📆 Wednesday, April 3
► European equities show minimal movements, as robust economic indicators and rising commodity prices hint at enduring high-interest rates. The Stoxx 600 slightly drops, reflecting uncertainties over the Federal Reserve's interest rate trajectory, further complicated by surging 10-year US Treasury yields. Markets await the release of Eurozone inflation data which is forecasted to remain unchanged at 2.6%.
► In the US, futures anticipate a subdued opening amidst soaring Treasury yields, driven by positive job and manufacturing data, casting doubts on the anticipated pace of Fed's easing. Our chief analyst Robert Lindner says good data has become temporarily “bad” data again as it further push back rate cut bets. However, signs of a strong US economy will ultimately mean that the ongoing market rally can persist. This follows a session where Treasuries steadied, but the 10-year yield reached its peak for the year, adding pressure on equities. The focus shifts to Fed Chair Jerome Powell's upcoming speech and critical inflation data from Europe, all while swap traders scale back expectations for rate reductions, estimating about 65 basis points cut this year, contrary to the more optimistic Fed forecasts.
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