Another good night for Asian equities. The Hang Seng is up 3%, as is the CSI 300, mainly related to the headline that "China is to implement 'FORCEFUL' interest rate cuts" (source: Politburo). As for the rest of the day, the data comes thick and fast. First up, we have the SNB. They are widely expected to cut rates by 25 bps. The Bloomberg survey only has three participants, and one bold forecaster has opted for a larger 50 bps move. Then, out of the US, we have Initial Claims, GDP, Durable Goods, and Pending Home Sales.
Since the Fed cut rates by 50 bps last week, more attention has been given to the risk that other G10 central banks could follow suit. The BoC Governor Macklem noted the possibility that 50 bps incremental rate cuts could be in scope for Canada. The Riksbank also indicated that it may choose to cut rates by 50 bps rather than 25 bps at one of its remaining policy meetings this year. Macklem noted that “as you get closer to the inflation target, your risk management calculus changes... you become more concerned about the downside risks." The labour market is pointing to some downside risks. As for the SNB, there will be a cut, but the 25/50 debate rumbles on...
In other markets, Bitcoin fell 0.2% to $63,376.53, Ether rose 0.7% to $2,597.65, the yield on 10-year US Treasuries was little changed at 3.78%, and Japan’s 10-year yield advanced 1.5 basis points to 0.825%. In commodities, West Texas Intermediate crude fell 0.3% to $69.50 a barrel, and spot gold rose 0.2% to $2,661.58 an ounce. The only other point of note today is we have a lot of speeches – the Fed’s Collins, Kugler, Bowman, Williams, and Powell all speak, as do the ECB's Lagarde and De Guindos.
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