The Day at a Glance | March 25 2024

The Top

*The United States Federal Reserve seems to be on track to cut interest rates as the presidential campaign intensifies.

*China is committed treating foreign companies as domestic counterparts in an attempt to attract more foreign investment.

*The ECB is confident that wage growth is slowing towards normal levels, which could lead the way for interest rate cuts, according to Philip Lane, chief economist at the ECB.

*Japan’s top currency diplomat said he is prepared to respond appropriately to yen movements amid speculation about the currency’s weakness.

*The US stock market is operating with declines. 

Economic environment

The United States Federal Reserve appears to be on track to cut the federal funds rate as the presidential campaign intensifies. According to Reuters, the Federal Reserve could play an important role in the election year by helping to shape attitudes about persistent high inflation and rising housing costs which have been a burden on Joe Biden’s re-election efforts. Additionally, the agency notes that interest rate cuts could encourage criticism, including from the primary Republican rival Donald Trump, arguing that an agency created to be an independent monetary authority is tilting the political balance towards Biden. In this way, investors anticipate cuts from two of the four Fed meetings until then, in mid-June and again in mid-September, decisions that Biden could point to as evidence that the worst of inflation is over and which could influence voters’ perceptions of the US economy’s situation

Markets and companies

The US stock market is operating with declines, kicking off a week where there will be fewer trading days due to the Easter holiday. Last week, stock indices once again reached new highs as investors digested the message from the Federal Reserve, which maintained the expectation of three interest rate cuts for this year. Additionally, the market is on track to close March positively, thanks to the rally observed in the rise of technology sector stocks and also due to expectations of interest rate cuts. This week, the release of the Personal Consumption Expenditures (PCE) inflation scheduled for Friday, is considered as one of the Fed’s preferred indicators for measuring inflation. In Europe, markets were operating with mixed movements as investors assimilated the latest central bank policy decisions, while in Asia, stock markets had a mixed performance as they assimilated the publication of inflation data from multiple countries in the region. The yield on the 10-year Treasury bond registered an increase, standing at 4.24%, awaiting the inflation figures to be published at the end of the week. Regarding commodities, oil prices rise in response to Ukraine’s attacks on Russian refineries. WTI trades at $81.56 per barrel while Brent is at $86.34 per barrel. Meanwhile, gold maintains its gains, reaching $2,176.6 per ounce. In Mexico, the IPC operates with increases, standing at 56,647.7 units.

Corporate news

*Shares of chip manufacturers, such as Intel and Advanced Micro Devices, declined after reports circulated that China would be taking steps to gradually reduce the use of processors manufactured by US companies in government-used computers.

*Boeing’s CEO, Dave Calhoun, and Chairman of the Board, Larry Kellner, resigned from their positions. The company’s shares rose.

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