2024-03-06 22:25:00
“If the economy progresses significantly as expected, it is likely appropriate to begin reducing policy restraints at some point this year,” Powell said at a House Financial Services Committee hearing. He also said that “continued progress towards the 2% inflation target is not guaranteed.”See more
The euro/dollar exchange rate rose 0.37% to $1.0897. At one point, it rose to $1.09155, its highest level since February 2nd.
“Mr. Powell began his testimony by essentially repeating what he and other officials have been saying for months,” said Matt Weller, head of market research at StoneX. However, in recent weeks there had been speculation in the market that the Federal Reserve would shy away from lowering interest rates in the first half of this year, he said. “I rewound it,” he said.
The dollar index against six major currencies fell 0.41% to 103.36.
According to the US employment report for February released by Automatic Data Processing (ADP), a corporate payroll service, on the 6th, the number of private sector employees will increase by 140,000, compared to economists’ forecasts compiled by Reuters (15 (10,000,000 people). Wage growth for workers who did not change jobs slowed to 5.1% year-on-year from 5.3% in January, and was the smallest since August 2021. See more His GBP/USD rose 0.25% to $1.2738. British Finance Minister Hunt announced on the 6th, in his spring financial report (spring budget formulation policy) to Parliament, that the rate of national insurance contributions paid by workers would be reduced by 2 percentage points of wages.See more
The dollar/yen exchange rate fell 0.45% to 149.38 yen. Jiji Press reported on the 6th that some participants at the Bank of Japan’s monetary policy meeting to be held on March 18th and 19th are expected to express their opinion that it is appropriate to end negative interest rates.
The US dollar also fell 0.57% against the Canadian dollar. On the 6th, the Bank of Canada (BOC, the central bank) left the policy interest rate unchanged at 5.0%, saying it was too early to consider cutting interest rates given the continued underlying inflation.See more
The Australian dollar rose 0.94% to US$0.6565.
Crypto asset (virtual currency) Bitcoin rose 5.76% to $66,963. The price had fallen significantly after hitting a new all-time high the day before.
NY foreign exchange market:
“If the economy progresses significantly as expected, it is likely appropriate to begin reducing policy restraints at some point this year,” Powell said in testimony before the House Financial Services Committee. . At the same time, “the economic outlook is uncertain, and continued progress towards the 2% inflation target is not guaranteed,” he said, adding that there is a risk that interest rates are cut too soon and inflation accelerates again, and that monetary tightening remains too long and the current economic Both mentioned the risk of damaging the expansion.See more
“Chairman Powell said pretty straight forward that rate hikes are over,” said Marvin Lo, senior global macro strategist at State Street in Boston. “I feel that I can play a role. The focus will be on how long it will take.”
The Labor Department’s February 8 employment report may provide clues as to the direction of the Federal Reserve’s policy, and the market will also be keeping an eye on the February Consumer Price Index (CPI) to be released next week.
Will Compernoll, macro strategist at FHN Financial in New York, said there are also concerns in the market that the economy is “overheating.” However, he said that this only becomes a problem if the inflation rate is high, saying, “If the employment report comes out almost as expected, then everything will depend on the CPI.”
The yield on the 10-year note fell 3 basis points (bp) to 4.108% in late trading. At one point, it was 4.079%, the lowest level since February 7th.
The two-year bond yield rose 1 basis point to 4.552%. However, at one point it fell to 4.510%, the lowest level since February 15th.
The difference in yield between 2-year bonds and 10-year bonds is -45 basis points.
Mi Financial・Bond Market:
Chairman Powell told a House Financial Services Committee hearing on the 6th that he expects to start lowering interest rates by the end of the year, indicating that he does not think the U.S. economy is at risk of slipping into recession. However, he declined to say when he would cut interest rates.
“We want to see further data that confirms and increases our confidence that inflation is falling sustainably to 2%,” the Fed said before cutting rates.See more
Quincy Crosby, chief global strategist at LPL Financial, said: “Chairman Powell made it clear that the Fed expects to cut interest rates by the end of the year.The market wanted to hear this.There was some ambiguity, but overall The message was clear.”
Mark Raschini, chief investment strategist at Janney Montgomery Scott, said that along with Powell’s testimony, economic data released on Wednesday also raised expectations for rate cuts and confidence in the labor market.
According to the US employment report for February released by Automatic Data Processing (ADP), a corporate payroll service, on the 6th, the number of private sector employees will increase by 140,000, compared to economists’ forecasts compiled by Reuters (15 (10,000,000 people). See more Additionally, the number of job openings in the January Employment Trends Survey (JOLTS) released by the U.S. Department of Labor decreased by 26,000 to 8,863,000.See more
“While the number of job openings has declined slightly, it remains fairly healthy and continues to demonstrate the resilience of the labor market, consistent with the consensus Goldilocks scenario,” Raschini said.
Of the 11 major sectors in the S&P 500 (.SPX), opens new tab, 9 sectors rose. Utilities (.SPLRCU), opens new tab, which are sensitive to interest rate trends, led the rise by about 1%, and information technology (.SPLRCT), opens new tab, which rose 0.9%. General Consumer Discretionary (.SPLRCD), opens new tab had the biggest decline, dropping 0.4%. On this day, semiconductor stocks, which had underperformed the previous day, outperformed the overall market. The Philadelphia Semiconductor Index (.SOX), opens new tab rose 2.4% to close at a record high. This is the fourth day in the past five business days that the index has hit a new high. Electric vehicle (EV) giant Tesla (TSLA.O), opens new tab, fell 2.3%. It fell for three days in a row. Analysts from the highly-watched Morgan Stanley have lowered their price targets, pointing out that demand for EVs continues to slow in major markets such as China, despite significant price cuts.
Shares of Chinese e-commerce giant JD.com (JD.com), listed on the US market, soared 16.2%. In addition to quarterly sales exceeding market expectations, the company expanded its share buyback program.
Cryptocurrency-related stocks were also bought, with Coinbase Global (COIN.O), opens new tab up 10% and MicroStrategy (MSTR.O), opens new tab up 18.6%.
US stock market:
NY precious metals:
According to weekly inventory statistics released this morning by the U.S. Energy Information Administration (EIA), U.S. crude oil inventories for the week ending on the 1st increased by 1.4 million barrels from the previous week, an increase that was lower than market expectations (an increase of 2.1 million barrels). Gasoline inventories decreased by 4.5 million barrels, and distillate inventories decreased by 4.1 million barrels, both of which were much larger than market expectations (1.6 million barrels and 700,000 barrels). The market price at one point rose to nearly $80.70 amid speculation that supply and demand would tighten following inventory statistics.
NYMEX Energy:
This is a provisional value based on LSEG data.The previous day’s ratio may not match
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