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  • Traders Exploit Loopholes in New Sanctions on Russian Metals
    on April 17, 2024 at 7:37 pm

    Traders quickly found loopholes in the new sanctions imposed by the UK and US against Russian metals like aluminum, copper, and nickel on the London Metal Exchange (LME). The sanctions, effective from April 12, prohibit the trading of Russian metals produced after this date on the LME. However, traders are focusing on the substantial stocks of Russian metals already stored in LME’s global warehouses to potentially capitalize on the market.

  • Powell Cautious on Rate Cuts, Sees Longer Path to Inflation Target
    on April 17, 2024 at 7:35 pm

    Federal Reserve Chair Jerome Powell recently stated that the conditions necessary for reducing interest rates are unlikely to materialize soon, given the current economic data. Despite a significant decline in inflation in the latter half of last year, recent figures have not convincingly demonstrated progress toward the Fed’s 2% inflation target. Powell emphasized the need for more substantial evidence of sustained inflation reduction before considering rate cuts. Financial markets, which had initially anticipated rate reductions as early as June, are now adjusting their expectations toward September, as reflected in the latest projections from the CME FedWatch tool.

  • Stocks End Mixed as Powell Signals Delayed Rate Cuts
    on April 17, 2024 at 7:30 pm

    U.S. stocks experienced fluctuations following Federal Reserve Chair Jerome Powell’s cautionary remarks indicating that interest rate cuts may be delayed due to persistent inflation concerns. During a discussion at the Wilson Center, Powell expressed that recent data did not bolster confidence in quickly reaching the Fed’s 2% inflation target, suggesting a more prolonged period of high rates. This led to mixed results in the stock market, with the Dow slightly up by 0.2%, while the S&P 500 and Nasdaq both declined. Concurrently, the 2-year Treasury yield briefly crossed the 5% mark, underscoring the market’s reaction to the anticipated continuation of restrictive monetary policy.

  • Opinion: Cutting Interest Rates is Misguided
    on April 17, 2024 at 7:26 pm

    The opinion piece argues that the Federal Reserve Chair Jerome Powell’s focus on cutting interest rates may be misguided, given the persistent uncertainty around inflation returning to the 2% target and the growing concern over the federal deficit. The article suggests that lowering rates could exacerbate inflation, especially as significant investments by the Biden administration in manufacturing sectors like electric vehicles and semiconductors are already boosting factory construction, potentially fueling further inflationary pressures.

  • Dollar's Surge Triggers Market Interventions as Asian Currencies Tumble
    on April 17, 2024 at 7:21 pm

    The U.S. dollar’s resurgence significantly impacted emerging-market currencies, particularly after China’s decision to lower its yuan reference rate. This move intensified selling pressures across Asia, notably affecting the Indonesian rupiah, Indian rupee, and South Korean won. The ripple effect of the dollar’s strength was felt globally, driving a key index of emerging-market currencies to annual lows and causing corresponding declines in stock markets. In response to severe depreciations, Bank Indonesia intervened to support the rupiah as it crossed 16,000 per dollar for the first time in four years, and South Korean authorities warned against the economic risks of rapid currency fluctuations.