KUALA LUMPUR, June 5 (Bernama) -- Bursa Malaysia closed higher, with the benchmark index rising 0.60 per cent as bargain-hunting persisted following the recent sell-off, despite weaker performances across regional markets. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) gained 10.17 points to 1,693.43 from Thursday's close of 1,683.26. The benchmark index opened 3.19 points higher at 1,686.45 and traded between 1,684.36 and 1,698.53 during the trading session. However, broader market sentiment remained negative, with losers outnumbering gainers 666 to 477. A total of 574 counters were unchanged, 958 untraded and 12 suspended. Turnover fell to 3.41 billion units worth RM3.04 billion from 3.47 billion units worth RM3.58 billion on Thursday.
.jpg)
Bond traders are gearing up for potential aggressive interest-rate cuts by the Federal Reserve (Fed) amid growing concerns about the US economy's health. Despite inflation cooling, investors fear a weakening labor market, prompting speculation about larger-than-expected rate reductions.
Key Insights:
Current Market Expectations:
- Investors are fully pricing in at least two quarter-point rate cuts this year.
- Some traders are betting on a half-point cut in mid-September or sooner.
Economic Concerns:
- High benchmark rates have pressured companies and consumers.
- There are growing concerns about the labor market weakening.
Influential Opinions:
- Former New York Fed President William Dudley and Mohamed El-Erian suggest the Fed risks a mistake by keeping rates too high.
- Dudley even called for a rate cut at this week's policy meeting.
Market Reactions:
- The market has seen policy-sensitive short-term US yields drop.
- Eco-friendly data on jobless claims, US growth, and consumer spending support the Fed holding tight for now.
Fed's Position:
- Policymakers have kept the target rate at 5.25% to 5.5% while awaiting signs of sustained inflation cooling.
- With inflation showing signs of cooling, emphasis has shifted to full employment.
Upcoming Data and Decisions:
- The next jobs report and economic data will be crucial in shaping future Fed decisions.
- Fed Chair Jerome Powell may use his press conference to hint at potential policy changes.
Possible Scenarios:
- Some analysts believe the Fed could opt for deeper cuts if the economy weakens further.
- Others suggest a slow and steady approach with quarter-point cuts per meeting.
Uncertainty and Speculation:
- Traders have positioned themselves for various scenarios using options linked to the Secured Overnight Financing Rate.
- A sudden large rate cut would indicate significant economic distress.
The next couple of months will be critical for the Fed as it navigates economic uncertainties and decides on the best course of action to support the US economy.
Comments
Post a Comment