Asian shares extended their rally on Friday, bathing in the afterglow of an outsized interest rate cut in the United States, while the yen edged higher as the Bank of Japan held rates steady and stayed upbeat on the economy. In China, the central bank kept its benchmark lending rates on hold, countering expectations for a move lower.
Australia's central bank will keep its key policy interest rate unchanged on Tuesday and for the rest of the year amid elevated price pressures, according to economists polled by Reuters, with most expecting the first reduction early next year. Inflation slowed to 3.5% in July but was still above the Reserve Bank of Australia's 2%-3% target range.
The yen pared its losses on Friday as the Bank of Japan sounded optimistic about growth and signalled it will be judicious about further policy tightening, while the dollar had its own problems as markets priced in more rapid U.S. rate cuts. It has been a tough week for the yen, with the euro gaining 2.2% to 159.46 as speculators booked profit on recent long yen positions.
Japan's Nikkei share average futures were largely unmoved by the Bank of Japan's widely expected decision to leave policy settings steady on Friday. Nikkei futures remained 2.1% higher as of 0255 GMT, shortly after the BOJ announcement.
The Bank of Japan kept interest rates steady on Friday and maintained its view the economy remained on track for a moderate recovery. In a widely expected move, the central bank left unchanged its overnight call rate target at 0.25% by a unanimous vote. BOJ Governor Kazuo Ueda will hold a news conference at 3:30 p.m. to explain the decision.
The Bank of Japan kept interest rates steady on Friday and maintained its view the economy remained on track for a moderate recovery. In a widely expected move, the central bank left unchanged its overnight call rate target at 0.25% by a unanimous vote. BOJ Governor Kazuo Ueda will hold a news conference at 3:30 p.m. to explain the decision.
Japan's Nikkei share average jumped more than 2% in the morning session on Friday, tracking overnight gains on Wall Street, while traders also kept a wary eye ahead of the Bank of Japan's policy decision later in the day. The tech-heavy Nikkei was up 2.05% at 37,915.87, as of 0156 GMT, with chip-sector stocks rallying in line with U.S. equities' upbeat moves overnight.
China unexpectedly left benchmark lending rates unchanged at the monthly fixing on Friday, confounding market expectations that were primed for a move after the Federal Reserve delivered an outsized interest rate cut earlier this week.
The Bank of Japan kept interest rates steady on Friday and revised up its assessment on consumption, signalling its confidence a solid economic recovery would allow the central bank to raise interest rates again in coming months.
- World stocks hovered near record highs on Friday, underpinned by a big interest rate cut from the Federal Reserve earlier this week, while the yen eased after Bank of Japan Governor Kazuo Ueda tempered market expectations around imminent rate hikes.
Asian shares extended their rally on Friday, bathing in the afterglow of an outsized interest rate cut in the United States, while the yen was jittery ahead of a monetary policy decision in Japan as traders look for clues about future tightening. In China, the central bank held its benchmark lending rates steady, dashing hopes for imminent policy support for its ailing economy.
* BOJ keeps short-term rate steady at 0.25% as expected. * BOJ upgrades view on consumption. * Gov Ueda says domestic economy on track, warns of U.S. risk. * Remarks weaken yen, heighten uncertainty on rate hike timing. By Leika Kihara and Kantaro Komiya.
Japan's 10-year government bond yield was flat on Friday, as the market expects the Bank of Japan to maintain its interest rates at its policy meeting.
Gold prices steadied near record highs on Friday and were poised for a weekly gain, as markets adjusted to the U.S. Federal Reserve's recent super-sized interest rate reduction and signs that further cuts were on the horizon. FUNDAMENTALS. * Spot gold held its ground at $2,586.98 per ounce, as of 0028 GMT, and has climbed about 0.4% for the week so far.
The dollar strengthened against the yen on Friday, hitting its highest level in two weeks, after the Bank of Japan left interest rates unchanged and indicated that it was not in a hurry to hike them again.
Oil prices, which were little changed in early Asian trade on Friday, were on track to end higher for a second straight week following a large cut in U.S. interest rates and declining global stockpiles. Brent futures, which were trading 19 cents or 0.3% lower at $73.69 a barrel at 0027 GMT on Friday, gained 4.3% this week.
The yen remained under pressure on Friday as investors wagered the Bank of Japan would wrap up a policy meeting sounding cautious on further tightening, while the U.S. dollar had its own problems as markets priced in more rapid U.S. rate cuts. It has been a tough week for the yen, with the euro gaining 2.2% to 159.46 as speculators booked profit on recent long yen positions.
Republican presidential candidate Donald Trump said on Thursday the U.S. Federal Reserve's decision to cut interest rates by half of a percentage point was "a political move."
Japan's Nikkei share average rose strongly in early trading on Friday, tracking overnight gains on Wall Street, while traders also kept a wary eye on a Bank of Japan policy announcement later in the day. The tech-heavy Nikkei was up 1.8% at 37,822.84, as of 00:04 GMT, with chip-sector stocks outperforming in line with U.S. equity moves on Thursday.
Japan's five-year government bond yield edged up on Friday, as investors awaited the Bank of Japan's policy decision later in the day. The BOJ is set to keep monetary policy steady, but signal its confidence that solid wage growth and consumption will allow the central bank to raise interest rates again in coming months.
* Aug core CPI up 2.8% yr/yr, matches forecast. * Index lest fuel rises 2.0% yr/yr in August. * Data backs up BOJ view conditions in place for more rate hikes. By Leika Kihara.
- A look at the day ahead in Asian markets. A bumper week of central bank meetings that included the U.S. Federal Reserve on Wednesday and the Bank of England on Thursday rounds off on Friday with attention fixed on Asia, and policy decisions from the Bank of Japan and People's Bank of China.
A look at the day ahead in Asian markets. A bumper week of central bank meetings that included the U.S. Federal Reserve on Wednesday and the Bank of England on Thursday rounds off on Friday with attention fixed on Asia, and policy decisions from the Bank of Japan and People's Bank of China.
Big global investors are on alert for wild market swings after a jumbo U.S. rate cut sparked confusion over whether the world's dominant economy is set to boom or face recession, muddling prospects for stocks, bonds and currencies worldwide.
* World stocks push higher after bumper Fed cut. * Fed move seems to point to soft landing. * Risk appetite weighs on Treasury bonds. * Graphic: World FX rates http://tmsnrt.rs/2egbfVh. By Isla Binnie.
* BOJ concludes 2-day meeting, decision expected 0300-0430 GMT. * Board widely expected to keep short-term rate steady at 0.25% * Focus on any hints from Ueda on next rate hike timing. * Governor Ueda likely to brief media 0630 GMT. By Leika Kihara.
- Consumers started shopping for Halloween decor and costumes well before October this year, taking advantage of special events, even though overall spending has decreased from last year's record high, data from the National Retail Federation showed on Thursday. WHY IT'S IMPORTANT.
Brazil's real outpaced its regional
peers on Thursday after the central bank kicked off an interest
rate-hiking cycle and signaled more increases, while key indexes
for Latin American assets ...
Consumers started shopping for Halloween decor and costumes well before October this year, taking advantage of special events, even though overall spending has decreased from last year's record high, data from the National Retail Federation showed on Thursday. WHY IT'S IMPORTANT.
* Dow also posts record closing high. * BofA expects Fed to go for 75-bp cut in Q4. * US big banks rise after Fed's rate cut. By Noel Randewich and Purvi Agarwal. The S&P 500 surged to a record high close on Thursday, the day after the Federal Reserve cut interest rates by 50 basis points and indicated more rate cuts were on the horizon.
* U.S. jobless claims drop to four-month low. * U.S. existing home sales fall. * U.S. yield curve bear-steepens. * U.S. 10-year TIPS auction shows solid demand. By Matt Tracy.
The U.S. dollar slipped in
choppy trading on Wednesday as markets grappled with the
supersized 50 basis point interest rate cut, as well as the
switch to an easing monetary policy stance delivered by ...
* World stocks push higher after bumper Fed cut. * Fed move seems to point to soft landing. * Risk appetite weighs on Treasury bonds. * Graphic: World FX rates http://tmsnrt.rs/2egbfVh. By Isla Binnie.
* S&P 500, Dow hit record highs. * BofA expects Fed to go for 75-bp cut in Q4. * US big banks rise after Fed's rate cut. * S&P 500 +1.87%, Nasdaq +2.70%, Dow +1.42% By Noel Randewich and Purvi Agarwal. Sept 19 - The S&P 500 surged to intra-day record highs on Thursday, the day after the Federal Reserve cut interest rates by 50 basis points and indicated more rate cuts were on the horizon.
BMO Capital Markets on Thursday said it was raising its S&P 500 target for 2024 to 6,100 from 5,600. The benchmark index was last at 5,720, up 1.8% on the day, following Wednesday's Federal Reserve decision to kick off its monetary easing cycle with half-a-percentage point reduction.
U.S. President Joe Biden said on Thursday he expects the Federal Reserve to continue cutting interest rates and vowed that his administration would keep working to lower costs for Americans.
* Canadian dollar gains 0.4% against the greenback. * Touches its strongest level since Sept. 6 at 1.3534. * Price of U.S. oil increases 1.8% * Ten-year yield rises further above 2-year rate. By Fergal Smith.
- The U.S. central bank's decision to cut interest rates by half a percentage point leaves open the risk of a resurgence in inflation, a former Kansas City Federal Reserve president said on Thursday. "They are gambling that they have inflation under control," Thomas Hoenig told the Reuters Global Markets Forum.
The U.S. central bank's decision to cut interest rates by half a percentage point leaves open the risk of a resurgence in inflation, a former Kansas City Federal Reserve president said on Thursday. "They are gambling that they have inflation under control," Thomas Hoenig told the Reuters Global Markets Forum.
U.S. President Joe Biden said on Thursday he expects the Federal Reserve to continue cutting interest rates and vowed that his administration would keep working to lower costs for Americans.
* Biden highlights progress on inflation, employment. * Fed rate cut signals inflation drop, Brainard says. * White House sees no significant risks to economic outlook. By Andrea Shalal and Nandita Bose.
U.S. mortgage rates dropped to the lowest level in more than 1-1/2 years this week and could fall further after the Federal Reserve cut interest rates for the first time since 2020. The average rate on the popular 30-year fixed-rate mortgage fell to 6.09%, the lowest since February 2023, from 6.20% last week, mortgage finance agency Freddie Mac said on Thursday.
The South African rand held onto early gains on Thursday following the South African Reserve Bank's decision to cut interest rates for the first time in over four years, after a super-sized interest rate cut by the U.S. Federal Reserve. At 1600 GMT, the rand traded at 17.4775 against the dollar, about 0.4% stronger than its previous close. The U.S. currency was down 0.3% against a basket of peers.
-Most major brokerages expect the U.S. Federal Reserve to lower interest rates by a cumulative 50 basis points in its November and December meetings, after the central bank announced an outsized reduction in its September meeting. Fed Chair Jerome Powell called the half-percentage-point cut a "recalibration" to account for the sharp decline in inflation since last year.
U.S. mortgage rates dropped to the lowest level in more than 1-1/2 years this week and could fall further after the Federal Reserve cut interest rates for the first time since 2020. The average rate on the popular 30-year fixed-rate mortgage fell to 6.09%, the lowest since February 2023, from 6.20% last week, mortgage finance agency Freddie Mac said in a statement on Thursday.
* S&P 500, Dow hit record highs. * BofA expects Fed to go for 75-bp cut in Q4. * US big banks rise after Fed's jumbo rate cut. * Weekly jobless claims stand at 219,000. * Indexes up: Dow 1.03%, S&P 500 1.73%, Nasdaq 2.78% By Johann M Cherian and Purvi Agarwal.
U.S. Treasury yields advanced on the longer end of the curve on Thursday, in line with gains in stocks, as better-than-expected jobless claims data further stoked global risk appetite, a day after the Federal Reserve announced a jumbo interest rate cut.
* Dollar index hit lowest in more than a year. * Domestic data supports Australian, New Zealand currencies. * Sterling jumps after BoE. By Chibuike Oguh and Stefano Rebaudo.
* World stocks push higher after bumper Fed cut. * Surprisingly low US jobless claims add to cheer. * Oil rises, bears see concerns of weaker labor market. * Sterling rallies as BoE holds rates. * Graphic: World FX rates http://tmsnrt.rs/2egbfVh. By Isla Binnie.
In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.
Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.
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