Aurelia Butler

TORONTO (Reuters) – Canada’s main stock index rose on Monday to its highest closing level in nearly four weeks as investors snapped up stocks in some of the most depressed sectors of the market amid hopes that central banks would ease the pace of interest rate hikes.The Toronto Stock Exchange’s S&P/TSX composite index ended up 42.56 points, or 0.2%, at 19,857.07, its highest closing level since Dec. 14.”Market moves on a day-to-day basis are very much being dictated by the inflation picture and central bank actions. That has not changed (from 2022),” said Elvis Picardo, portfolio manager at Luft Financial, iA Private Wealth.The U.S. benchmark S&P 500 index closed barely changed as expectations that the Federal Reserve will become less aggressive with its interest rate hikes were offset by lingering worries about inflation.”It does seem like, even though market participants are braced for a recession, the tone, at least for the first few days of this year, has been encouraging,” Picardo said. “We are seeing some buying come back into the beaten-down groups like technology.” The Toronto market’s technology sector lost 35.7% in 2022. It was up nearly 1% on Monday, while energy gained 0.6% as oil settled 1.2% higher at $74.63 a barrel. Oil rose after China reopened its borders, boosting the outlook for fuel demand.A standout among individual names was financial services firm Canaccord Genuity Group Inc. Its shares soared 29.5% after a group led by the company’s management said it would launch a takeover bid at nearly C$1.13 billion ($845 million).Cannabis producer Tilray (NASDAQ:TLRY) Brands Inc was one of the laggards. Its shares fell 8.1% after the company reported a second-quarter loss. More

(Reuters) – A look at the day ahead in Asian markets from Stephen Culp.Asian markets could be in for a bumpy ride on Tuesday after a rocky U.S. session for stocks, as a lack of market moving catalysts and remarks from a Fed official helped take the air out of earlier gains.Risk appetite has bounced between U.S. economic resiliency and signs of cooling inflation and fears that the central bank will keep restrictive policy rates in place for longer than many might have hoped, potentially tipping the world’s largest economy into recession.As for the world’s second-largest economy, Beijing’s reversal of its zero-COVID policy resulted in tourists flowing into mainland China for the first time in years, sparking optimism of demand recovery, which in turn gave a boost to crude prices, and sent benchmark U.S. Treasury yields lower. While China’s reopening has resulted in spiking COVID infections, recent talks with Pfizer (NYSE:PFE) over securing a license to produce a generic version of its COVID drug has eased fears of another shutdown. Economists at many big banks are revising up their GDP growth forecasts for the second half of this year.China’s yuan on Monday touched a near-five-month high against the greenback.Consumer prices data coming from Japan on Tuesday and from the United States and China later in the week will offer further evidence regarding the extent to which global inflation has peaked – or not.Further signs of cooling inflation could raise the possibility of a pause in monetary policy.On Monday, Atlanta Fed President Raphael Bostic provided assurances that it will be “appropriate and important” for the Fed to exercise caution as it calibrates its war on inflation. Here’s a look at various U.S. inflation indicators, and how far most of them have to fall before approaching the Fed’s average annual 2% interest target:Data from the Federal Reserve on Monday showed outstanding consumer credit grew in November by more than analysts expected, underscoring the strength of the American consumer and adding to the possibility of the fabled “soft landing.”Some developments that could move markets on Tuesday are as follows: – Federal Reserve Chair Jerome Powell is due to participate in a “Central Bank Independence” panel in Stockholm, Sweden, which will include a Q&A session- Japan releases its CPI report for December, which is expected to show core annual inflation of 3.8%, hotter than the previous month’s 3.6% reading More

SAN FRANCISCO/ATLANTA (Reuters) -Federal Reserve policymakers say fresh inflation data out later this week will help them decide whether they can slow the pace of interest rate hikes at their upcoming meeting, to just a quarter point increase instead of the larger jumps they used for most of 2022.If U.S. consumer price data released on Thursday confirms the cooling seen in most recent monthly jobs report, Atlanta Fed Bank President Raphael Bostic told reporters on Monday that he would have to take a quarter point increase “more seriously and to move in that direction.” “Eventually I want us to get to 25” basis point rate hikes, he said. “The specific timing of that is going to be a function of the data that comes in.”Asked in a Wall Street Journal interview early on Monday about her preferred rate-hike size for the Jan. 31 to Feb.1 meeting, San Francisco Fed President Mary Daly said both 25 and 50 basis point rate hikes are “on the table” for her. She, like Bostic, expects the Fed policy rate – now at 4.25% to 4.5% – to need to rise to a 5% to 5.25% range to do the job on inflation. Getting there in “gradual steps does give you the ability to respond to incoming information” and take account of the delayed effect of higher borrowing costs on the broad economy, Daly said. But at the same time, “I want to be data dependent, not wall off a 50 basis point increase,” she said, adding that she will pay close attention to any signs in this week’s consumer price index report for improvement in the most persistent part of the inflation picture, the price of core services excluding shelter.After nearly a year of aggressive rate hikes designed to slow the economy and bring soaring inflation to heel, Fed policymakers say they are encouraged by the recent slowing in jobs and wage growth that could signal cooler inflation ahead. But they are loathe to stop interest rate hikes or even downshift to smaller rate-hike increments too soon, for fear of entrenching high inflation and ultimately forcing the Fed to raise rates further. As they calibrate the size of their rate hikes over coming meetings, policymakers continue to debate not just how high rates need to rise, but also how long they need to stay there to bring inflation closer to the Fed’s 2% target. The Fed’s last policy meeting minutes in December showed no policymakers expect to cut rates this year. That contrasts with market expectations for the Fed to start cutting rates by the second half of the year, presumably in response to a slowing economy. On Monday, Bostic said his “base case” is for no rate cuts in 2024 either, although that call has wide confidence bands around it. That would make him among the most hawkish of the Fed’s 19 policymakers, most of whom expect cuts to the policy rate to below 4.5% next year.Daly said that as the Fed tightens policy, she expects the U.S. unemployment rate, now at 3.5%, to rise to about 4.5% or 4.6%, and inflation, now running at 5.5% by the Fed’s preferred measure, to the low 3% range by the end of 2023 and closer to 2% in 2024.Getting inflation down faster than that would require “enormous” labor market pain that Daly said she is not willing to inflict. More