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.
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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