The benchmark index has recovered from a pullback earlier this month caused by a dour U.S. jobs report and the yen carry trade as better-than-expected data calmed nerves over a sharp slowdown in the world’s largest economy.
“The data has prompted investors to shift towards pricing a 25bp Federal Reserve rate cut on 18 September. However, there will be a myriad of data inputs into the Fed equation and the events calendar picks up next week,” said analysts at ING, in a note.
“The oil market is struggling to retain its recently recaptured $80/bbl floor as the recent string of weak macroeconomic indicators reassert their downward pressure while geopolitical concerns appear to fade into the background,” said Harry Tchilinguirian, head of research at Onyx Capital Group.
Uncertainty over the U.S. presidential election also factored into caution towards crypto, as Kamala Harris and Donald Trump were seen polling neck-and-neck in the 2024 race. So far, only Trump has presented a pro-crypto stance.
Softer U.S. inflation data this week has put an interest rate cut by the Federal Reserve for the first time in more than four years firmly on the agenda at its next meeting in September, although the healthy labor market data as well as the retail sales suggest a 25-basis-point cut rather than anything more…
Japan’s Prime Minister Fumio Kishida said on Wednesday he would step down next month, succumbing to public disaffection over political scandals and rising living costs that marred his three-year term, and setting off a scramble to replace him.
The dollar hovered near a one-week low on Wednesday as traders bet U.S. consumer price data later in the day will keep the Federal Reserve on course to cut rates next month, while sterling eased after softer-than-expected inflation numbers.
“The American Petroleum Institute reported a significant drawdown in U.S. crude inventories of 5.2 million barrels, far more than a forecasted decline of 2 million. The data signalled that oil demand remains healthy,” said Danish Lim, investment analyst at Phillip Nova.
But despite this week’s rebound, Bitcoin still remained close to a trading range seen for most of this year, as it struggled to make new highs after a rally in March. The token has also largely lagged a rally in stock markets in recent sessions.
The prospect of lower interest rates bodes well for stock markets, given that it frees up capital that can then be invested into the sector. Lower rates also help soothe concerns over slowing economic growth, after weak readings on the labor market sparked increased volatility on Wall Street.
