September 5, 2024
United States:
Wall Street’s Big Bet on Jumbo Fed Cuts Hangs on US Jobs Report
The bold bet from the likes of Citigroup Inc. and JPMorgan Chase & Co. that the Federal Reserve will slash interest rates by a half-percentage-point this month faces its biggest test yet from Friday’s US jobs report.
Interest-rate swap contracts show a roughly 35% chance that the Fed executes a jumbo cut when it meets Sept. 17-18, but a quarter-point reduction is still favored by traders and remains the more popular call among economists. That split has boosted the scope for big gains and losses in the Treasury market around the jobs report, which last month helped send markets into a tailspin when the employment figures missed expectations.
United Kingdom:
UK Firms Expect to Raise Prices by the Least in Three Years
UK businesses expect to raise their prices by the least in three years — a sign that firms see price pressures remaining contained.
The Bank of England’s survey of chief financial officers showed expected price growth over the next year easing to 3.4% last month, the lowest reading since August 2021.
Asia:
BOJ to Need More Hikes If Justified by Data, Board Member Says
Bank of Japan Board Member Hajime Takata highlighted the need for higher interest rates if inflation continues to develop in line with the bank’s outlook, although he indicated there’s no need to rush any move.
“It will be necessary to adjust the degree of monetary easing by shifting up another gear” if inflationary trends align with projections, Takata said Thursday in a speech in Ishikawa, on the coast of the Sea of Japan. “We need to proceed with making a world with positive interest rates.”
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