September 27, 2024
United States:
Bonds Rise as Mild Inflation Backs Case for Another Big Fed Cut
Treasuries gained as a modest rise in the Federal Reserve’s favored measure of underlying US inflation reinforced trader expectations for another large interest-rate cut in November.
The advance in US bonds on Friday pushed yields lower by at least four basis points across the curve after data showed the personal consumption expenditures price index and household spending barely rose in August. The yield on two-year notes, which is most sensitive to the Fed’s policy, slid to 3.58%.
Europe:
ECB Rate-Cut Bets Jump as France, Spain Inflation Sinks Below 2%
Inflation in France and Spain plunged below 2% — fueling predictions by investors and economists that the European Central Bank will speed up the pace of interest-rate cuts.
Data Friday showed consumer prices in France rose 1.5% from a year ago in September — sinking below 2% for the first time in more than three years mainly due to falls in energy costs. Spain saw a similar trend, with inflation easing to 1.7% on fuel, power and food.
Asia:
China Cuts Key Rate, Frees Up Cash for Banks to Spur Growth
China cut the amount of cash banks must keep in reserve Friday and lowered a key policy rate, as Beijing rolls out a strong stimulus package unveiled this week in a push to shore up the slowing economy and investor confidence.
The People’s Bank of China’s 0.5 percentage point reduction to the reserve requirement ratio was announced earlier this week by central bank chief Pan Gongsheng, who didn’t provide a timeframe.
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