Asian stock volatility continues, with the CSI 300 up 2.4% and the Hang Seng rising 3.7%, following the release of details on stimulus measures. Optimism is also building globally after US stocks hit fresh highs. The FOMC minutes supported this sentiment, with Fed officials viewing risks to their dual mandate as roughly balanced. While all participants supported lower interest rates, only “a few” backed a smaller move to allow for more assessment, and “some” would have preferred a quarter-point cut. However, a 50bps cut was seen as bringing rates into “better alignment” with the economy.
Looking ahead, the key event today is the release of the US Consumer Price Index at 13:30 UK time, expected to show inflation further moderating, which would bolster the case for Fed easing in the coming months. The YoY estimate is 2.3%, with MoM expected at 0.1%, down from 2.5% and 0.2%, respectively. Despite this, market pricing indicates that the likelihood of another 50bps rate cut is now off the table following last week’s strong jobs report. Fed speakers, including John Williams and Thomas Barkin, will also be in focus.
In the markets, Bitcoin rose 0.7% to $60,822.26, Ether increased 1.6% to $2,392.96, the yield on 10-year Treasuries edged up to 4.07%, West Texas Intermediate crude rose 0.9% to $73.90 a barrel, and spot gold was up 0.2% to $2,614.17 an ounce. Our thoughts are with our friends in Florida—stay safe, and have a good day.
