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The UK pound fell in value after data revealed weaker-than-expected economic growth in November, prompting concerns about the need for further interest rate cuts to stimulate activity. The currency has experienced a significant decline due to worries about high inflation, slow growth, and doubts about the government's ability to manage its deficit. Traders are increasingly betting on interest rate cuts by the Bank of England, with expectations of a quarter-point reduction at the next meeting in February. The market remains uncertain, with ongoing fragility in UK markets and potential event risks on the horizon. [Extracted from the article]

The UK pound fell as weaker-than-expected growth data for November highlighted the need for further interest rate cuts to stimulate economic activity. The currency's decline was attributed to concerns over high inflation, slow growth, and doubts about the government's deficit management. Despite a slight easing in the market, the outlook for the pound remains uncertain, with expectations of additional rate cuts potentially diminishing its appeal. Traders are pricing in a high likelihood of interest rate reductions by the Bank of England in the coming months. [Extracted from the article]

The UK bond and currency markets experienced a tumultuous week, with yields near decade highs and the pound at its weakest since late 2023. Concerns over public finances and inflation led to a sharp market rout, drawing comparisons to a previous market meltdown. Investors are cautious ahead of a key UK inflation report, with some recommending a cautious stance on UK rates. Despite reassurances from UK officials, the outlook remains challenging, with higher borrowing costs threatening fiscal headroom and potential cuts to public spending. The next inflation report will be crucial for assessing risks and the Bank of England's next steps. [Extracted from the article]

The UK bond and currency markets experienced a tumultuous week, with yields near decade highs and the pound at its weakest since late 2023. Concerns over public finances and inflation led to a sharp market rout, drawing comparisons to a previous market meltdown. Investors are cautious ahead of a key UK inflation report, with some recommending a cautious stance on UK rates. Despite reassurances from UK officials, the outlook for UK government bonds and the pound remains uncertain. [Extracted from the article]

The UK bond and currency markets experienced a tumultuous week, with yields near decade highs and the pound close to its weakest since late 2023. Concerns over public finances and inflation led to a selloff, reminiscent of a previous market meltdown. Despite reassurances from UK officials, investors remain cautious, with some maintaining bullish bets on UK government bonds. The outlook for the pound remains uncertain, with banks predicting further drops as interest rates are cut. [Extracted from the article]

The article from Bloomberg.com discusses the recent turmoil in UK bond and currency markets, with yields near decade highs and the pound close to its weakest since late 2023. Concerns over public finances and inflation have led to a selloff, drawing comparisons to a market meltdown two years ago. Despite reassurances from UK officials, investors remain cautious, with some maintaining bullish bets on UK government bonds. The article highlights the challenges facing the Labour government, as higher borrowing costs may necessitate fiscal tightening. [Extracted from the article]

J.P. Morgan Asset Management predicts that the European government bond market's strong performance will soon decline, with Australia emerging as a potential outperformer. The Reserve Bank of Australia's dovish stance and lack of rate cuts, in contrast to the European Central Bank's expected cuts, make Australian government bonds an attractive investment. While European bonds have seen significant gains, Australian bonds are now being viewed as a more appealing option for investors. [Extracted from the article]

J.P. Morgan Asset Management predicts that the European government bond market's strong performance will soon decline, with Australia emerging as a potential outperformer. The Reserve Bank of Australia's dovish stance and lack of rate cuts so far make Australian bonds appealing. European bonds have outperformed US bonds due to expectations of more aggressive rate cuts by the ECB, but Australian bonds may offer better near-term opportunities. [Extracted from the article]

Traders are increasingly betting on the European Central Bank implementing a significant interest rate cut in December due to concerns about economic growth. Market indicators suggest an 18% chance of a half-point cut at the final meeting of the year, with expectations of quarter-point reductions at every meeting through April. This shift in outlook follows recent rate cuts by President Christine Lagarde in response to a weakening economy, signaling a potential for more aggressive easing measures in the future. [Extracted from the article]

Traders are increasingly betting on the European Central Bank implementing a significant interest rate cut in December, with a 20% chance of a half-point reduction. This shift in expectations follows the ECB's recent decision to lower rates in response to economic challenges. Analysts predict further rate cuts in the coming months, reflecting concerns about weakening economic data and inflation below the central bank's target. [Extracted from the article]

Traders are increasingly betting on a significant half-point interest rate cut by the European Central Bank in December, following policymakers' concerns about economic growth. Market expectations have shifted towards more aggressive easing measures after President Christine Lagarde's decision to cut rates for the second consecutive meeting. The ECB's move to lower interest rates for the third time this year reflects a response to weakening economic data in the euro-area and falling inflation rates below the central bank's target. [Extracted from the article]

France's position as one of Europe's safest bond markets is at risk due to a fragile minority government struggling to address a long-standing debt problem. France's benchmark bond yield is now higher than that of Spain and Portugal, and is approaching levels seen in Italy and Greece. This shift reflects a changing global landscape where investors have more options for bonds with improving finances. France's fiscal situation is dire, with a swelling deficit and signs of a cooling economy. The country's credit risk is increasing, and it may join the peripheral markets if it fails to address its structural issues. [Extracted from the article]

France's status as one of Europe's safest bond markets is at risk due to a fragile minority government and a long-standing debt problem. France's benchmark bond yield is now higher than that of Spain and Portugal, and is approaching the levels of Italy and Greece. This shift reflects a changing global landscape where investors have more options for bonds with improving finances. France's fiscal situation is dire, with a growing deficit and the need for spending cuts and higher taxes. The country's political deadlock and failure to meet long-term fiscal goals have raised concerns among investors, and there is a possibility of a correction in peripheral bonds. [Extracted from the article]

UK inflation rose less than expected in July, prompting traders to bring forward bets on interest-rate cuts. The Consumer Prices Index increased by 2.2%, lower than the 2.3% expected by economists. Services inflation posted the lowest reading in over two years. The Bank of England had forecast a reading of 2.4% in July and an increase to 2.8% later this year, but the lower-than-expected inflation figures have led traders to anticipate rate cuts in November and December. The pound fell slightly in response to the news. [Extracted from the article]

The euro has reached its highest level in seven months, rising by 0.9% to $1.1008, due to indications that the US economy is weaker than previously believed. This has led to increased expectations of interest rate cuts by the Federal Reserve, making the dollar less attractive. While the European Central Bank has already implemented rate cuts, traders are speculating that the Fed may lower borrowing costs more aggressively than the ECB. The recent softening of US jobs and activity data has also contributed to the euro's strength. [Extracted from the article]

The euro has reached its highest level in seven months against the US dollar due to concerns about the weakening US economy and the possibility of Federal Reserve interest-rate cuts. The euro's gains for the year are only 0.5%, making it one of the top performers among major currencies. This increase in the euro's value is a result of a global market repricing triggered by softer US economic data and fears of a faltering US economy. Expectations for rate reductions by the Federal Reserve are now more aggressive than those for the European Central Bank. [Extracted from the article]

Traders are predicting that the Bank of England (BOE) will cut interest rates in August after policymakers indicated their willingness to ease monetary policy. Money markets are currently pricing in a more than 50% chance of a quarter-point reduction at the next central bank meeting. This shift in expectations comes after the BOE decided to keep interest rates unchanged but stated that the decision was "finely balanced" for some members of the Monetary Policy Committee. The yield on two-year gilts, which are sensitive to changes in monetary policy, fell to its lowest level since March, and the pound also slipped. [Extracted from the article]

Traders are predicting that the Bank of England (BOE) will cut interest rates in August after policymakers indicated their willingness to ease monetary policy. Money markets are currently pricing in a more than 50% chance of a quarter-point reduction at the next central bank meeting. This shift in expectations comes after UK inflation fell to the central bank's target for the first time in almost three years. The decision and commentary from the BOE are seen as significant in bringing an August rate cut into consideration. [Extracted from the article]

Insight Investment Management Ltd and Toronto Dominion Bank are making contrarian calls, buying US Treasuries and selling European bonds, as they believe the market is underestimating the number of interest-rate cuts from the Federal Reserve. This goes against the popular belief that European bonds will outperform US bonds due to the weakening euro-area economy. Insight Investment has initiated a long position on US Treasuries versus European bonds to position for the expected convergence of rate paths. Traders currently expect three quarter-point cuts from the European Central Bank (ECB) and only one from the Federal Reserve, but some investors are starting to question this outlook. The latest economic data from the euro area shows that the bloc exited recession in the first quarter, with inflation stalling in April. Some analysts believe that the ECB may disappoint markets by not committing to consecutive rate cuts after June, while the Federal Reserve is likely to start easing in September. Pooja Kumra, head of European rates strategy at TD, recommends tactically buying 10-year Treasuries against equivalent German bonds, targeting a spread drop to 170 basis points in two to three weeks. [Extracted from the article]

US and German bonds are facing a decline in demand as investors prepare for new debt sales. Treasury yields have risen, trading close to five-month highs, while German rates have also increased. The rush for safe assets seen last week has diminished due to the absence of major Middle East tensions. This week's bond auctions in the US and Europe will test investor appetite after yields reached their highest levels in 2024. The US Treasury plans to sell $183 billion in two-, five-, and seven-year notes, while Germany and Italy aim to raise up to €14 billion ($14.9 billion). The European Union is expected to sell three- and 30-year bonds. Yields have surged this month as signs of a resilient US economy have led traders to push out bets on Fed interest-rate cuts. The release of the Fed's preferred inflation gauge, the personal consumption expenditures price index, is also awaited. In Europe, markets will focus on PMIs, German Ifo gauges, and speeches from European Central Bank members throughout the week. [Extracted from the article]

Traders are increasingly betting on larger interest-rate cuts from the European Central Bank (ECB) this year due to a gloomier economic outlook for the euro area. Money markets are now predicting about four quarter-point reductions by the end of the year, with the first cut expected by June. The ECB has left its deposit rate at 4% but has lowered its inflation forecast for this year to 2.3% and revised its 2025 forecast down to 2%. The market's confidence in rate cuts is growing, and attention is now focused on President Christine Lagarde's upcoming address in Frankfurt. [Extracted from the article]

Traders are increasingly betting on interest-rate cuts from the European Central Bank (ECB) this year following a decrease in inflation forecasts by policymakers. Money markets are now predicting four quarter-point reductions by the end of the year, with the first cut expected by June. The ECB has left its deposit rate unchanged at 4% for the fourth consecutive meeting and has revised its inflation forecast for 2024 down to 2.3%. This shift in expectations comes after recent speculation that major central banks would reduce the number of rate cuts due to stronger global economic data and gradual easing of price pressures. [Extracted from the article]

UK government bonds have experienced their first weekly advance in over a month, leading strategists and investors to believe that a rally is beginning. The prospect of rate cuts and a slowdown in inflation have bolstered investor confidence. Mizuho International Plc recommends buying the dip, predicting that a deceleration in consumer price growth will put gilts into "full rally mode" by the second quarter. Baring Investment Services Limited has also been adding to their position, betting that weak growth and soft inflation will prompt the Bank of England to cut rates faster than the Federal Reserve. Traders are currently betting on four quarter-point rate cuts in the UK this year, with the ECB expected to move in April, the Fed in May, and the BOE in June. The BOE now believes that inflation will fall to its 2% target in the second quarter, leading policymakers to consider interest-rate cuts. However, attention will turn to the March 6 budget for any potential stimulus from the government, and the BOE expects inflation to bounce back to almost 3%. Despite these risks, it is likely that rate cuts will need to be implemented sooner rather than later, as the UK economy is currently in a state of malaise. [Extracted from the article]

UK government bonds, known as gilts, experienced their best week in over a month, with the 10-year yield falling 16 basis points. This comes after five weeks of losses and the worst start to a year on record for the asset class. The Bank of England's more dovish outlook, which includes the possibility of interest rate cuts, has contributed to the rally. Traders are now betting on four quarter-point cuts in the UK this year, compared to at least five in the euro area and the US. [Extracted from the article]

UK government bonds had their best week in over a month, with the 10-year yield falling 16 basis points, the most since mid-December. This reversed the worst start to the year on record for the asset class. The gains were part of a global rally, but were consolidated after the Bank of England signaled the possibility of interest rate cuts if inflation continues to slow. Traders are betting on over four quarter-point cuts this year, with the first reduction expected by June. The Bank of England's more cautious stance has supported the pound, which posted its best weekly gain since mid-December. However, the impact of any stimulus from the government's upcoming budget remains uncertain. [Extracted from the article]

Germany and Greece experienced record demand for their bond sales as investors sought to secure high yields before the European Central Bank begins cutting interest rates. Bids for Germany's 30-year bonds reached €74 billion, while Greece's 10-year debt attracted €35 billion in orders, the highest ever. This surge in demand reflects market support for Greece following its upgrade to investment grade and its strong economic growth and fiscal consolidation efforts. Italy is also looking to tap into this demand with the sale of a new 15-year note. [Extracted from the article]

Greece has received record demand for its first new bond since regaining investment grade, with €35 billion ($37.9 billion) in orders for a syndicated sale of 10-year paper. This surge in demand is attributed to speculation that the European Central Bank may lower interest rates in April, prompting investors to seek government bonds. Greece's strong economic growth and ongoing fiscal adjustments have also contributed to the high demand for its bonds. The new Greek bonds also qualify for the ECB's bond-buying program, further attracting investors. [Extracted from the article]

Norway's central bank has raised its key deposit rate by a quarter point to 4.5% in an effort to strengthen the krone, despite global expectations of easing monetary policy. The decision goes against the trend of other major economies, such as the US Federal Reserve, which is expected to ease policy. The rate hike was driven by concerns about inflation and the weakening krone, which has contributed to imported price and wage pressures. The central bank's forecast suggests that the benchmark rate will remain at 4.5% until autumn 2024 before gradually decreasing. [Extracted from the article]

Norway's central bank, Norges Bank, has raised its key deposit rate by a quarter point to 4.5% in an effort to strengthen the krone. This decision goes against the trend of global markets, which are anticipating rate cuts in major economies. The move is aimed at reducing the risk of high inflation persisting for a long period of time. The decision was unexpected, as only a minority of economists predicted the rate hike. The krone strengthened by as much as 2.2% against the euro following the announcement. [Extracted from the article]

Traders have increased their bets on interest-rate cuts by the European Central Bank (ECB) and the Bank of England (BOE) in the coming year following the Federal Reserve's shift towards looser monetary policy. Markets are now pricing in 157 basis points of ECB easing, indicating the expectation of six quarter-point cuts and a 30% chance of a seventh cut. For the BOE, markets are fully pricing in five quarter-point cuts, up from three earlier in the week. These developments come after the Fed signaled the end of its tightening campaign and projected more aggressive rate cuts in 2024. [Extracted from the article]

Traders are increasingly betting on interest-rate cuts by the Bank of England (BOE) in 2024, following weak GDP data that suggests policymakers will not be able to maintain tight monetary policy for much longer. Markets have priced in 96 basis points of easing, indicating the expectation of three quarter-point cuts and an 85% chance of a fourth, which would bring borrowing costs to 4.25%. This aligns BOE expectations more closely with those for the Federal Reserve, which is expected to lower borrowing costs by at least one percentage point next year. The UK economy contracted more than anticipated in October, setting the stage for continued stagnation through 2024. Wage growth is also slowing, leading some to argue that the BOE has already done enough to control inflationary pressures after a series of aggressive rate increases. The pound fell and UK bonds gained following the release of the GDP data. [Extracted from the article]

Investors are increasingly betting that the European Central Bank (ECB) will lead the world's major central banks in implementing interest-rate cuts. This shift in market sentiment comes after one of the ECB's more hawkish policymakers, Isabel Schnabel, described the slowdown in inflation as "encouraging." Currently, there is a nearly 90% chance that the ECB will begin its easing cycle in the first quarter of next year, with five quarter-point cuts fully priced in and an 80% chance of a sixth reduction. If these predictions are accurate, the ECB will be the first major central bank to cut rates in 2024 and will have the most aggressive easing cycle. However, some experts caution that expectations for rate cuts by central banks globally may be excessive. The Federal Reserve is expected to lower rates by 125 basis points in May, while the Bank of England is currently pricing in three quarter-point cuts starting in June. The belief that major central banks will need to ease monetary conditions to support their economies in the coming year has led to a surge in bond prices, with yields on 10-year US and German bonds falling over 45 basis points in the past month. Schnabel's comments came after a report showed that euro-area inflation had slowed to 2.4%, approaching the ECB's 2% target. While Schnabel effectively ruled out another rate hike, she cautioned against making definitive statements about future rate cuts. Some experts, such as strategists at BlackRock Inc., [Extracted from the article]

Traders are predicting that the European Central Bank (ECB) will start cutting interest rates earlier than expected next year, due to lower-than-anticipated inflation in the region. Swaps tied to the ECB's meeting dates indicate a quarter-point decrease in the deposit rate is fully priced by April, with a 50% chance of a cut as early as March. Markets are also betting on four quarter-point cuts in 2024, bringing the deposit rate back to 2.75%. However, some officials argue that the battle against inflation is not yet over, and there are risks of inflation exceeding expectations. [Extracted from the article]

Traders are increasingly predicting that the European Central Bank (ECB) will cut interest rates earlier than expected next year, despite warnings from policymakers that rates will remain high for a while. Swaps tied to the ECB's meeting dates indicate that a quarter-point decrease in the deposit rate is now fully priced in by April, compared to the previous expectation of a rate cut in June. This shift in expectations follows data showing lower-than-expected inflation in France and slower consumer price growth in Spain and Germany. However, ECB officials are cautioning that the battle against inflation is not yet over. [Extracted from the article]

(Bloomberg) -- The euro was headed for the longest streak of losses since its inception on bets the European Central Bank is done raising interest rates. Traders have been ditching the euro over the past two months on bets the ECB will struggle to tighten monetary policy further amid signs of a worsening economy. [Extracted from the article]

Traders have been ditching the euro over the past two months on bets the ECB will struggle to tighten monetary policy further amid signs of a worsening economy. (Bloomberg) -- The euro was headed for the longest streak of losses since its inception on bets the European Central Bank is done raising interest rates. [Extracted from the article]

The surge in gilt yields also comes after sticky UK inflation and strong wage data boosted investor bets that the Bank of England will need to raise interest rates further to 6% and keep them high for longer. (Bloomberg) -- UK government bonds slid to send benchmark yields to the highest since 2008, on concerns major central banks will continue to raise interest rates to quell inflation. [Extracted from the article]

(Bloomberg) -- UK government bonds slid to send benchmark yields to the highest since the financial crisis, on concerns major central banks will continue to raise interest rates to quell inflation. The surge in gilt yields also comes after sticky UK inflation and strong wage data boosted investor bets that the Bank of England will need to raise interest rates further to 6% and keep them high for longer. [Extracted from the article]

(Bloomberg) -- UK government bonds slid to send benchmark yields to the highest since the financial crisis, on concerns major central banks will continue to raise interest rates to quell inflation. The surge in gilt yields also comes after sticky UK inflation and strong wage data boosted investor bets that the Bank of England will need to raise interest rates further to 6% and keep them high for longer. [Extracted from the article]

Traders are no long fully pricing another 50 basis points of hikes for the European Central Bank and erased bets on the Bank of England taking the key rate to 6.5%, seeing a peak of 6.25% instead. (Bloomberg) -- Bonds rallied for a second day as traders bet an aggressive streak of global interest-rate hikes is close to ending, bolstered by optimism inflation in the world's biggest economy will continue to slow. [Extracted from the article]

(Bloomberg) -- UK wages rose more than expected to a level that Bank of England Governor Andrew Bailey said is fueling inflation, maintaining pressure for higher interest rates. Did the market have too much priced expecting rates to get to 6.5%?" The BOE was forced to step up the pace of its interest rate rises last month after much stronger than expected labor market and inflation data. [Extracted from the article]

Official data is expected to show inflation slowed to its lowest in 14 months, while investors are pricing in a 13th consecutive rate hike from the BOE to bring wage-price pressures under control. What Bloomberg Economics Says... "There is some speculation among investors that a string of hotter-than-expected pay and inflation data could prompt the Bank of England to opt for a 50-basis-point hike at its June meeting. (Bloomberg) -- Britain's bond market is approaching an inflection point, with inflation data and a Bank of England decision set to shape the outlook for traders after yields rose to the highest level since 2008. [Extracted from the article]

Money-market traders reacted by increasing their rate-hike expectations, implying an almost 80% probability of the ECB raising rates to 4% by October, up from 50% before the decision. (Bloomberg) -- The euro gained more than 1% and regional government bonds slumped as traders increased bets the European Central Bank will raise interest rates after officials hiked and signaled more to come. [Extracted from the article]

Money-market traders reacted by increasing their rate-hike expectations, implying an almost 80% probability of the ECB raising rates to 4% by October, up from 50% before the decision. (Bloomberg) -- The euro gained and government bonds extended losses as traders increased bets the European Central Bank will raise interest rates to 4% after officials hiked and signaled more to come. [Extracted from the article]

(Bloomberg) -- Central banks will be more hamstrung about how much they can do to boost growth if inflation remains sticky, according to JPMorgan Asset Management. Karen Ward, the firm's chief markets strategist for EMEA, said investors were too optimistic to think central banks would cut interest rates to support growth. [Extracted from the article]

Tighter financial conditions have led investors to rethink their expectations for interest rates around the world, paring bets on aggressive tightening by the Fed and its main counterparts. (Bloomberg) -- The euro approached its 2023 peak and the pound matched its strongest level of the year as the dollar continued its descent, with investors growing convinced the Federal Reserve will cut interest rates later this year. Swap rates tied to the Fed meetings imply the upper bound of the Fed Funds target rate peaking at 5.2% and then being cut by 65 basis points until the end of the year. [Extracted from the article]

Gundlach Joins Powell-Is-Wrong Chorus Predicting Rate Cuts "It's a time of white knuckling in these markets", said Ed Al-Hussainy, a rates strategist at Columbia Threadneedle Investments. (Bloomberg) -- Bond traders no longer expect the Federal Reserve will raise interest rates in May, betting its next shift will be a rate cut that could come as soon as June. [Extracted from the article]

(Bloomberg) -- Global bonds rallied on Friday as renewed concern over the banking sector spurred demand for safe assets and fueled bets central banks won't be able to keep raising rates for long. US swap rates linked to policy meeting dates almost completely abandoned wagers on a May rate increase and briefly fully priced in a quarter-point rate cut by June, even as Fed Chair Jerome Powell insisted Wednesday that cuts are not his "base case.". [Extracted from the article]

The yield on US two-year bonds - among the most sensitive to policy changes - fell more than 20 basis points on Friday and is down over 40 basis points since the Fed decision on Wednesday. UK government bonds also got a boost from the Bank of England's decision to hike its policy rate by a quarter-point while saying inflation in the second quarter may be lower than previously expected. US swap rates linked to policy meeting dates show traders are betting on rates being reduced later this year even as Fed Chair Jerome Powell insisted Wednesday that cuts are not his "base case.". [Extracted from the article]

UK government bonds also got a boost from the Bank of England's decision to hike its policy rate by a quarter-point while saying inflation in the second quarter may be lower than previously expected. (Bloomberg) -- Global bonds rallied on Friday as renewed concern over the banking sector spurred demand for safe assets. [Extracted from the article]