European stocks rebounded and government bond yields rose again as oil prices firmed, despite smaller rate cuts by China than investors had expected, with hopes remaining for further stimulus.
The euro fell to a two-month low against the dollar and a 12-month low against the pound after German and eurozone business activity slumped more than expected in August, leading to concerns about the state of the European economy and potential pauses in tightening measures by the European Central Bank, while the dollar rose to a two-month peak amid positive U.S. economic data.
Treasury yields fell to their lowest levels in over a week due to concerns about job creation and consumer confidence, leading bond traders to lower the probability of a Federal Reserve interest rate hike this year.
European bonds and stocks fell as inflation data suggested that inflation in the euro region may not be fully subsiding, while utilities led the decline in the Stoxx Europe 600 and the German and Spanish inflation data complicated the outlook for European policy makers.
The US dollar dropped to a two-week low against the euro and other currencies after data revealed lower than expected private payroll growth in August, leading to speculation that the Federal Reserve will halt interest rate increases.
Euro zone inflation holds steady in August, but underlying price growth falls, complicating decisions for the European Central Bank as it considers a pause in rate hikes amid a slowdown in economic growth.
Consumer prices in the eurozone rose 5.3% on average this month compared to last year, with core inflation easing to 5.3%, potentially increasing pressure on the European Central Bank to raise interest rates.
U.S. Treasury yields rise as investors await jobs report for insight into the economy and Fed's monetary policy decisions.
The U.S. is currently experiencing a prolonged high inflation cycle that is causing significant damage to the purchasing power of the currency, and the recent lower inflation rate is misleading as it ignores the accumulated harm; in order to combat this cycle, the Federal Reserve needs to raise interest rates higher than the inflation rate and reverse its bond purchases.
U.S. stock futures decline as bond yields rise despite weak economic news from China and Europe.
U.S. Treasury yields dropped as concerns over potential interest rate hikes grew due to recent economic data, including lower jobless claims and sustained inflationary pressures.
Euro zone government bond yields were mixed while money markets increased their bets on another rate hike by the European Central Bank, with investors split on whether the ECB will raise interest rates and money markets pricing in a higher chance of an ECB move by year-end.
The euro has been continuously decreasing in value against the dollar for the eighth consecutive week, reflecting the economic challenges faced by Europe, including high inflation and the specter of recession, while the United States has better control over inflation and a stronger labor market, leading to a widening gap between the euro and the dollar.
The European Central Bank is expected to raise interest rates, but traders believe that any immediate risk to the euro is likely to be on the downside, and if there is a hike, it will likely be the last.
The European Central Bank has raised its main interest rate for the 10th consecutive time to tackle inflation, but indicated that further hikes may be paused for now, causing the euro to fall and European stocks to rally.
Euro zone bonds and stocks rally as traders maintain their bets on the European Central Bank cutting interest rates next year amid concerns over economic growth.
The Federal Reserve's continued message of higher interest rates is expected to impact Treasury yields and the U.S. dollar, with the 10-year Treasury yield predicted to experience a slight increase and the U.S. dollar expected to edge higher.
Treasury yields rise and stocks fall as traders anticipate longer-lasting higher rates to prevent inflation, while Brent oil briefly surpasses $95 a barrel; the Federal Reserve's decision on interest rates is eagerly awaited by investors.
The Federal Reserve will continue raising interest rates until inflation decreases, even if it means more people losing their jobs, according to CNBC's Jim Cramer.
The Federal Reserve left interest rates unchanged while revising its forecasts for economic growth, unemployment, and inflation, indicating a "higher for longer" stance on interest rates and potentially only one more rate hike this year. The Fed aims to achieve a soft landing for the economy and believes it can withstand higher rates, but external complications such as rising oil prices and an auto strike could influence future decisions.
