Global Markets Stir: Fed Chatter, Dollar Decline
The dollar continued its decline, hitting its lowest since August amidst talk of the Federal Reserve nearing the end of interest rate hikes.
Traders anticipate a 30% chance of a rate cut in March based on subdued inflation data. Investors await insights from the Fed’s meeting minutes next week.
Currency strategists foresee ongoing pressure on the dollar and US yields due to a dovish Fed sentiment. US equity futures stabilized after a three-week rally, propelling the S&P 500 to an 11-week high. Notably, Microsoft Corp. rose 2% in pre-market trading after appointing Sam Altman, a former OpenAI co-founder. Treasury yields edged up before a US 20-year auction.
In Europe, the Stoxx Europe 600 index fluctuated amid negative corporate news, with Bayer AG dropping 10% due to a halted drug trial. Moody’s improved Italy’s debt outlook, aiding Italian banks and narrowing Italy’s yield premium over German bonds.
European gas prices surged due to conflicts in the Red Sea, driving benchmark futures up 6.9%. The ECB suggested potential rate hikes if market bets undermine its policy stance. Argentina saw a new president, Javier Milei, causing a rally in bonds and emerging-market stocks.
Zambia’s eurobonds plunged after failing to secure bondholders’ consensus on a restructuring deal. The offshore yuan strengthened, and Japan’s Nikkei 225 Stock Average hit a peak not seen since 1990, up 28% this year due to various factors including currency depreciation and corporate reforms.