Post by account_disabled on Feb 25, 2024 7:52:44 GMT
US Treasury yields fell slightly and stocks advanced on Wednesday as investors shrugged off higher-than-expected US inflation data. Interest rate-sensitive two-year U.S. Treasury yields fell to 4.98 percent, from 5.04 percent before the consumer price data. Bond yields fall when prices rise. The benchmark S&P 500 stock index rose 0.3 percent and the technology-focused Nasdaq Composite gained 0.5 percent after new data showed U.S. consumer prices rose at an annual rate. 3.7 percent in August, compared to 3.2 percent the previous month and marginally above analysts' forecasts. Core inflation fell from 4.7 percent to 4.3 percent during the same period. The dollar gave up earlier gains to trade flat against a basket of six peer currencies. Despite the rally, the overwhelming majority of market participants still expected the Federal Reserve to keep interest rates steady at its monetary policy meeting next week.
The rise in the US inflation rate in August is unlikely to prompt the Federal Reserve to raise interest rates further this month,” said Richard Garland, chief investment strategist at Omnis Investments. "The main impact Job Function Email Database on the headline inflation rate comes from rising energy prices, but the Federal Reserve is likely to take this into account given that core inflation remains subdued and inflation expectations have been falling." Richard Flynn, managing director at Charles Schwab UK, said: "While it appears the Federal Reserve may be done with raising rates this cycle, today's report is likely to reinforce its tendency to keep rates high for a prolonged period, to avoid boosting inflation. higher". An increase in the headline figure was expected as oil prices have risen since June after oil exporters Saudi Arabia and Russia announced supply cuts in an effort to prop up prices.
International benchmark Brent crude rose 0.2 percent to $92.21 a barrel on Wednesday, hitting a new 10-month high earlier in the day. The US equivalent West Texas Intermediate rose 0.1 percent to $88.94. However, recent price pressure has led traders to tilt their bets in favor of another rate hike by the European Central Bank, which will announce its policy decision on Thursday. Swap markets now put a 63 percent chance that the central bank will raise eurozone interest rates by 0.25 percentage points to 4 percent this week. Yields on two-year German Bunds, a policy-sensitive regional benchmark in Europe, rose 0.04 percentage point to 3.16 percent on Wednesday. If "the ECB decides to raise rates tomorrow, they are more likely to signal their willingness to pause thereafter, keeping the impact on the terminal rate fairly limited," said Jason Davis, global rates portfolio manager at JPMorgan Asset. Management.
The rise in the US inflation rate in August is unlikely to prompt the Federal Reserve to raise interest rates further this month,” said Richard Garland, chief investment strategist at Omnis Investments. "The main impact Job Function Email Database on the headline inflation rate comes from rising energy prices, but the Federal Reserve is likely to take this into account given that core inflation remains subdued and inflation expectations have been falling." Richard Flynn, managing director at Charles Schwab UK, said: "While it appears the Federal Reserve may be done with raising rates this cycle, today's report is likely to reinforce its tendency to keep rates high for a prolonged period, to avoid boosting inflation. higher". An increase in the headline figure was expected as oil prices have risen since June after oil exporters Saudi Arabia and Russia announced supply cuts in an effort to prop up prices.
International benchmark Brent crude rose 0.2 percent to $92.21 a barrel on Wednesday, hitting a new 10-month high earlier in the day. The US equivalent West Texas Intermediate rose 0.1 percent to $88.94. However, recent price pressure has led traders to tilt their bets in favor of another rate hike by the European Central Bank, which will announce its policy decision on Thursday. Swap markets now put a 63 percent chance that the central bank will raise eurozone interest rates by 0.25 percentage points to 4 percent this week. Yields on two-year German Bunds, a policy-sensitive regional benchmark in Europe, rose 0.04 percentage point to 3.16 percent on Wednesday. If "the ECB decides to raise rates tomorrow, they are more likely to signal their willingness to pause thereafter, keeping the impact on the terminal rate fairly limited," said Jason Davis, global rates portfolio manager at JPMorgan Asset. Management.