📆 Wednesday, January 17
► The European Central Bank, led by Christine Lagarde, and Federal Reserve officials, including Christopher Waller, have strongly opposed market anticipations for imminent interest rate cuts. Their collective pushback signals a continued focus on combating inflation. This stand has led to a drop in market pricing for a Fed rate cut in March, now at around 65% (down from 80% last Friday), and a deferral of ECB rate cut expectations to June.
► In Europe, the Stoxx Europe 600 index saw a notable decline of more than 1.2% in early trading, with sectors like real estate and retail hit hardest. The UK's inflation unexpectedly increased to 4% in December, prompting a reevaluation of the Bank of England's rate cut expectations which weighed heavily on the FTSE 100 trading near 1.5% lower. Our chief analyst Robert Lindner already anticipated these movements yesterday, positioning the community SHORT in the UK market. Inflation in the Eurozone also rose to 2.9% in December, aligning with market consensus. Core inflation in the Eurozone, excluding food and energy, cooled to 3.4% in December, the lowest since March 2022, suggesting a divergent trend in overall and core inflation rates.
► In the US, the Nasdaq and S&P 500 also fell, reflecting a broader global selloff. However, US Treasury yields stabilized after rising yesterday. Markets await retail sales and industrial production data (13:30 UTC+0), as well as earnings reports from Charles Schwab and Prologis later today.
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