2026-01-23 10:58
Chinese equity funds see biggest outflow on record of $49 bln US equities see $16.8 bln outflow European, Japanese equity funds see inflows Jan 23 (Reuters) - Global equity funds recorded their largest outflows on record in the week to Wednesday, as heavy withdrawals from the U.S. and China outweighed a relatively strong showing in other regions, BofA Global Research said. World stock funds saw $43.2 billion in outflows combined in the week through to Wednesday, with the U.S. seeing $16.8 billion in outflows and Chinese stocks seeing $49.2 billion in outflows, BofA said in its weekly roundup of flows in and out of world markets using data from EPFR. Sign up here. The outflows in Chinese equities were the biggest on record, which BofA attributed to selling by the so-called "national team" of Chinese state-backed investors. Chinese regulators in recent weeks have been taking action to slow the pace of market gains. Stocks around the world have also been hurt by the complicated geopolitical situation, most recently illustrated by U.S. President Donald Trump's threats to impose tariffs on European allies until Washington was allowed to buy Greenland. While those concerns have subsided after Trump said a framework on a future deal over Greenland has been reached, they revived talk of the "Sell America" trade that emerged in the aftermath of Trump's sweeping tariff announcement last April, as investors look to diversify their portfolios. European equities recorded their sixth-straight week of inflows while Japanese funds saw a $2.2 billion inflow, the biggest since October 2025, according to BofA. Despite the Chinese weakness, global emerging markets equity funds recorded their fourth-consecutive week of increasing inflows. Fixed-income flows remained resilient, with global funds bringing in $15.4 billion though slowing from $23.4 billion in inflows seen last week. https://www.reuters.com/world/asia-pacific/global-markets-flows-urgent-2026-01-23/
2026-01-23 10:45
Greene says 2026 pay growth may keep upward pressure on CPI Surveys point to pay growth of around 3.5% for 2026 Greene sees wage growth of 3% needed to keep CPI at 2% Big Fed rate cuts would add to upward pressure on CPI Greene voted against BoE's December rate cut LONDON, Jan 23 (Reuters) - Bank of England policymaker Megan Greene said on Friday she remained concerned about how much businesses intend to raise wages this year and the challenge it could pose to the BoE achieving its 2% inflation target. Greene also said the BoE should not follow in the footsteps of the Federal Reserve if the U.S. central bank cuts interest rates aggressively this year - something investors see as a possibility given pressure from President Donald Trump. Sign up here. The BoE's Monetary Policy Committee voted 5-4 last month to cut its key interest rate to 3.75% from 4%. Greene opposed the move. GREENE FOCUSED ON INFLATION AND WAGE EXPECTATIONS Although BoE Governor Andrew Bailey has forecast that inflation will fall from 3.4% in December to around 2% by April or May, much of that is due to one-off factors. "I will be watching household and business inflation expectations over the next few months to see if they come down in line with lower inflation outturns. Even more concerning, in my view, are the forward indicators for wage growth," Greene said in a speech , opens new tab to the Resolution Foundation think tank. Private sector wage growth slowed to an annual rate of 3.6% in the three months to November, its lowest level in five years. But Greene said the drop reflected high wage growth in late 2024 and "our outlook for next year is that this decline may have run its course". Preliminary results from a BoE survey of businesses due out next month pointed to 2026 wage growth of 3.5%, above the level of 3% or just over that was consistent with 2% inflation in the medium term, Greene said. Unemployment is rising - which normally would push down on wage growth - but Greene said there was a risk that this linkage had weakened since the COVID-19 pandemic. FED RATE CUTS LIKELY TO PUSH UP UK INFLATION Most of Greene's speech focused on how changes in Fed interest rates affect Britain. Investors often took the view, she said, that when the Fed cuts rates, the BoE comes under pressure to follow suit to stop sterling from strengthening against the dollar, which would make British exports less competitive, growth slower and inflation fall below target. Greene said this explanation was too simple, as U.S. rate cuts also tended to lower British government borrowing costs and push up the share prices of British companies, helping the economy. New analysis by Greene and BoE colleagues suggested that a surprise loosening of Fed policy would, on balance, be likely to put upward pressure on British inflation. "This would, in my view, give even greater cause for concern about a risk of UK inflation persistence ... warranting a slower withdrawal of monetary policy restriction in the UK," she said. https://www.reuters.com/sustainability/sustainable-finance-reporting/bank-englands-greene-says-she-is-still-worried-about-inflation-pressures-2026-01-23/
2026-01-23 10:43
TOKYO, Jan 23 (Reuters) - Japanese Finance Minister Satsuki Katayama said on Friday she was watching currency markets closely, but declined to comment on speculation among traders that authorities had checked currency rates with banks - a prelude to potential intervention. Katayama was speaking to reporters at the Ministry of Finance after the yen jumped suddenly against the dollar, raising speculation that authorities were preparing to support the currency, which has been weakening recently. Sign up here. Japan's top currency diplomat, Atsushi Mimura, also declined to comment on the yen's sharp rise. "In this situation, I have no intention of commenting on that," said Mimura, vice finance minister for international affairs, when asked whether Tokyo had conducted yen-buying interventions. Asked about speculation that authorities had conducted rate checks, he also said he had "no intention of commenting on that either." https://www.reuters.com/world/asia-pacific/japans-finance-minister-watching-fx-closely-no-comment-rate-checks-2026-01-23/
2026-01-23 09:38
Jan 26 (Reuters) - Gulp down a motion sickness tablet because the whirlwind is set to continue this week. There's a spicy first Federal Reserve meeting of the year, teetering U.S. and European relations and jitters in Japan. Apple, Microsoft, Meta, Tesla and Samsung all report earnings and there's a deluge of emerging market interest rate decisions. Sign up here. Here's all you need to know about what will be moving markets by Marc Jones and Amanda Cooper in London, Lewis Krauskopf in New York and Gregor Stuart Hunter in Singapore. 1/SAFE GREENLANDING ZONE? With U.S. President Donald Trump, Europe and NATO stepping back from their icy precipice over Greenland, markets - with the notable exception of the gold bugs and weapons firms - will be hoping the tensions continue to melt away. For that they will want to see more tangible details about the "framework deal" the sides have struck, and for the crisis to stay safely out of Trump's social media feed. It could help bring world stock markets back to record highs and tap the brakes on gold's seemingly unstoppable rush which has now powered past $5,000 an ounce, although given the way this year has started, it might just make way for another geopolitical flashpoint. 2/FIGHT THE FED The Federal Reserve holds its latest interest rate-setting meeting and, with Jerome Powell & co widely expected to hold rates steady on Wednesday, focus will be just as much on the threats to the U.S. central bank's cherished independence. Investors will still be watching for signals when rates might move, of course, but this will be the first time Powell holds a Fed press conference since this month's revelations that the Trump administration had launched an investigation into his multi-billion-dollar refurbishment of the Fed's headquarters. Powell has slammed the move as a "pretext" to try to gain more influence over interest rates. It also adds to the other two key subplots in the independence row - the U.S. Supreme Court's case over Trump's bid to fire governor Lisa Cook and his still-to-be-announced decision on who takes over from Powell as Fed chief in May. 3/HOW MAGNIFICENT? Four out of the seven so-called "Magnificent Seven" U.S. tech giants report earnings this week - Microsoft (MSFT.O) , opens new tab, Apple (AAPL.O) , opens new tab, Facebook parent Meta (META.O) , opens new tab, Elon Musk's Tesla (TSLA.O) , opens new tab - as does South Korea's Samsung (005930.KS) , opens new tab. The key for many will be to what extent their massive spending - funded increasingly by debt in some cases - on the global AI arms race is paying off. It is no longer enough just to beat forecasts. Companies have to smash them out of the ground and offer racy enough guidance that make investors feel comfortable about their stratospheric valuations. The geopolitical ructions of the last couple of weeks aside, it's pockets of the market beyond AI that are performing most strongly right now. The Magnificent Seven may find shareholders that have become accustomed to blockbuster results want even more magnificence. 4/JITTERS IN JAPAN Campaigning will be hotting up in Japan ahead of the snap February 8 election that Prime Minister Sanae Takaichi has called in a bid to tighten her grip on the ruling Liberal Democratic Party. Takaichi's pledges to boost spending and suspend the country's food sales tax for two years have been pummelling the yen and Japanese government bonds, so much so that Finance Minister Satsuki Katayama had to call for calm last week and the Bank of Japan deployed some interest rate hike hints. Analysts worry the yen has become unmoored from its traditional anchor - the gap between Japanese and U.S. long-term interest rates - and that alongside the erratic bond market behaviour, shows that investors are now sweating over the country's 221% debt-to-GDP ratio. 5/HOLD TIGHT There's a smorgasbord of emerging market central banks meeting and though there will not be many immediate movements, there will be plenty of signals to scan as the hot streak for EM currencies, debt and stocks rumbles on. Heavyweight Brazil is widely expected to keep its rates unchanged at 15% again, but may well hint at a cut. Chile is expected to be a near carbon copy with its 4.5% rates. Hungary should stick at 6.5% as its crucial election draws closer. South Africa is tipped to stay at 6.75% due to high electricity inflation, although a cut has not been completely dismissed. It will not all be sideways though. Colombia is expected to cut its rates between a quarter and a half point, despite recent wage increases, and Ghana is seen slashing its rate by 300 basis points having seen its currency, the cedi, begin to wobble after its gold-linked rush over the last year. https://www.reuters.com/business/take-five/global-markets-themes-graphic-2026-01-23/
2026-01-23 07:40
Jan 23 (Reuters) - British retail sales rose unexpectedly last month, helped by strong online sales, according to data published on Friday which added to signs of a pickup in the economy after finance minister Rachel Reeves' budget. Sales volumes rose by 0.4% in December from November, the Office for National Statistics said, marking a brighter end to an otherwise drab quarter for shops. Sign up here. Economists polled by Reuters had expected sales to fall by 0.1% in month-on-month terms. Earlier on Friday, market research firm GfK said consumer confidence rose to its highest level since August 2024 as households became more positive about their own finances. For the fourth quarter as a whole, retail sales fell by 0.3%, reflecting declines in November and October, which the ONS said would exert a 0.01 percentage-point drag on overall economic output. "Non-store retailers rebounded, with online jewellers confirming renewed demand for precious metals, following a lull in November 2025," the ONS said. Compared with December a year ago, retail sales volumes were 2.5% higher, marking the strongest such reading since April. Still, overall retail sales volumes remained 2.2% lower last month than their level six years ago, before the COVID-19 pandemic. Major British retailers were generally cautious about 2026 prospects in their post-Christmas trading updates. Food retail leader Tesco (TSCO.L) , opens new tab outperformed the wider market but Marks & Spencer (MKS.L) , opens new tab disappointed with its clothing sales and Primark owner Associated British Foods (ABF.L) , opens new tab warned on profit. Fashion retailer Next(NXT.L) , opens new tab and electricals group Currys(CURY.L) , opens new tab raised profit outlooks. https://www.reuters.com/world/uk/uk-retail-sales-show-unexpected-increase-december-2026-01-23/
2026-01-23 07:39
LONDON, Jan 22 (Reuters) - Britain's approval for a hyperscale data centre just outside London will come under scrutiny, after campaigners were on Thursday granted permission to bring a first of its kind legal challenge over the project. Plans for a 90MW data centre in Buckinghamshire were approved by the government last year, after the local authority had refused permission. Sign up here. But British non-profit Foxglove and environmental charity Global Action Plan argued ministers failed to consider the impact on climate change of the vast amount of electricity the data centre will need. Global data centre demand and planned projects have surged since ChatGPT was released in late 2022, as investors and governments bet on generative AI, increasing demand for electricity capacity to power the centres. The groups' lawyers say the Ministry of Housing, Community and Local Government (MHCLG) also failed to assess the "much larger amounts of additional electricity" to power and cool" computers, as opposed to the data centre's office functions. Greystoke Land, which is developing the site, argued the project was lawfully approved and said the legal challenge should not go ahead. But officials at MHCLG, in a letter to London's High Court this week, accepted permission for the project should be quashed as it was granted on the basis of climate mitigation measures which were then not secured. The High Court granted Foxglove and Global Action Plan the go-ahead to challenge the decision at a hearing on Thursday, meaning a full hearing of their case is due later this year. Foxglove and Global Action Plan say theirs is the first legal challenge to a hyperscale data centre in Britain. ($1 = 0.7449 pounds) (This story has been refiled to fix a typo in paragraph 3) https://www.reuters.com/world/uk/uk-court-gives-go-ahead-challenge-large-data-centre-2026-01-22/
