Latest news with #JordanRochester
Yahoo
23-06-2025
- Business
- Yahoo
Europe Leads Global Bond Selloff as Oil Stokes Inflation Fears
(Bloomberg) -- US Treasuries fell slightly, following a decline in European bonds as the escalating conflict in the Middle East stoked fears of an oil supply disruption that would fan inflation. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice One Architect's Quest to Save Mumbai's Heritage From Disappearing NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Treasury yields ticked higher across the curve, with 10-year yields up as much as three basis points to 4.40%. Traders pared bets on interest-rate cuts from the Federal Reserve to price 48 basis points of reductions by year-end. The moves were sharper in Europe, with the region seen as more vulnerable to swings in oil prices due to its reliance on energy imports. German 10-year yields rose as much as five basis points to 2.56%, while comparative breakevens rose as much as four basis points. Traders are watching to see how Tehran responds to US strikes on Iranian nuclear facilities that pushed the Middle East into uncharted territory. Iran could retaliate by disrupting shipping in the Strait of Hormuz — a narrow artery through which a fifth of the world's crude output flows. 'We are all oil traders this morning,' said Jordan Rochester, head of macro strategy for EMEA at Mizuho International Plc. A rise in energy prices risks 'stronger inflation for central bankers this summer,' he added, which could limit rate cuts. The moves in European bonds came even as the data showed the euro area's private sector barely grew in June. Markets moved to price 20 basis points of cuts from the European Central Bank this year, which means a 80% chance of a final quarter-point reduction. While the US' role as a net-energy exporter may help the American economy be relatively more insulated from an oil price spike, the uncertainty could give further justification to the wait-and-see approach of Fed officials. 'Any negative impact would be through deteriorating financial conditions or through higher for longer rates as the Fed have another reason to delay cuts,' wrote macro strategists at Deutsche Bank led by Jim Reid. In Europe 'the impact is potentially more serious,' they said, noting that every $10 increase in oil prices per barrel could add a quarter of a percent to HICP within a quarter, referring to a key inflation measure. The dollar gained against all Group-of-10 peers, with the Bloomberg Dollar Spot Index up as much as 0.6%. 'A further step up in the Middle East conflict is a concern here,' said Richard McGuire, head of rates strategy at Rabobank. Treasuries could 'outperform on the notion that they are still the world's risk-free rate even if US exceptionalism is already under clear threat from the Trump administration.' (Updates market moves, adds context.) Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
23-06-2025
- Business
- Yahoo
Europe Leads Global Bond Selloff as Oil Stokes Inflation Fears
(Bloomberg) -- Europe led a global bond selloff as the escalating conflict in the Middle East stoked fears of an oil supply disruption that would fan inflation. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice One Architect's Quest to Save Mumbai's Heritage From Disappearing NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports German yields climbed across the curve, with 10-year yields up as much as five basis points to 2.56%, the highest level in a week. Treasury yields also rose, with 10-year yields up as much as three basis points to 4.40%. Traders are watching to see how Tehran responds to US strikes on Iranian nuclear facilities that pushed the Middle East into uncharted territory. Iran could retaliate by disrupting shipping in the Strait of Hormuz — a narrow artery through which a fifth of the world's crude output flows. 'We are all oil traders this morning,' said Jordan Rochester, head of macro strategy for EMEA at Mizuho International Plc. A rise in energy prices risks 'stronger inflation for central bankers this summer,' he added, which could limit rate cuts. Unlike the US, which is a net energy exporter, Europe is more vulnerable to swings in oil prices due to its reliance on imports. Traders pared bets on European Central Bank interest-rate cuts to price around 20 basis points by year-end, while German 10-year breakevens rose as much as four basis points. The moves came even as data showed the region's private sector barely grew in June. For the US, 'any negative impact would be through deteriorating financial conditions or through higher for longer rates as the Fed have another reason to delay cuts,' wrote macro strategists at Deutsche Bank led by Jim Reid. In Europe 'the impact is potentially more serious,' they said, noting that every $10 increase in oil prices per barrel could add a quarter of a percent to HICP within a quarter, referring to a key inflation measure. The dollar gained against all Group-of-10 peers, with the Bloomberg Dollar Spot Index up as much as 0.4%. 'A further step up in the Middle East conflict is a concern here,' said Richard McGuire, head of rates strategy at Rabobank. Treasuries could 'outperform on the notion that they are still the world's risk-free rate even if US exceptionalism is already under clear threat from the Trump administration,' he added. Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P.
Yahoo
10-06-2025
- Business
- Yahoo
Rochester: Trump Escalates to De-Escalate
Asian shares edged higher on the back of US-China trade talks as officials struck a positive tone after the first day of negotiations. Jordan Rochester, Head of EMEA FICC Strategy at Mizuho spoke to Bloomberg's Lizzy Burden on Horizons Middle East and Africa on the market reaction to President Trump's tariffs plan.
Bloomberg
28-05-2025
- Business
- Bloomberg
Single Best Idea: Rochester & Lazar
Tom Keene breaks down the Single Best Idea from the latest edition of Bloomberg Surveillance Radio. In this episode, we feature conversations with Jordan Rochester & Nancy Lazar Watch Tom and Paul LIVE every day on YouTube:
Yahoo
14-04-2025
- Business
- Yahoo
The Euro Is Emerging as Alternative Safe Haven Along With Bunds
(Bloomberg) — The euro's fastest rally in a decade and a half is gaining traction, with traders betting on a move to $1.20 and strategists scrambling to update their forecasts. The Secret Formula for Faster Trains NYC Tourist Helicopter Crashes in Hudson River, Killing Six Even Oslo Has an Air Quality Problem Inside the Quiet, Extravagant Expansion of the Frick Collection Lisbon Mayor Wants Companies to Help Fix City's Housing Shortage Europe's common currency hit its strongest level in three years at the end of last week as economic uncertainty radiating from US tariff policy raised questions about the dollar's traditional haven role. Three out of four options contracts bought Friday were for more euro gains, according to data from the Depository Trust & Clearing Corporation. Traders say hedge funds are targeting a move to $1.20. And strategists at Mizuho International Plc see rising odds that the currency hits that level — the highest since mid-2021 — in the coming months. 'The FX market is long euros, but structural diversification flows will make this a theme many will jump on,' said Jordan Rochester, head of macro strategy for EMEA at Mizuho International Plc. 'My upside risk of $1.15–$1.20 this year is quickly becoming a base case.' US Bonds Have Never Lost Out This Much to Bunds in a Rout The euro is emerging as a prime beneficiary of greenback weakness as investors reassess the dollar's role in the global financial system after President Donald Trump whipsawed markets with his tariffs rollout and took the trade war with China to a new level. Germany's Finance Minister said on Friday that governments should seize on the chance to give the euro more weight in global commerce. Now, strategists are assessing where the common currency goes next after its two-day jump of almost 4%, from $1.10 to nearly $1.15. The euro was trading 0.5% higher at $1.1413 as of 7:45 a.m. in London. So far, none of the 51 respondents in Bloomberg's FX poll are forecasting the euro to climb above $1.15 this year, but two Europe-based traders described large volumes going through on Friday that seek to benefit from further euro gains. Hedge funds are targeting a move to $1.20 over the next three to six months, they said. Friday saw the second-largest volumes ever for euro options, according to the DTCC data. Positioning for euro strength in the options market has accelerated sharply. So-called risk reversals — a barometer of market sentiment that measures demand for contracts to buy or sell the currency — surged last week, with one-week contracts showing the highest skew toward a euro rally in five years. Volatility also jumped, closing at the third-highest since 2010. Leveraged and institutional traders were long the euro by the most in six months as of April 8, according to CFTC positioning data. Structural Forces There are key structural forces underpinning the euro's gains. The extra spending anticipated from Germany after its historic move to loosen its fiscal rules is seen buttressing the euro-area in the event of a global downturn. Meanwhile, tariffs — whatever level they're eventually set at — will reduce Europe's trade surplus with the US, meaning less revenue gets invested back into dollar assets. What Bloomberg strategists say... 'The euro looks set to punch through levels that few would have envisaged at the start of the year. The big question for European traders, though, is how much of currency strength is welcome for the region's central banks given that they hardly want economic conditions to tighten when they are already concerned about prospects for economic growth.' —Ven Ram, Macro Strategist, Dubai To be sure, it's not clear the currency can maintain the searing pace of recent days. Credit Agricole SA's Valentin Marinov calls the euro-dollar pair 'excessively overbought' and the French bank's positioning model has switched to a short stance on the euro. And Erik Nelson, macro strategist at Wells Fargo, warns that further strength in the euro won't come without speed bumps. Any reserve-currency rotation 'happens over months and quarters — not days,' he said. But there's no question that the currency has inherited some of the dollar's traditional role as a refuge as questions mount over the US economy and, by extension, the greenback. The World Is Finding a Plausible Alternative to Treasuries Once treated primarily as a risk asset, the euro has lately been rallying on news good and bad, according to Van Luu, global head of currencies at Russell Investments. 'I do see a structural shift that favors the euro in the medium term within the context of what's a safe haven and what's not.' The Beauty Salon Recession Indicator Trump Is Firing the Wrong People, on Purpose World Travelers Are Rethinking Vacation Plans to the US How One MBA Grad Blew the Whistle on a $2 Billion Deal Cheap Consumer Goods Are the American Dream, Actually ©2025 Bloomberg L.P. Sign in to access your portfolio
