Global markets pause as US jobs data approaches

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Financial markets are betting there’s an 80% chance the Fed will hike rates by 50 basis points at its March 21-22 meeting

The London Stock Exchange Group offices are seen in the City of London on December 29 2017. File Picture: REUTERS/Toby Melville/File Photo

US Federal Reserve chief Jerome Powell stuck to his message of higher and potentially faster interest rate hikes during a hearing on Wednesday, but also emphasised that the decision would hinge on the strength of incoming data. “Our core view is that 5.5% will be enough, but that they [the Fed] will have to stay there longer than the market expects,” said Iain Cunningham, co-head of multi-asset growth and co-portfolio manager of the Ninety One Global Macro Allocation Fund.

Japan’s lower house of parliament on Thursday approved the government’s nominee Kazuo Ueda to be next central bank governor, signing off on a new leadership that will be tasked with steering an exit from ultra-loose monetary policy. The two-year Treasury yields held close to 15-year highs at 5.04%, while the benchmark 10-year yields were steady at 3.9953%.

“Powell conceded that the March decision is data-dependent,” said Thierry Wizman, Macquarie’s global FX and rates strategist. “The question facing us, therefore, is whether January’s economic re-acceleration was a blip or a trend.”

 

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