6 Min Read
LONDON (Reuters) - Just as long-dormant inflation finally rears its head again, there are some signs that financial markets may already have overestimated the impact - or at least the response.
FILE PHOTO: A U.S. dollar note is seen in front of a stock graph in this November 7, 2016 picture illustration. REUTERS/Dado Ruvic/Illustration/File Photo
One of the biggest fears of the year for global investors has been that a policy-supercharged, post-pandemic recovery of major economies seeds an inflation surge that spooks central banks into tightening credit well before they currently suggest.
While there’s some argument for holding stocks during an inflation scare, the worry is central banks get spooked - lifting borrowing costs and dragging on growth and earnings estimates and rethinking discounted valuations for growth and technology stocks.
By Reuters Staff
2 Min Read
FILE PHOTO: Vice-President of the European Central Bank (ECB) Luis de Guindos gives a statement during the second day of the Informal Meeting of EU Ministers for Economics and Financial Affairs in Berlin, Germany September 12, 2020. Odd Andersen/Pool via REUTERS
FRANKFURT (Reuters) - The European Central Bank will act on any “detrimental” rise in borrowing costs and considers removing stimulus too early a bigger risk than acting too late, ECB Vice President Luis de Guindos said on Wednesday.
With borrowing costs rising last month, the ECB stepped up bond purchases to cap yields but some policymakers are now discussing a cut in bond purchases once the pandemic is brought under control in the second half of the year.
MSCI EM stocks eye best day in two weeks Polish zloty supported by strong data, rate hike hopes (Adds, graphic, details on Russian rouble, updates prices)
April 14 (Reuters) - Falling global bond yields helped lift emerging market currencies and stocks on Wednesday, with Russia’s rouble extending gains on hopes of easing tensions between Moscow and Washington over Ukraine.
The rouble rose 0.4%, having marked its best day in five months on Tuesday after a phone call between U.S. President Joe Biden and Russian President Vladimir Putin, which the Kremlin said was a proposal to normalise ties.
Simmering tensions over eastern Ukraine had pushed the rouble down to five-month lows over the last few weeks on fears of Western sanctions against Moscow over military action.
QE, funding for lending maintained RBNZ says impact of new housing rules to be observed (Adds details, analyst comment)
WELLINGTON, April 14 (Reuters) - New Zealand’s central bank left all its current policy settings unchanged on Wednesday, saying monetary stimulus should continue to ensure its inflation and employment targets are met.
The Reserve Bank of New Zealand (RBNZ) also said it needed time to observe the impact of new housing market measures and a gradual revival in tourism on its recovering economy.
It kept the official cash rate (OCR) at a record low of 0.25%, while also continuing the NZ$100 billion ($70.55 billion) quantitative easing and Funding for Lending Programme (FLP) tools, both introduced last year to support a market hit by the COVID-19 pandemic.
Breakingviews
3 Min Read
The logo of Amazon is seen at the company logistics centre in Boves, France, January 19, 2019. REUTERS/Pascal Rossignol
WASHINGTON (Reuters Breakingviews) - Alibaba’s, $2.8 billion fine from the Chinese antitrust watchdog ought to worry U.S. rival Amazon.com. Beijing’s case against Jack Ma’s e-commerce giant shows it’s possible to define the market and single out data usage in ways that American regulators haven’t yet managed to do, but could.
Big U.S. technology firms have eluded regulators for several reasons. One is that in trying to pinpoint market abuse, watchdogs first have to agree what that market is. Even that isn’t simple. Last year, Bezos told Congress that his company competes in the overall retail market, where it has less than 4% market share in the United States. But in e-commerce, it has 40% of sales, compared to No. 2 Walmart with 7%, according to eMarketer.