Sign in
From ripple effects across the pond to indications of further potentially big rate cuts, interest rates are still top of mind on Planet Finance everywhere.
#1- US Federal Reserve officials signaled the possibility of more big rate cuts this year, with Chicago Fed President Austan Goolsbee saying at a Q&A that the current benchmark interest rate was “hundreds” of basis points above the neutral level, also known as the “r-star,” Bloomberg reports.
#2- In the wake of the Fed’s rate cut, forecasts for the USD weaken, as investors look towards the GBP. Goldman Sachs sees the GBP hitting USD 1.40 within a year, up from USD 1.32 previously, Bloomberg reports. This optimism is linked to the Bank of England’s measured stance on rate cuts and solid UK economic growth. So far this year, the GBP has appreciated 4.5%, making it the best-performing currency in the G10.
On the flip side, Goldman downgraded its USD forecasts against several currencies following the rate cut as lower yields are expected to shift interest away, including the JPY and EUR.
#3- Meanwhile, the European Central Bank (ECB) is facing mounting pressure to act amid signs of economic stagnation, with more investors now pricing in a potential rate cut next meeting after the eurozone’s PMI fell to 48.9, into contraction territory, Bloomberg reported separately.
MARKETS THIS MORNING-
Chinese stocks are rallying after China’s central bank announced a slew of support measures, including cutting banks’ reserve ratio and signaling rate cuts, as it looks to boost economic growth. Hong Kong’s Hang Seng index was up 2.35% on its open, while the mainland Chinese CSI 300 was up 1%. Meanwhile, Japan’s Nikkei is also up 1.37%, while the Topix gained 1%.
Wall Street futures are little changed this morning, with the Dow and Nasdaq both slipping marginally.
|
ADX |
9,454 |
+0.2% (YTD: -1.3%) |
|
|
DFM |
4,434 |
-0.1% (YTD: +9.2%) |
|
|
Nasdaq Dubai UAE20 |
3,863 |
-0.5% (YTD: +0.5%) |
|
|
USD : AED CBUAE |
Buy 3.67 |
Sell 3.67 |
|
|
EIBOR |
4.9% o/n |
4.1% 1 yr |
|
|
Tadawul |
12,130 |
+0.4% (YTD: +1.4%) |
|
|
EGX30 |
31,023 |
-0.1% (YTD: +24.6%) |
|
|
S&P 500 |
5,719 |
+0.3% (YTD: +19.9%) |
|
|
FTSE 100 |
8,560 |
+0.4% (YTD: +6.8%) |
|
|
Euro Stoxx 50 |
4,886 |
+0.3% (YTD: +8.1%) |
|
|
Brent crude |
USD 74.27 |
-0.3% |
|
|
Natural gas (Nymex) |
USD 2.61 |
+7.4% |
|
|
Gold |
USD 2,652.10 |
+0.2% |
|
|
BTC |
USD 63,315.50 |
+0.2% (YTD: +49.9%) |
THE CLOSING BELL-
The DFM fell 0.1% yesterday on turnover of AED 297.2 mn. The index is up 9.2% YTD.
In the green: Orascom Construction (+3.0%), GFH Financial Group (+1.6%) and Dubai Taxi Company (+1.6%).
In the red: International Financial Advisors (-10.0%), Shuaa Capital (-6.4%) and Takaful Emarat (-5.9%).
Over on the ADX, the index closed up 0.2% on turnover of AED 1.5 bn. Meanwhile Nasdaq Dubai closed down 0.5%.
CORPORATE ACTIONS-
Adnoc Distribution will distribute AED 1.29 bn in interim dividends for 1H 2024, with the second dividend expected to be paid in April 2025, according to an ADX disclosure (pdf). The company approved earlier this year a new five-year dividend policy that will see it shell out USD 700 mn or a minimum of 75% of net income, whichever is higher, from 2024 to 2028.
