In economic data this morning, the EU CPI came in as expected at 2.3% for the headline 1.9% for the core measure. The ECB has cut rates 10 times since the peak. It is expected that they would slow down/stop the declines as rates are now considered expansionary.
The Federal Reserve is expected to keep rates unchanged for the fifth consecutive meeting. Previously, the Fed had cut rates by a full 100 basis points—from 5.5% to 4.5%. Market participants are now turning their attention to forward guidance. Will the Fed lean toward further easing as inflation remains stubbornly above the 2% target, global peers cut rates more aggressively, and signs of slower growth begin to emerge? Tariff-related uncertainty is also a growing factor, complicating the inflation-growth dynamic.
On the economic data front, U.S. mortgage applications fell by 2.6% this week, with the average 30-year mortgage rate easing slightly from 6.93% to 6.84%. At 8:30 AM ET, just ahead of the Fed announcement, building permits and housing starts will be released. Permits are expected to rise to 1.428 million (from 1.412 million), while starts are forecast to slip to 1.357 million from 1.361 million.
Finally, geopolitics continues to weigh on sentiment. President Trump and Iran’s Supreme Leader have exchanged threats, with Tehran warning that any attack on Iran would result in “irreparable damage” to the U.S. Will the US get involved?, Will they supply Israel with their bunker buster technology? Will they stay out of it and continue to negotiate for a peace settlement?
Dow industrial average +32.2 pointsS&P index +8.78 pointsNasdaq index +47.67 points
In the US debt market, yields are marginally lower after moving lower yesterday:
2-year yield 3.947%, -0.2 basis points5-year yield 3.976%, -1.0 basis points10 year yield 4.375%, -1.6 basis points30 year yield 4.872%, -2.0 basisIn other markets,:
Crude oil futures are up $0.29 at $73.56Gold is down five dollars at $3384.17Bitcoin is trading little changed at $104,414. This article was written by Greg Michalowski at www.forexlive.com. Read More Details
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