September 19, 2024
United States:
Bonds Fall as Sign of Strong Job Market Follows Fed Rate Cut
Treasury yields extended their rebound from year-to-date lows as a sign of labor-market strength followed Wednesday’s bigger-than-expected Federal Reserve interest-rate cut.
In early US trading, yields across maturities climbed after weekly initial jobless claims unexpectedly fell and stock index futures pointed to gains for the equity market. Two-year yields, more closely tied to Fed rate decisions than longer maturities and briefly under 3.58% this week in mounting anticipation of the half-point rate cut, rebounded to around 3.61%.
United Kingdom:
BOE Vows Gradual Approach to Easing With Vote to Hold Rates
The Bank of England warned investors it won’t rush to ease monetary policy, deciding against a second consecutive cut in borrowing costs as it awaits further signs inflationary pressures have subsided.
The BOE’s Monetary Policy Committee voted 8-1 to keep rates steady at 5%, an outcome whose caution contrasts with the half-point reduction delivered in the US on the eve of the UK announcement on Thursday. While the decision was in line with the expectations of economists and investors, it pushed the pound to its strongest level against the dollar since March 2022.
Asia:
BOJ Meeting to Test Fate of Yen-Sensitive Japanese Stocks
Traders betting on further recovery in Japanese equities are looking to any steer from the Bank of Japan that may cap the yen’s gains and support exporters.
The yen weakened and stocks rose on Thursday, moving contrary to what some investors had feared after the Federal Reserve’s decisive 50-basis point cut. That makes signaling on Friday from BOJ Governor Kazuo Ueda the near-term key in determining the outlook on the narrowing rate gap between the two economies, after his comments at the last policy meeting sent shock waves through markets.
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