US and European stocks rallied yesterday in overseas markets. After a series of US bank failures, the stock of First Republic Bank, which had been the next concern, rebounded and finally bottomed out, giving the market a sense of security. In addition, although the US consumer price index was an event risk, the market reaction was relatively calm, with the year-on-year and core year-on-year growth slowing as expected.
Recently, there has been a dizzying shift in expectations for US interest rate hikes, from a 25bp hike to a 50bp hike, and some even predicting that they will remain unchanged due to financial instability. Currently, about 80% of investors are pricing in a 25bp rate hike, which is likely to become the consensus of the market. With the passing of two major events such as the US employment report and the US consumer price index, it seems that the market’s view is almost solidified.
Today, we will continue to wait for the release of a series of US economic statistics while paying close attention to whether the US financial instability has calmed down.
The US financial instability has subsided earlier than expected, but today, European stocks fell sharply due to the decline in Credit Suisse stocks and the prospect of a 50bp rate hike by the ECB tomorrow. While EUR selling is on fire, buying is gathering in GOLD and JPY, and the risk is off again.
Market volatility continues.
pay attention to the movement after the announcement of US retail sales and PPI