October 3, 2023
United States:
State Street Bets on Fed ‘Dramatically’ Cutting Rates Next Year
State Street Global Advisors is betting against the higher-for-longer mantra sweeping across global bond markets.
The Wall Street giant is wagering that the Federal Reserve will cut interest rates by at least a full percentage point next year — double what markets are pricing in — as policy makers respond to further slowing in growth and inflation.
Europe:
ECB Not Yet at Price Target, More Work to Be Done, Lane Says
The European Central Bank can’t relent in its fight to tame inflation even as maintaining the current level of interest rates is the “base case,” according to Chief Economist Philip Lane.
“Price increases are still well above 2%, we are not at the inflation target yet and therefore there is still work to be done in terms of bringing inflation down,” Lane said at a conference in Vilnius, Lithuania, on Tuesday.
Asia:
China Stocks in Hong Kong Drop Most Since July as Market Reopens
Chinese stocks listed in Hong Kong slumped as trading resumed after a holiday, hurt by a broad risk-off mood across the region and continued concern about the nation’s economic outlook.
The Hang Seng China Enterprises Index slid 3.2%, the most in nearly three months. Support from mainland traders was absent as markets there remain closed for the Golden Week holiday, while bets for higher US interest rates boosted the dollar and sapped sentiment across the region.
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