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Take Five: The tightrope trick

Friday, May 6, 2022
Take Five: The tightrope trick © Reuters. FILE PHOTO: The Federal Reserve building is seen before the Federal Reserve board is expected to signal plans to raise interest rates in March as it focuses on fighting inflation in Washington, U.S., January 26, 2022. REUTERS/Joshua Roberts

How to dampen inflation without slamming the brakes on growth? That's the tricky job central banks face. But as others grapple with soaring prices, we will see how hard China's COVID lockdowns are snarling up trade and slowing its economy.

And another complication -- M&A deals worth over $400 billion are waiting for financing, but costs are rising fast.

Here is your week ahead in markets from Lewis Krauskopf in New York, Tom Westbrook in Singapore, Andres Gonzalez in Madrid; Dhara Ranasinghe and Karin Strohecker in London.

1/NAME OF THE GAME

Red-hot inflation is infusing central bankers with a sense of urgency. The Fed delivered its biggest rate rise in 22 years, Australia hiked by more than expected and India weighed in with an out-of-meeting move.

But the policy tightening rush is adding to the storm clouds gathering over the world economy, hit by soaring food and energy prices, war in Ukraine and China's COVID curbs. The Bank of England while raising rates, also flagged recession risks.

Germany's ZEW sentiment index and preliminary Q1 UK GDP data will highlight the tightrope central banks are walking. And in emerging markets, Mexico, Peru, Malaysia and Romania are likely to confirm the rate hike cycle continues.

Rate hikes cycle is underway https://fingfx.thomsonreuters.com/gfx/mkt/myvmnyydgpr/Rates.PNG

2/INFLATION STATIONS

Is U.S. inflation peaking after the fastest surge in over 40 years? The April consumer price index, due on Wednesday, will show.

March CPI came in at 8.5% on an annualised basis, as gasoline costs hit record highs. On a monthly basis, CPI jumped 1.2%, the biggest gain since September 2005.

Early forecasts are for a 0.2% monthly rise.

The March inflation surge probably sealed the Fed's 50 basis-point rate rise on May 4. The upcoming inflation print could sway expectations for how monetary policy will be adjusted going forward.

U.S. consumer price inflation https://fingfx.thomsonreuters.com/gfx/mkt/zdpxoggrgvx/Pasted%20image%201651677937685.png

3/SPRING BREAKDOWN

China's anti-COVID lockdowns give every indication of stretching through the spring. Alongside the strain on tens of millions of people, damage to the economic outlook - in China and globally - is immense.

And markets' patience with limited policy support is wearing thin. If trade figures due Monday follow the recent spate of dire economic activity, then world growth forecasts, already deteriorating, will get even gloomier.

Iron ore, oil and copper prices are already wavering. In the teeth of a steep U.S. hiking cycle, the slowdown also bodes ill for the wobbling Chinese yuan and in turn, for the foreigners who have placed their money in local markets.

Lockdowns hit the brakes on China's growth https://fingfx.thomsonreuters.com/gfx/mkt/lgvdwggrypo/Pasted%20image%201651752855133.png

4/ OIL AND PRIDE

Banning Russian oil imports seems to be a question of when, not if, for the European Union. The bloc is close to agreeing its sixth and fiercest package of sanctions against Moscow for invading Ukraine, according to the bloc's top diplomat.

The centrepiece of the package is a phased embargo on Russian oil, which makes up over a quarter of EU imports. The move will push European refineries into a race to find new crude suppliers and leave drivers with bigger bills at the pump at a time when the cost of living crisis is squeezing consumers globally.

Meanwhile Russia will hold the annual May 9 Victory Day in Moscow to mark the anniversary of the Soviet Union's triumph over Nazi Germany. The Kremlin dismissed speculation that President Vladimir Putin planned to declare war against Ukraine and a national mobilisation on the highly symbolic day.

World's top oil producers https://fingfx.thomsonreuters.com/gfx/mkt/znpnemoozvl/Global%20oil%20producers.PNG

5/WAITING FOR MONEY

Global dealmaking is recovering after a first-quarter slump caused by Russia's invasion of Ukraine.

April M&A rose 30% from March to $387 billion, and included mega deals such as Elon Musk's $44 billion buyout of Twitter (NYSE:TWTR) and a 58 billion-euro ($61.04 billion) bid by a consortium for Italian airport and motorway operator Atlantia.

Now the M&A market faces another challenge - funding.

Globally, more than $400 billion worth of deals have been announced since January but not completed, Refinitiv data shows.

M&A deals typically include 'staple financing', a pre-arranged package offered to potential purchasers to finance the acquisition. Once the deal is agreed, the buyer can syndicate the financing, inviting other banks to join. Or it can tap bond or equity markets.

But funding costs have spiralled since the deals were agreed. Average global corporate debt yields have soared 100 basis points since the Feb. 24 invasion, and by 150 bps on junk-rated U.S. companies, ICE (NYSE:ICE) BofA indexes show.

That's left some enormous deals hanging. They include Microsoft (NASDAQ:MSFT)'s purchase of Activision Blizzard (NASDAQ:ATVI), Musk's Twitter acquisition and an investment by Macquarie and the British Columbia Investment Management into Britain's National Grid (LON:NG).

Top 10 pending M&A deals globally ($ bln) https://graphics.reuters.com/GLOBAL-MARKETS/FIVE/lbpgnydjdvq/chart.png

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28-05-2022 10:40:55 (UTC+7)

EUR/USD

1.0735

+0.0011 (+0.10%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (8)

Sell (0)

EUR/USD

1.0735

+0.0011 (+0.10%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (8)

Sell (0)

GBP/USD

1.2629

+0.0035 (+0.28%)

Summary

Sell

Moving Avg:

Buy (4)

Sell (8)

Indicators:

Buy (3)

Sell (5)

USD/JPY

127.13

-0.01 (-0.01%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (1)

AUD/USD

0.7161

+0.0063 (+0.89%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (0)

USD/CAD

1.2723

-0.0049 (-0.38%)

Summary

Neutral

Moving Avg:

Buy (9)

Sell (3)

Indicators:

Buy (2)

Sell (6)

EUR/JPY

136.48

+0.14 (+0.10%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (8)

Sell (0)

EUR/CHF

1.0278

-0.0010 (-0.10%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (2)

Gold Futures

1,851.64

+4.04 (+0.22%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (2)

Silver Futures

22.130

+0.165 (+0.75%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (6)

Sell (0)

Copper Futures

4.3225

+0.0635 (+1.49%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (0)

Sell (9)

Crude Oil WTI Futures

115.07

+0.98 (+0.86%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (0)

Sell (7)

Brent Oil Futures

115.32

+1.15 (+1.01%)

Summary

↑ Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (0)

Sell (7)

Natural Gas Futures

8.708

-0.187 (-2.10%)

Summary

↑ Buy

Moving Avg:

Buy (9)

Sell (3)

Indicators:

Buy (6)

Sell (1)

US Coffee C Futures

228.65

+2.05 (+0.90%)

Summary

↑ Sell

Moving Avg:

Buy (2)

Sell (10)

Indicators:

Buy (0)

Sell (8)

Euro Stoxx 50

3,808.86

+68.55 (+1.83%)

Summary

↑ Buy

Moving Avg:

Buy (9)

Sell (3)

Indicators:

Buy (9)

Sell (0)

S&P 500

4,158.24

+100.40 (+2.47%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (0)

DAX

14,462.19

+230.90 (+1.62%)

Summary

↑ Buy

Moving Avg:

Buy (10)

Sell (2)

Indicators:

Buy (7)

Sell (0)

FTSE 100

7,585.46

+20.54 (+0.27%)

Summary

Sell

Moving Avg:

Buy (1)

Sell (11)

Indicators:

Buy (4)

Sell (4)

Hang Seng

20,697.36

+581.16 (+2.89%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

US Small Cap 2000

1,887.90

+49.66 (+2.70%)

Summary

Neutral

Moving Avg:

Buy (6)

Sell (6)

Indicators:

Buy (4)

Sell (5)

IBEX 35

8,933.60

+44.80 (+0.50%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (9)

Sell (0)

BASF SE NA O.N.

51.110

+0.320 (+0.63%)

Summary

Neutral

Moving Avg:

Buy (7)

Sell (5)

Indicators:

Buy (1)

Sell (7)

Bayer AG NA

66.58

+0.68 (+1.03%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (7)

Sell (0)

Allianz SE VNA O.N.

200.20

+1.40 (+0.70%)

Summary

↑ Buy

Moving Avg:

Buy (12)

Sell (0)

Indicators:

Buy (8)

Sell (0)

Adidas AG

179.96

+3.20 (+1.81%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (7)

Sell (1)

Deutsche Lufthansa AG

6.881

+0.031 (+0.45%)

Summary

↑ Buy

Moving Avg:

Buy (11)

Sell (1)

Indicators:

Buy (7)

Sell (2)

Siemens AG Class N

121.86

+3.34 (+2.82%)

Summary

Buy

Moving Avg:

Buy (8)

Sell (4)

Indicators:

Buy (5)

Sell (1)

Deutsche Bank AG

10.392

-0.022 (-0.21%)

Summary

↑ Sell

Moving Avg:

Buy (3)

Sell (9)

Indicators:

Buy (1)

Sell (6)

 EUR/USD1.0735↑ Buy
 GBP/USD1.2629Sell
 USD/JPY127.13↑ Buy
 AUD/USD0.7161↑ Buy
 USD/CAD1.2723Neutral
 EUR/JPY136.48↑ Buy
 EUR/CHF1.0278↑ Buy
 Gold1,851.64↑ Buy
 Silver22.130↑ Buy
 Copper4.3225↑ Sell
 Crude Oil WTI115.07↑ Sell
 Brent Oil115.32↑ Sell
 Natural Gas8.708↑ Buy
 US Coffee C228.65↑ Sell
 Euro Stoxx 503,808.86↑ Buy
 S&P 5004,158.24↑ Buy
 DAX14,462.19↑ Buy
 FTSE 1007,585.46Sell
 Hang Seng20,697.36↑ Buy
 Small Cap 20001,887.90Neutral
 IBEX 358,933.60↑ Buy
 BASF51.110Neutral
 Bayer66.58↑ Buy
 Allianz200.20↑ Buy
 Adidas179.96↑ Buy
 Lufthansa6.881↑ Buy
 Siemens AG121.86Buy
 Deutsche Bank AG10.392↑ Sell
Mua/Bán 1 chỉ SJC
# So hôm qua # Chênh TG
SJC Eximbank6,830/ 6,940
(0/ 0) # 1,716
SJC HCM6,850/ 6,950
(-5/ -5) # 1,738
SJC Hanoi6,850/ 6,952
(-5/ -5) # 1,740
SJC Danang6,850/ 6,952
(-5/ -5) # 1,740
SJC Nhatrang6,850/ 6,952
(-5/ -5) # 1,740
SJC Cantho6,850/ 6,952
(-5/ -5) # 1,740
Cập nhật 28-05-2022 10:40:57
Xem lịch sử giá vàng SJC: nhấn đây!
ↀ Giá vàng thế giới
$1,853.48+0.570.03%
Live 24 hour Gold Chart
ʘ Giá bán lẻ xăng dầu
Sản phẩmVùng 1Vùng 2
RON 95-V31.25031.870
RON 95-III30.65031.260
E5 RON 92-II29.63030.220
DO 0.05S25.55026.060
DO 0,001S-V26.35026.870
Dầu hỏa 2-K24.40024.880
ↂ Giá dầu thô thế giới
WTI$113.93+1.171.01%
Brent$115.32+4.013.36%
$ Tỷ giá Vietcombank
Ngoại tệMua vàoBán ra
USD23.030,0023.340,00
EUR24.263,1125.622,23
GBP28.523,9629.740,84
JPY177,60188,03
KRW15,9119,38
Cập nhật lúc 10:35:49 28/05/2022
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