US stocks rose Thursday, Treasury rose. As data showed he continued to see US inflation fall in December, pressure on the Federal Reserve (Fed) to continue sharp rate hikes eased.
Wall Street blue chip S&P 500 and tech-heavy Nasdaq Composite both traded 0.3% and 0.2% higher in New York, respectively, adding to the gains recorded in the previous session, with modest early losses. rice field.
The move came after a report from the Labor Department showed that annual consumer price growth in the US slowed to 6.5% in December from 7.1% in November, broadly in line with economists’ expectations. The closely watched ‘core’ measure of inflation, which excludes volatile food and energy prices, fell to 5.7% in December from 6% the previous month.
The latest figures make it more likely that the Fed will raise its key policy rate by 0.25 percentage points at its central bank meeting at the end of January, following a 0.25 percentage point increase in the final month of 2022. On when the rate ‘Fed pivot’ is coming this year.
nevertheless Federal Reserve Bank Officials have argued that interest rates are unlikely to fall until 2024, but hopes of “an easing cycle in the second half of the year, China’s resumption of economic activity, and lower energy prices” are all pushing investors into risky assets. Ing.
Wednesday’s S&P 500 posted its first consecutive day gain in three weeks, while the Nasdaq Composite posted its first four-day winning streak in four months. “Inflation in line with consensus will probably allow risks to continue to rise,” Turner said.
Rates markets had priced in a c.75% chance that the Fed would cut interest rates by 0.25% at its end-January meeting, raising it to its target range of 4.5% to 4.75%, but assigned a c.91% probability. Banks are making this move following the December inflation release.
Markets have moderately contracted to where the central bank’s key policy rate is expected to peak later this year, and investors expect borrowing costs to plateau at around 4.9% in June.
US Treasury bonds rose across the board on this day, with the yield on two-year US Treasuries, which are particularly sensitive to interest rates, falling 0.08 percentage points to 4.15%. The benchmark 10-year Treasury yield fell 0.03 percentage points to 3.52%. Bond yields move inversely with prices.
A measure of dollar strength against a basket of six other currencies fell 0.4% on Thursday, down more than 8% in the past three months.
Elsewhere in the stock market, Europe’s Stox 600 rose 0.7% on Thursday while Germany’s Dax rose 0.8%. FTSE100 It rose 0.7%, nearing an all-time high. In Asia, Hong Kong’s Hang Seng rose his 0.3%, while China’s CSI 300, which lists Shanghai and Shenzhen, rose his 0.2%.