On Thursday, after the European Central Bank increased interest rates by a historic 75 basis points and Federal Reserve Chair Jerome Powell stated that the U.S. Inflation management was something the central bank was “seriously devoted” to.
Following the ECB news, the rates on eurozone government bonds increased. Following Powell’s comments, benchmark 10-year Treasury note rates increased and were last at 3. 32%. The yield on the two-year note rose by four basis points to 3.491%. In terms of currencies, the dollar rose against the yen due to Powell’s hawkish position, while sterling declined against the dollar following the death of Queen Elizabeth, the longest-reigning monarch in British history and the nation’s symbol for seven decades.
Following his comments, Wall Street equities initially declined, but they later turned around and ended up gaining ground thanks in large part to rate-sensitive banks and healthcare industry shares. “The MSCI world stock index surged 0.76%, while the pan-European STOXX 600 index increased by 0.50 percent. The dollar increased in nine out of the previous ten trading sessions as it increased 0. 1% to 143.96 yen in afternoon New York trade. After plummeting to a seven-month low in the previous session, crude prices increased by roughly 1%.