Except Japan, Stocks Elsewhere Ended In Green

Except INR (flat), other global currencies appreciated against the dollar

Dipanwita Mazumdar

Economist,

Bank of Baroda   

Mumbai, February 7, 2024: In the recent trading session, it is reflected that investors have already priced in a late start to the rate cut cycle of Fed. Recent comments of Fed Officials (Cleveland Fed President and Minneapolis Fed President) also spoke of risks to embark too soon on the rate cut cycle, without having a full confidence on evolution of inflation to the targeted level. Thus US 10Y yield softened. Elsewhere, ECB official (Boris Vujcic) spoke of not rushing too soon to the rate cut cycle. On macro front, UK’s BRC’s sales data picked up, indicating some inflationary pressure. In Germany, factory orders inched up by 8.9%, on MoM basis (est.: -0.2%) in Dec’23. On domestic front, RBI’s policy is closely awaited.

• Except Japan, stocks elsewhere ended in green. Reports that the Chinese government may unveil further stimulus measures to stabilize the markets, led to a sharp jump in stocks in Hong Kong and China. Investors also monitored comments from Fed and ECB officials to gauge the timing and quantum of rate cuts this year, while also focusing on corporate earnings report. Sensex rose by 0.6%, led by gains in oil and gas and technology stocks. It is trading further higher today, in line with other Asian stocks.
• Except INR (flat), other global currencies appreciated against the dollar. DXY took a breather and fell by 0.2%, as investors continue to assess the timing of Fed rate cuts. GBP and JPY rose by 0.5% each. EUR rose by 0.1% as Germany’s factory orders rose unexpectedly in Dec’23. INR is trading stronger today, in line with other Asian currencies.

Except China (higher), global yields closed lower. Buying appetite for sovereign

securities increased following comments of major central bank officials which

signalled a delayed start to the easing cycle. US and UK’s 10Y yield fell the

most by 6bps, each. India’s 10Y yield closed flat. It is trading lower at 7.07%

today.

(The views expressed in this research note are personal views of the author(s) and do not necessarily reflect the views of Bank of Baroda. Nothing contained in this publication shall constitute or be deemed to constitute an offer to sell/ purchase or as an invitation or solicitation to do so for any securities of any entity.)