October 04, 2024
United States:
Traders Wipe Out Bets on Big Fed Cuts as Jobs Data Hits Bonds
Traders slashed their bets on the pace of future Federal Reserve interest-rate cuts after September US employment data blew past estimates and signaled a robust hiring trend.
The chance of a half-point rate cut in November was priced out, with the contract showing 25 basis points of easing now expected. Swap contracts tied to the outcome of future Fed meetings were pricing in only about 55 basis points of rate cuts for November and December combined, a drop of 10 basis points after the jobs report.
Europe:
Germany, France and Italy Urge the EU to Ease Banking Regulation
Germany, France and Italy urged the European Union to show restraint in financial rule making and instead focus on boosting the competitiveness of its banking sector, the latest sign of a global political shift to prioritize economic growth over regulation.
The EU’s three biggest economies want the bloc to ease some rules that are already in place so that banks will have “a level playing field” with other major jurisdictions. They also called on the next European Commission to “refrain from launching new large-scale initiatives” in finance over the short to medium term, issuing the plea in a joint letter to the director general for financial services.
Asia:
Ishiba Ally Sends Signal to Warn BOJ Against Rate Hike Too Soon
Japan’s new Prime Minister Shigeru Ishiba doesn’t unconditionally support the raising of interest rates, one of his closest allies said, underscoring the view that the new cabinet is unlikely to want the Bank of Japan to rush into further rate hikes.
“It’s not necessarily accurate to say Prime Minister Ishiba is pro-rate hikes,” Ryosei Akazawa, the minister for economic revitalization in Ishiba’s new cabinet, told reporters in Tokyo on Wednesday. “There are various conditions that need to be met for a hike. The top priority is overcoming deflation.”
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