (BNPP.PA), as well as Deutsche Bank (DBKGn.DE) and Barclays (BARC.L), as less volatile financial markets dented investment banks’ earnings.
Sales at its French retail banking division edged up 0.4% as a decline in the net interest margin interest (NIM) — earnings on loans minus deposit costs — due to higher deposit costs was partially offset by hedging contracts against the risks tied to interest rates.
Its NIM in Italy, its second-biggest market, jumped by 48%, as higher interest rates are more quickly passed on to customers than in France, where almost all mortgages are signed on a fixed rate basis and where the government determines the remuneration of the country’s most popular savings account, thus squeezing margins for banks.
Credit Agricole controls Europe’s largest fund manager Amundi (AMUN.PA) and recently announced plans to acquire Belgian wealth management firm Degroof Petercam.
($1 = 0.9361 euros)
Reporting by Mathieu Rosemain;
Additional reporting by Augustin Turpin;
editing by Silvia Aloisi and Jason Neely
Our Standards: The Thomson Reuters Trust Principles.
Two women walk next to the Reserve Bank of Australia headquarters in central Sydney, Australia February 6, 2018. REUTERS/Daniel Munoz/File Photo Acquire Licensing Rights
A look at the day ahead in European and global markets from Tom Westbrook:
Bond markets have curbed a little of last week’s enthusiasm about a prospective peak in global interest rates, but still cheered a rate hike in Australia that looks to be the last of the cycle.
The Aussie dollar fell more than 0.8% and Australian government bonds rallied because the 25 basis point hike by the Reserve Bank of Australia came with a softening of language on whether further hikes would be needed.
The ASX200 (.AXJO) lifted from mid-session lows.
It was an otherwise quiet session in the absence of major updates that might have consequences for the interest rate outlook.
Gravity dragged South Korean shares back to earth, with the Kospi (.KS11), which soared 5.7% on Monday after a short-selling ban was re-imposed, falling 3%.
Three days of strong gains for the MSCI Asia ex-Japan index (.MIAPJ0000PUS) also came to an end.
Data showed Chinese imports unexpectedly grew in October, a welcome signal on domestic consumption, but exports contracted at a quicker pace than expected, giving a mixed picture overall.
Last week’s chaos in Chinese money markets has subsided but it left behind a glimpse of financial pressures beneath the surface and the challenges around China’s uneven recovery from the COVID-19 pandemic.
Read Reuters’ exclusive report on what happened here: Clashing priorities behind China’s rare money market distress.
British house prices, German industrial output and European producer prices are due later on Tuesday, as are earnings from UBS (UBSG.S).
Overnight news from the U.S. included the latest humbling of WeWork (WE.N), which sought bankruptcy protection. It expects to continue in business, but the move represents an admission by majority owner SoftBank that the office-space firm cannot survive unless it renegotiates its pricey leases.
Israeli Prime Minister Benjamin Netanyahu said his government would consider “tactical little pauses” in fighting to facilitate the entry of aid or the exit of hostages from the Gaza Strip, but again rejected calls for a ceasefire despite international pressure.
Without a Fight won the 163rd Melbourne Cup by two lengths.
Key developments that could influence markets on Tuesday:
Earnings: UBS
Economics: German industrial output, Euro zone producer prices, UK house prices, NY Fed household debt report
Speakers: Fed’s Waller, Logan and Schmid, ECB’s de Guindos and McCaul, BoC’s Kozicki
Reporting by Tom Westbrook; Editing by Edmund Klamann
Our Standards: The Thomson Reuters Trust Principles.