02.04.2024. Rate expectations should be reviewed

02.04.2024. Rate expectations should be reviewed
02.04.2024. Rate expectations should be reviewed
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We are walking deeper into spring. Financial market participants basically continue to discuss the old big topics – of course, with new nuances. Namely, US data has proven to be very strong in recent days. It always makes one wonder how soon and how fast the US Federal Reserve might act in terms of interest rates on the US dollar.

If until recently there was a rather iron-clad belief that the US Federal Reserve System would start its US dollar interest rate reduction cycle in June, now these assumptions have weakened.

The US ISM manufacturing sector PMI index rose to 50.3 points last month. A mark of 50 points for this indicator separates growth from recession. Prior to that, this sector in the US had been in recession for 16 months.

As US manufacturing and new orders grow, so do the timing of FRS rate hikes. Or – if everything is more or less perfect, why reduce interest rates, where there is a risk that it may even turn out to be a mistake. As if the data is good, but the fact is that it scares the market participants. For a long time, the rise in share prices has been based on broad assumptions about a decisive downward turn in interest rates.

A preliminary measure of eurozone inflation for March will be announced in the middle of this week. At the end of the week, the attention of market participants in the data field will be directed to the latest indicators on the health of the US labor market.

Apranga will inform the Baltics about its turnover data today. EfTEN Real Estate Fund’s regular shareholders’ meeting will also take place.

The article is in Latvian

Tags: #02.04.2024 Rate expectations reviewed

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