What’s important in today’s US and global markets
Mike Dolan, Editor, Financial Industry, Financial Market
The Federal Reserve makes Hawkish’s turn in the face of another Wall Street failure, so it appears that the European Central Bank is once again set to ease borrowing rates — or at least that’s what the market expects.
In today’s column, we’ll go into all the details and explain why the bond market doesn’t seem too worried about long-term inflation. The answers may not be all good news.
The US stock market will be closed on Good Friday holidays, so we will be closed tomorrow. And I will be on holiday next week. But “morning bids” are back on Tuesday and have all the market coverage I’m looking for from my Reuters colleagues.
Now on the market news.
Today’s market
* Investors mixed on Thursday as investors analyzed corporate earnings to measure the fallout of President Donald Trump’s volatile trade policy.
*Japan is “deeply concerned” about the global economic radioactive effects from US President Donald Trump’s trade tariffs, the general minister said in the government’s strongest warning as it still began trade talks on Thursday.
* President Donald Trump’s desire for a strong yen for the dollar is almost certain to fall into trade negotiations with Japan, but analysts say efforts to shift currencies are full of risks on both sides.
*U.S. Federal Reserve Chairman Jerome Powell said Wednesday that the Fed will wait for more data on the direction of the economy before changing interest rates, but warned that President Donald Trump’s tariff policies risk pushing inflation and employment further from central bank targets.
*Projects seen by Reuters that Reuters have been ongoing for a US-owned company seized by the Kremlin and placed under state control to be used to feed Russian troops, suggesting that Moscow could threaten global warming ties with the United States.
As the Fed offers Hawkish Twist, the ECB is easily set up
The last trading day of the week, shortened to US market holidays, is to look at stock futures that will recoup some of Wednesday’s sudden tech-driven losses. Taiwan’s revenues from TSMC have risen, and its unchanging revenue growth outlook stabilized the chip ship, which was surprised again yesterday, as new license fees linked to US-China trade spats sunk Nvidia shares nearly 7% yesterday.
But if investors were hoping the Fed would bail out the market, Chair Jay Powell made it clear that it wasn’t happening anytime soon.
Speaking in Chicago late yesterday, Powell appears to suggest that the central bank will hold off for a long time to curb inflation expectations.
“Taxes are likely to generate at least a temporary increase in inflation,” he said. “The inflation effect could also be more sustained.”
Powell’s resolve to hold the line was made little to offset the S&P 500’s 2% or more decline, but Treasury yields have receved as the market-based measure of long-term inflation expectations are fixed at nearly 2%.
Meanwhile, the Bank of Canada also surprised some by resisting another interest rate cut on Wednesday. Due to this stagnation of North American rate in the background, the ECB is currently on the deck.
The money market has cut today’s quarterly point ECB rate price to 2.25% as the euro is near a three-year high against the sick dollar, with the euro approaching a three-year high as uncertainty in the trade war and the euro’s true effective exchange rate index at its highest level in 10 years.
The Euro ahead of the decision, the German band was fine-tuned higher, with the benchmark for Euro stocks being slightly red. An unusual revenue mistake from luxury brand Hermes has undermined the mood.
Back on Wall Street, investors are waiting for another massive release of revenue data and revenue updates on Thursday, including Netflix. Retail and industry figures for March on Wednesday showed only minor errors on the most sensitive measurements.
Attention is being paid to negotiations with the Japanese delegation in Washington. Italian Prime Minister Georgia Meloni also met with President Donald Trump on Thursday.
Finally, check out my column today. There we see that the Fed’s intense nose stance in the face of tariff uncertainty and market volatility appears to be beating the fight to lock in long-term inflation expectations.
The chart of the day
As the US-China trade war escalates, everyone is seeing China’s holdings of US government debt, like the hawk, especially after severe thwarts in the financial markets last week. The only financial data on foreign holdings of US debt securities released Wednesday is in February – before tariffs really begin. However, the numbers showed the actual possession of the Chinese entities that were engraved in the month, which could possibly be just part of the photograph.
China has held $784.3 billion, up from $760.8 billion, and Japanese investors have also raised a lot. It is estimated that many Chinese ownership is being held on behalf of Europe. This is probably captured as a Belgian holding, where the Eurowaiver Clearinghouse is based. That said, Belgium-based ownership also rose almost $20 billion in February. So, if China recently offloaded the Ministry of Finance, we have to wait to find even more difficult data.
Events to watch today
* European Central Bank’s policy decisions at a press conference from ECB President Christine Lagarde
*U.S. March Housing Start/Freedom, Weekly Unemployment Claims, Philadelphia Federal Reserve April Business Survey
*Fed Michael Barr speaks
*Kristalina Georgieva, Managing Director of International Monetary Fund, ahead of the IMF/World Bank Spring Meeting
*Japan Economic Minister Ryosei Akazawa meets US Treasury Secretary Scott Bessent of Washington. Italian Prime Minister Giorgia Meloni meets President Donald Trump in Washington
*US corporate revenue: Netflix, American Express, State Street, Blackstone, Charles Schwab, Snap-on, Fifth Third Bancorp, Dr Horton, Keycorp, Huntington Bancshares, Marsh & McLennan, UnitedHealth, Truist Financial, Regions Financial, etc.
*The US Treasury sells 5-year inflation protection securities
The opinions expressed are those of the author. They do not reflect the views of Reuters News. Reuters News is committed to integrity, independence and freedom from bias under the principle of trust.
(Edited by Mike Dolan and Anna Szymanski)
