Reports of BOB Fed Rates Cuts:
US producer (Fed Rates Cuts) prices surged by 0.3% in Jan’24, exceeding the estimated 0.1% rise and contrasting with a 0.1% decline in Dec’23. The hike, driven by services inflation, suggests a delayed start to Fed rate cuts. Meanwhile, housing starts declined by 14.8% to 1.33mn units (est. 1.46mn units). In China, PBOC kept the 1Y LPR steady at 3.45% but slashed the 5Y LPR by 25bps to 3.95%, the first cut since Jun’23. Additionally, minutes from the Reserve Bank of Australia meeting highlighted vigilance on inflation, leaving room for further rate hikes.
Global stocks saw mixed results amid anticipation of Fed minutes. Shanghai Comp led gains, while Hang Seng and US stocks moderated. Sensex advanced slightly, driven by consumer durables and auto stocks but traded lower in line with Asian peers today.
Fed Rates Cuts In currency markets, except for EUR and INR, other currencies weakened against the dollar. DXY marginally rose, tracking US PPI and housing starts data. Japan’s yen depreciated further, reflecting policy divergence between BoJ and Fed. INR slightly appreciated, outperforming other Asian currencies.
Fed Rates Cuts Global yields remained stable, with investors already pricing in a delayed Fed rate cut cycle. India’s 10Y yield inched up to 7.09%. Short-term rates saw minimal changes, while liquidity decreased marginally.
Oil prices remained steady, influenced by Middle-East developments. Brent crude hovered around $83.6/bbl. Gold and base metal prices experienced minor fluctuations.
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