CME Financial News

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Key Takeaways

Middle East. Cash Treasury markets had been closed for a holiday on Monday, so Tuesday morning was traders' first chance to react to Palestinian militants' surprise attack on Israel as well as Fed officials' overnight comments. After dropping 15 basis points at the open, 10-year yields were 12.5 bps lower at 4.66% at 1235 GMT. Two-year yields also dived more than 13 bps to a one-month low of 4.926% as short-term rate expectations were dialled back. Yields fall when bond prices rally. Fed Vice Chair Philip Jefferson and Dallas Fed president Lorie Logan both noted on Monday that the recent run-up in yields may reduce the need for further interest rate hikes. «If term premiums rise, they could do some of the work of cooling the economy for us, leaving less need for additional monetary policy tightening,» Logan said. Analysts at Citi noted Logan has been one of the strongest advocates that the Fed would need to follow through with further tightening, but interpreted her remarks as suggesting that higher long-term rates curtail the need for short-end hikes. Implied futures pricing has reduced the probability of another rate hike this year from above 40% last week to about 26% on Tuesday, according to CME's FedWatch tool. The Mideast conflict, already claiming more than 1,500 lives, drove bond yields lower globally on Monday as investors turned to safe-haven assets.

By Davide Barbuscia

interest rates again this year. The last time the dollar hit that milestone was in 2014. The greenback this week was up 0.5%, but those 12 consecutive weeks of rises translated to an 8% increase in the dollar's value.

By Karen Brettell

private payrolls data, leading investors to reduce bets the Federal Reserve will hike rates again this year. After touching an 11-month high earlier this week, the dollar index, which tracks the greenback against six other currencies including the euro and yen, edged 0.07% lower to 106.68 after Wednesday's data showed U.S. private payrolls increased far less than expected in September. Although analysts said more evidence was needed to be sure how fast the labour market is cooling, money markets cut their bets for a Fed rate hike in November, and are now seeing an almost 80% chance the central bank will keep its rates steady.

Asian shares rebounded from 11-month lows on Thursday as a plunge in oil prices and softer U.S. labour data helped pull Treasury yields off 16-year peaks, although a looming U.S. payrolls report could make or break the rally.

NYSE Arca Exchange has submitted an updated application to list the Bitwise Bitcoin exchange-traded fund (ETF) Trust. 

As widely expected, the Fed’s Federal Open Market Committee (FOMC) decided to maintain its benchmark rate within a range of 5.25% to 5.5% on Wednesday. The central bank also did not rule out the possibility of a twelfth rate hike.

Treasury yields rose to 16-year highs on Thursday, a day after the Federal Reserve surprised investors by flagging the potential for an additional rate hike, and an expectation for fewer cuts next year. The U.S. central bank held interest rates steady, as was widely expected, and said that its benchmark overnight interest rate may still be lifted one more time this year to a peak 5.50%-5.75% range. It also now expects half a percentage point of rate cuts in 2024.

As widely expected, the Fed’s Federal Open Market Committee (FOMC) decided to maintain its benchmark rate within a range of 5.25% to 5.5% on Wednesday. The central bank also did not rule out the possibility of a twelfth rate hike.

By Brigid Riley

As often has been the case, this week's Federal Reserve meeting will be less about what policymakers are doing now than what they expect to be doing in the future.

By Rodrigo Campos

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A majority of the economists see the central bank leaving interest rates unchanged at the end of the meeting, even though inflation remains higher and above the targeted 2%. The consumer price index-based inflation in the US rose 3.7% from a year ago in August, primarily due to the spike in gas prices. This was up from a 3.2% annual increase in July. Even Though the inflation has cooled off significantly from the peak and moved closer to the Fed’s 2% target, the recent rise in oil and gasoline prices pose upside risks to inflation. During its previous policy meeting in July the Fed committee had said that it will continue to assess incoming data and its implications for monetary policy. Indicating that price pressures remain a pain point even after a significant moderation from the peak, the Fed said it was watchful to inflation risks and was committed to bring it down to its target of 2% annual increase. In the minutes of the Fed’s previous meeting too, the central bank hinted at interest rates staying higher for longer amid inflation risks. According to the CME Fedwatch tool, 99% of the investors are expecting the Fed to leave the federal funds target range at 5.25-5.50%. Given that the status quo has been largely factored into prices, the outlook for interest rate trajectory for the rest of 2023 is what will be closely tracked by investors across the globe on Wednesday. “Markets expect the Fed to sound hawkish while pausing and indicate one more rate hike this year.

By Rae Wee

(Reuters) — The Federal Reserve is unlikely to raise interest rates at its Oct. 31-Nov. 1 meeting, Goldman Sachs strategists wrote on Saturday, while also forecasting the U.S. central bank would lift its economic growth projections when policymakers gather next week.

By Lewis Krauskopf

The University of Michigan's preliminary reading of its Consumer Sentiment Index dropped to 67.7 this month from a final reading of 69.5 in August and below the forecast of 69.1 among economists polled by Reuters. However, consumers saw inflation lower on both a one-year and five-year basis. Earlier data from the Labor Department showed import prices increased 0.5% last month as fuel prices jumped, but underlying price pressures stayed subdued while a separate report from the New York Fed showed factory activity picked up in the state in September. «None of the data currently points to a recession.