In light of the recent low inflation numbers, traders are already pricing in a 30% possibility of the first Fed rate decrease in March. Investors are eager to learn more about the policy makers’ perspectives as they anticipate the release of the minutes from the most recent Fed rates meeting on Tuesday.
According to Win Thin, global head of currency strategy at Brown Brothers Harriman & Co., “the dovish Fed narrative remains in place.” “US yields and the dollar are probably going to continue to decline.”
US equity futures increased somewhat, indicating that equities would continue their three-week rise that helped the S&P 500 to an 11-week high. After appointing OpenAI co-founders Sam Altman and Greg Brockman to head its internal artificial intelligence division, Microsoft Corp. saw a 2.7% increase in pre-market trading. Ahead of the US 20-year auction, Treasury rates increased slightly.
Numerous bad corporate news stories affected shares, causing the Stoxx Europe 600 index to swing.
After the German pharmaceutical firm lost a trial involving its Roundup herbicide and halted a significant therapeutic study, Bayer AG had its biggest ever decline in value. In US premarket trade, peer company Bristol-Myers Squibb Co. had a decline of more than 4%.
Following the UK equipment rental company’s downward revision to its revenue estimates, Ashtead Group Plc fell. A 12% decrease in Julius Baer Group Ltd. occurred following the Swiss bank’s warning of a decline in profits due to increased bad-loan payments.
Benchmark European gas futures had a 6.9% increase. Ahead of an OPEC+ meeting later this week, colder weather forecasts and increased crude oil prices also contributed to the surge.
Pierre Wunsch, a member of the Governing Council, stated on Monday that the European Central Bank would need to increase borrowing costs once again if investor bets for monetary relaxation weaken the institution’s policy position. He was the first of several ECB representatives who would be speaking on Monday and later this week.
In the runoff election for president on Sunday, libertarian candidate Javier Milei of Argentina beat Economy Minister Sergio Massa. Bonds issued by Argentina surged, while developing-nation equities and an emerging-market currency indicator both saw gains.
In other developing markets, Zambia’s eurobonds fell sharply on the announcement that the nation was unable to carry out a restructuring agreement with bondholders since the accord was not endorsed by all creditors. The value of securities due in 2027 dropped by more than two cents.
Following the People’s Bank of China’s increase in the daily reference rate for the currency to the highest level since August, the offshore yuan appreciated. Following the central bank’s decision earlier this month to hold policy rates in favour of alternative ways to bolster stimulus expenditure, the country’s commercial lenders maintained their benchmark lending rates constant on Monday.
The Nikkei 225 Stock Average in Japan temporarily overtook its intraday top from June to attain the greatest level since 1990, bringing its gains for the year to over 28%. Recent weakening of the yen, strong business earnings, and corporate governance reforms have all helped the index.