Il moment is critical and the markets are frozen pending the announcement this evening from the Fed of its rate decision, which will be followed by similar moves this week by the Bank of England and the Bank of Japan that could reshape the monetary policy outlook for the rest of 2026. In the Asian markets, the Kospi bounces slightly, while the performance of the 10-year US government bonds, falling back below 5% thanks also to a slowdown in the price of oil.
The Fed is expected to raise rates for the first time in three years. But the question is whether this will be just the beginning.
Following the data on theinflation highs published last week and the nearly 25% jump in prices Petroleum U.S. crude oil over the past two weeks, financial markets have priced in a very high probability (94,5%) of a rate hike tonight at the close of trading. Fed monetary policy meeting, bringing them into a range between 3,75% and 4,00%. The unknown is whether this will be an isolated increase, or rather the beginning of a a series of increases in relation to the continuation of the war and the rising price of oil. Therefore, attention will be focused on the next press conference by Fed Chairman Kevin Warsh. President Donald Trump Trump he has repeatedly expressed his preference for lower interest rates, saying last month that the United States will halt trade with countries with which it has a trade deficit if the Federal Reserve doesn't cut rates. This means there's a collision course between Warsh and Trump. But analysts say that if the Fed were to keep rates unchanged, markets would collapse.
Yesterday, Wall Street extended its sell-off. The Senate failed to pass a cryptocurrency bill, and the sector collapsed.
IERI (Yesterday) Wall Street extended the sell-off as investors worried about theincrease in returns of U.S. Treasury securities, the high debt and the surge in prices of Petroleum. The Dow Jones closed at -0,63%, S & P 500 at -0,45%, Nasdaq at -0,78. The only sector to survive was the energy sector.
Wall Street, like all markets, is awaiting the Fed's decision. Prices have already priced in a 25 basis point increase. Some analysts say that if no increase materializes and bond yields extend their rally due to higher inflation expectations, the S&P 500 could fall another 1,25%-1,75%.
OpenAI has begun preliminary discussions with investors for a new funding round that would value the ChatGPT creator to over $1.200 trillion, ahead of a possible initial public offering. Mark Zuckerberg, CEO of Meta Platforms, said AI labs should rely on independent evaluators and consultants to ensure the safety of models. JPMorgan Chase & Co. expects trading revenue and investment banking fees to rise in the third quarter, a stark contrast to a warning issued by Bank of America Corp. earlier this week.
Il yield on securities The 10-year U.S. Treasury note reached 5,041%, its highest level since 2007, before retracing. The average 10-year yield on G7 countries reached 4,285%, the highest level since financial crisis of 2008 and one percentage point higher than before the start of the war with Iran. U.S. Treasury Secretary Scott Bessent said Tuesday that the rise in bond yields was due to "global problems," but did not provide further details on the specific causes. Rising interest rates are increasing the pressure on companies heavily indebted, including those that have invested large sums inartificial intelligenceAdding to these concerns are growing fears about the disruptive potential of AI, which are driving a slowdown in data center construction, culminating on Monday.
Il bitcoin, which had already suffered losses in the past few days, fell further after the Senate The U.S. House of Representatives has failed to pass Trump's long-awaited cryptocurrency legislation, a blow to digital asset companies. Coinbase: e Strategy fell by 10,1% and 5,4% respectively.
Asia attempts a recovery led by the Kospi (+0,9%)
Asian stock markets recorded a slight increase, thanks to a lull in the global sell-off of bonds and the fall in prices of Petroleum, which helped calm tempers ahead of the Federal Reserve's decision. After a shaky start, MSCI's broadest index of Asia-Pacific stocks rose 0,5%, breaking a four-day losing streak, with the Kospi South Korea leads with a +0,9%. Nikkei 225 rose 0,4%.
Il yield on securities The 10-year U.S. Treasury yield is at 4,9938% after attempting to retest the 5% threshold, which it surpassed yesterday for the first time in three years. Government bonds in Australia, Japan, and New Zealand are also recovering. The U.S. Treasury index dollar The U.S. dollar, which measures the greenback's strength against a basket of six currencies, fell 0,1% to 99,601 after nearing a two-week high.
The prices of Petroleum Crude oil fell in Asian trading, with Brent crude futures falling 0,6% to $108,13 a barrel after rising 2,9% on Tuesday, following shipping industry sources saying crude cargoes at the Saudi export hub of Yanbu on the Red Sea had been suspended and Riyadh had cancelled some cargo deliveries to European customers. cryptocurrency They recovered slightly from the collapse that followed the US Senate's vote against the cryptocurrency bill. Bitcoin lost 0,1% to $75.821,94, while Ether fell 0,2% to $2.402,12.'gold rose to around $4.330 an ounce after two days of losses.
European stocks opened slightly higher. At the Milan Stock Exchange, Stellantis and Campari were all eyes on the stock market.
European markets are expected to rise at the open. Euro Stoxx 50 futures are up 0,2%.
CampariDeutsche Bank raised its recommendation to Buy from Hold. The target price is €7,10, up from €6,20.
Eni. It has signed a memorandum of understanding with Senegal to initiate preliminary studies and evaluate the potential of five offshore blocks. The Senegalese Energy Minister announced this.
Intesa Sanpaolo – MPS. The Antitrust Authority has opened an investigation into Intesa Sanpaolo's takeover bid for Monte dei Paschi di Siena.
StellantisBerenberg cut its rating from Buy to Hold, with a target price of €5,10 from €7,80.
UnicreditCEO Andrea Orcel wants Bettina Orlopp to step down as CEO of Commerzbank and opposes the German government's request to continue having two representatives on the supervisory board, three sources familiar with the matter told Reuters. UniCredit also wants Commerzbank Chairman Jens Weidmann to step down.
