US equities were lower on Thursday, as further Fed speakers added to recent hawkish rhetoric.
United States
Speaking on Thursday, New York Fed President Jonh Williams said that while it is not their baseline case, it is possible if warranted to increase rates further. Adding to these, Minneapolis Fed President Neel Kashkari noted the Fed could potentially wait until 2025 before lowering rates. Ralphael Bostic of the Atlanta Fed also added they are comfortable keeping interest rates steady, and that he does not think it is appropriate to lower rates until towards the end of the year. Treasury yields were higher with the 2-year rate up 5.4 basis points to 4.986% while the 10-year yield rose 4.7 basis points, strengthening the US dollar index by 0.21%.
In economic data, the Conference Board’s leading index for March declined -0.3% below expectations of a -0.1% decrease, while initial jobless claims for the week ending April 13th were in line with expectations at 212k. The rise in bond yields again weighed on equities, with the S&P500 down -0.22% along with the Nasdaq Composite -0.52% and Russell 2000 -0.26%.
Europe
European equities finished the session slightly higher, although there was no major data to guide investors who are now focused on quarterly earnings. The Euro Stoxx 600 rose 0.24% along with the DAX 0.38%, CAC 0.52% and FTSE100 0.37%. Expectations for first-quarter earnings to have declined -11% over the 12 months.
Australia
The ASX is expected to open weaker this morning, with ASX200 futures down -55 points or -0.72% to 7,612. The index rose 0.48% on Thursday with the majority of sectors higher as materials 0.99% and financials 0.66% contributed the most to gains. The Australian dollar was modestly lower on Thursday by -0.22% to 0.6421 after the number of employed in March decreased -6.6k compared to estimates of a 7.2k increase, with the unemployment rate rising to 3.8% from 3.7% previously.
Australian Employment (MoM)
Commodities
Oil prices were slightly lower overnight with both WTI and Brent crude down just -0.13% and -0.45% respectively. While iron ore futures rose 1.27% on Thursday, they have given up those gains this morning trading -1.92% lower at US$114.60 while copper finished 2.09% higher. Gold rose 0.76% on Thursday to US$2,379 an oz, while silver edged up 0.08% and Bitcoin climbed 4.39% to US$63,528.
Economic Calendar
Japan Inflation (YoY Mar) 09:30
UK Retail Sales (YoY Mar) 16:00
Fed Goolsbee Speech 00:30
This article was written by James Woods, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
