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Oil's flagging, euro-area inflation hits the 2 percent target, and the stars align around a March increase for the Fed. Here are some of the things people in markets are talking about today.
The dollar strengthened overnight as the hitherto dovish Lael Brainard became the latest Federal Reserve official to suggest conditions may "soon" be propitious for raising rates. Options traders scrambling to price in a March hike exchanged a record volume of Fed futures contracts yesterday, while those expectations are also having impacts farther afield. Check out emerging-market borrowers, who are selling bonds at an unprecedented pace ahead of the anticipated increase. As of 4 a.m. Eastern Time, the Bloomberg Dollar Spot Index was gaining for a fifth day, up against every G-10 currency this week.
Euro-area inflation, out at 5 a.m. Eastern Time, accelerated to its fastest pace since January 2013. Analysts had expected it to hit the 2 percent mark, but doing so may still provide ammunition to those calling for an exit from the European Central Bank’s monetary stimulus program. The bank's latest projections foresee an average inflation rate of 1.3 percent this year. It will have the chance to update that forecast when its Governing Council meets next week.
Outside Europe, stocks are on a giddy tear, as growth-optimism mounts — even if it definitely wasn't today's Swiss GDP print that gave them that feeling. Stock gauges worldwide chalked up a handful of bullish levels: U.S. and U.K. indexes set records on Wednesday, Japanese stocks jumped to the highest since December 2015 today, while European stocks were fluctuating after closing at the highest level in more than a year the day before.
By coincidence, both oil and the pound are mired in their longest losing streaks in two months. By 4:55 a.m., oil was sliding for a third day as record-high U.S. crude stockpiles were seen jeopardizing OPEC’s efforts to drain a global surplus, even while Saudi Arabia's February shipments fell. In newly released U.K. data, a gauge of construction-industry demand dropped for a second month in February. Prime Minister Theresa May vowed to have another go, after her Brexit bill was defeated in Parliament's second chamber on Wednesday.
Snap Inc., the Los Angeles-based maker of disappearing photo technology favored by millennials, will start trading on the New York Stock Exchange today. Having priced shares above the marketed range, the company's going public at a valuation more than twice that of Facebook Inc. and four times more than Twitter Inc. Demand outpaced the number of shares being offered by a multiple of 10, people familiar with the situation said.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Ray Dalio's unorthodox culture.
- No specifics = no problem for market bulls still bent on reflation.
- Investors are starting to pay attention to Chinese politics again.
- Someone should tell U.K. bonds their friends are leaving.
- Saudi pitch to fund titans: We have $2 trillion, we need your expertise.
- Here's how long it takes to earn your breakfast around the world.
- Republicans hide the new Obamacare draft under a shroud of secrecy.