Europe Asia News

Last week’s weak inflation data strengthened expectations that the Federal Reserve will cut interest rates. Markets are currently anticipating a rate cut in June and pricing in around 62 basis points of easing in total this year.

This implies two quarter-point cuts and roughly a 50% probability of a third cut. However, employment data that exceeded expectations and marked the strongest increase in more than a year, along with a surprise decline in the unemployment rate, indicated that the labor market has stabilized.

Investors are now awaiting the minutes of the Fed’s latest meeting, preliminary GDP data, and the core personal consumption expenditures (PCE) price index—the central bank’s preferred inflation gauge—for further guidance.

U.S. bond markets were closed on Monday due to the Presidents’ Day holiday.