Patchy signals on rates leave markets uncertain
investmentnews.comBonds fell and stocks struggled for direction as traders parsed the latest commentary from central bankers for clues on the path for interest rates.
European Central Bank President Christine Lagarde said at the weekend the ECB could hike again, even if it pauses at its next meeting. In the US, Federal Reserve Bank of Minneapolis President Neel Kashkari described the inflation outlook as “quite positive,” despite the likelihood of job losses and slower growth. Yields on German bonds and US Treasuries climbed.
The yen dropped against the dollar after the Bank of Japan announced unscheduled bond-purchase operations to buy debt. The BOJ was seeking to contain a selloff after it said Friday it will allow yields to rise above a 0.5% cap.
This week will build into another busy one for earnings. Heineken NV slumped as much as 6.4% on Monday after the Dutch brewer reduced its earnings forecast. Apple Inc. and Amazon.com Inc. are among companies reporting in the coming days.
Equities in Asia rose, with Chinese stock gauges higher on expectations of more government stimulus. Europe’s benchmark stock index was little changed. US equity futures were steady following a rally Friday that pushed the Nasdaq 100 nearly 2% higher amid optimism that a soft landing for the world’s biggest economy is within reach.
On the policy front, July inflation numbers for the European Union due Monday will give the latest indication of how effective the ECB’s policy tightening campaign has been to curb price gains. Attention is already turning to the Bank of England’s interest rate decision on Thursday, where traders are positioning for a 25 basis-point hike.
In China, July manufacturing PMI data remained in contraction but beat estimates. More
Read more on investmentnews.com
