Dominated by news of attacks on Saudi oil processing facilities, U.S. Federal Reserve Bank repo operations and the FOMC meeting, U.S. stock markets and the U.S. dollar remained relatively calm while 10-year U.S. interest rates moved lower off their recent highs.
Despite President Trump’s tweets requesting the U.S Federal Reserve Bank dramatically lower rates, higher-than-expected CPI and PPI numbers and better-than-expected retail sales, chain-store sales, consumer sentiment and business inventories reports pushed 10-year interest rates higher by over 30bps and reduced the probability of a rate increase at this week’s FOMC meeting.
Returning Tuesday from a long holiday weekend, U.S. stock and commodity markets moved lower as global and U.S. growth concerns, prompted by tweets from President Trump, increased.
A mix of stronger-than-expected U.S. economic reports and statements from China seemingly de-escalating trade frictions moved U.S. stock markets higher while also strengthening the U.S. dollar.
U.S. stock markets and the U.S. dollar were higher through Thursday last week following the Trump administration’s positive statements and actions regarding U.S-China trade frictions and following the release of FOMC minutes and Jerome Powell’s comments at Jackson Hole confirming the U.S. Federal Reserve Bank will act to maintain economic expansion.
A volatile week for U.S. stock markets and U.S. interest rates resulting from quickly changing expectations of global growth and U.S-China trade relations.