| Record wagers tied to the Fed's expected rate cut risk sharp losses. Legal scrutiny of banks that lost big on the Archegos collapse ramps up. Steve Cohen is stepping away from the trading floor. —Nicole Bullock Traders who are locked into record wagers tied to the Federal Reserve's expected interest-rate cut Wednesday are risking sharp losses if officials opt for a standard-sized quarter-point reduction. Activity in October fed funds futures, which investors are using to bet on this week's policy meeting, has jumped to the most extreme level of any such contract since the derivative's inception in 1988, according to data compiled by Bloomberg. The bulk of these new bets are targeting an outsized half-point cut, including a surge of positions put in place this week, the data show. The US Justice Department is ramping up scrutiny of banks that collectively lost billions of dollars in the collapse of Bill Hwang's investment firm — mere months after scoring a conviction against him for deceiving those very firms. Prosecutors in the Justice Department's criminal antitrust division have kicked back to life a dormant probe examining how Hwang's lenders unwound more than $150 billion in bets placed by his family office, Archegos, according to people familiar with the matter. From the moment pagers began exploding across Lebanon Tuesday, theories began to circulate on how devices considered outmoded in much of the world were turned into dangerous weapons that killed several people and wounded almost 3,000. As Lebanon accused Israel of engineering the attack aimed at Hezbollah militants, much of the debate centered on the possibility that the supply chain for the retro devices had been compromised. One prevailing idea was that the pagers had been engineered so that their batteries would heat up until the devices exploded. Steve Cohen has stepped away from the trading floor. While the billionaire hedge fund founder remains Point72 Asset Management's co-chief investment officer along with Harry Schwefel, he's no longer investing clients' capital. Cohen, 68, is instead focused on driving the firm's growth and mentoring and developing talent, the firm said in an emailed statement. Bank Indonesia is likely to cut its key rate by 25 basis points to 6.00% on Wednesday, anticipating imminent easing by the Federal Reserve during the New York day. The US policy decision will be followed by a press conference. Brazil's central bank will likely raise its policy rate — just three meetings after the last cut of a long easing cycle. Here's what caught our eye over the past 24 hours: - Novo says Ozempic 'very likely' target for next US price cut
- Sony joins a crypto push in Japan as calls grow for looser rules
- Palm Beach confronts soaring $93,000 daily cost to protect Trump
- Salesforce's new AI strategy acknowledges that AI will take jobs
- Broker returns $10 million in profit from Argentine ghost bonds
- Leader of Delhi's government resigns months before polls
- Snap's $1,200 AR glasses are fun to use, but need more apps
The retail sales report -- showing a resilient US consumer -- failed to produce a downside surprise to cement a 50-basis point cut, leaving the outcome of Wednesday's meeting of the Federal Open Market Committee still the most uncertain in years. For bonds, having rallied hard, most of the risks are to the downside in the event that the Fed opts for 25 basis points, while equities still may find catalysts to break new highs if the elusive soft landing is achieved nonetheless. Looking back at the Fed since Jerome Powell has been chairman, two things are clear. One, Powell wants to build a consensus around decisions and, two, telegraph policy guidance so loudly that markets price in the move ahead of the FOMC meeting. This time around, it looks like he has achieved neither. Ed Harrison writes the Everything Risk newsletter. Follow him on X at @edwardnh. | 
No comments:
Post a Comment