Actions in Wall Street fall this Wednesday, while investors would dig Inflation reading in January higher than expected. He Dow Jones Industrial Average (^DJI) falls around 0.8%, while the reference index S&P 500 (^GSPC) drops by 1%. He Nasdaq Composite (^Ixic), with great technological weight, retreats more than 1.1%.
The Russell 2000 of Small Caps falls more than 1%, and the yields of the bonds rise, with the yield of the 2 -year bonus in 4%and the 10 -year in 4.5%.
The January Consumer Price Index (ICC), published on Wednesday, showed that consumer prices in general increased more than expected in January, while basic prices invested the deceleration last month. In “basic” terms, which excludes the most volatile costs of food and fuel, prices in January rose 0.4% compared to the previous month, rather than the monthly increase in December, and 3.3% compared to last year , also above the last month.
The highest inflation reading than expected delayed investor bets on cuts in interest rates by 2025. As of Wednesday morning, the markets anticipated only one interest rate cut, after having discounted two for two Most of the year.
At the same time, the markets are on alert for more political surprises of Trump, who is expected to announce reciprocal rates about many countries before the weekend.
“The conclusion is clear. The Federal Reserve should not cut. Regardless of the way in which the Fed decides to divide the data (main, basic and extraordinary), all exceeded expectations. Annualized data at 3 and 6 months are also uploading, “he said in statements to the field, Dan Silukportfolio manager in Janus Henderson.
And he added that: “Although the IPC data at the beginning of the year are known for its seasonality and distortions, the labor market is clearly stable and economic conditions do not justify a relaxation of conditions. Everything indicates that the neutral interest rate should be higher. ”
Tariff tired
Some analysts have commented that much of Trump’s rhetoric about tariffs seems to be more a negotiation tool, since many of their most aggressive threats have ended up being attenuated, delayed or not materializing so far.
This has maintained to some extent support for European shares and the euro. “The challenge for operators is that, despite the certain fatigue in Trump -related operations, there is no way to predict if tomorrow will be the day when Washington significantly expands tariffs. That is why we are reluctant to forecast a significant correction of the dollar Without some kind of macroeconomic evidence that supports it, “said the Estry Strata, Chris Turner.
The euro rises 0.1%, standing at $ 1,0373. The European Union, together with Mexico and Canada, has condemned the last round of tariffs on Trump metals, stating that the 27 -nations block will adopt “firm and proportionate retaliation measures.”
The yields of the US Treasury bonds increased on Wednesday, since the mass sale after Powell’s testimony extended, carrying the yields of the reference bonus to 10 years to a maximum of a week of 4,556%, what which in turn promoted the dollar 0.85% against Japanese Yen, reaching 153.78.
In Asia, the renewed enthusiasm of Chinese investors for opportunities in artificial intelligence showed no signs of deceleration. Hong Kong Hang Seng index (.hsi) jumped 1.83%, driven by a rebound in the actions of Alibab iPhone users in China.
In the raw material sector, gold falls 0.3% au $ 2,889 on an ounce, under the pressure of higher bond yields and Powell’s quiet attitude regarding the need for feat cuts, while Petroleum decreased 0.7% Au $ S76.46 per barrel.
Source: Ambito
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