- The latest readings on jobs and factory-gate inflation were slightly softer than expected, giving hope to those who believe the Federal Reserve is nearing the end of an era of aggressive interest rate hikes.
- The S&P 500 gained 1.3%, while the more rate-sensitive Nasdaq 100 gained 2.0%, after US jobless claims for the week ending April 8 increased to 239,000, exceeding estimates of 235,000. Meanwhile, producer prices rose 2.7% year on year, compared to the 3% expected.
- Treasury yields increased, with the 10-year yield hovering around 3.44%. The dollar continued to lose ground against a basket of currencies, while the euro/dollar exchange rate reached a one-year high.
- The consumer inflation report released this week showed a drop in headline figures year on year, but an increase in core prices. Meanwhile, March payrolls rose at a solid pace last week, with unemployment remaining near record lows. All of this has resulted in swap markets still favouring a quarter-point hike by the Federal Reserve in May, though traders have increased their bets that the Fed will cut interest rates sooner than expected earlier in the week.
