Financial Markets Daily Report01 febrero 2024
The FOMC kept US interest rates on hold, saying it needed more confidence that inflation was moving toward 2% on a sustainable basis before cutting rates. Powell later stated that the FOMC was unlikely to have such confidence by March.
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- The FOMC kept US interest rates on hold, saying it needed more confidence that inflation was moving toward 2% on a sustainable basis before cutting rates. Powell later stated that the FOMC was unlikely to have such confidence by March.
- However, US Treasury yields fell across the board yesterday, pushed down by a slowdown in US labour costs. The Employment Cost Index rose 0.9% in Q4 (down from 1.1% in Q3) and the ADP report also showed slowing wage growth.
- In the eurozone, government bond yields had also fallen ahead of the FOMC meeting on the back of some positive surprises in French and German inflation data, as well as a lower-than-expected ADP report and Chicago PMI.
- In the FX market, the EUR weakened against its major counterparts, while the JPY strengthened against the USD on growing expectations of an end to negative interest rates from the BoJ. In commodities, the price of the European natural gas benchmark, the Dutch TTF, fell as tensions in the Red Sea redirected LNG flows to Europe.