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Futures Slide As Global Yields Soar, Pushing Bond Markets To Edge Of Breaking

Futures Slide As Global Yields Soar, Pushing Bond Markets To Edge Of Breaking

US equities extended their recent slump, set to trim their modest…



Futures Slide As Global Yields Soar, Pushing Bond Markets To Edge Of Breaking

US equities extended their recent slump, set to trim their modest weekly advance even further as soaring bonds yields and poor earnings renewed the gloom that’s sent stocks into a bear market this year. Contracts on the S&P 500 dipped 0.4% at 7:30 a.m. ET, putting the underlying index on track to sharply pare this week’s 2.3% gain...

... as the yield on the 10-year Treasury rose to 4.29%, the highest since 2007 and as Treasuries dropped for a 12th consecutive week, which would match longest stretch since 1984. Fed swaps price in a 5% peak policy rate in 2023 after Philly Fed President Patrick Harker said that the Fed is likely to raise interest rates to “well above” 4% this year and hold them at restrictive levels to combat inflation,

“The global inflation bogeyman continues to scare the bond markets,” said strategists at Societe Generale SA including Ninon Bachet. “Central banks have additional big moves to make in their tightening process, so we remain short duration.”

Nasdaq 100 futures fell 0.9% after the tech-heavy gauge advanced 3.3% from Monday through Thursday. Surging yields also pushed the dollar sharply higher, with USDJPY soaring above 151.50 and the yuan falling to the weakest level since 2008.

At this point, absent a Fed short-circuit of the soaring dollar (in the form of a major liquidity injection), a global currency crisis is all but assured; one look at the latest record weekly usage in the SNB swap line with the Fed confirms without a doubt that there is now a global currency shortage which is becoming more systemic by the week if not day.

In premarket trading, Twitter shares tumbled, falling as much as 16% and well below Elon Musk’s offer price, on concern the deal may be terminated by the government. Earnings from appliance maker Whirlpool and social-media platform Snap disappointed investors after the market closed Thursday. Snap plunged 27% in premarket trading Friday after its slowest quarterly sales growth ever. This sets the stage for what investors can expect when bigger players like Alphabet and Meta Platforms report next week. Earlier this week, firms among AT&T as well as IBM had beaten expectations earlier this week. Here are some of the biggest US movers today:

  • Whirlpool shares drop 4% in US postmarket trading after the company cut its FY ongoing EPS guidance; shares of Swedish peer Electrolux also fall.
  • CSX gained 3% in premarket trading. It’s unchanged FY guidance comes as a relief after peer Union Pacific cut its forecast for volume growth, Morgan Stanley analysts write after the freight transportation firm reported 3Q earnings that beat estimates.
  • Opendoor Technologies slides 2.5% in premarket trading after Truist Securities cut the price target to $5 from $8 as the analyst trims their margin estimates for the real estate firm.
  • Autoliv shares rise as much as 5.9% in premarket trading after the firm said it expects to see full-year organic revenue growth of about 15%, higher than the 14.5% that analysts had been expecting.
  • Under Armour shares decline 3.2% in premarket trading after Telsey Advisory Group downgrades the sportswear brand to market perform from outperform, expecting high inventory rates from Nike and Adidas to weigh on FY23 and for the company to once again cut its 2022 outlook again when it reports on November 3.
  • Immunic shares sink 71% in premarket trading after interim analysis of the biopharma company’s Phase 1b clinical trial of IMU-935 patients with moderate-to-severe psoriasis showed a placebo rate that Piper Sandler says was “surprisingly high.”
  • SVB Financial dropped 17% in premarket trading after lowering its full-year forecast for net interest income growth.
  • Tenet drops 18% in premarket trading after the health care company narrowed its operating revenue guidance to a level below Wall Street estimates.

As Bloomberg notes, the S&P 500 hasn’t been able to hold onto gains for more than a week since early August, a sign of persistent economic headwinds as the Federal Reserve continues raising interest rates. The earnings season will be key to dictating the direction of equities until the US central bank meets next month. Ironically, so far it is nowhere near as bad as some had suspected with 74% of companies have exceeded earnings expectations versus the long-term, prepandemic average of 72%, according to Bloomberg analysts Gina Martin Adams and Gillian Wolff.

“History tells us that markets don’t find a bottom until investors begin to anticipate rate cuts, leading indicators point to better growth, or valuations price a bear case scenario. That’s not the case today,” UBS Global Wealth Management strategists led by Mark Haefele wrote in a note. “Equity valuations, despite falling in absolute terms, don’t yet fully discount a bear case.”

Investor sentiment has turned deeply pessimistic but that’s not yet being reflected in equity flows and “final capitulation” remains elusive, according to strategists at Bank of America Corp. US funds had a second straight week of inflows at $12 billion in the week through Oct. 19, according to a note from the bank citing EPFR Global data.

European stocks fell amid the broader risk-off mood. Euro Stoxx 50 slumps 1.6% as retailers, consumer products and construction are the worst-performing sectors as all industry groups in Europe fall. Here are some of the biggest European movers today:

  • L’Oreal’s 3Q sales showed “hairline fractures appearing,” according to Morgan Stanley, with volumes sequentially softening, pockets of weaker demand and changing consumer behavior. The stock fell as much as 5.5%, biggest intraday drop in more than two years.
  • Adidas shares plunge as much as 10%, the most since March 7, after the German sportswear maker cut its outlook for the year flagging slowing demand, partly due to a weakening in footfall in China, and also because of inventory build-up, providing further warning about the consumer slowdown.
  • Sika shares drop as much as 5.1% despite maintaining its FY guidance, as Jefferies says a third-quarter Ebit miss may trigger mild downgrades.
  • Telia shares fall as muchy as 8.9% to their lowest level since 2003, as a steep increase in energy costs prompts a cut to its profit outlook, with operational free cash flow for 2022 set to be below the minimum dividend level.
  • PostNL declines as much as 12%, the most since May 9, after the Dutch mail carrier withdrew its FY guidance, citing rising inflation and a drop in consumer confidence which has led to 3Q under performance, particularly in parcel delivery.
  • Grifols shares dropped as much as 8.8% to their lowest level in 10 years following a media report that it could face legal claims in the US for as much as $270m. Banco Santander notes potential fine size could represent about 1% to 4% of plasma firm’s market cap.
  • Deliveroo shares rise as much as 6.2%. The food delivery firm lifted its adjusted Ebitda margin guidance for the year, making progress on plans to improve profitability amid slowing growth.
  • Borregaard shares climb as much as 3.7% after the specialized biochemicals supplier reports 3Q results that may push earnings per share estimates for 2023 and 2024 higher by 2%-3%, DNB analyst says in note.

Earlier in the session, Asian stocks fell, set to cap a second week of declines, as recession worries weighed on sentiment amid hawkish central-bank remarks and stringent China Covid restrictions. The MSCI Asia Pacific Index dropped as much as 1.2% Friday, with most of the markets in the region marking losses. The Hong Kong benchmark hit its lowest since April 2009, while gauges in Singapore and the Philippines declined more than 1%. China’s pandemic rules continued to weigh on regional investor sentiment amid additional lockdowns. Risk sentiment was also hurt by higher Treasury yields after a Federal Reserve official said he expects interest rates to be “well above” 4% this year.

“I think the risks for recession in the region are pretty high,” David Chao, Asia Pacific market strategist at Invesco, said in an interview with Bloomberg TV. Still, Chao believes Asia Pacific is “relatively more attractive” than Europe and the US as the region is somewhat insulated from high levels of inflation and central bank tightening.  Traders will be on the watch for earnings reports in the coming days to understand the impact of high inflation and China’s virus restrictions on corporate health and growth. Down about 30% this year, the key Asian stock gauge is trading near its lowest level since April 2020.

Japanese stocks fell, as losses in chemical makers and railways offset gains in electronics makers. Japan’s core inflation reached 3% for the first time in over three decades excluding tax-hike impacts. The Topix fell 0.7% to close at 1,881.98, while the Nikkei declined 0.4% to 26,890.58. The yen slightly extended its loss after falling through 150 per dollar Thursday. Sony Group Corp. contributed the most to the Topix Index decline, decreasing 1.5%. Out of 2,166 stocks in the index, 442 rose and 1,626 fell, while 98 were unchanged

Australian stocks also slid as banks, property shares weigh; the S&P/ASX 200 index fell 0.8% to close at 6,676.80, with banks and real estate stocks leading the declines. All sectors slumped except for energy as oil gained. The benchmark notched a second week of declines, down 1.2%. In New Zealand, the S&P/NZX 50 index fell 0.5% to 10,782.36.

India stocks posted their biggest weekly gain since July as investor sentiment was buoyant ahead of a key festival next week while corporate earnings season gathers steam. The S&P BSE Sensex rose 0.2% to 59,307.15 in Mumbai, while the NSE Nifty 50 Index was little changed. Both the gauges rose at least 2.3% this week.   All but three of BSE Ltd.’s 19 sector sub-indexes declined, led by capital goods companies. For the week, banking stocks were the best performers, thanks to strong earnings performances by top lenders including HDFC Bank. After a stronger-than-expected quarterly performances by technology and banking companies, earnings were starting to reflect worries over elevated costs.  Of 17 Nifty 50 Index firms, which have posted results so far, 11 have either met or surpassed the consensus view while five have missed.

In FX, the Bloomberg Dollar Spot Index roared higher after whipsawing in early European hours; the greenback rose against all its Group-of-10 peers. Long-dated Treasuries fell, driving the 10-year benchmark yield to a 15-year high, as traders bet the Federal Reserve will press ahead with rate hikes to defeat inflation.

  • The euro reversed an early European session gain and bonds from the region fell across the board. Germany’s 10-year yield climbed above 2.5% for first time since 2011.
  • The pound fell against all of its G-10 peers and tumbled as much as 1.2%, while gilts sold off as markets entered another bout of uncertainty amid a truncated leadership contest following the resignation of Liz Truss. The next leader could be decided as soon as Monday. The UK budget deficit in September exceeded estimates
  • The yen fell beyond 151 per dollar as the disparity between US and Japanese yields continued to grow, putting the currency on track for a 10th straight weekly loss. The relative premium to own exposure in short-term dollar-yen options rose to levels not seen for more than six years due to the risk of intervention as realized volatility remains in defensive mode. The Bank of Japan will keep conducting monetary easing to support the economy and sustainably and stably achieve its price target accompanied by wage growth, Governor Haruhiko Kuroda said in a speech in Tokyo. Finance Minister Shunichi Suzuki told reporters that Japan is firmly confronting forex speculators in the market now.
  • The onshore yuan fell to the weakest level since 2008 as the greenback surged on hawkish comments from a Federal Reserve official. 

In rates, Treasuries dropped for 12th week, which would match longest stretch in 38 years. BOJ boosted bond purchases to hold 10-year yield at 0.25% ceiling, while Australian bonds drop. Longer-dated Treasuries extended Thursday’s declines, steepening 2s10s and 5s30s spreads by at least 4bp into early US session. Bigger bear-steepening move grips German curve as 10-year yields top 2.5% for first time since 2011. US yields were cheaper by nearly 7bp across long-end of the curve with 2s10s, 5s30s spreads steeper by about 4.5bp and 6.5bp on the day. German long-end yields are cheaper by 11.5bp on the day while Gilts 10-year yield rose 8bps, trading around 4% as traders add BOE and ECB rate-hike premium.

In commodities, WTI drifts 1.6% lower to trade near $83.19, but off lows amid the firmer Dollar and deterioration of broader risk sentiment. Saudi and China are said to be ready to cooperate oil market stability; Saudi remains the most trusted China oil supplier, according to a joint statement cited by Bloomberg. LME metals are lower across the board with 3M copper also weighed on by the risk mood – the red metal trades on either side of USD 7,500/t. Spot gold posts modest losses and remains under USD 1,650/oz after dipping below yesterday’s lows.

Bitcoin is under pressure and has lost the USD 19k handle and lies at the lower-end of a circa USD 700 range for the session.

Looking to the day ahead now, data releases include UK retail sales for September and the US Monthly budget statement. From central banks, we’ll hear from New York Fed President Williams. Finally, earnings releases include Verizon Communications and American Express.

Market Snapshot

  • S&P 500 futures down 0.6% to 3,653.00
  • STOXX Europe 600 down 1.4% to 393.11
  • MXAP down 1.1% to 135.34
  • MXAPJ down 0.9% to 438.50
  • Nikkei down 0.4% to 26,890.58
  • Topix down 0.7% to 1,881.98
  • Hang Seng Index down 0.4% to 16,211.12
  • Shanghai Composite up 0.1% to 3,038.93
  • Sensex up 0.2% to 59,347.19
  • Australia S&P/ASX 200 down 0.8% to 6,676.76
  • Kospi down 0.2% to 2,213.12
  • German 10Y yield up 3.7% at 2.49%
  • Euro down 0.2% at $0.9758
  • Brent Futures down 1% to $91.45/bbl
  • Gold spot down 0.4% to $1,621.21
  • U.S. Dollar Index up 0.42% to 113.357

Top Overnight News from Bloomberg

  • Giorgia Meloni clinched a mandate from her coalition on the path to becoming Italy’s first female premier, after weeks of political stasis following her right-wing alliance’s election win
  • The UK Treasury may be forced to delay its long-awaited Oct. 31 fiscal plan because of the resignation of Prime Minister Liz Truss, adding a layer of political risk to an event that had become crucial for markets and the Bank of England
  • The Conservative Party is desperate to draw a line under Truss’s disastrous premiership, with a rapid leadership contest aimed at trying to give the winner a shot at overturning an unprecedented deficit in the polls
  • Regardless of who wins the race to succeed Truss as UK Prime Minister, one thing is clear: the pound is set to keep falling. That’s the prognosis of market players who see sterling continuing its descent as economic headwinds and the Bank of England’s policy stance act as a drag
  • Traders in UK government bonds helped topple Truss. Now they’re setting their sights on the next goal: ensuring her successor will stick to the fiscal discipline required to shore up the country’s fragile finances
  • UK retail sales fell more than expected last month after the death of Queen Elizabeth II curtailed activity and cost-of- living pressures hit harder. The volume of goods sold in shops and online dropped 1.4% in September after a revised 1.7% decline the month before. Economists had expected an 0.5% drop
  • ECB officials are considering whether to add a new overnight interest rate to co-exist with its three existing levers to manipulate the cost of money, Expansion reported, citing people familiar with the matter
  • The EU agreed to press ahead with a set of emergency actions to address the bloc’s energy crisis, with Germany yielding to pressure from other member states to pave the way for a temporary price cap on natural gas. European natural gas prices fell after the accord
  • US Treasuries have entered the longest sustained slump in 38 years, as policy makers signal their determination to keep raising rates until they are sure inflation is under control
  • The Communist Party’s list of Central Committee members released Saturday will be scrutinized by economists for what it means for the People’s Bank of China. Governor Yi Gang, 64, and Guo Shuqing, 66, who is party chief and deputy governor at the central bank, are around the official retirement age, fueling speculation over whether they’ll remain in their posts
  • China’s yuan is expected to weaken further after the Communist Party Congress ends this weekend, as the central bank loosens its grip on the currency, according to market watchers

A More detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks traded cautiously with the region lacking firm direction following the weak lead from Wall Street where stocks reversed initial gains amid mixed data releases and continued upside in yields.  ASX 200 was dragged lower by underperformance in industrials and the top-weighted financials sector, while the Australian Treasurer also flagged a 25bps hit to Q4 GDP from recent floods. Nikkei 225 was slightly softer after mostly inline inflation data which showed Core CPI at its fastest pace of increase since 2014 and as participants remained on alert for intervention after the JPY weakened beyond the 150.00 level for the first time since 1990. Hang Seng and Shanghai Comp. were indecisive heading towards the conclusion of the Communist Party Congress and pending release of delayed key data. Furthermore, Chinese press reports noted analysts see room for an LPR cut by year-end, although there was also the threat of further tech restrictions with the US eyeing expanding its China tech ban to quantum computing and A.I. products.

Top Asian News

  • US is reportedly eyeing expanding its China tech ban to quantum computing and AI products, according to Bloomberg.
  • Australian PM Albanese said he is concerned about a delay to the implementation of the UK-Australia trade agreement amid UK political instability, according to Reuters.
  • Australian Treasurer Chalmers said the latest floods are to cut 25bps from GDP growth in the December quarter, while floods will add 10bps to inflation in December and March quarters, according to Reuters.
  • India Rate-Setter Wants RBI to Focus on Softening Core Inflation
  • China Market Revival Hopes in Tatters as Congress Disappoints
  • Hong Kong Cancels Screening of Batman Film Shot in the City
  • Chinese City Plans Offshore Wind Farm That Could Power Norway
  • Asian Development Bank Approves $1.5 Billion Loan for Pakistan

Cash bourses in Europe started the session with losses which then extended to the downside as market sentiment further deteriorated. Sectors in Europe are in a sea of red, but defensive sectors are faring better than cyclical peers, with Healthcare, Food & Beverages, Optimised Personal Goods, and Utilities towards the top of the bunch, whilst Retail, Consumer Products, Construction, Real Estate, and Basic Resources reside on the other end of the spectrum. US equity futures are also softer across the board with the NQ (-0.9%) lagging its peers (ES -0.6%, RTY -0.5%, YM -0.4%) as bond yields continue to climb. SNAP (SNAP) - Q3 2022 (USD): Adj. EPS 0.08 (exp. 0.00), Revenue 1.128 (exp. 1.14bln). Daily active users rose 19% Y/Y to 363mln (exp. 358.7mln), sees Q4 DAU of about 375mln. Quarterly sales growth was slowest on record. Authorized a stock repurchase program of up to USD 500mln of its Class A common stock. Not providing formal Q4 guidance and sees it as highly likely that Y/Y revenue growth will decelerate as we move through Q4, due in large part to the fact that Q4 has historically been relatively more dependent on brand-oriented advertising revenue, which declined slightly on a Y/Y basis in the most recent quarter. Estimate adj. EBITDA would be about USD 200mln under about flat Y/Y revenue growth assumption for D4. (businesswire) -25% in the pre-market. US government is reportedly mulling a security review regarding Elon Musk's deal to acquire Twitter (TWTR), according to Bloomberg. Additionally, Elon Musk is said to have told prospective investors that he planned to cut almost 75% of Twitter (TWTR) workers, according to documents cited by Washington Post. CATL slows battery investment plans in N. America, according to Reuters sources; due to concern that new US rules around sourcing battery material will increase costs.

Top European News

  • German Parliament votes to approve the suspension of the debt brake, via Reuters.
  • Italy's Meloni says she has been proposed by the rightist coalition as PM to President Mattarella, via Reuters.
  • The ECB is planning to create a new interest rate, according to Expansion.
  • Adidas’s Unsold Sneakers and Problems Are Piling Up for Next CEO
  • Renault Slips as Inflation Worries Offset Revenue Gains
  • French Central Banker Warns Against Algos in Currency Trading
  • Credit Suisse Set to Settle Criminal Tax Case in France


  • DXY has continued to benefit from further yield upside with the 10-yr eclipsing 4.25% and the index to a 113.50+ best.
  • As such, peers across the board are hampered with GBP lagging and approaching 1.11 amid the latest bout of political turmoil.
  • EUR/USD seemingly found support as it neared the 0.97 mark and conscious of multiple chunky OpEx for the NY Cut.
  • Traditional havens are also dented despite risk sentiment given differentials weighing; USD/JPY has risen to a test of 151.00, with participants attentive for any BoJ/MoF reaction.
  • Antipodeans are unable to escape the USD's ascendance with CAD similarly dented, but off worst, amid the most recent paring of crude losses.
  • China's major state-owned banks are seen selling USD in the onshore spot market to stabilise the Yuan, according to Reuters sources; meant to prevent the spot price from weakening past 7.25.

Fixed Income

  • Debt has extended on initial downbeat performance amid Germany approving the debt brakes suspension to fund their EUR 200bln energy support scheme.
  • As such, Bunds are subdued by over a full point; though, amid ongoing political turmoil, Gilts remain the laggard and briefly lost the 97.00 handle sending the corresponding yield back above 4.0%.
  • Stateside, USTs are similarly pressured though a touch more contained ahead of Fed's Williams as we near the blackout period.
  • Elsewhere, the periphery has been unreactive to the as-expected announcement that the Italian coalition has put Meloni forward to become PM.


  • WTI and Brent December contracts are lower intraday but off lows amid the firmer Dollar and deterioration of broader risk sentiment.
  • Spot gold posts modest losses and remains under USD 1,650/oz after dipping below yesterday’s lows.
  • LME metals are lower across the board with 3M copper also weighed on by the risk mood – the red metal trades on either side of USD 7,500/t.
  • Saudi and China are said to be ready to cooperate oil market stability; Saudi remains the most trusted China oil supplier, according to a joint statement cited by Bloomberg.
  • EU Council President Michel said the European Council reached an agreement on energy and agreed to work on measures to contain energy prices, according to Bloomberg.
  • Belgium PM says it will take 2-3 weeks for energy ministers to come up with how to implement the gas price cap, via FT's Bounds; two energy ministers summit will probably be needed to agree energy package, via WSJ's Norman.
  • Hungary's PM Orban said an agreement was reached that even if the EU imposes a gas price cap, long-term supply agreements will be exempt, according to a Facebook post.
  • US Treasury Official estimates that Russia has sufficient tankers and services to trade about 80-90% of its oil, following the December 5th sanctions; circa. 1-2mln BPD of Russian crude and refined products could be shut in if they resist the price cap, via Reuters.


  • US Secretary of State Blinken said they take the Russian threat to use nuclear weapons seriously but have not yet seen a reason to change our nuclear status, according to Al Jazeera.
  • EU could reinforce sanctions on Iran if support for Russia isn't wound back; "Several leaders said they'd be open to additional sanctions this morning.", according to WSJ's Norman.
  • US Secretary of State Blinken said they place great emphasis on making sure the differences between China and Taiwan are resolved peacefully and not through coercion or force, according to Al Jazeera.

US Event Calendar

  • 3:15 p.m. ET: President Joe Biden delivers remarks on student debt relief in Dover, Delaware

Central Bank Speakers

  • 09:10: Fed’s Williams Makes Opening Remarks at Careers Event
  • 09:40: Fed’s Evans Speaks at Community Banking Symposium

DB's Jim Reid concludes the overnight wrap

Risk assets struggled and sovereign bond yields hit fresh multi-year highs yesterday as investors moved to price in the most aggressive path for central bank rate hikes so far. In fact, there was a notable milestone for Fed funds futures, since by the close they expected the Fed to take rates above 5% next year, which is the first time that futures for an upcoming meeting have closed that high in this cycle so far. Bear in mind that on the day of Chair Powell’s hawkish Jackson Hole speech in late-August they closed at 3.78% for the March meeting, so the stronger-than-expected inflation prints over the last couple of months have led to a big reappraisal in how hawkish the Fed and other central banks are expected to be.

Those increasingly hawkish expectations drove a fresh selloff in US Treasuries, with the 10yr yield up +9.5bps to close at 4.23%. That’s their highest level since 2008, and came as the 10yr real yield (+4.0bps) hit a post-2009 high of its own at 1.74%. And those rises have continued overnight, with 10yr yields up another +2.7bps to a new high of 4.26% as we go to print. Those moves have been partly supported by stronger-than-expected data, with the weekly initial jobless claims for the week ending October 15 unexpectedly falling to 214k (vs. 233k expected), which was seen as giving the Fed more space to keep hiking rates. But we also had a fresh round of speakers from the Fed, including Philadelphia Fed President Harker, who said that he expected rates to be “well above” 4% by the end of the year. In the meantime, Governor Cook reiterated the message from Chair Powell that the Fed would “keep at it until the job is done”, and that this would “likely will require ongoing rate hikes and then keeping policy restrictive for some time.” Remember that today is the last we’ll hear from any FOMC members, as the Fed will then be entering its blackout period ahead of the next meeting a week on Wednesday.

Central bank hawkishness had a knock-on effect on equities too, with the S&P 500 (-0.80%) losing ground for a second day running, reversing course from its early gains when it had been on track to hit a 2-week high. Those declines were led by the more cyclical sectors, but it was a broad-based move that saw over three-quarters of the index’s members lose ground on the day. Small-cap stocks underperformed in particular, with the Russell 2000 down -1.24%, whereas the Dow Jones only shed -0.30%. European equities had a comparatively better performance though, having closed before the US selloff, and the STOXX 600 advanced +0.26%.

Whilst markets are gearing up for the next round of central bank decisions, here in the UK we’re also set to have another Prime Minister by the end of next week after Liz Truss announced her resignation yesterday after just 44 days in office. That’ll mean she’s the shortest-serving PM in UK history, and caps off a brief but tumultuous period in office, with the turning point occurring on September 23 when the government’s mini-budget triggered market turmoil that eventually led the government to U-turn on most of what they announced that day. The mini-budget also led to a sharp decline in the Conservatives’ polling position against the backdrop of large rises in mortgage rates, with the opposition Labour Party seeing their largest poll leads since the late-1990s. As such, we saw growing numbers of Conservative MPs withdraw their support from Truss over recent days, ultimately leading to her resignation yesterday.

In terms of what happens next, there’s now going to be another Conservative leadership election to select the next Prime Minister, in a short contest that’ll conclude by Friday October 28 at the latest. Candidates will require nominations from 100 MPs by Monday afternoon to go onto the ballot, which means there can only be a maximum of three anyway. MPs will then vote on Monday to take that down to two candidates for grassroots Conservative members to vote on. But unlike before, MPs will also hold an indicative vote between the final two, and it’s certainly possible that the losing candidate comes under significant pressure to drop out, so we could potentially know the next PM by Monday.

When it comes to who’ll be the next PM, the bookmakers’ favourite is former Chancellor Rishi Sunak, who was the runner-up to Liz Truss over the summer. But speculation is also swirling around former PM Boris Johnson, who the Times newspaper reported is expected to stand in the contest, and who a number of Conservative MPs have already publicly endorsed.

In terms of the market reaction, there weren’t any discernible moves in response to Truss’ resignation. Sterling only saw a small movement of +0.14% against the US Dollar, and the moves in 10yr gilt yields (+2.9bps) echoed those in other European countries. However, one development that led investors to dial back the amount of rate hikes priced in for the coming months was a speech by BoE Deputy Governor Broadbent, who said that “Whether official interest rates have to rise by quite as much as currently priced in financial markets remains to be seen”.

As with gilts, sovereign bonds elsewhere in Europe lost ground, with yields on 10yr bunds (+2.8bps) rising to a post-2011 high of 2.39%. That followed growing expectations that the ECB were set to maintain their hawkish stance over the coming months, with the deposit rate priced in by overnight index swaps for the March meeting up a further +4.5bps to a new high of 2.76%, and this morning it’s up another +6.2bps to 2.82%. That rise in yields was driven by higher inflation breakevens yesterday rather than real rates, which wasn’t helped by the fact that natural gas futures rebounded by +13.01% to €127 per megawatt-hour, ending a run of 5 consecutive daily declines.

Overnight in Asia, the major equity indices have been struggling overnight as bond yields continue to rise. That’s seen the Nikkei (-0.33%), the Hang Seng (-0.17%) and the Kospi (-0.33%) all lose ground, although the CSI 300 (+0.15%) and the Shanghai Comp (+0.50%) have both made gains. US and European equity futures have similarly fallen back, with contracts tied to the S&P 500 (-0.23%) and the NASDAQ 100 (-0.57%) are both lower. Snap reported their weakest sales ever quarterly sales growth, up just 6% in Q3.

Elsewhere in Asia, the other big piece of news was that the Japanese Yen weakened through 150 per dollar for first time since 1990 just after we went to press yesterday. It’s now currently trading at 150.40, putting it well on track for a 10th consecutive weekly decline against the dollar. In response, finance minister Suzuki said that there had been “absolutely no change to our thinking that we’ll take an appropriate response against excessive moves”. The moves also came as Japanese inflation remained strong, with CPI staying at +3.0% (vs. +2.9% expected), and CPI excluding fresh food up to +3.0% as expected. Apart from the jump in 2014 following the sales tax hike, that’s the highest that core measure has been since 1991.

Looking at yesterday’s other data, US existing home sales fell to an annualised rate of 4.71m in September (vs. 4.70m expected), which is their lowest level in a decade if you exclude the pandemic months of April and May 2020. Meanwhile in Germany, producer price inflation remained at +45.8% year-on-year in September (vs. +45.4% expected).

To the day ahead now, and data releases include UK retail sales for September. From central banks, we’ll hear from New York Fed President Williams. Finally, earnings releases include Verizon Communications and American Express.

Tyler Durden Fri, 10/21/2022 - 08:02

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Infosys Recognized as the Top Service Provider Across Nordics in the Whitelane Research and PA Consulting IT Sourcing Study 2023

Infosys Recognized as the Top Service Provider Across Nordics in the Whitelane Research and PA Consulting IT Sourcing Study 2023
PR Newswire
STOCKHOLM, March 31, 2023

Infosys achieves a notable rise in overall ranking in the Nordics with a customer…



Infosys Recognized as the Top Service Provider Across Nordics in the Whitelane Research and PA Consulting IT Sourcing Study 2023

PR Newswire

Infosys achieves a notable rise in overall ranking in the Nordics with a customer satisfaction score of 81 percent as compared to the industry average of 73 percent

STOCKHOLM, March 31, 2023 /PRNewswire/ -- Infosys (NSE: INFY) (BSE: INFY) (NYSE: INFY), a global leader in next-generation digital services and consulting, today announced that it has been recognized as one of the top service providers in the Nordics, achieving the highest awarded score in Whitelane Research and PA Consulting's 2023 IT Sourcing Study. The report ranked Infosys as the number one service provider and an 'Exceptional Performer' in the categories of Digital Transformation, Application Services, and Cloud & Infrastructure Hosting Services. Infosys also ranked number one in overall General Satisfaction and Service Delivery.

For the report, Whitelane Research and PA Consulting, the innovation and transformation consultancy, surveyed nearly 400 CXOs and key decision-makers from top IT spending organizations in the Nordics and evaluated over 750 unique IT sourcing relationships and more than 1,400 cloud sourcing relationships. These service providers were assessed based on their service delivery, client relationships, commercial leverage, and transformation capabilities.

Some of Infosys' key differentiating factors highlighted in the report are:

  • Infosys ranked as a top provider in the Nordics across key performance indicators on service delivery quality, account management quality, price level and transformative innovation.
  • Infosys' ranked above the industry average by 8 percent year-on-year, making it one of the top system integrators in the Nordics.
  • Infosys is positioned as a "Strong Performer" in Security Services and scored significantly above average on account management.

Arne Erik Berntzen, Group CIO of Posten Norge, said: "Infosys has been integral in helping Posten Norge transform its IT Service Management capabilities. As Posten's partner since 2021, Infosys picked up the IT Service Management function from the incumbent, successfully transforming it through a brand-new implementation of ServiceNow, redesigning IT service management to suit the next-generation development processes and resulting in a significant improvement of the overall customer experience. I congratulate Infosys for achieving the top ranking in the 2023 Nordic IT Sourcing Study."

Antti Koskelin, SVP & CIO at KONE, said: "Infosys has been our trusted partner in our digitalization journey since 2017 and have helped us in establishing best-in-class services blueprint and rolling-in our enterprise IT landscape over the last few years. Digital transformations need partners to constantly learn, give ideas that work and be flexible to share risks and rewards with us, and Infosys has done just that. I am delighted that Infosys has been positioned No. 1 in Whitelane's 2023 Nordic Survey. This is definitely a reflection of their capabilities."

Jef Loos, Head of Research Europe, Whitelane Research, said, "In today's dynamic IT market, client demand is ever evolving, and staying ahead of the curve requires a strategic blend of optimized offerings and trusted client relationships. Infosys' impressive ranking in Whitelane's Nordic IT Sourcing Study is a testament to their unwavering commitment to fulfilling client demands effectively. Through their innovative solutions and exceptional customer service, Infosys has established itself as a leader in the industry, paving the way for a brighter and more successful future for all."

Hemant Lamba, Executive Vice President & Global Head – Strategic Sales, Infosys said, "Our ranking as one of the top service providers across the Nordics in the Whitelane Research and PA Consulting 2023 IT Sourcing Study, endorses our commitment to this important market. This is a significant milestone in our regional strategy, and the recognition revalidates our commitment towards driving customer success and excellence in delivering innovative IT services. Through our geographical presence in the Nordics, we will continue to drive business innovation and IT transformation in the region, backed by a strong partner network. We look forward to continuing investing in this market to foster client confidence and further enhance delivery."

About Infosys

Infosys is a global leader in next-generation digital services and consulting. Over 300,000 of our people work to amplify human potential and create the next opportunity for people, businesses and communities. With over four decades of experience in managing the systems and workings of global enterprises, we expertly steer clients, in more than 50 countries, as they navigate their digital transformation powered by the cloud. We enable them with an AI-powered core, empower the business with agile digital at scale and drive continuous improvement with always-on learning through the transfer of digital skills, expertise, and ideas from our innovation ecosystem. We are deeply committed to being a well-governed, environmentally sustainable organization where diverse talent thrives in an inclusive workplace.

Visit to see how Infosys (NSE, BSE, NYSE: INFY) can help your enterprise navigate your next.

Safe Harbor

Certain statements in this release concerning our future growth prospects, financial expectations and plans for navigating the COVID-19 impact on our employees, clients and stakeholders are forward-looking statements intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding COVID-19 and the effects of government and other measures seeking to contain its spread, risks related to an economic downturn or recession in India, the United States and other countries around the world, changes in political, business, and economic conditions, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India and the US, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry and the outcome of pending litigation and government investigation. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2022. These filings are available at Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.



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mRNA-LNP Vaccine Development: Evaluation of Novel Ionizable Lipids

In this GEN webinar, our distinguished speaker Dr. Nicholas Valiante, will provide insights into designing, developing, and manufacturing mRNA vaccines…



Broadcast Date: April 12, 2023
Time: 8:00 am PT, 11:00 am ET, 16:00 CET

The success of the mRNA-LNP COVID-19 vaccines have clinically proven the modality of lipid-based nanoparticle delivery, demonstrating the possibilities for rapid design, development, and manufacturing of other promising genomic medicines.

Due to their modular nature, LNP excipients can be mixed, matched, and modified during formulation to improve immune responses. Similarly, the encapsulated mRNA can be optimized to improve translation efficiency and stability.

In this GEN webinar, our distinguished speaker Dr. Nicholas Valiante, will provide insights into designing, developing, and manufacturing mRNA vaccines to maximize performance. Dr. Valiante will expand on the process to evaluate and select ionizable lipids required for mRNA-LNP vaccines development.

A live Q&A session will follow the presentation, offering you a chance to pose questions to our expert panelist.

Nicholas Valiante, PhD
Chief Scientific Officer, President
Innovac Therapeutics

Precision Nanosystems logo

The post mRNA-LNP Vaccine Development: Evaluation of Novel Ionizable Lipids appeared first on GEN - Genetic Engineering and Biotechnology News.

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What Has Driven the Labor Force Participation Gap since February 2020?

The U.S. labor force participation rate (LFPR) currently stands at 62.5 percent, 0.8 percentage point below its level in February 2020. This “participation…



The U.S. labor force participation rate (LFPR) currently stands at 62.5 percent, 0.8 percentage point below its level in February 2020. This “participation gap” translates into 2.1 million workers out of the labor force. In this post, we evaluate three potential drivers of the gap: First, population aging from the baby boomers reaching retirement age puts downward pressure on participation. Second, the share of individuals of retirement age that are actually retired has risen since the onset of the COVID-19 pandemic. Finally, long COVID and disability more generally may induce more people to leave the labor force. We find that nearly all of the participation gap can be explained by population aging, which caused a significant rise in the number of retirements. Higher retirement rates compared to pre-COVID have had only a modest effect, while disability has virtually no effect.

The LFPR is defined as the ratio between workers in the labor force (either employed or unemployed) and the civilian, non-institutional population age 16 and older. As the chart below shows, the LFPR has been gradually declining since the early 2000s. It stayed relatively flat over the period 2014-19 and even slightly rose up to February 2020 as the strong labor market exerted a positive effect on labor supply. After a dramatic decline in the early months of the pandemic, participation has recovered gradually but remains significantly below its pre-COVID level—by 0.8  percentage point or 2.1 million workers as of February 2023. We examine potential drivers of the participation gap using the Current Population Survey (CPS), a monthly survey of about 60,000  households that is conducted by the Bureau of Labor Statistics (BLS).

The Labor Force Participation Rate (LFPR) Remains below its Pre-Pandemic Level

Liberty Street Economics chart showing the LFPR has declined gradually since the early 2000s. It also stayed relatively flat from 2014-19 and rose slightly until February 2020. After a steep decline in the early months of the pandemic, participation has recovered gradually but remains 0.8 pp below its pre-COVID level.
Sources: Current Population Survey; Bureau of Labor Statistics.
Notes: The chart shows the seasonally adjusted LFPR for the population aged 16+ years. The red dashed line illustrates the size of the shortfall between 2020:m2 and 2023:m2.

Population Aging

We first analyze population aging. As noted elsewhere, the panel chart below illustrates that as the baby boomer cohort has reached the retirement threshold, retirements have increased dramatically. The left panel shows the distribution of the U.S. population in 2009. Each gray bar shows the number of individuals of a given age in the U.S. population from U.S. Census data. The blue bars show the number of workers in that age group who are retired. We indicate the baby boomer cohort, that is, those workers born between 1946 and 1964, by the gray shaded area, and mark the retirement age of 65 years by the vertical red line. The left panel shows that in 2009 the baby boomers were just beginning to enter retirement.

Baby Boomer Retirements Have Increased Dramatically over Time

Two-panel Liberty Street Economics chart showing retirements have increased dramatically as the baby-boomer cohort has reached the retirement threshold. The left panel shows the distribution of the U.S. population in 2009, while the right panel shows the same distribution in 2022.
Sources: U.S. Census Bureau; Current Population Survey (CPS); authors’ calculations.
Notes: The gray bars show the U.S. population of a given age. The blue bars show the estimated number of retirees at each age, computed from the share of retired workers at each age from the CPS. The red vertical line indicates the normal retirement age of 65 years. The gray shaded area indicates the ages corresponding to the baby boomer cohort, that is, those individuals born between 1946 and 1964.

The right panel of the chart shows the same distribution in 2022. By 2022, a large share of the baby boomer generation had entered retirement, leading to a significant increase in the number of individuals retired, as indicated by the blue bars.

Retirements within Specific Age Groups Have Increased Compared to Pre-Pandemic Levels

We next examine retirements within age groups in more detail. The previous chart suggests that retirement shares by age group have risen only modestly, as shown by the height of the blue bars relative to the gray bars. To substantiate this point, we break the population into groups of individuals aged 60-69, 70-79, and over 79. We focus on individuals aged 60 and older since these account for more than 90 percent of all retirees in the United States. For those aged 60-69, the retirement share has risen from an average of 39.7  percent in 2018-19 to 40.0 percent over the second half of 2022. The retirement share for those aged 70-79 has increased from 77.5 percent in 2018-19 to 78.8 percent in the more recent period. Finally, among those over 79, the retirement share has gone up from 88.5 percent to 90.5 percent. Here we consider the average over 2018-19 as our pre-pandemic reference point to remove shorter-term movements in the retirement shares.

How does this change in retirement behavior affect overall retirements? The share of retired workers in the U.S. population has risen substantially, from an average of 18 percent in 2018-19 to nearly 20 percent at the end of 2022. However, once we control for the overall aging of the population, the changes in the age-specific retirement shares reported above imply an increase in the overall share of retirees in the population of only about 0.3  percentage point.

Share of Workers with Disability and Not in the Labor Force Has Actually Fallen

We finally analyze the effect of disability on the participation gap. To capture a broad notion of disability, we focus on a set of six questions in the CPS that ask respondents whether because of a physical, mental, or emotional condition they have serious difficulty concentrating, remembering, or making decisions.

We start by considering the number of disabled individuals in the labor force as a share of the total population. The share of workers with disability (based on the above definition) rose from an average of 2.5 percent of the population in 2018-19 to about 2.9 percent in the last six months of 2022. While the rise in disability among workers in the labor force may have implications for the intensity of work effort, a recent study has found relatively little change in average hours worked by workers with disability. Therefore, there may be relatively little effect on the LFPR since these workers are still in the labor force. For this reason, we focus on the share of disabled individuals not in the labor force. This share has risen slightly, from about 9.2 percent in 2018-19 to 9.4 percent in the second half of 2022. Once we adjust for aging, we find that the share of disabled individuals not in the labor force has, in fact, marginally declined. This result arises because disability shares have slightly fallen for the older age groups.

Impact on Labor Force Participation

How have the three channels affected labor force participation? We first analyze the impact of population aging in isolation by constructing a counterfactual LFPR that keeps constant the share of the population in each age group at February 2020 levels. The gold line in the chart below shows this age-adjusted participation rate. Removing the effect of aging can explain the entire participation gap, lifting LFPR by 0.9 percentage point in February 2023. This big effect arises because the large baby boomer cohort is right at the retirement cutoff. As the chart above shows, the retirement share rises dramatically with age around the age of 65. Consequently, the aging of the baby boomers between 2020 and 2022 led to a significant rise in retirements, reducing participation.

Second, we analyze the effect of excess retirements on participation, in addition to the effect of aging. To do so, we analyze how the overall age-adjusted retirement share would change if we went back to the retirement shares in each age group of 2018-19. In other words, we ask what LFPR would prevail if retirement behavior went back to pre-COVID levels, controlling for aging. Since about half of new retirees in 2020-22 were already out of the labor force prior to retirement (for example, a stay-at-home partner who transitions into retirement), we multiply the effect of excess retirement by one half. The red line in the chart below shows that additionally removing excess retirements increases LFPR by a further 0.2 percentage point in February 2023. This effect is smaller than in a recent study that finds a 0.6 percentage point effect. The difference arises mainly because we assume that only half of all excess retirees could return to the labor force, since the rest were already out of the labor force prior to retirement.

Finally, the increase in disability has virtually no effect on the participation gap because, as discussed above, the increase is entirely accounted for by individuals that remain in the labor force. We do not separately plot this effect on the chart below. Overall, our results imply that undoing the effects of population aging and excess retirements would raise the LFPR by 1.1 percentage point from 62.5 percent to 63.6 percent, more than making up for the participation gap.

Participation Rate Is Higher after Adjusting for Aging and Excess Retirements

Liberty Street Economics chart showing the headline labor force participation rate reported by the Bureau of Labor Statistics, the counterfactual labor force participation rate that keeps the share of the population in each age group constant at February 2020 levels, and the surplus of retired workers in the recent period compared to 2018-19.
Sources: Current Population Survey; authors’ calculations.
Notes: The blue line shows the headline labor force participation rate (LFPR) reported by the Bureau of Labor Statistics. The gold line is the counterfactual LFPR holding fixed the population age structure in February 2020. The red line further adds the surplus of retired workers in the recent period compared to 2018-19, at the fixed age structure of February 2020.


In this blog post we show that demographic trends, specifically population aging, exert a powerful influence on labor force participation. In other words, the participation gap largely disappears once we control for population aging, indicating that participation has recovered a great deal since the large shock induced by the pandemic. Other possible contributing factors, such as elevated retirement rates or disability, play only a minor role in explaining the participation gap. Population aging is likely to continue to exert strong downward pressure on participation going forward, as more of the baby boomer generation continue to enter retirement.

Chart data

Mary Amiti is the head of Labor and Product Market Studies in the Federal Reserve Bank of New York’s Research and Statistics Group.

Sebastian Heise is a research economist in Labor and Product Market Studies in the Federal Reserve Bank of New York’s Research and Statistics Group. 

Giorgio Topa is an economic research advisor in Labor and Product Market Studies in the Federal Reserve Bank of New York’s Research and Statistics Group.

Julia Wu is a research analyst in the Federal Reserve Bank of New York’s Research and Statistics Group.

How to cite this post:
Mary Amiti, Sebastian Heise, Giorgio Topa, and Julia Wu, “What Has Driven the Labor Force Participation Gap since February 2020?,” Federal Reserve Bank of New York Liberty Street Economics, March 30, 2023,

The views expressed in this post are those of the author(s) and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author(s).

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