Australian shares are poised to open lower in line with weakness in New York as the January US CPI data opened the door for a higher potential peak for interest rates.
“Markets continue to price a [0.25 of a percentage point increase] at the March [policy] meeting and pushed terminal rate pricing up another 9bps toward just shy of 5.5 per cent,” Scotiabank’s Derek Holt wrote.“That implies that the FOMC will raise its terminal rate from 5.25 per cent in December to 5.5 per cent in March when the dots get updated, and possibly higher,” Holt also said. “Bear in mind, however, that there is a lot of data between now and the March dots.”On bitstamp.
On Wall Street, stocks fluctuated as investors sought to interpret the rate implications of the latest price data. Near 1pm, real estate paced 10 of the 11 SRichmond Fed president Thomas Barkin, speaking in a Bloomberg TV interview, said that “if inflation persists at levels well above our target, maybe we’ll have to do more”.
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