US interest rates fall – the krona strengthens against the dollar
American interest rates fell after the Swedish closing yesterday, while the dollar has become somewhat weaker against both the yen and the euro. Oil futures continue to rise after the announcement that Opec+ is cutting its production. The krone is 8 öre stronger against the dollar and just over 2 öre stronger against the euro.
Early Thursday morning the two-year US yield is down 5 basis points to 4.15 percent, while the ten-year yield is 4 basis points lower at 3.74 percent.
Hopes that the US labor market is cooling were clouded on Wednesday afternoon, after a slightly higher than expected ISM report showed a rise in the employment index for the services sector.
“Optimism that bolstered financial markets earlier this week waned as US data continued to point to the need for further, decisive action from the central bank,” analysts at ANZ told Reuters.
“Attention is now firmly focused on the September jobs report… The market needs to brace itself for a strong number,” ANZ added.
Atlanta Fed chief Raphael Bostic, said on Wednesday that he advocated raising rates to 4.5 percent by the end of the year, an additional 125 basis points of tightening, before pausing thereafter. His counterpart in San Francisco, Mary Daly, warned to expect some rate cuts in 2023.
“Inflation fears can be subdued, but then they turn into growth fears and that becomes a problem for corporate earnings,” said Emily Roland, investment strategist at John Hancock Investment Management, in an interview with Bloomberg TV.
“Even if interest rates actually fall, it’s probably too early to say give the go-ahead for stocks,” she continued.
This afternoon it will be US data in the form of Challenger’s notification statistics and the weekly figures on the number of newly registered unemployed.
Fed representatives Charles Evans, Lisa Cook and Loretta Mester are scheduled to speak at various events on Thursday.
Asian markets are mixed on Thursday, Japanese interest rates are steady and the yen has strengthened slightly against the dollar.
China is still closed on weekends.
Late on Wednesday, North Korea fired two more ballistic missiles, which was condemned by Japan, South Korea and the United States.
On the foreign exchange market, the dollar is now trading around 144:6 against the yen, compared to 144:7 at the Swedish close yesterday, while the euro has strengthened to 0:992 against the dollar (0:985).
The krone is 8 öre stronger against the dollar and just over 2 öre stronger against the euro.
Deputy Governor of the Riksbank Martin In an interview with Svenska Dagbladet, Flodén defends the Riksbank’s shock therapy and says that the krona is “unreasonably weak”.
On Thursday’s European macro agenda, we find, among other things, the CPI from the Netherlands, industrial orders from Germany and from the euro area retail sales in August.
The ECB publishes the minutes of the latest interest rate meeting shortly after lunch.
Here at home, a lot of Statistics Sweden’s statistics await, such as the GDP indicator, industrial orders, production value index and household consumption.