volatility

Investors wary of lingering Treasury volatility as US stocks rally

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By Saqib Iqbal Ahmed NEW YORK (Reuters) – A still-jittery bond market is clouding the outlook for a rally in U.S. stocks, analysts tracking measures of market volatility said. Stocks and bonds have been in a tight relationship over the last few months, with the S&P 500 index surging nearly 7% in the last 10 sessions while the benchmark 10-year Treasury yield has tumbled 37 basis points from a 16-year high. At the same time, the Cboe Volatility Index,, which measures expectations for stock gyrations, has fallen to a seven-week low of 14.13. While such a retreat in Wall Street’s

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Stock options bets on volatility around macro events are finally paying off

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By Saqib Iqbal Ahmed NEW YORK (Reuters) – Options traders betting that Wednesday’s Federal Reserve meeting and highly anticipated macroeconomic events later this week could cause gyrations in markets may be rewarded, if recent trends hold. Data from Susquehanna Financial Group showed that using options to bet on volatility around key macroeconomic news events has started paying off in recent weeks, after a months-long period of muted moves. In nine out of 10 instances, stock market moves after events such as Fed meetings and key data releases in the period from early June to mid-September fell short of the volatility

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Traders wary of volatility as JP Morgan fund’s big options trade looms

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By Saqib Iqbal Ahmed NEW YORK (Reuters) – A $16 billion JP Morgan fund, expected to reset its options positions on Friday, is drawing traders’ attention as a potential source of additional volatility at the end of the worst month for U.S. stocks this year. The JPMorgan Hedged Equity Fund, with about $16.05 billion in assets, holds a basket of S&P 500 stocks along with options on the benchmark index and resets hedges once a quarter. Its holdings include some of the market’s biggest names, such as Apple Inc, Microsoft Corp and Amazon.com Inc. The fund’s sheer size means its

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Japan Finance Minister Suzuki reiterates warning against excessive FX volatility

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By Tetsushi Kajimoto TOKYO (Reuters) – Japan won’t rule out any options to deal with excessive currency volatility, Finance Minister Shunichi Suzuki said on Thursday, reiterating a warning against speculative moves on the yen which is struggling near 11-month lows against the dollar. Suzuki declined to respond when asked whether the government had any plans for making rate checks, usually a prelude to an intervention. The yen has depreciated to near 150 per dollar, a level seen by financial markets as a red line that would spur Japanese authorities to intervene, like they did last year. However, analysts are sceptical

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Japan will not rule out any options against forex volatility – PM Kishida

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(Reuters) – Japanese Prime Minister Fumio Kishida said on Thursday that his government will not rule out any options in addressing excessive volatility in the foreign exchange market. “It is important that exchange rates move stably, reflecting the fundamentals,” Kishida said in a question and answer session at the Economic Club of New York that was broadcast online. “In fact, authorities are in close communication internationally, and they share the understanding that excessive volatility is undesirable,” he said. The government is closely monitoring the movements in the foreign exchange market “at a high level of vigilance,” and “will appropriately respond

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Analysis-Asia’s worries over currency volatility get in the way of rate cuts

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By Ankur Banerjee SINGAPORE (Reuters) – A spurt in the U.S. dollar and China’s defence of the yuan are forcing Asian central banks to step up interventions in their weakening currencies, and one clear casualty is their desire to slowly ease monetary policy to shore up cooling economic growth. Central banks from Indonesia, South Korea and the Philippines kept rates unchanged as expected this month. But investors who were hoping they would hint at eventual rate cuts, citing cooling inflation and the need for stimulatory economic settings, found instead the focus had turned to currency weakness. “Asian central banks are

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Putin says financial market volatility has hampered investment

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MOSCOW (Reuters) – Russian President Vladimir Putin on Tuesday said volatility on financial markets had hampered companies’ investment decisions and was something that needed to be brought under control. “The government and central bank need to actively use the instruments available to them,” Putin said. “Work is needed, among other things, on limiting unproductive, speculative demand, controlling the outflow of capital, monitoring the behaviour of the main participants of the financial market.” The rouble strengthened sharply last week after hitting a near 17-month low of 101.75 to the dollar, as the central bank hiked its key rate by 350 basis

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Italy CPI rises again in April amid energy prices volatility

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By Antonella Cinelli ROME (Reuters) – Italian inflation jumped unexpectedly in April, driven by another spike in energy prices, official statistics agency ISTAT said on Tuesday. EU-harmonised consumer prices (HICP) rose a preliminary 1.0% month-on-month, with annual inflation accelerating to 8.8% from 8.1% in March, well above the median forecast of a 7.8% year-on-year rise. Italy’s inflation dynamic continues to be affected by an ongoing adjustment in energy prices, its most volatile component, wrote Loredana Maria Federico, chief Italian economist at UniCredit. ISTAT underlined that the annual rise was mainly due to non-regulated energy products such as fuel for domestic

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Marketmind: Low volatility propping up risk appetite

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By Jamie McGeever (Reuters) – A look at the day ahead in Asian markets from Jamie McGeever. Stocks may be treading water as investors digest a mixed flow of U.S. earnings and red hot UK inflation is pushing up global bond yields, but investors in Asia with a glass half full outlook on Thursday might want to latch on Wall Street’s volatility. Or rather, lack of it. The VIX index, also known as Wall Street’s fear gauge, fell on Wednesday to its lowest point since November 2021, and is below the average of the last 5, 10, 15 and 20

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Asia’s cashed-up companies beat market as volatility swirls

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By Patturaja Murugaboopathy and Gaurav Dogra (Reuters) – Shares of Asian companies with big cash balances are outperforming the broader market and analysts say the money will be a cushion against volatility and earnings downgrades. The shares of the top 300 listed Asian companies based on their net cash levels have risen about 9% this year, according to Refinitiv data, compared with the MSCI Asia Pacific share index’s 4.6% gain. “Cash implies safety amidst the volatility we have seen to start the year, said Vikas Pershad, investments portfolio manager for Asian Equities at M&G Investments. “It is understandable that investors

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Japan cuts view on industrial output, vigilant on market volatility

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TOKYO (Reuters) – Japan’s government cut its assessment of the strength of industrial production for the first time in three months in March, pointing to weakening demand in the global semiconductor industry. Its overall assessment of the economy was unchanged in the monthly economic report, however. Amid lingering concerns about stress in the world’s banking system, the government retained a vigilant stance in relation to economic effects of financial market fluctuations. Issued by the Cabinet Office, the report said industrial production had weakened recently because the global semiconductor industry had faced a deteriorating market and was therefore buying less fabrication

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Marketmind: Bank stress, bond volatility and disinflation

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A look at the day ahead in U.S. and global markets from Mike Dolan The explosion of banking stress has reshaped the entire U.S. interest rate map, wiping expectations of further Federal Reserve rate hikes off the table and sending U.S. Treasury bond volatility to its highest since 2009. The release of February’s U.S. consumer price inflation report later on Tuesday had until a few days ago promised to be the biggest market mover of the week – but now it may prove to be something of a sideshow to a wider unfolding drama. Despite weekend moves by the Fed

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Analysis-Investors seek uncorrelated assets on worries volatility will return

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By Laura Matthews (Reuters) – Concerns that last year’s wild swings in stocks and bonds will resurface in 2023 are boosting the appeal of investments less dependent on upside in either asset class, such as managed futures and private markets. Soaring interest rates sparked a rare lockstep tumble in equity and fixed income last year, upending traditional diversification strategies such as the 60/40 portfolio and igniting demand for investments that aim to deliver returns not correlated to broader markets. Both stocks and bonds have bounced so far this year. Yet some market participants are convinced the Federal Reserve’s fight against

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Equinor raises energy trading forecast on volatility, flexibility

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By Nora Buli LONDON (Reuters) – Norway’s Equinor raised its energy trading division’s outlook on Wednesday, saying it expects the business to profit from a more flexible asset portfolio and market volatility. Equinor earlier posted record overall profits for 2022, driven by soaring gas prices, sending its shares up 7%. It lifted the adjusted quarterly earnings guidance for its Marketing, Midstream and Processing (MMP) segment to $400 million-$800 million, from $250 million-$500 million previously. “It’s important that we believe that the markets will be volatile because if they’re not volatile, there’s less money to be made,” Irene Rummelhoff, the head

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Column-Low visibility, low volatility make strange pairing :Mike Dolan

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By Mike Dolan LONDON (Reuters) – Like mirages on the horizon, recession forecasts seem to be appearing and disappearing with great regularity – questioning any investment conviction, the reliability of pandemic-distorted data and still-low volatility gauges in financial markets. In just six weeks of 2023, economic forecasters have hurriedly revised away this year’s long-assumed recessions in euro zone and the United States – confounded as they were by a mix of warm weather in Europe and some wild U.S. jobs market revisions and statistical quirks that have dramatically reshaped the interest rate outlook stateside. Throw in China’s unexpectedly swift removal

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China state media warn of two-way volatility for yuan in 2023

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SHANGHAI (Reuters) – Investors should avoid Chinese currency risk and adapt to higher foreign exchange volatility, three state financial newspapers in Shanghai and Beijing said in front-page commentaries on Tuesday after more than a week of strong gains by the yuan. The currency may have strengthened, but this year it would be volatile in both directions, they warned. Since the newspapers delivered essentially the same message on the same day and on their front pages, they had almost certainly been directed to do so by the government. The yuan has strengthened 2.2% against the dollar this year, hitting an almost

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EU’s gas price cap scheme could backfire, raise volatility -ECB

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FRANKFURT (Reuters) – Proposed European Union rules aimed at tempering natural gas price spikes may actually jeopardize financial stability and need to be redesigned, the European Central Bank said on Thursday in a formal opinion. The EU proposed a “market correction mechanism” last month aimed at tempering natural gas prices and market volatility after a spike in energy costs pushed inflation to record highs and raised financial market stress in energy derivatives trading. The ECB, a guardian of the bloc’s financial stability, acknowledged that the goal was to moderate extreme price levels and volatility, but warned that the rules could

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Marketmind: China reopening as volatility ebbs

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(Reuters) – A look at the day ahead in U.S. and global markets from Mike Dolan. A punchy U.S. jobs report and the beginnings of China’s COVID-related reopening seem to be seen more as positive soft-landing signals than another stick to rattle central bank cages. Even though news of above-forecast November U.S. payrolls and wages on Friday and the hesitant and patchy easing of China’s COVID curbs could argue for a stickier inflation picture ahead, markets were determined to see the glass as half full. The employment report certainly didn’t shift the dial on market expectations for the Federal Reserve,

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Volatility in yuan spurs bets China will widen its band

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SHANGHAI (Reuters) – As macroeconomic risks induce unprecedented levels of volatility in China’s yuan, investors are betting that authorities may widen the currency’s tight trading band for first time since 2014 to allow market forces greater say. China’s yuan is allowed to move in a narrow range of 2% against the U.S. dollar, around a daily official midpoint fixing set by the People’s Bank of China (PBOC). In the 8 years since the band was defined, the currency has rarely ever moved beyond 1% on either side of the mid-point. It lost its languor in September as an aggressive Federal

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Broker TP ICAP third-quarter revenue jumps on market volatility

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(Reuters) – TP ICAP posted a 14% jump in its third-quarter revenue in reported currency on Tuesday, as the world’s biggest inter-dealer broker benefited from stock and foreign exchange market volatility and robust performance in its global broking unit. Trading platforms are now seeing a rise in client activity after market volatility rose, triggered by Britain’s “mini-budget” and larger global economic uncertainties fuelled by rising inflation rates and Ukraine-Russia conflict. The British firm said revenues in its Global Broking unit in the three months ended Sept. 30, rose 20% in reported currency, and all asset classes saw high single-digit to

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Japan’s premier Kishida: Ready to act against excessive FX volatility

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TOKYO (Reuters) – Japanese Prime Minister Fumio Kishida said on Friday the government is ready to take appropriate action against excessive volatility in the currency market. “No one benefits from speculative, sharp volatility in the currency market,” Kishida told a briefing, on the yen’s recent sharp declines. On monetary policy, Kishida said the Bank of Japan must make decisions taking into account not just currency moves but economic and price developments as well as the impact of the interest rate burden on the public. (Reporting by Leika Kihara and Daniel Leussink; Editing by Susan Fenton)

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Japan keeps warning on market volatility, raises view on capex in report

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By Kantaro Komiya TOKYO (Reuters) – Japan reiterated a warning that “full attention” should be paid to market volatility in its monthly economic report published on Tuesday, following the government’s repeated market interventions in the wake of the yen’s slide to a 32-year low. With a yen-buying operation last week estimated at a record 5.5 trillion yen ($36.95 billion), and another suspected intervention on Monday, Japan has been attempting to stem the currency’s depreciation that has jacked up costs of imported goods for households and businesses. The October economic report kept the overall assessment of the economy unchanged for a

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MOF’s Suzuki: Japan will act resolutely on forex volatility – Kyodo

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TOKYO (Reuters) – There are no changes to Japan’s position that it will act resolutely in case of volatility in the currency market, the Kyodo news agency quoted Japan’s Finance Minister Shunichi Suzuki as saying on Saturday. The dollar jumped about 1% to a 32-year high 148.83 yen on Friday as investors remained focussed on the policy divergence between the U.S. Federal Reserve’s aggressive interest rate hikes and the Bank of Japan’s ultra-low rates. (Reporting by Satoshi Sugiyama; Editing by William Mallard)

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Global markets like ‘whack-a-mole’, volatility, liquidity are issues – bank execs

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NEW YORK (Reuters) – Trying to navigate through global market stresses is like “whack-a-mole,” Citigroup Inc CEO Jane Fraser said on Friday, as she added the bank is constantly stress testing scenarios. Wall Street banking executives said they were keeping a close watch on markets, after the volatility in the U.K., with liquidity a particular focus. The UK government’s “mini-Budget” on Sept. 23 triggered some of the biggest ever jumps in UK government bond yields and triggered a crisis among pension funds needing to find cash. That shook broader markets with U.S. yields surging along with those on British government

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Fed’s Evans: Market volatility can create restrictiveness

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By Dhara Ranasinghe and Jorgelina do Rosario LONDON (Reuters) – Federal Reserve Bank of Chicago President Charles Evans said on Wednesday that volatility in markets can create additional restrictiveness in financial conditions.     Global markets have been whipsawed this week by turmoil in UK markets, already on edge over aggressive rate hikes from the U.S. Federal Reserve and other major central banks.     “The U.S. economy and inflation are going to be largely dictated by the stance of monetary policy and everything else that is going on supply shocks, the labour issues we’re dealing with,” Evans said in London. “It is a case

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