MONEY MASTER

Asian equities rallied sharply as  optimism over a potential Middle East peace deal  triggered a broad risk-on move, with  falling oil prices easing inflation concerns and supporting equities . Equity Markets Rally on Diplomatic Breakthrough Hopes Regional markets extended gains alongside global equities: Nikkei 225   +4.3% Kospi   +8.3% Australia’s resource-heavy stocks  +1.8% The rally reflects  renewed investor confidence , supported by expectations that a  peace agreement could be reached soon . Oil Prices Drop, Easing Inflation and Policy Risks Energy markets reacted strongly to the improving outlook: Brent crude ~US$89 per barrel West Texas Intermediate crude   ~US$86 per barrel Key driver: Stocks rose because lower oil prices reduce inflation and Federal Reserve tightening risks , improving the outlook for interest rates and valuations. Global Markets Join Risk-On Rally Wall Street posted strong gains overnight: Nasdaq Composite  ...

Quick Summary Gold rose 0.5% to US$5,174  amid US tariff uncertainty Markets expect  three Fed rate cuts in 2026 Silver and platinum also advanced Traders watching key resistance near  US$5,205–US$5,244 Safe-Haven Demand Returns Gold prices rebounded in Asian trading as investors sought safety following fresh confusion over US trade policy. Spot gold:  US$5,174.76 (+0.5%) US April futures:  US$5,192.20 (+0.3%) The move comes after the US Supreme Court struck down a batch of tariff measures introduced by President  Donald Trump , creating renewed policy uncertainty. Although Washington began collecting a temporary 10% global import tariff, officials are reportedly working to raise it to 15%, adding to market confusion. Key point: Policy uncertainty is reviving demand for defensive assets. Fed Outlook Supports Bullion Two US Federal Reserve officials signalled  no urgency to adjust interest rates . Markets now expect: Three 25-basis-point cuts this year ...

Despite hovering near record highs, the U.S. stock market might be sending misleading signals about the real state of the economy. Here's what you need to know. 1. Stocks Are Up—but the Economy Isn't Booming The S&P 500 is only about  1.1% below its record high  set just last week, and it's already up  8.7% year-to-date . But according to analysts, this  optimism in markets  might not match the  slower economic growth  being seen on the ground. Consumer spending  is weakening Residential investment  has declined Employment growth  is slowing Bob Elliott, CEO of Unlimited Funds, warned that "the stock market is too optimistic" and might be underestimating inflation risks and overestimating Fed rate cuts. 2. Fed Minutes Reveal Uncertainty According to the  Federal Reserve’s July meeting minutes , there's  no clear path ahead  for inflation and interest rates. Here are key takeaways: Tariffs are  adding to goods infl...

As inflation inches closer to the Fed’s 2% target,  San Francisco Fed President Mary Daly  believes  two rate cuts remain on the table in 2025 , despite concerns about recent tariff announcements. Daly suggested the  price impact of Trump’s new tariffs may be muted , as businesses are finding ways to  absorb part of the cost  or  negotiate shared burden structures  that prevent full pass-through to consumers. “Some companies are cutting into their margins instead of passing costs along,” Daly said. “This could prevent a major spike in consumer inflation.” Key Points for Investors Two rate cuts likely in 2025 , according to Daly Tariffs may lead to  one-off price increases , not long-term inflation Growth and spending are moderating — but  not weakening Daly: Inflation  still on track  to hit 2% Futures pricing shows  first cut likely in September Diverging Views Inside the Fed While June meeting minutes show  a split ...

With early signs of labor market cooling and trade tensions easing, investors are now seriously weighing the potential for a  July rate cut  by the Federal Reserve — a shift that could spark another leg up for both equities and credit. Surprise Softness in Jobs Market Wednesday’s  ADP employment report  landed well below expectations, showing a  33,000 job loss  in June versus a forecasted  98,000 gain . It marked the first contraction in private payrolls in over two years and raised eyebrows across Wall Street. While ADP data doesn’t always line up with the official nonfarm payrolls report (due Thursday), it adds to the case that  labor conditions are softening faster than expected . What to Watch: Thursday’s NFP Consensus is calling for a  +110,000  jobs print. But if the number misses, it could transform the Fed’s  July 30 meeting into a “live” decision point — with a possible cut in play. Market participants are currently pricin...

What’s Driving the Euro Rally? The  euro surged past $1.17 , hitting its highest level since September 2021 — and the options market is betting this rally has legs. Data from the  Depository Trust & Clearing Corporation  showed  $56 billion in euro options traded Thursday , far outpacing other major currencies. What stands out?  Heavy interest in call options  — contracts that gain if the euro climbs — especially those targeting a  break of $1.20 . Why Now? Fed rate cut expectations  are weighing on the dollar. Iran-Israel truce  is reducing safe-haven demand for USD. Germany’s fiscal expansion  has revived eurozone growth hopes. Trump’s tariff threats  are pushing traders away from the greenback. Momentum Check: Euro is  up 15% from February lows . Trading near decade highs vs. the Chinese yuan. Asset managers most bullish  since early 2024. Hedge funds least bearish  since April. Investor Signals: “It’s full ste...

Wall Street's major indexes  bounced back on Thursday , a day after the  Federal Reserve's unexpected hawkish outlook  caused sharp market declines. The central bank's updated projections, which include  fewer-than-expected interest rate cuts and higher inflation expectations  for 2025, caught many investors off guard. On Wednesday, the Fed revealed it anticipates  only two 25 basis point cuts in 2025 , a half-point less than its September forecast. Additionally, inflation expectations for 2025 were raised, coinciding with the first year of the new Trump administration. This announcement led to  the steepest daily losses in US stocks since August. Traders are now predicting  just one quarter-point rate reduction by mid-2025 , compared to prior expectations of three cuts by the end of next year. Key Market Movements As of 9:44 am ET: Dow Jones Industrial Average : +395.85 points (+0.94%) at 42,722.72 S&P 500 : +52.72 points (+0.90%) at 5,924.80...

Three US Federal Reserve officials indicated on Monday that they expect interest rates to continue declining over the next year, but stopped short of committing to a rate cut at their upcoming meeting on Dec. 17-18 . Key Remarks from Fed Officials Christopher Waller (Fed Governor) Leaning Towards a Cut : Inclined to support a rate cut in December but emphasized that his decision will depend on upcoming data, particularly on inflation and economic activity. “Policy remains significantly restrictive, and cutting again will mean pressing the brake pedal less hard,” Waller said. Inflation Concerns : Highlighted the risk of inflation stalling above the 2% target , though he sees no evidence of persistent price increases in key service categories. John Williams (New York Fed President) Cautious Approach : Stressed that the path for policy depends on data , emphasizing the uncertainty of the economic outlook . Raphael Bostic (Atlanta Fed President) Keeping Options Open : Said he would wait...

The Federal Reserve (Fed) cut interest rates by 25 basis points on Thursday, bringing the federal funds rate to a range of 4.5% to 4.75%. Fed Chair Jerome Powell confirmed he would not resign if requested by re-elected President Donald Trump, stating that Fed board leaders cannot legally be removed or demoted. Powell emphasized that the US election outcome will not impact near-term Fed policy decisions. He noted the central bank’s approach remains focused on economic stability and employment as it moves toward a neutral stance on interest rates. This marks the second consecutive rate cut after a half-point reduction in September. The Fed is taking a “measured” approach to easing, signaling no urgency for further rate cuts but remaining attentive to economic conditions . Despite Trump’s previous criticisms of Powell, the Fed chair reiterated the focus on maintaining price stability and maximum employment amidst potential fiscal changes under Trump’s new term, including aggr...

Bond investors are adopting defensive positions as uncertainty around the Federal Reserve's interest-rate cuts continues to mount. A combination of persistent inflation and weaker-than-expected labor market data has led traders to scale back expectations for further Fed easing in 2024. This shift drove Treasury yields to their highest levels since July, while volatility in the bond market , as measured by the ICE BofA Move Index , climbed to its highest point since January. Amid this uncertainty, asset managers such as BlackRock Inc. , Pacific Investment Management Co. (PIMCO) , and UBS Global Wealth Management are recommending that investors focus on five-year bonds , which offer a balance between risk and reward. Solita Marcelli , chief investment officer at UBS Global, suggests positioning portfolios in medium-term Treasuries and investment-grade corporate securities to hedge against potential economic shocks and capitalize on durable income opportunities. Investors have ...

US Federal Reserve (Fed) Chair Jerome Powell is facing an uphill battle to secure another large interest rate cut , especially as the labor market remains resilient . After the recent half-point rate reduction , which lowered the benchmark lending rate to 4.75%-5%, Powell emphasized the move was a recalibration to keep the labor market strong. This cut marked a break from the usual gradual approach of the Fed, with some officials supporting it based on inflation data showing that price growth was nearing the Fed’s 2% target . However, minutes from the meeting revealed that some officials preferred a more cautious 25-basis-point cut, indicating the Fed is not in a rush to cut rates quickly. Powell echoed this sentiment at a recent event, stating, "This is not a committee that feels like it’s in a hurry." Recent labor market data revealed a 254,000 increase in payrolls and a drop in unemployment to 4.1% , further supporting a measured approach. The Atlanta Fed’s GDP track...

Federal Reserve Chair Jerome Powell indicated on Monday that the US central bank is likely to proceed with a measured approach to interest rate cuts, emphasizing that there is no urgency to act quickly. His comments came as new data bolstered confidence in the ongoing economic growth and consumer spending. "This is not a committee that feels like it is in a hurry to cut rates quickly," Powell stated during a conference with the National Association for Business Economics . This comes after the Federal Open Market Committee's recent decision to initiate an easing cycle with a larger-than-expected half-percentage-point reduction during its meeting on September 17-18. Powell affirmed that the Fed is prepared to adjust the speed of its rate cuts to align with its goal of maintaining inflation near the 2% target while keeping unemployment low. “We will do what it takes in terms of the speed with which we move,” he said. Projected Rate Cuts and Economic Growth Despite discus...

With the Federal Reserve's recent rate cut , banks that borrowed from the Bank Term Funding Program (BTFP) , established after the collapse of Silicon Valley Bank, may start repaying their loans faster. This could lead to a drain in liquidity from the financial system, according to RBC Capital Markets strategist Izaac Brook. The BTFP , launched in 2023 to support struggling financial institutions, surged in popularity, with borrowing peaking at US$168 billion earlier this year. However, after the Fed slashed rates by half a percentage point , the program’s attractiveness has waned. Brook noted that we might soon see an increase in early loan repayments as the cost of borrowing through the BTFP is now less appealing. Many financial institutions tapped the program to take advantage of its favorable terms , which included a one-year overnight index swap rate plus 10 basis points and no penalty for early repayment . However, borrowing has since declined, with the latest data showin...

Despite the Federal Reserve's half-percentage-point interest rate cut last week, public sentiment about the economy remains uncertain. While lower rates have begun making credit cheaper for households and businesses—leading to reductions in mortgage rates and corporate bond yields —the impact has yet to be fully felt by consumers. The Fed's recent move marks the first in a series of expected rate cuts, aimed at easing credit conditions and potentially improving the financial outlook for Americans. However, it is unclear how quickly this will influence voters' perceptions ahead of the November 5 US presidential election . Inflation has dropped sharply, with the consumer price index (CPI) falling from over 9% in mid-2022 to 2.6% in August 2024. Yet, Americans like Julie Miller from Nevada, one of the battleground states, still face economic pressures. While Miller's daughter struggles to buy a home due to high prices, rising costs at places like Taco Bell have forc...

 Global equities advanced on Friday, ending a volatile week largely unchanged despite a massive sell-off earlier in the week. A series of comments from Federal Reserve policymakers expressing confidence in cooling inflation, along with a significant drop in U.S. jobless claims, helped support a stock market recovery. Key Highlights: Wall Street Recovery: The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all closed higher after a choppy trading session. Despite Monday's 3% drop in the S&P 500, which triggered a global sell-off, the indexes managed to recover some ground by the end of the week. Economic Data and Market Sentiment: Investors focused on the potential for the S&P 500 to break out of its recent trading range, but economic data was insufficient to drive a decisive move. The CBOE volatility index, Wall Street's "fear gauge," dropped significantly, indicating a return to relative calm after Monday's spike. Global Market Movements...

Federal Reserve Chair Jerome Powell will testify before Congress this week, addressing concerns about high interest rates and new bank capital requirements. This marks his last scheduled appearance before the upcoming presidential election. Interest Rates and Inflation: Powell will face pressure to cut interest rates, as some lawmakers argue that high borrowing costs are hurting consumers. Despite recent data showing inflation slowing, the labor market is cooling, with the unemployment rate rising to 4.1%. Fed Independence: Some Democrats, like Senator Elizabeth Warren, are pushing for rate cuts, while others emphasize the importance of the Fed's independence from political influence. Representative Jim Himes stressed that monetary policy should not be swayed by electoral politics. Bank Capital Requirements: Powell is also expected to face questions about increasing capital requirements for major Wall Street banks. The proposal has faced criticism from Republicans, who argue it cou...