• Wed. Feb 21st, 2024
Morning Bid: Market Level, Aussie Hikes, Crypto Judders

A look at the day ahead in US and global markets from Mike Dolan

As world stock markets were flat on Tuesday, Australia dashed hopes that central banks might be poised to pause the interest rate hike cycle, the crypto universe dealt its latest blow and Apple sank overnight.

A relatively quiet week for US macroeconomic and market news, with investors resting on the assumption that the Federal Reserve will avoid a rate hike at next week’s policy meeting, while considering a final hike in next month’s campaign. May’s soft services sector surveys underscore that notion.

However, the Reserve Bank of Australia was not about to hold back. It raised interest rates to an 11-year high on Tuesday and warned that more tightening would be needed to ensure inflation returns to target, lifting the Aussie dollar as markets lean toward a pause.

Investors will be briefed on the Bank of Canada’s latest policy decision on Wednesday, with many predicting a resumption of interest rate tightening after a four-month hiatus.

Stock and bond markets, however, remained calm. S&P500 futures were mostly flat after a mixed start to the week.

Apple’s AAPL.O stock pulled back a touch after hitting a record high on Monday, just ahead of the launch of its new gadget.

In its riskiest bet since the introduction of the iPhone more than a decade ago, the company released a pricey augmented-reality headset called the Vision Pro.

The Vision Pro will start at $3,499, more than triple the price of the most expensive headset in Meta’s line of mixed and virtual reality devices.

The crypto world was far from calm, with Bitcoin struggling to find its feet after retreating 5% to a three-month low on Monday.

U.S. regulators sued Binance and its CEO Changpeng Zhao on Monday for allegedly running a “web of fraud,” putting further pressure on the world’s largest cryptocurrency exchange.

The Securities and Exchange Commission complaint alleges 13 charges against Binance, Zhao and the operator of the supposedly independent US exchange. Binance said it respectfully disagrees with the SEC’s allegations.

But investors pulled about $790 million from the exchange and its U.S. affiliate in the past 24 hours, data firm Nansen said on Tuesday.

Oil retreated sharply again despite Saudi Arabia’s plans to cut crude output again over the weekend, with many analysts seeing the solo move as a reflection of disagreements within the OPEC cartel.

The euro and euro debt yields retreated on surveys that showed domestic inflation expectations in the bloc were falling.

The yuan fell after reports that Chinese authorities asked the country’s biggest banks to cut deposit rates for at least the second time in a year in an effort to boost the economy.

Overall the dollar was marginally firmer.

Events to watch later on Tuesday:

* US Secretary of State Anthony Blinken visits Saudi Arabia

* US Corporate Income: JM Smucker

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By Mike Dolan, Editing XXXX mike.dolan@thomsonreuters.com. Twitter: @reutersMikeD

Our standards: Thomson Reuters Trust Principles.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and freedom from bias under the Trust Principles.

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