Posted Jul 6, 2023, 8:34 a.m. Updated Jul 6, 2023, 8:42 a.m.
The first full session on Wall Street this week ended in a pullback in reaction to signs of a global economic slowdown and confirmation by the Federal Reserve of its offensive stance. Sino-American trade tensions add to the caution of investors, especially as several statistics concerning employment in the United States are on the agenda for the day.
Asian markets followed the downward movement by amplifying it on Thursday with declines of 1.70% for the Nikkei 225 in Tokyo and more than 3% for the Hang Seng in Hong Kong. The yield on 10-year US Treasuries was holding around 3.96% in Asia this morning, a level not seen in four months, after a 9 basis point surge on Wednesday evening. That of the 2-year loan is close to 5%
Minutes from last month’s Fed monetary policy committee meeting show that a strong majority of its members believe interest rates will need to be pushed higher. Whether ” almost all “have judged” appropriate or acceptable to pause by keeping policy rates within a 5% to 5.25% range in June, some favored a 25 basis point hike. Almost everyone thinks that further hikes in the federal rate target during 2023 would be appropriate. Traders and economists generally expect a 25 basis point tightening in July, but are more puzzled about what happens next. The employment figures for June tomorrow and those for inflation next week will help to see things more clearly.
Janet Yellen will try to renew the dialogue in Beijing
Janet Yellen begins a visit to Beijing on Thursday as China tightens restrictions on exports of two metals, germanium and gallium, crucial for the semiconductor industry. The US Treasury Secretary will try to renew the dialogue as Washington plans to limit the access of semiconductors linked to the “cloud” to Chinese companies.
In Europe, orders to German industry rose 6.4% in May, significantly more than the 1% increase expected, after rising 0.2% the previous month. Year on year, the contraction decreased from 9.3% in April to 4.3% in May. The afternoon will be American with the ADP Employer Services survey on job creations in the private sector in June, weekly jobless claims, the JOLTS survey on job vacancies in June and, finally, the non-manufacturing ISM index.
Stellantis takes over a battery factory in Canada
On the stock side, Stellantis will resume construction of an electric vehicle battery factory in Canada after the federal government and the province of Ontario increased subsidies for the project valued at 3.47 billion euros.
Air Liquide plans to cut 430 jobs in its home healthcare division in France, as part of a reorganization of these activities.
Among the analysts’ notes, HSBC raised its recommendation on Vicat to “reduce” to “keep” and raised its target price from 22 to 27 euros.
2023-07-06 06:34:17
#minutes #hawkish #Fed #focus #statistics #employment #United #States
