Marketmind: Jolted markets fret about economy, Fed rate path
2023.04.05 01:03
© Reuters. FILE PHOTO: Share traders look at their screens at the stock exchange in Frankfurt, Germany, January 15, 2019. REUTERS/Kai Pfaffenbach/File Photo
A look at the day ahead in European and global markets from Ankur Banerjee
Risk sentiment remains fragile as skittish investors fret about a recession after a slew of economic data through the week points to a cooling U.S. economy.
The JOLTS report on Tuesday showed that U.S. job openings dropped to their lowest level in nearly two years in February, with traders wagering that the Fed is just about done with its interest rate hikes.
Investors raised their bets to a roughly 60% probability of no move following the Fed’s May 2-3 meeting, compared to about a 43% chance the day before, based on pricing of interest-rate futures.
And yet, Federal Reserve Bank of Cleveland President Loretta Mester said that the U.S. central bank likely has more interest rate rises ahead amid signs the recent banking sector troubles have been contained.
A surprise 50 basis point hike from New Zealand’s central bank shocked the Asian market, with kiwi-dollar scaling a two-month peak. Twenty-two of 24 economists in a Reuters poll had forecast the Reserve Bank of New Zealand would raise rates by just 25 basis points.
Meanwhile, JPMorgan (NYSE:) CEO Jamie Dimon said the impact of the U.S. banking crisis will be felt for years to come.
“The current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come,” Dimon wrote in a 43-page annual message to shareholders.
Stock futures indicate a lower open in Europe, with purchasing managers index surveys for the Eurozone, France and Germany later in the day that will showcase the state of economy in Europe. Investors still anticipate few more rate hikes in the region.
A Reuters poll of foreign exchange strategists showed that the U.S. dollar will weaken against most major currencies this year as the interest rate gap with its peers stops widening.
In the crypto world, ‘s dog replaced Twitter’s blue bird on Monday as the social media company’s logo (and remains there as of last twitter scroll), helping the meme coin add as much as $4 billion to its market value.
Key developments that could influence markets on Wednesday:
Economic events: S&P Global (NYSE:) Service PMI data for Eurozone, France, Germany
(Graphic: Odds point to no May rate hike –
