(Bloomberg) — Stocks were mixed and U.S. Treasury yields fell after Federal Reserve Chairman Jerome Powell downplayed the possibility of further interest rate hikes. After a sharp rally that signaled intervention, the yen resumed its decline.
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Europe’s Stoxx 600 fell 0.3% as Novo Nordisk A/S fell after disappointing results and global trade standard bearer Moller-Maersk A/S fell 4%. Shell rose after the energy producer reported higher profits and announced a $3.5 billion share buyback. US futures rose.
The Bloomberg dollar index fell for the second day in a row, reflecting the drop in US yields following the Fed’s decision. That said, traders are focusing on other factors, including euro zone manufacturing data and Apple’s quarterly results due later on Thursday.
The Fed is on the brink of an impending rate hike, as officials unanimously decided to keep the target range for the benchmark federal funds rate unchanged at 5.25-5.5%, given a slew of data suggesting persistent inflationary pressures. I downplayed the possibility. Powell said the central bank’s next action was unlikely to be a rate hike, and officials needed to see convincing evidence that policy was not tightened enough to bring inflation back to the 2% target. He said there is.
“The bar was set high for a hawkish surprise last night,” said Kyle Rodda, senior market analyst at Capital.com in Melbourne, but the Fed “wasn’t willing to jump over it.” Stated.
Further insight into the health of the U.S. economy will come from April’s nonfarm jobs report, which will be released on Friday. Bloomberg economic modeling shows the unemployment rate unchanged at 3.8%. This suggests that “employment conditions are likely to remain challenging for the Fed,” economists Andrei Sokol and Scott Johnson wrote in a note.
Apple’s results, to be released after the U.S. market closes, will give investors a better understanding of how the iPhone maker is weathering sluggish sales, due in part to a weak Chinese market.
“Earnings have been very resilient and it’s been very constructive on the equity side,” John Woods, Asia Pacific CIO at Lombard Odier, said in an interview on Bloomberg TV. “Right now, this is overwhelmingly an American story.”
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The yen fell as much as 1.1% against the dollar in New York after surging late Wednesday. The fresh decline suggests investors are skeptical that Japanese authorities will be able to stop the currency from weakening, given the wide interest rate differential with the United States. Asked whether officials had intervened, Japan’s top monetary authority, Masato Kanda, said he had nothing to say.
In commodities, crude oil regained losses from Wednesday and gold rose.
This week’s main events:
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Eurozone S&P Global Manufacturing PMI, Thursday
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US factory orders, new unemployment claims, trade, Thursday
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Apple’s earnings, Thursday
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Eurozone unemployment rate, Friday
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US unemployment rate, non-farm payrolls, ISM services, Friday
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Chicago Fed President Austan Goolsby speaks on Friday
The main movements in the market are:
stock
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As of 8:32 a.m. London time, the Stoxx European 600 was down 0.2%.
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S&P 500 futures rose 0.5%
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Nasdaq 100 futures rose 0.7%
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Dow Jones Industrial Average futures rose 0.3%.
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MSCI Asia Pacific Index rose 0.9%
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MSCI Emerging Markets Index rises 0.5%
currency
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The Bloomberg Dollar Spot Index fell 0.5%.
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The euro was almost unchanged at $1.0721.
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The Japanese yen fell 0.5% to 155.34 yen to the dollar.
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The offshore yuan rose 0.1% to 7.2256 yuan to the dollar.
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The British pound was almost unchanged at $1.2534.
cryptocurrency
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Bitcoin rose 0.7% to $57,723.17
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Ether fell 0.3% to $2,928.85.
bond
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The 10-year Treasury yield fell 2 basis points to 4.61%.
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Germany’s 10-year bond yield fell 3 basis points to 2.55%.
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UK 10-year bond yields fell 4 basis points to 4.32%.
merchandise
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Brent crude rose 0.7% to $84.06 per barrel.
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Spot gold fell 0.4% to $2,311.37 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Winnie Hsu and Richard Henderson.
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