FinancialMarkets 6 Things You Need To Know
Good Day, Fed keeps rates at 5.5%, the Bank of England is expected to hold rates today. Deutsche Bank announces a share buyback and job cuts.
BoE Rate Decision
The BOE will probably hold rates today after the Fed did so yesterday. But it may deliver a lower inflation forecast, potentially opening the way for easing. Markets are pricing in rate cuts starting in
the middle of the year.
The Bank of England is likely on Thursday to deliver a brighter outlook for the UK economy, reducing its
forecast for inflation this year and potentially opening the way to interest-rate reductions that could
boost growth. Economists surveyed by Bloomberg unanimously expect the UK central bank to leave its
key lending rate at a 16-year high of 5.25% when the latest decision is announced at 12 p.m. London
time. Investors expect forecasts accompanying the decision to signal when monetary policy might be
eased.
FED Rate Decision
Federal Reserve officials cemented the end of their aggressive campaign to push up interest rates, and
sought to reset expectations for how soon and how fast they’ll cut this year as inflation pressures fade.
While policymakers are shifting their focus to when to start easing policy amid a favorable pullback in
inflation, it’s clear they’re in no rush to lower rates. Chair Jerome Powell said officials would move patiently and doused speculation that rate cuts would start at the next meeting.
Goldman pushed back its forecast for the first Fed cut to May after Jerome Powell cautioned that a March
reduction is “not the most likely case.” Jeffrey Gundlach told CNBC a recession is still probable this year
and the drop in inflation may stall.
Ukraine Rates
Ukraine issued a stark warning to allies that it faces a “critical” shortage of artillery shells as Russia deploys three times as much firepower on the frontlines. And the shortage is growing worse, according to
Ukrainian Defense Minister Rustem Umerov. He urged European Union allies to do more to meet their
pledge of supplying a million artillery rounds. Russia’s invasion is approaching its third year as Vladimir
Putin seeks to drag out a bloody conflict in which his forces have killed tens of thousands of Ukrainians.
In Washington, some key Republican senators are signaling they could drop demands for harsher immigration restrictions as their price for helping Ukraine, and would back a stand-alone emergency aid
package for the besieged country, along with funds for Israel and Taiwan. Far-right Republicans in the
House—urged on by Donald Trump—have opposed a proposed Ukraine aid and border deal, even one
including significant concessions recently offered up by US President Joe Biden.
Oil Market Yesterday
Oil prices climbed on Thursday, supported by signals
from the U.S. Federal Reserve on a possible start to
rate cuts and as China unveiled new support
measures for its embattled property market.
Tankers carrying Russian oil have continued sailing
through the Red Sea largely uninterrupted by
Houthi attacks on shipping and face lower risks than
competitors, according to shipping executives, analysts and flows data.
The energy market remains on edge as it waits for a
US response to the drone attack on American troops
in Jordan, ANZ Research said in a note, after the
Houthi group said it would keep up attacks on U.S.
and British warships in the Red Sea in what it called
acts of self-defence.
Saudi Arabia's surprise reversal of its oil expansion
ambitions was at least six months in the making,
said an industry source, after Riyadh concluded its
vast spare capacity was enough to supply markets
during crises and further investments in new fields
would make no economic sense.
OPEC oil output in January registered the biggest
monthly drop since July, a Reuters survey found, as
several members implemented new voluntary production cuts agreed with the wider OPEC+ alliance
and unrest curbed Libyan output.
MACRO Economics
U.S. stocks tumbled on the last trading day in January after the Federal Reserve held interest rates
steady while dashing hopes for interest rate cut as
soon as March.
The dollar held near a seven-week high against the
euro on Thursday, reached after Federal Reserve
Chair Jerome Powell pushed back on the idea of a
U.S. interest rate cut as soon as March.
Federal Reserve Chair Jerome Powell, in a sweeping
endorsement of the U.S. economy's strength, said
on Wednesday that interest rates had peaked and
would move lower in coming months, with inflation
continuing to fall and an expectation of sustained
job and economic growth.
Gold climbed for a fourth straight day on Thursday
as investors held onto hopes the Federal Reserve
would trim interest rates by a significant margin this
year, even after the U.S. central bank pushed back
against the idea of a cut in March.
from Chair Jerome Powell.
Key Market Data Today / Tomorrow
All times are Eastern Time (EST). We focus on U.S economic data mainly, as the U.S data drives
the markets mostly. Sometimes we look at Key China data as well as European Union data.
Thursday
OPEC Meeting
05.00
EUR CPI
05.00
BoE Rate Decision
07.00
Jobless Claims
08.30
ISM Manufacturing PMI
10.00
Friday
Non Farm Payroll
08.30
Michigan Consumer Expectations
10.00
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