Markets Stabilize as Focus Turns to Central Banks

There were no major new developments in the Middle East overnight, so investors’ focus has now turned to central banks with three interest rate decisions due over the next 24 hours. The Fed is expected to announce that it is holding the Fed Funds rate steady at 4.50% at 2:00 pm EDT, leaving investors to focus on the statement and FOMC member projections for hints on the future trend of interest rates amid ongoing tariff trade tensions and signs of slowing in the US economy such as yesterday’s disappointing US retail sales report.

The final economic reports before the decision were mixed. US housing starts (1.25M vs Street 1.36M) were disappointing while weekly jobless claims (245K vs previous 250K) showed improvement.  The US 10-year Treasury note yield has dropped toward 4.35% ahead of today’s news.

Also today, Bank of Canada Governor Macklem is speaking at 11:30 am EDT and several ECB officials are holding a panel discussion. Tomorrow morning, the Swiss National Bank is expected to cut its benchmark rate by 0.25% to 0.00%, while the Bank of England is expected to stay the course at 4.25%.

US index futures are trading flat to up 0.2%, stabilizing after US indices fell 0.7% to 1.0% yesterday. European action is mixed with the Dax down 0.2% and the FTSE up 0.1%. With a gain of 0.6%, Crude Oil is back above $75.00/bbl. Copper is up 0.9%. Gold is steady near $3,400/oz. Bitcoin is down 0.3%.

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