Global markets are recalibrating amid uncertainty over central bank rate paths following a tumultuous week marked by policy decisions that have left investors on edge. The dollar weakened against major currencies, including the yen. A Thursday summary of opinions from the Bank of Japan’s recent meeting, where rates were raised, revealed divergent views among members—one pinpointing the neutral rate at 1%, while another advocated for timely rate hikes to avoid abrupt increases. Investors are keenly awaiting US jobless claims data on Thursday for further insights.
Markets have been in turmoil since last week’s weak economic data stoked fears that the Federal Reserve’s decision to maintain rates at a two-decade high could trigger a deeper economic slowdown.
Analysts from SARACEN MARKETS describe the current period as a consolidation phase, with investors likely remaining cautious until new data emerges. The upcoming days are critical; they will either restore calm or unleash a new wave of volatility.
The dollar’s decline on Thursday reversed gains from the previous session, influenced by tepid demand for a 10-year Treasury auction and substantial debt offerings totaling $31.8 billion from blue-chip companies. The auction’s outcome aligns with expectations of a near-term correction higher in yields.
Oil prices stabilized after experiencing their biggest advance in a week, with the market on high alert over potential retaliatory actions by Iran against Israel following the assassinations of Hamas and Hezbollah leaders.