Stocks soothed by Fed signals ahead of Apple earnings

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LONDON, May 2 - World markets showed relief on Thursday after the Federal Reserve shot down talk of more interest rate hikes, while the yen backpeddled after another suspected bout of FX intervention and Apple earnings were looming large for Wall Street.

He also said the Fed would scale back the pace of quantitative tightening or 'QT' of its balance sheet starting on June 1, allowing only $25 billion in Treasury bonds to run off each month versus the current $60 billion. Shortly after Powell had finished telling reporters the Fed may have to leave rates elevated, the Japanese currency surged against the dollar in its second suspected intervention-fuelled leap of the week.

European dealers had nudged the euro up as much as 0.1% to $1.0727 despite data showing a deepening downturn in euro zone manufacturing activity. Analysts on average see iPhone sales, which account for about half of Apple's revenue, falling 10.4% in the first three months of 2024, according to LSEG. That drop would be the steepest in more than three years.

Ten-year Treasury yields rose 2.3 basis points to 4.611% in Tokyo and Europe, having fallen 9.3 bps in New York on Thursday. Two-year yields , which fell more than 10 bps in New York overnight, rose 1 bp to 4.9497%.

 

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