The latest edition of our finance and property news digest with a distinctively Australian flavour. On Monday US Equity markets rose and the dollar slid, driven by the idea that China may ease COVID restrictions, the prospects of a GOP rise in the mid-terms and hopes the U.S. economy is slowing enough to allow the Federal Reserve to ease its aggressive hiking of interest rates.
While a divided Congress is typically viewed as good for markets, the hope the U.S. economy is losing enough momentum for the Fed to slow the pace of monetary tightening pushed the dollar lower, said Joe Manimbo, senior market analyst at Convera in Washington. “The market is really desperate for the Fed to pivot,” Manimbo said. “It will take anything it can get in terms of signs of a softening economy to hold out hope that a pivot might materialize sooner rather than later,” he said.
The relatively strong U.S. jobs report last week ensured the Fed will be in no rush to ease policy, though the pace of rate hikes may slow as the U.S. central banks keeps rates higher for longer, a view that pressured Treasury yields higher.
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