Federal Reserve: The S&P 500, Nasdaq, and Dow traded largely flat ahead of the Federal Reserve's interest rate decision, where policymakers left rates unchanged at 3.50%–3.75%, as expected. However, Chair Kevin Warsh delivered a notably hawkish message, emphasising that the Fed will not tolerate persistently high inflation. Treasury yields rose, and rate expectations shifted higher following the announcement, with markets now fully pricing in a 25 bp rate hike by October.
Eurozone Inflation Mixed: Eurozone CPI remained steady at 3.2%, suggesting that underlying inflationary pressures continue to moderate. The data reinforced expectations that the European Central Bank may have greater flexibility on future policy decisions while remaining attentive to headline inflation trends.
UK Inflation Supports BoE Caution: UK CPI remained at 2.8% year-on-year, broadly in line with expectations ahead of today's Bank of England interest rate decision. The data is unlikely to materially alter policy expectations, with markets anticipating the BoE will maintain a cautious stance as inflation continues to move toward target levels.
Oil Extends Decline: Brent crude continued its recent sell-off, falling to $78.88 per barrel as geopolitical risk premiums continued to unwind. Markets remain focused on the prospect of increased global supply and improving shipping conditions in the Middle East, reducing concerns over potential disruptions to energy markets.
Economic Calendar
- Bank of England Interest Rate Decision
- Japan CPI
- Japan Core CPI
- Swiss National Bank Interest Rate Decision
Key Market Moves Today
- S&P 500 Futures: +0.77% (7,550.3)
- U.S. 10-Year Yield: -3.56 bps (4.45%)
- Brent Crude: -1.85% ($78.08)
- Bitcoin: -0.69% ($63,923)
- Spot Gold: +1.44% ($4,318)
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