Central Bankers Remain Split on Interest Rate Cuts

US markets appear ready to pick up where they left off on Tuesday. Index futures are trading flat to up 0.5%, with NASDAQ futures leading the way higher, a sign that investors remain particularly focused on large cap Technology stocks. European markets are also climbing today with the FTSE up 0.3% and the Dax up 0.5%.

Three interest rate decisions overnight and this morning indicate that central bankers remain split on what to do about interest rates in the current stagflationary environment. The Swiss National Bank cut its benchmark rate by 0.25% to 1.25% as expected. The Bank of England and the Peoples Bank of China held their rates steady. This now brings the score this month to 4 of the major central banks staying on hold compared to 3 central banks who cut rates.

Metals are climbing this morning with Copper up 1.4% and Gold up 0.2%. Energy has softened with US Crude Oil steady and Natural Gas down 2.5%. Cryptos are up again with Bitcoin climbing 1.8%. Housing data dominates this morning’s news flow. US housing starts came in soft (1.27M vs street 1.37M) confirming yesterday’s decline in the NAHB housing market index. Canada new house prices increased in line with expectations.

In other news, US jobless claims were worse than expected (238K vs street 235K). The Philadelphia Fed Manufacturing Index was worse than expected (1.3 vs street 5.0). Tomorrow brings flash Manufacturing PMI and Flash Service PMI reports from around the world.

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