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Sep 10, 2013

Breakingviews- Yield curve shifts look less lucrative for banks

(The author is a Reuters Breakingviews columnist. The
opinions expressed are her own.)

By Swaha Pattanaik

LONDON, Sept 10 (Reuters Breakingviews) – When longer-term
interest rates creep up, that’s usually a cue for banks to rake
in bigger profits by borrowing much more cheaply than they lend.
Regulation and the economic environment complicate the equation
this time.

Aug 29, 2013
via Breakingviews

The euro’s serene summer may come to an abrupt end

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By Swaha Pattanaik

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

The euro has been a haven of stability during a summer that has seen government bond yields leap, stocks crumble, and emerging markets slide. But the mood is souring. Some investors are so convinced the currency will weaken against the dollar that they are paying hefty premiums to express their bearishness in the options market.

Aug 27, 2013
via Breakingviews

Emerging market woes support higher U.S. yields

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By Swaha Pattanaik

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

When there is turmoil in global markets, safe havens, such as U.S. government bonds, typically benefit. But right now, the pattern may be different. In Brazil, India and Indonesia, central banks have intervened to slow their currencies’ slide in the past two weeks. Traders say that other countries are doing the same. These raids on foreign exchange reserves will add to the tailwinds that are driving U.S. Treasury yields higher.

Aug 21, 2013
via Breakingviews

Bond yield menace intrudes on equity market party

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By Swaha Pattanaik

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Bond yields are still low by historical standards. But they have been rising fast enough to erode the equity risk premium (ERP). That means that last week’s pattern – falling share prices and rising yields – is likely to become more common.

Apr 14, 2013

Bankers count on watered down EU trading tax

LONDON, April 14 (Reuters) – Bankers are confident they can
persuade the European Union that its proposed financial trading
tax poses enough risks to struggling economies and banks to
warrant being watered down.

Their campaign against the tax, which will be imposed by 11
of the EU’s 27 countries, focuses on how much it would boost the
cost of funding for governments and companies, erode returns
earned even by long-term investors, and hurt funding markets
which are crucial to the health of the financial system.

Jul 27, 2012

Draghi raises market hopes ECB may not want to meet

LONDON (Reuters) – Mario Draghi has set a high bar by declaring that his European Central Bank will do whatever it takes within its mandate to preserve the euro.

At the very least, financial markets expect the ECB to overcome the Bundesbank’s reservations and resume its Securities Markets Programme (SMP), which it last deployed to buy government bonds in the open market nearly five months ago.

Jul 27, 2012

Analysis: Draghi raises market hopes ECB may not want to meet

LONDON (Reuters) – Mario Draghi has set a high bar by declaring that his European Central Bank will do whatever it takes within its mandate to preserve the euro.

At the very least, financial markets expect the ECB to overcome the Bundesbank’s reservations and resume its Securities Markets Programme (SMP), which it last deployed to buy government bonds in the open market nearly five months ago.

May 17, 2012

Analysis: A curious case of German risk and safety

LONDON (Reuters) – Investors can’t seem to buy enough German government bonds and yet the cost of insuring against a German default has slowly crept up.

It might seem counterintuitive that the two phenomena are occurring at the same time but they have a common driving force – growing concern the euro zone crisis has worsened so much that Greece could end up leaving the single currency.

Mar 16, 2012

Sound and fury of French election matters for markets

LONDON, March 16 (Reuters) – Investors looking through
the fog of French election campaign rhetoric see enough
differences between the two main presidential contenders to care
who wins.

Protectionism, potshots at European Union rules and promises
to raise taxes on the rich are as much a part of the platform of
conservative incumbent Nicolas Sarkozy as his Socialist rival
Francois Hollande.

Feb 1, 2012

Analysis: Why ECB liquidity is not reaching Portugal

LONDON (Reuters) – A slump in Portuguese bond prices in the past month shows there are parts of the euro zone government debt market that massive shots of cheap money from the European Central Bank cannot reach.

Italian, Spanish and Irish bonds have all rallied as banks used some of the 489 billion euros they borrowed from the ECB in December to buy such debt, a profitable trade because the special three-year loans were so cheap.

    • About Swaha

      "Swaha is a columnist for Reuters Breakingviews. She has been covering financial markets and policymaking for 22 years, reporting on key economic and monetary milestones and breaking market-moving news. She was responsible for regional FX, bonds and stock market teams as Reuters EMEA Markets editor between 2008 and 2013. She was Senior Economics Correspondent in France between 2005 and 2008, European Economics and Monetary Affairs Correspondent in Brussels between 2001 and 2005 and headed up the Reuters FX reporting desk in London between 1998 and 2001. Swaha previously worked at Bloomberg, Euromoney and IDEA."
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