- Global equities fell after a slew of European central bank officials pushed back against the notion of rapid interest rate cuts, a message that Federal Reserve Chair Jerome Powell could repeat later in the day.
- Europe’s STOXX 600 traded near flat and US equity futures were little moved, as rates on 10-year Treasuries climbed by two basis points to 4.6%. The slide in oil prices also gained speed, sending WTI crude futures below $77, approaching a three-month low. The dollar firmed for the third straight day.
- Traders have been trying to predict how strongly global central bankers will push back against the decline in government bond yields, which might hamper efforts to keep inflation under control. On Wednesday, Bank of England Governor Bailey warned that it is too early to talk about rate reduction, while three eurozone rate-setters all signalled that policy will remain tight.
- Meanwhile, Fed Governor Cook warned that international tensions could have negative consequences, including increased inflation. Powell and New York Fed President John Williams are up next. They are widely expected to join other policymakers in dismissing the possibility of policy easing.
- ECB's Kazaks: We can't exclude the possibility that further rate hikes may be needed.
