Insight into U.S. and global markets ahead, by Mike Dolan, highlighted significant developments this week. Governor statements, along with positive economic indicators, reduced concerns over U.S. Treasury yields before Donald Trump's inauguration. This led to a decline in yields and a surge in world stocks on Friday.
Governor Waller's projection of potential interest rate cuts added to market optimism, hinting at more easing than previously anticipated. The market responded with renewed expectations of rate cuts in 2025, altering Fed futures.
Despite a tech-sector setback on Wall Street, the market showed resilience, with futures up ahead of the weekend and Martin Luther King holiday. Focus now shifts to Trump's inauguration and policy actions, particularly in the Treasury market.
Key points included Trump's Treasury Secretary nominee emphasizing the importance of maintaining Trump's tax cuts while affirming the dollar's global role and Fed independence. U.S. economic data showed mixed results, with firm retail spending and higher business confidence, while overseas, Chinese economic indicators met expectations, easing concerns about a slowdown.
In Europe, euro zone inflation was in line with forecasts, though Britain faced unexpected economic challenges. Important upcoming U.S. market events include housing and industrial data, as well as corporate earnings reports.