Bond yields climbed after Federal Reserve Chair Jerome Powell signalled patience before cutting interest rates further.
Powell told Congress that the Fed doesn’t need to rush to adjust interest rates, indicating that the economy remains strong. Markets continue to fully price in just one quarter-point rate cut by the central bank this year, expected by September, whereas two rate cuts were anticipated last December.
Overnight, Hong Kong stocks rallied, driven by gains in Alibaba and BYD. DeepSeek news also helped lift the Hang Seng Index, with UBS strategists, including James Wang, suggesting that the rally in Chinese stocks spurred by DeepSeek’s artificial intelligence app may be “less than halfway” done.
U.S. index futures were little changed overnight. Sterling and the euro also remained steady.
Cryptos were down overnight:
- Bitcoin fell 0.6% to $95,781.14.
- Ethereum declined 0.6% to $2,605.90.
- Litecoin dropped 1.4%.
The key event of the day will be the U.S. CPI data. A 0.3% increase is expected, reflecting a 0.4% rise in food prices and a 0.6% increase in energy prices.
Three components expected to impact the report include increases in both used and new car prices, rising car insurance costs, and overall seasonal distortions.
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