Traders have sharply pulled back expectations of interest-rate cuts by the U.S. Federal Reserve this year after the central bank on Wednesday held rates steady and projected higher inflation and a single reduction in borrowing costs. Most global brokerages, however, stuck to their calls on the Fed's likely actions, citing largely in line commentary.
By Amanda Cooper. Euro zone government bond yields rose on Thursday, ahead of a European Central Bank rate decision, as global bonds and stocks sold off in light of another jump in the oil price and after the U.S. Federal Reserve forecast higher inflation.
* FOMC maintains policy rate in 3.50%-3.75% range as expected. * Fed funds futures imply U.S. central bank to stand pat all year. * BOJ votes 8-1 to hold interest rates. By Sophie Kiderlin and Gregor Stuart Hunter.
Aluminium prices tumbled as much as 8% on Thursday as speculators scrambled to liquidate bullish positions while copper sank to a three-month low on worries that surging oil prices will hit global growth at the same time the market is swamped with plentiful inventories.
* Oil surges 9% as Iran conflict worsens. * European and Asia stock markets tumble, borrowing costs rise. * ECB and BoE next up in packed 24 hours of central bank meetings. By Marc Jones and Ankur Banerjee.
Saskatchewan's plan for a balanced budget in 2025-26 didn't come to fruition as the province now expects to register a $1.2 billion deficit, or 1.0% of gross domestic product, in the outgoing fiscal year, said National Bank of Canada. In 2026-27, Saskatchewan is set to run a shortfall again, though it's expected to be smaller at $819 million, 0.7% of GDP.
* FTSE 100 down 1.9% * FTSE 250 hits near 4-month low. * Energy stocks hit record high as oil prices surge. * Bank of England expected to pause rate cuts amid inflation concerns. * HSBC (HSBC) considers cutting up to 20,000 jobs, Bloomberg reports.
* Stocks drop 2.8%, FX down 0.6% * Poland producer prices fall below expectations. * Gulf States request urgent talks at UNHRC on Iran's strikes, documents show. * Central bank policy decisions awaited in Czech Republic, Ukraine. By Twesha Dikshit.
The yen has held up better against the US dollar overnight Wednesday, supported by the Bank of Japan's latest policy update and further verbal intervention from Japanese policymakers, said MUFG. It has helped to prevent USD/JPY from rising above the 160.00 level after hitting a high of 159.87, wrote the bank in a note to clients.
* Futures off: Dow 0.29%, S&P 500 0.34%, Nasdaq 0.48% U.S. stock index futures slipped on Thursday as crude prices soared on intensifying hostilities in the Middle East, fanning inflation worries that have prompted the Federal Reserve to take a more cautious stance on interest rate cuts this year. The Fed left rates unchanged on Wednesday and Chair Jerome Powell flagged higher inflation ahead.
* Alibaba's (BABA) revenue, net income miss analysts' estimates. * Cloud revenue grows 36%, AI business to separate from cloud arm. * Alibaba's (BABA) shares drop more than 6% in early trading. * Singles' Day promotions fail to boost consumer enthusiasm. By Akash Sriram and Casey Hall.
* Traders price in more than two hikes from ECB, BoE. * BoE holds rates but vote more hawkish than expected. * Two-year bond yields surge as investors await ECB. By Samuel Indyk and Yoruk Bahceli.
The Swiss National Bank has increased its readiness to intervene in currency markets to dampen raised demand for the Swiss franc, Chairman Martin Schlegel said on Thursday, although he declined to indicate the scale of purchases the central bank could carry out this year.
* Fed, BoC, and BoJ keep interest rates on hold amid inflation concerns. * ECB expected to hold interest rates steady. * Oil rises over $115 a barrel after Iran strikes Middle East energy facilities. By Pablo Sinha.
Global economic growth has continued to outperform expectations for 14 straight months - just as the war in Iran fuels fresh concerns about energy prices and global stability - putting the world economy on track for its longest run of upside surprises since the 2008-09 financial crisis.
The outlook for the Swiss economy is uncertain with short-term growth potentially "rather subdued," Swiss National Bank governing board member Petra Tschudin said on Thursday. "The main risk to the economic outlook for Switzerland is the development in the global economy," said Tschudin after the SNB's latest interest rate decision.
* Traders price in ECB, BoE rate hikes this year. * ECB, BoE rate decisions later. * SNB, Sweden hold rates steady. Investors were sticking with bets for rate hikes in Europe on Thursday, ahead of European Central Bank and Bank of England policy decisions, with rate cut hopes dashed as the U.S.-Israeli war with Iran boots energy prices and stokes inflation fears.
* Swiss franc this month hit highest vs euro since 2015. * SNB zero rate is lowest among major central banks. * Swiss annual inflation running at only 0.1% * 2026 inflation forecast raised to 0.5% from 0.3% By John Revill.
* Regular wage growth +3.8% versus Reuters poll +4.0% * Increase is weakest since late 2020. * Bank of England watching inflation heat in jobs market. * But BoE now also focused on risks from war in Middle East. * Jobless rate holds at 5.2% By William Schomberg and David Milliken.
Sterling was steady on Thursday as markets focused on the Bank of England's interest rate decision later in the day, with investors looking out for any clues from policymakers about the impact of the Iran war. Data published on Thursday meanwhile showed that British wages, excluding bonuses, rose at their slowest pace since late 2020 in the three months to January.
The Swiss National Bank made the following statement after its policy review on Thursday: The Swiss National Bank is leaving the SNB policy rate unchanged at 0%. Banks' sight deposits held at the SNB will be remunerated at the SNB policy rate up to a certain threshold. Global economic growth was solid in the fourth quarter.
Short-dated U.S. Treasury yields hit their highest level since last August on Thursday, after the U.S. Federal Reserve flagged the risk of a pick-up in inflation, prompting investors to begin to price in the possibility of no more rate cuts this year.
The Swiss National Bank kept its policy rate on hold on Thursday in the face of a surge in the value of the Swiss franc driven by the Iran war, which also led to a spike in global oil prices, blurring the inflation outlook. The SNB maintained its policy rate at 0%, the lowest among major central banks, as expected by a wide majority of analysts polled by Reuters.
Top central banks on Thursday said they stood ready to tackle any surge in inflation with tighter policy as the latest escalation in the Iran war put the Middle East's vital energy infrastructure in the line of fire, pushing fuel prices higher.
* FOMC maintains policy rate in 3.50%-3.75% range as expected. * Fed funds futures imply U.S. central bank to stand pat all year. * BOJ votes 8-1 to hold interest rates. By Sophie Kiderlin and Gregor Stuart Hunter.
Euro zone government bond yields rose on Thursday ahead of a European Central Bank rate decision, as global bonds and stocks sold off in light of another jump in the oil price and after the Federal Reserve forecast higher inflation. An Israeli attack on Iran's largest natural gas field on Wednesday pushed the crude price above $110 a barrel, sending fresh shockwaves through markets.
Copper slid to its lowest point in three months on Thursday in a cross-complex selloff of base metals, as oil prices spiked following Iranian attacks in the Middle East, stoking inflation fears and stronger dollar amid weakening rate-cut expectation.
* ECB holds its key rate at 2% * Policymakers expect rate hike discussion in April. * Move seen as more likely in June. * Lagarde says central bank well positioned. By Francesco Canepa and Balazs Koranyi.
Morgan Stanley (MS) on Thursday joined Goldman Sachs and Barclays in pushing back its forecast for the U.S. Federal Reserve's next interest rate cut to September from June after the central bank flagged inflationary risks amid the Middle East conflict.
* Fed and BoC keep interest rates on hold amid inflation concerns. * Trump considers deploying troops to Middle East. * Oil rises over $110 a barrel after Iran strikes Middle East energy facilities. By Noel John. Gold prices fell to a more-than-one-month low on Thursday, weighed down by a firm dollar and a hawkish Federal Reserve, which limited hopes for near-term interest rate cuts.
The Bank of Japan kept interest rates steady on Thursday but warned that rising oil costs from the Middle East conflict could fuel underlying inflation, signalling caution over mounting price pressures.
The Bank of Japan kept interest rates steady on Thursday but warned that rising oil costs from the Middle East conflict could fuel underlying inflation, signalling caution over mounting price pressures.
S&P: * S&P: HONDA MOTOR DOWNGRADED TO 'BBB+' ON EARNINGS DOWNTURN; OUTLOOK STABLE. * S&P: HONDA MOTOR'S PERFORMANCE WILL DETERIORATE SIGNIFICANTLY IN NEXT COUPLE OF YEARS ON EV-RELATED LOSSES AND TAKE TIME TO RECOVER.
The following are the top stories on the New York Times business pages. - Jerome Powell, the chair of the Federal Reserve who has faced withering pressure from U.S. President Trump just months before his term as chair ends, said on Wednesday that he would continue to lead the central bank until his replacement was confirmed by the Senate.
A look at the day ahead in European and global markets from Ankur Banerjee. As the U.S. and Israel's war with Iran intensifies after major attacks on energy infrastructure, central bank meetings have become the stage for policymakers to unite in flagging the prospect of accelerating inflation due to soaring energy prices.
A look at the day ahead in European and global markets from Ankur Banerjee As the U.S. and Israel's war with Iran intensifies after major attacks on energy infrastructure, central bank meetings have become the stage for policymakers to unite in flagging the prospect of accelerating inflation due to soaring energy prices.
Investors are facing a cloudier view of U.S. monetary policy in the coming months, with a war in the Middle East muddying the outlook for a Federal Reserve that already was grappling with above-target inflation and an uneven labor market.
* Fed and BoC keep interest rates on hold amid inflation concerns. * Trump considers deploying troops to Middle East. * Oil rises over $110 a barrel after Iran strikes Middle East energy facilities. * Gold fell 3.7% in the previous session. By Noel John.
China is expected to keep benchmark lending rates steady for the 10th consecutive month in March on Friday, a Reuters survey showed, as rising global oil prices driven by heightened Middle East tensions add uncertainty to the inflation outlook.
* FOMC maintains policy rate in 3.50%-3.75% range as expected. * Fed funds futures imply U.S. central bank to stand pat all year. * BOJ votes 8-1 to hold interest rates; Governor Ueda to speak later. By Gregor Stuart Hunter.
Copper slid to its lowest in more than two months on Thursday, as oil prices spiked following Iranian attacks in the Middle East, stoking inflation fears and reinforcing a hawkish U.S. central bank outlook, while rising inventories added pressure.
Japan's lower house of parliament approved on Thursday Prime Minister Sanae Takaichi's choice of two like-minded monetary doves to join the central bank board, a move that could influence its decision on the timing and pace of further interest rate hikes.
The Bank of Japan kept interest rates steady on Thursday and maintained its assessment the economy was recovering moderately, even as an escalating Middle East conflict clouded the outlook. As widely expected, the central bank left unchanged its short-term policy rate at 0.75% in a two-day meeting that ended on Thursday.
Japanese stocks and bonds fell on Thursday and the yen remained fragile as investors weighed the economic impact of the prolonged Middle East conflict.
* Board keeps policy rate unchanged at 0.75% as expected. * Two board members see price goal met sooner than expected. * Board focus somewhat tilted to upside price risk, Ueda says. * Ueda says war impact comes on top of wage gains, solid growth. * BOJ to disclose by summer new inflation indicator. By Leika Kihara and Makiko Yamazaki.
The Bank of Japan held interest rates steady on Thursday but maintained its bias for tighter monetary policy, warning that surging oil prices driven by the Middle East conflict could exacerbate inflationary pressures.
The euro and the Japanese yen advanced against the U.S. dollar on Thursday as key central banks kept interest rates steady amid concerns about inflation from rising oil prices in the midst of the Middle East conflict. The European Central Bank left interest rates unchanged as expected but signalled it was closely watching growth and inflation risks from surging oil prices.
Japan's Nikkei fell on Thursday as investors weighed the impact of the Middle East conflict on corporate growth, while markets also focused on how the Bank of Japan will respond to the Iran war-linked oil shock in its policy decision later in the day.
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.
Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.
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