
Phoenix Hotels Were a Rare Success Story Even Before the Super Bowl
The booming Phoenix hospitality sector is poised for another win as it hosts the Super Bowl between the Philadelphia Eagles and the Kansas City Chiefs this Sunday.
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The booming Phoenix hospitality sector is poised for another win as it hosts the Super Bowl between the Philadelphia Eagles and the Kansas City Chiefs this Sunday.
Evidence of falling prices in Sweden’s commercial real estate sector is starting to pile up as landlords slash the valuations of their portfolios.
The Riksbank will probably raise its interest rate by a half point this week, staring down the mounting danger of an economic slump to act against rampant inflation.
Britain’s housing market may be showing tentative signs of improvement after a brutal 2022.
Average occupancy levels at many Dublin offices have fallen to 10% or lower on Mondays and Fridays as the majority of employees opt to work from home, according to a survey.
Feb 15, 2020
Bloomberg News
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Traders are so fixated on the coronavirus that, in the absence of compelling reasons to do otherwise, they’re piling into hedges in case the contagion is a disaster for the global economy.
Much of the activity involves bets that the Federal Reserve will feel increased pressure to reduce interest rates. A flurry of eurodollar options trades emerged this week that profit if the central bank delivers more than the one-to-two quarter-point cuts already priced in for 2020.
During the holiday-shortened week ahead, there’s little in the calendar of events that looks likely to pull investors away from virus headlines.
“The impact of the virus on the global economy is going to be significantly more than what people are expecting, and when the global economy goes south, the Fed steps in,” said Tony Farren, managing director at broker-dealer Mischler Financial in Stamford, Connecticut.
Farren is paying more attention than usual to Australian data, given the country’s dependence on China, seeking clues about any spillover effects from the virus called Covid-19. A March rate cut by the Fed would surprise him, “but June is possible and poor economic data in the summer would open the door to cuts in September and possibly December,” Farren said.
Minutes of the Federal Open Market Committee’s Jan. 28-29 meeting, to be released Wednesday, cover a period in which policy makers were still monitoring the virus originating from China.
A more real-time view -- Treasuries trading from the past few days -- shows market participants are worried about the economy’s prospects. A flight-to-quality move ahead of the three-day weekend drove the widely watched spread between 2- and 10-year yields to the flattest level since November.
Strategists at Deutsche Bank AG and Credit Suisse Group AG argue the Fed could be forced to cut rates by July.
Citigroup Inc.’s Calvin Tse is bracing for markets to price in a preemptive March reduction. This week he recommended a trade involving the overnight index swap dated around the March 17-18 meeting of Fed policy makers. The swap only implies a slight chance of easing. But if those odds increase, “this trade can make a lot of money,” he said in an interview.
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--With assistance from Edward Bolingbroke.
To contact the reporter on this story: Vivien Lou Chen in San Francisco at vchen1@bloomberg.net
To contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, Nick Baker, Mark Tannenbaum
©2020 Bloomberg L.P.