April 9, 2024
United States:
State Street Sees Half-Point Fed Rate Cut as Soon as June
State Street Global Advisors is bucking the recent hawkish shift in market consensus to bet that the Federal Reserve will cut interest rates by 50 basis points as soon as June.
The $3.6 trillion asset manager thinks the Federal Reserve will front-run monetary easing ahead of the US presidential election in November. By the end of the year, the firm expects reductions to total 150 basis points — two and a half times what markets are currently pricing.
Europe:
ECB-Fed Split Ignites Talk of Euro Sliding to Dollar Parity
Talk of the euro touching parity with the dollar is returning as policymakers at the European Central Bank look primed to deliver more interest-rate cuts this year than their US peers.
Lenders including Bank of America Corp. and Germany’s LBBW are wargaming a variety of tail risks and warn of euro weakness ahead if wagers on the differing pace of rate cuts at the ECB and the Federal Reserve play out. Geoffrey Yu, a senior strategist at Bank of New York Mellon, says the euro could touch parity with the dollar this year and doesn’t rule out a cut by the ECB on Thursday.
Asia:
India May Devote More Sugar to Ethanol in Blow to Export Hopes
India may allow sugar mills to use more of the sweetener to make ethanol, in a move likely to reduce the odds of easing export curbs any time soon, according to a person familiar with the matter.
The government is considering a proposal to permit factories to use an additional 800,000 tons of sugar for biofuel this year, as the crop is likely to be higher than predicted, said the person, who asked not to be identified as the talks are confidential. That would be on top of 1.7 million tons allocated earlier.
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