Morning Bid: Tough Fed talk

Morning Bid: Tough Fed talk

A look at the day ahead in markets from Anshuman Daga

While Fed speakers talk tough on interest rates and keep market expectations in check, Britain’s bleak outlook will also weigh on UK assets.

St. Louis Fed President James Bullard said that even under a “generous” analysis of monetary policy, the Fed needs to keep raising interest rates given that its tightening so far “had only limited effects on observed inflation.”

And Minneapolis Federal Reserve Bank President Neel Kashkari said it’s hard to know how high the U.S. central bank will need to raise interest rates but it should not stop until it’s clear that inflation has peaked.

For now, it does look like recent market enthusiasm about a short period of rising rates on signs of slower inflation was misplaced. On Friday, the change in mood pushed the dollar on course for its best week in a month, while Asian stocks were stable.

However, there was some good news as British consumer confidence edged up this month though it stayed close to record-low levels, market research firm GfK said on Friday.

This came a day after the country’s budget forecasters warned Britain faced a record hit to living standards this year, battered by surging inflation. Finance minister Jeremy Hunt also announced more pain, with tax rises now and spending cuts further ahead.

On the corporate front, Francesco De Ferrari, who heads Credit Suisse’s (CSGN.S) wealth management business, told Reuters he is targeting growth markets, high net worth clients and technology to fuel the fortunes of the embattled Swiss bank.

Meanwhile, John Ray, who was named FTX’s CEO to steer FTX Group through bankruptcy, outlined fund abuses and untrustworthy records in his first findings at the collapse crypto exchange, describing it as a “complete failure” of controls.

The Securities Commission of The Bahamas assumed control of all digital assets of FTX.

The morale was downbeat at Twitter as hundreds of employees started leaving the beleaguered social media company following an ultimatum from Elon Musk that staffers sign up for “long hours at high intensity,” or leave.

Finally, be prepared for delays in the holiday season.

Postal workers at Britain’s Royal Mail will strike for six days in the run-up to the busy Christmas period in a dispute over pay and conditions, their union said on Thursday.

Key developments that could influence markets on Friday:

UK Oct retail sales

U.S. Oct existing home sales

Fed’s Powell speaks