LONDON (Reuters) - The number of companies in England and Wales declared insolvent during the three months to the end of September remained close to levels seen after the 2008 financial crisis and was down only slightly from the previous quarter's 14-year high.

The Insolvency Service, a government agency, said the number of insolvencies fell 2% to 6,208 on a seasonally adjusted basis, but was 10% higher than in the same period a year earlier.

Many businesses and households have come under increased pressure from rising interest rates as well as and a jump in the cost of energy and other necessities such as food.

"The last two quarters saw the highest quarterly insolvency numbers since Q2 2009," the Insolvency Service said.

Most of the increase has been driven by a surge in creditors' voluntary liquidations - a form of insolvency where directors and creditors agree to wind up a struggling business, which is now the most common since records began in 1960.

There were also 735 compulsory liquidations, a similar level to before the COVID-19 pandemic but up by 46% on a year earlier. Until the end of March 2022, there were restrictions on courts winding up businesses affected by the pandemic.

The Bank of England raised interest rates 14 times between December 2021 and August 2023, lifting benchmark borrowing costs from 0.1% to 5.25%.

Most economists think the central bank will keep rates on hold on Thursday after its latest rate meeting, but do not expect a rate cut until the second half of next year.

"Escalating interest rates have added to the cost of servicing the already increased debt burden of some firms, made refinancing impossible or punitively expensive for others, and generally made access to funding difficult," said Mark Ford (NYSE:F), a restructuring partner at professional services firm Evelyn Partners.

By Brigid Riley and Kevin Buckland

TOKYO (Reuters) - A day after loosening its grip on long-term interest rates, the Bank of Japan intervened in the government bond market to rein in a jump in yields to fresh decade highs, reminding the market that it should avoid moving too fast.

The 10-year Japanese government bond yield rose 2 basis points (bps) to 0.970% on Wednesday, a level last seen in May 2013, before retreating immediately after the BOJ announced an emergency bond-purchase operation. It stood at 0.955% as of 0605 GMT.

"They've said okay, let's let the market find a new equilibrium - but let's remind the market that about the upper bound, we can intervene," said Claudio Irigoyen, global head of economics at BofA Global Research.

Japan's central bank on Tuesday took another small step away from its decade-long commitment to ultra-easy stimulus by changing the 1% ceiling for the 10-year yield to a reference point rather than a hard cap.

It also removed a pledge to defend the level with offers to buy unlimited amount of bonds, nodding to market forces that have continued to push yields up in line with global moves and domestic inflationary pressures.

There's "a continued sense of caution in the market that we're moving in the direction of policy normalisation," said Keisuke Tsuruta, fixed income strategist at Mitsubishi UFJ (NYSE:MUFG) Morgan Stanley Securities.

While the 10-year yield's rise was halted by the BOJ's intervention, other parts of the curve continued to climb.

The five-year yield reached 0.485% after the announcement, a level not seen since April 2011.

The 20-year JGB yield touched 1.745% for the first time since July 2013, and the 30-year yield reached 1.91%, a level last seen in May 2013.

The two-year JGB had not traded yet following the intervention, but the yield ticked up to 0.160% earlier in the day for the first time since July 2011.

Yield curve controls are "simplified but effectively dead," said James Malcolm, UBS currency strategist based in London.

"The positive spin is that less overt control should help market function recover."

SYDNEY (Reuters) - Chances of an imminent hike in Australian interest rates grew on Wednesday after data showed house prices rebounding to near record highs and the International Monetary Fund recommended tightening monetary and fiscal policy screws to curb inflation.

Markets responded by pricing in a near-70% chance that the Reserve Bank of Australia (RBA) will raise rates by a quarter point to 4.35% when it meets on Nov. 7, ending four months of keeping rates on hold.

High readings for inflation and consumer spending had already suggested policy might be too loose, and that view was reinforced by a CoreLogic report showing house prices had regained all the ground lost during the RBA's previous 12 rate hikes.

"The turnaround in property prices has been quite remarkable," declared Gareth Aird, head of Australian economics at CBA. "The RBA's 400 basis points of tightening reduced home borrower capacity by 30%, but property prices are now back to their previous peak."

So far this year, values in Sydney, Perth and Brisbane are all up more than 10%, adding billions to household wealth at a time when the RBA would really rather they not be spending.

A separate report from PropTrack foresaw further gains ahead given booming migration, a tight rental market and a supply squeeze as home building lagged far behind population growth.

IMF WEIGHS IN

The IMF also weighed in on Wednesday by arguing tighter monetary and fiscal policy was needed in order to bring inflation back to the RBA's target band of 2-3%.

In its regular review of Australia, the IMF staff noted the resilience of the economy as the jobless rate remained near a 50-year low of 3.6%, while economic output was estimated to be running at 1% above potential.

"Staff therefore recommend further monetary policy tightening to ensure that inflation comes back to the target range by 2025 and minimize the risk of de-anchoring inflation expectations," they said.

They also called for different levels of government to take a more measured approach to infrastructure investment as massive projects compete for scarce resources and push up costs.

S&P Global Ratings estimates capital expenditure by Australian states and territories will be a record A$320 over the next four years.

"Each project on its own probably doesn't add that much to national inflation," said Martin Foo, lead analyst at S&P Global Ratings. "But the problem is that if you add up all of these projects together, then they are having a significant impact."

The US housing market is potentially on the brink of recession, as mortgage rates near 8%, according to Wells Fargo economists. This situation is largely attributed to the Federal Reserve's aggressive interest-rate hikes since March 2022, a strategy intended to control inflation that is expected to persist until 2024.

The Federal Reserve's policy could result in a decrease in construction and housing activity. The residential sector, which showed signs of improvement in early 2023, is now contracting. Even if mortgage rates drop when the Federal Reserve eases its monetary policy, financing costs might remain high. This could limit new construction and discourage sellers with low mortgage rates from listing their homes.

The average 30-year fixed-rate mortgage has climbed from under 4% to nearly 8%. In the first half of 2023, only 1% of Americans sold their houses. This trend suggests a potential slowdown in the housing market activity.

Various groups have urged Jerome Powell, the Fed's chair, to reconsider the bank's rate-hiking campaign. These groups include the National Association of Realtors, Mortgage Bankers Association, and National Association of Homebuilders. This situation echoes the 1980s when homebuilders from Jackson, MS sent a plea to then-Fed Chair Paul Volcker with the inscription "Help! Help! We Need You. Please Lower Interest Rates."

The current situation underscores a growing concern about the impact of rising interest rates on the housing market. As economists continue to monitor these trends, it remains clear that future decisions by the Federal Reserve will significantly influence the trajectory of the US housing market.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

(Reuters) -Financial markets have got off to a volatile start to the week, after Hamas militants launched an assault on Israel at the weekend, triggering violent conflict that left hundreds dead.

A bond market rout last week and currency gyrations already had financial markets on edge ahead of U.S. inflation numbers and the start of earnings season.

There's plenty to chew over for policymakers meeting at the World Bank/International Monetary Fund annual meeting, while Britain's opposition Labour party - vying for government - will set out its stall ahead of next year's election.

Here's your week ahead in markets from Kevin Buckland in Tokyo, Lewis Krauskopf in New York, Rachel Savage in Johannesburg, and Naomi Rovnick and Dhara Ranasinghe in London.

1/ A JAPANESE INTRIGUE

When all were bowing before king dollar in days gone by, the yen suddenly had other ideas. Following a grind to a new one-year peak above 150 yen on Tuesday, the bottom fell out, and a minute or so later the dollar was bouncing off 147.

    Markets whispered about possible intervention, although many had doubts and the dollar recovered quickly, lacking the shock-and-awe of Japan's move a year ago. Central bank data strongly hints of no official action that day. But the spectre of intervention will likely keep tugging at dollar spikes, maybe all the way until the next central bank decision on Halloween.

Meanwhile, the euro is facing its own ghosts, with resurgent oil prices hurting a deteriorating economy and renewed concerns about Italy's fiscal position raising the risk of a move back towards the psychologically key $1 marker.

2/ HOT, COLD, OR JUST RIGHT?

    With benchmark Treasury yields around 16-year peaks, stakes are high for Thursday's monthly U.S. consumer price index report as investors gauge whether the Fed is likely to hike rates again to ensure inflation keeps cooling.

    August data showed the fastest inflation increase in 14 months as the cost of gasoline surged, though the annual rise in underlying inflation was the smallest in nearly two years. With oil prices around $90 a barrel, energy prices are also in focus.

    A hot report could spur worries that the Fed's rate posture may grow even more hawkish after its 'higher for longer' mantra in September spooked markets. The Fed is broadly expected to hold rates steady at its Oct 31-Nov. 1 meeting, although some traders are betting on another increase.

    3/ BETWEEN A YIELD AND A HARD PLACE

    Reports from major banks kick off third-quarter earnings season for U.S. companies with equity investors eager for a catalysts to revive stocks in the face of surging bond yields.

    JPMorgan, Citigroup and Wells Fargo will post results on Oct. 13 and give a first readout on the fallout from higher rates on issues from loan demand to consumer behaviour.

    Other companies set to report include snacks and beverages giant PepsiCo (NASDAQ:PEP) on Tuesday, Delta Air Lines (NYSE:DAL) on Thursday and insurer UnitedHealth Group (NYSE:UNH) on Oct 13.

    Overall, S&P 500 companies are expected to increase third-quarter earnings by 1.6% compared to the year-ago period, according to LSEG IBES, after earnings dipped 2.8% in the second quarter.

4/ LABOUR TAKES THE STAGE

The UK's governing Conservative party conference was marred by Prime Minister Rishi Sunak's controversial move to downsize plans for a long-awaited high speed railway.

Now it's time for the opposition Labour Party - riding high in opinion polls and having just clinched a clear by-election victory - to take the stage with business and markets looking out for what the potential next government might have to offer.

Asset managers are clamouring for Labour to listen to their ideas for reviving interest in the UK's moribund stock market - and any sign of changing political winds may bring some respite to underperforming equities, analysts said.

Hopes for an economic bounce, however, will be tempered by the UK's high government debt and Labour's vow for prudent budgets with fiscal rules similar to the current government's ones.

5/ MEETING IN MOROCCO

Finance officials and investors from around the globe are heading for the Morrocan city of Marrakech for the World Bank International Monetary Fund annual meetings. The gathering comes at a time when rocketing U.S. government bond yields that have led to a global jump in borrowing costs weigh on hopes that inflation can be lowered without triggering a major crisis.

Policy makers also face deepening global divides and calls from large emerging economies such as China to reform the Bretton Woods global financial architecture almost 80 years after it was established and make it more representative.

Amid these tensions, the IMF and World Bank are trying to boost their lending. Meanwhile, the Group of 20 leading economies' flagship debt restructuring initiative, the Common Framework, will also be in focus as it continues to face intense criticism for delays and a lack of concrete outcomes.

(Graphics by Sumanta Sen, Pasit Kongkunakornkul, Vineet Sachdev and Riddhima Talwanin; compiled by Karin Strohecker; editing by Kim Coghill)

By Polina Devitt

LONDON (Reuters) - Global gold demand excluding over-the-counter (OTC) trading slipped 6% in the third quarter as central bank buying fell short of last year's record levels and consumption by jewellers declined, the World Gold Council (WGC) said on Tuesday.

The quarter's demand of 1,147.5 metric tons however stood 8% ahead of its five-year average, and official sector purchases in the full year are expected to approach their 2022 level, the WGC said in its quarterly demand trends report.

Gold demand shot to an 11-year high in 2022 due to the biggest central bank purchases on record.

"With geopolitical tensions on the rise and an expectation for continued robust central bank buying, gold demand may surprise to the upside," said Louise Street, senior markets analyst at the WGC.

Spot gold prices hit $2,009.29 an ounce on Friday, surpassing the key psychological $2,000 level for the first time since mid-May, as investors piled into safe-haven bullion amid the Middle East conflict.

Demand from investors, who see bullion as a safe asset during periods of instability, rose 56% in the third quarter, but remained weak compared to the five-year average, the WGC said.

Central bank demand totalled 337.1 tons, down from a record 458.8 tons a year before. For the first nine months of 2023 however, official sector gold purchases hit 800 tons, more than in any January-September period in WGC data going back to 2000.

"This strong buying streak from central banks is expected to stay on course for the remainder of the year, indicating a robust annual total again in 2023," WGC said.

Buying of gold bars and coins fell by 14% in July-September with lower demand in Europe. Outflows from exchange traded funds (ETFs) storing bullion for investors continued due to investor sentiment that interest rates would remain high.

Including OTC trading, which is conducted directly between two parties rather than via an exchange, total global gold demand rose 6% to 1,267.1 metric tons in the third quarter.

QUARTERLY GOLD SUPPLY AND DEMAND (tonnes)*

SUPPLY Q3 2023 Q2 2023 Q3 2022 y/y %

change

Mine production 971.1 912.7 949.1 +2

Net producer hedging 7.2 -19.5 -26.8

Recycled gold 288.8 322.9 268.3 +8

Total supply 1,267.1 1,216.1 1,190.6 +6

DEMAND Q3 2023 Q2 2023 Q3 2022 y/y %

change

Jewellery fabrication 578.2 492.8 582.6 -1

Technology 75.3 70.4 77.3 -3

- of which electronics 61.1 56.4 63.5 -4

- other Industrial 11.8 11.6 11.3 +4

- dentistry 2.3 2.4 2.5 -6

Investment 156.9 255.7 100.5 +56

- of which bar and coin 296.2 276.8 344.2 -14

- ETFs & similar products -139.3 -21.1 -243.7

Central banks & other inst. 337.1 174.8 458.8 -27

GOLD DEMAND 1,147.5 993.7 1,219.2 -6

OTC and other 119.6 222.4 -28.6

TOTAL DEMAND 1,267.1 1,216.1 1,190.6 +6

LBMA gold price, $/oz 1,928.5 1,975.9 1,728.9 +12

* Source: World Gold Council, Gold Demand Trends Q3 2023

Investing.com -- The U.S. Treasury lowered its estimate for federal borrowing for the current quarter as it looks to continue replenishing its coffers.

The Treasury Department lowered its net borrowing estimate for the October through December quarter to $776 trillion, down from the $852 billion amount it had forecast in late July. 

Ahead of the announcement some had been expecting the Treasury to revised down borrowing projections. 

“For Q4, we expect that borrowing projections will be revised down to $745B from $850B in the first cut,” Jefferies said in a note.

For the January to March 2024 quarter, Treasury expects to borrow $816 billion in privately-held net marketable debt, assuming an end-of-March cash balance of $750 billion.

Treasury yields were little changed following the news.  

The Treasury on Wednesday will release the Treasury’s Quarterly Refunding statement, which includes a breakdown of how it intends to issue the debt.

The Treasury's funding plans have taken on added importance in recent months as some have attributed increased Treasury supply as one of the reasons for the jump in Treasury yields to multi-month highs.  

The U.S. Treasury has stepped up the pace of U.S. government bonds issuance after depleting its reserves to fund government operations - following the debt ceiling debacle earlier this year. 

Goldman Sachs economists have revised their projections for U.S. GDP growth and the likelihood of a government shutdown, following changes in House leadership and geopolitical risks. The fourth quarter of 2023 is now expected to see a GDP growth of +1.6%, and the first quarter of 2024 is anticipated to record a +1.7% increase. These adjustments discard previous assumptions of a government shutdown.

Newly elected House Speaker, Mike Johnson (R-La), has committed to avoiding a government shutdown during his recent appearance on FOX News' "Sunday Morning Futures." Congress faces a deadline of November 17 to pass legislation preventing a partial shutdown. Johnson's proposed solution is a stopgap continuing resolution (CR) that extends funding until either January 15 or April 15 of next year, depending on the support from House Republicans.

The GOP's slim majority, which can only withstand four defections while passing legislation, may be put to the test with upcoming aid packages for Israel and Ukraine. The ousting of former House Speaker Kevin McCarthy (R-Calif) by eight GOP members led to a 22-day scramble for leadership, culminating in Johnson's election.

Goldman Sachs analysts caution that an extended reliance on short-term extensions decreases the likelihood of Congress securing a deal on full-year spending bills. This could potentially impact funding through to the end of the fiscal year on September 30, 2024.

Earlier, Goldman Sachs had predicted a 2-3 week government shutdown this quarter due to geopolitical tensions including the Israeli conflict and U.S. air strikes in Syria. However, this prediction has now been nullified due to changes in House leadership. Despite this, Goldman Sachs' economists, including Jan Hatzius, have emphasized potential triggers for future governmental disruptions such as unresolved policy disagreements and dependency on temporary extensions of spending bills. This could potentially lead to a shutdown in early 2024, resulting in instability in future government operations.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

By Jamie McGeever

(Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.

Asia's economic calendar is jammed with top-tier releases on Tuesday, from Chinese purchasing managers index data to third quarter GDP figures from Hong Kong and Taiwan, but one stands above all others - the Bank of Japan's policy meeting.

Will the BOJ spook markets on Halloween and the final trading day of the month by effectively tightening monetary policy further with another tweak to its 'yield curve control' policy?

It is a huge week for global markets and policy - the BOJ's decision on Tuesday is the first of three major central bank pronouncements, with the U.S. Federal Reserve coming on Wednesday and the Bank of England on Thursday.

Speculation that the BOJ will act ramped up on Monday after Nikkei, citing sources close to the matter, reported that policymakers may further tweak YCC to allow the 10-year Japanese Government Bond yield to rise above 1%.

The yen rallied strongly for a second straight session, the 10-year yield rose again to a fresh decade-high nudging 0.89%, and the benchmark Nikkei 225 stock index gave back all of Friday's gains and slid 1%.

It is shaping up to be a year of two halves for Japanese stocks as the prospect of the BOJ abandoning its super-loose monetary policy becomes more likely. The Nikkei is down 3.6% this month, on track for its biggest monthly loss since December, and is down 8% so far in the second half of this year.

But it is still up 17% year-to-date thanks to a stunning 27% rally in the January-June period that saw it scale a 33-year high close to 34,000 points, as many investors bet that Japan Inc was back after years - decades - in the doldrums.

Negative interest rates, the BOJ accumulating 45% of all outstanding Japanese Government Bonds, and a 30% slide in the yen's value against the dollar since early 2021 made Japanese stocks extremely attractive.

By real effective exchange rate measures, the yen is its weakest in over 50 years, luring foreign buyers in to snap up assets on the relative cheap.

The question now is, how much of that is firmly in the rear-view mirror? And how far and how powerfully might the elastic snap back if a paradigm shift is underway and domestic borrowing costs keep on rising?

Inflation in Japan has finally taken off, and for the first time in decades, appears to be sticking well above 2%.

Also on Tuesday, China's PMI figures are expected to show that manufacturing activity grew slightly again in October, at the same pace as the previous month, according to a Reuters poll forecast.

After a deeply disappointing first half of the year, Chinese economic data have started to come in above expectations in recent months. Will this trend continue into the start of the fourth quarter?

Here are key developments that could provide more direction to markets on Tuesday:

- Bank of Japan policy decision

- China PMIs (October)

- Japan unemployment, industrial production, retail sales (September)

(By Jamie McGeever)

The International Monetary Fund (IMF) has projected a decrease in global growth to 3.0% in 2023, further declining to 2.9% in 2024, according to its "Navigating Global Divergences" report. This anticipated slowdown is attributed to multiple shocks including rising living costs, geo-economic fragmentation, the withdrawal of fiscal support, and cyclical factors.

Advanced economies are expected to experience a decline in growth from 2.6% to 1.5% in 2023 and further to 1.4% in 2024 due to policies aimed at curbing inflation. Meanwhile, developing economies are predicted to face a slight decrease from 4.1% in 2022 to 4.0% in the subsequent years, with disparities widening between regions.

Global inflation is set to decline from 8.7% in 2022 to 6.9% in 2023 and then further to 5.8% in 2024. This decline is attributed to tighter monetary policies and falling commodity prices, although core inflation pressures are expected to decrease at a slower pace.

The report also raises concerns about potential disruptions such as China's property sector crisis, the Ukraine conflict, extreme weather events, the transition to green energy, and potential spikes in food and energy prices due to climate and geopolitical shocks.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.