LIVE MARKETS Manchin caused an itch involuntaryness

LIVE MARKETS Manchin caused an itch involuntaryness ...

Oct 22 - Welcome home to a real-time audience of markets brought by Reuters journalists. You can share your thoughts with us in the evening.

MANCHIN INDUCED VOLATILITY (1207 GMT)

The blow to the US-Dollar Democratic spending plan came when the variant Omicron spread around the world and the central bank is finally going to roll-up their monetary stimulus.

The Democrats will be forced to scale back their expectations by focusing on fewer priorities and funding them permanently, says Mark Haefele, chief investment officer at UBS Global Wealth Management.

I think a reconciliation bill smaller and cheaper is still possible, and of course it will encounter numerous obstacles, adds Mr. Thomas.

UBS expects a failure to pass the bill in order to cut down the GDP growth a little by a few tenths of a cent at the new year's peak.

According to Haefele, the fiscal news caused market volatility, but, in our view, the other risk is secondary to the fact that - and the central banks, - all of which are taking place in different positions.

On Tuesday, the President Joe Biden said that he and the conservative Democratic Senator Joe Manchin were "going to get something done" on the president's proposed social spending and climate legislation.

In equity, UBS confirms that pharma stocks seem especially expensive, while the investment opportunity in the zero-to-zero carbon transition remains intact.

(Stefano Rebaudo)

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RECORD POWER PRICES: PERFECT STORM - FOR UTILITIES (1049 GMT)

The record-breaking surge in power prices during the winter months is likely to be a problem for Europe's economic recovery, as well as the new restrictions deprived the public in the power space.

Barclays sees an investment case "very favorable" and expects the power price market to move even higher.

"European generation was facing a 'perfect storm', but we believe that higher prices still aren't appropriate to yield a common solution: The current data shows that the u.s. dollar price is lower, but not to blame for that in-flight decline," says the UK bank.

"Considering the gravity of the issues causing power prices to rise, we think the risk of increased EPS impact should drive greater investor positivity, particularly for European utilities who benefit from high absolute power prices. But since we have been left behind, we think the scale of the potential impact of the EPS impact should help a greater investor satisfaction, especially in the context of those companies that have benefitted from higher power prices, not the more importantly he is the more advanced generation"

They mentioned Enel, EDF, Engie and RWE as possible benefiaries.

(Danilo Masoni).

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TECH HELPS STOXX STAY AFLOAT (0828 GMT)

European shares started the session in a mixed fashion with the STOXX 600 regional benchmark struggling to find a clear direction for the trade as well as parity in early deals.

In spite of increasing strength in tech, a retracement in commodity-related and travel stocks helped make the pan-European benchmark index stay float, up 0.2%.

In single-stock, Delivery Hero increased 5 % after the German food delivery group said that it would scale down its Foodpanda operations in Germany and sell the Japanese unit.

Here's the brief photograph of his opening image:

(Annilo Masoni)

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GIVE EFFECTIVE PAST OMICRON (0824 GMT)

In spite of the economic annoyances in the nation and the fear of a lack of democracy, the stocks continue to have a higher chance of survival. The Wall Street gains on Tuesday were mostly led by current lockdown beneficiaries in the tech industry, and largely by shares such as Carnival and Expedia.

We seemed to be headed for a somewhat different session however, despite the strong growth of European shares in Asia, and US futures pointing south.

Perhaps, the markets were afooting the Omicron impact, and pinning hopes on alternative therapies like the Pfizer and Moderna pill which could allow patients to treat COVID in a home, then the further explanation - the demand for a grant from the hospitality industry - is not only the promise of central banks and governments to backstopp economies but also the economy.

In Britain, stakes are particularly high. Data show GDP (ex-Omicron) grew slower than previously thought, at 1,1%. The economy remains 1.5% lower than pre-pandemic levels, and, more worryingly, Q3 business investment fell 2.5% versus year back.

While money is supported by bull markets, there's more.

This is seen in the record $1.75 trillion parked by US banks on Tuesday night in the overnight repo facility for the Fed. The excess reserves jumped to 0.5%, for the first time since October.

Seeing as this, an overnight reverse repo demand was 1,6 trillion dollars a week ago and dropped to 1,0 trillion dollars in August.

Meanwhile, action in the emerging markets continues.

The Turkish lira is at some half the lowest level due to the promise of compensation for deposit holders against currency losses. But the move stores up problems for the coming months; JPMorgan, for instance, estimates a 12% lira depreciation compared to lira interest rates will be able to reduce the budget deficit by 1% over six months.

In the day, the Czech National Bank may raise rates of up to 75 points, following the massive increase in 125 bps in November.

Key developments that should help markets more on Wednesday:

-Thailand's central bank held the rate of interest.

-The National Bank of Tschechise holds monetary policy meetings.

-US annual GDPQ3/Q3 corporate profit/consumer confidence/existing home sales.

(Sujata Rao)

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LESS SET TO READ - 734 GMT.

European shares have to extend yesterday's rebound, as investors look past potential short-term damage from the highly infectious Omicron virus variant - keeping confidence in the economy's growth potential.

The world's stock price futures have risen by 0.3-0,5 %, whereas the market-linked and travel stocks grew to the lowest day of the year.

In spite of that, volume is decreasing rapidly before Christmas. The trade is becoming worse when it comes to holiday.

Over in Asia, shares are broadly up, as risk appetite returns coming into the year-end, while US index rates will also enlarge slightly, thanks to a strong close.

Credit Suisse downgraded this week equities to neutral, citing near-term risks of Omicron and as well as the possibility of long-term impact of an oil spill.

(Danilo Masoni)

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