Sensex opened lower today in line with other Asian stocks

Better than expected initial jobless claims data of the US and hawkish commentary from Fed Chair Powell, pushed treasury yields higher and equity markets lower

Sonal Badhan,

Economist,

Bank of Baroda 

FinTech BizNews Service   

Mumbai, November 10, 2023: Better than expected initial jobless claims data of the US and hawkish commentary from Fed Chair Powell, pushed treasury yields higher and equity markets lower. Initial jobless claims for week ending 4 Nov 2023 came in at 217k (est.: 220k), versus upwardly revised 220k in claims in the previous week. Further, Fed Chair in his speech signalled that the central bank continues to maintain a tight vigil on inflation trajectory, and if needed, it will not hesitate to hike once again. Powell also signalled that rate cut should not be priced at this stage. Separately, RBA’s statement reaffirms that members are of the view that inflation is more persistent than anticipated. Inflation forecasts have thus been revised higher, assuming peak policy rate of 4.5% and 3.5% by end CY25.

• Global indices ended mixed. Investors monitored hawkish commentary by Fed Chair Powell and also closely tracked elevated treasury yields. As a result, S&P 500 snapped and lost its winning streak, ending lower by 0.8%. Sensex also ended in red and was dragged down by losses in IT and oil & gas stocks. It opened lower today in line with other Asian stocks.
• Global currencies ended mixed. DXY ended higher by 0.3% after Fed Chair expressed of not being confident if Fed has done enough to curb inflation. Thereby adding to the uncertainty to the end of rate hike cycle. INR ended flat. It is trading stronger today while other Asian currencies are trading mixed.
• Global yields closed mixed. US 10Y yield jumped the most (+13bps) following hawkish commentary from Fed Chair indicating possibility of one more rate hike in the coming months. India’s 10Y yield closed flat, despite inch up in oil prices. It is trading a tad higher at 7.29% 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.)