Bonds & Stocks
Treasury futures off lows into early US session, although cash yields remain cheaper by up to 6bp across front-end of the curve after comments from Fed’s Waller after Wednesday’s close, who said that data warrants fewer cuts or a later start to monetary-policy easing. Additional hawkish comments seen from BOE’s Haskel in early London session, who said rate cuts are a long way off, according to a Financial Times report. US session focus includes GDP, jobless claims data in a shortened trading day, with SIFMA recommending a 2pm New York cash close.
Economy
Downside surprises in February’s headline PCE price index were dulled by upward revisions to the January data. Still, core inflation cooled as Fed Chairman Jerome Powell expected, based on his comments following the March FOMC meeting. With personal spending accelerating and income growth slowing, the personal saving rate reached its lowest level since December 2022. The spending outlook now hinges partly on how much momentum can be maintained in the labor market.
World
Consumer price growth in Tokyo moderated while staying well above the central bank’s inflation target, keeping authorities on track to consider more interest rate increases after they hiked earlier this month for the first time since 2007. Prices excluding fresh food rose 2.4% in March in the capital, slowing slightly from 2.5% in February, the ministry of internal affairs said Friday. The reading matched economists’ estimates.