From Marc to Market:
Overview: The Fed's hawkish hold and signal that it may raise rates two more time this year sent ripples through the capital markets. Risk appetites have been dealt a blow. However, China's rate cut and likely additional supportive measures after disappointing data, helped lift the CSI 300 by 1.6%, the most this year. The Hang Seng rose by nearly 2.2%, the most in three months. Europe's Stoxx 600 is snapping a three-day advance and US index futures are trading lower. European bond yields are mostly 4-7 bp higher ahead of the ECB meeting, which is expected to deliver a rate hike and confirm its intentions to lift rates more. The US 10-year yield is up a couple of basis points to a little below 3.81%, while the two-year yield is up almost four basis point to nearly 4.73%.
Rising US rates helped lift the dollar to a new high for the year against the Japanese yen, and the second quarterly contraction in New Zealand (-0.1% in Q1 23 after -0.7% in Q4 22) weighed on the Kiwi. More broadly, the greenback is mixed now mostly inside yesterday's ranges. Most emerging market currencies, outside of a few central European currencies and the Chinese yuan, are sporting softer profiles today. Rising yields took a toll on gold, which slipped below $1930 to its lowest level since late March. A large build of US crude inventories is helping to keep WTI on the defensive. July WTI traded below $68 a barrel today before stabilizing. It has not settled above $70 a barrel this week.....
....The PBOC delivered a small cut in the benchmark one-year medium-term lending facility. The 10 bp cut brings the MLF rate to 2.65% and the PBOC also increased the volume to CNY237 bln from CNY125 in May. This was widely anticipated after the banks cut their deposit rates (in response to official requests) and the PBOC cut the seven-day repo rate. There is still scope to reduce reserve requirements as well. The government is believed to be working on other measures to support the economy and property market. Separately, China disappointing industrial output figures (unchanged at 3.6% year-to-date, year-over-year) and while retail sales improved, it was by less than expected. Fixed asset investment was weaker than expected and residential property sales contracted at a faster pace.....
....MUCH MORE
