Fixed Income:
In New York trade, U.S. Treasury yields experienced a slight decline and remained stable in Asia. Two-year yields stood at 4.59%, while 10-year yields were at 4.26%. The Federal Reserve maintained U.S. rates between 5.25% and 5.5% overnight, as anticipated, while raising inflation forecasts. The projection for three 25 basis point rate cuts this year remained unchanged from December.
Equities:
Asian shares rebounded, with gold prices and Japan’s Nikkei reaching record highs on Thursday following the U.S. Federal Reserve’s indication of adhering to interest rate reduction plans. Japan’s Nikkei surged by 1.5% to surpass 40,000 in early trading, while MSCI’s broadest index of Asia-Pacific shares outside Japan increased by 1.6%.
Forex:
The U.S. dollar experienced a slight decline as traders marginally raised their expectations for a U.S. rate cut in June. Against major peers, the dollar, which had previously strengthened amidst concerns of a more hawkish Fed stance, weakened, leading to a rise in the yen to 150.45 per dollar from near multi-decade lows. The euro traded at a week high of $1.0939 in Asia, while the Australian dollar surged to a one-week high following a robust jobs report that dispelled talks of early policy easing.
Commodities:
Gold, although slightly lower than its early spike, remained at $2,200 an ounce, marking a 7% increase this year. Spot gold reached a record high of $2,222 an ounce, benefiting from lower interest rates as bond yields declined. Brent crude futures remained steady at $86.34 a barrel.
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