English
Back
Open Account
Inflation heats up, central banks turn hawkish! Is the wind changing for gold prices?
真灼财经
joined discussion · Feb 20 16:44

[Zhenzhuo Finance] Fed's hawkish meeting minutes; focus on US GDP data

The Fed's meeting minutes released a hawkish signal, with several policymakers hinting at the possibility of considering an interest rate hike. The latest unemployment benefits data also showed stabilization in the labor market, with attention now on the initial Q4 GDP figures to be released by the US on Friday.
Overnight Highlights
The S&P 500 index fell as Trump increased pressure on Iran, intensifying geopolitical concerns. Treasury prices edged up, with strong performance in inflation-protected bond auctions, allowing long-term bonds to recover losses. The US Dollar Index rose for the fourth consecutive session, while unemployment claims data suggested an optimistic economic environment. WTI crude oil futures reached their highest level since August of the previous year amid growing concerns over the situation in Iran. Spot gold and silver prices moved higher, while most London industrial metals declined.
The Fed's meeting minutes released a hawkish signal, with several policymakers hinting at the possibility of considering an interest rate hike. The latest unemployment benefits data also showed stabilization in the labor market, with attention now on the initial Q4 GDP figures to be released by the US on Friday. Overnight Highlights The S&P 500 index fell as Trump increased pressure on Iran, intensifying geopolitical concerns. Treasury prices edged up, with strong performance in inflation-protected bond auctions, allowing long-term bonds to recover losses. The US Dollar Index rose for the fourth consecutive session, while unemployment claims data suggested an optimistic economic environment. WTI crude oil futures reached their highest level since August of the previous year amid growing concerns over the situation in Iran. Spot gold and silver prices moved higher, while most London industrial metals declined. International News US industrial production in January saw its largest increase in nearly a year. The Fed’s meeting minutes from the same month issued a hawkish signal, with several policymakers suggesting that if inflation remains persistently above target, interest rates may need to be raised. A productivity boom driven by artificial intelligence could push up the neutral interest rate level. Last week, the number of Americans filing first-time claims for unemployment benefits recorded the biggest drop since November. Fed Governor Milan stated that as the labor market improves, the number of rate cuts this year will be fewer than expected. Overseas investors net purchased $1.55 trillion worth of long-term US financial assets last year, with nearly $409 billion flowing into US Treasuries. In contrast, China sold off its holdings, reducing its position in US Treasuries to the lowest level since 2008 by the end of last year. The US trade deficit widened in December, making the annual trade deficit one of the largest since 1960, but the trade gap with China narrowed to the smallest in over two decades...
The Fed's meeting minutes released a hawkish signal, with several policymakers hinting at the possibility of considering an interest rate hike. The latest unemployment benefits data also showed stabilization in the labor market, with attention now on the initial Q4 GDP figures to be released by the US on Friday. Overnight Highlights The S&P 500 index fell as Trump increased pressure on Iran, intensifying geopolitical concerns. Treasury prices edged up, with strong performance in inflation-protected bond auctions, allowing long-term bonds to recover losses. The US Dollar Index rose for the fourth consecutive session, while unemployment claims data suggested an optimistic economic environment. WTI crude oil futures reached their highest level since August of the previous year amid growing concerns over the situation in Iran. Spot gold and silver prices moved higher, while most London industrial metals declined. International News US industrial production in January saw its largest increase in nearly a year. The Fed’s meeting minutes from the same month issued a hawkish signal, with several policymakers suggesting that if inflation remains persistently above target, interest rates may need to be raised. A productivity boom driven by artificial intelligence could push up the neutral interest rate level. Last week, the number of Americans filing first-time claims for unemployment benefits recorded the biggest drop since November. Fed Governor Milan stated that as the labor market improves, the number of rate cuts this year will be fewer than expected. Overseas investors net purchased $1.55 trillion worth of long-term US financial assets last year, with nearly $409 billion flowing into US Treasuries. In contrast, China sold off its holdings, reducing its position in US Treasuries to the lowest level since 2008 by the end of last year. The US trade deficit widened in December, making the annual trade deficit one of the largest since 1960, but the trade gap with China narrowed to the smallest in over two decades...
International News
US January industrial output recorded the largest increase in nearly a year. The minutes from the Fed's meeting that same month sent a hawkish signal, with several policymakers suggesting that if inflation remains persistently above target, interest rates may need to be raised. A productivity boom driven by artificial intelligence could push up the neutral rate level.
The number of Americans filing first-time unemployment claims last week recorded the largest drop since November. Fed Governor Milan stated that as the labor market improves, there will be fewer interest rate cuts this year than expected.
Overseas investors net purchased $1.55 trillion in US long-term financial assets last year, with nearly $409 billion flowing into US Treasuries. In contrast, China sold off its holdings, bringing its Treasury position down to the lowest level since 2008 by the end of last year.
The US trade deficit widened in December, with the annual deficit being one of the largest since 1960. However, the trade gap with China narrowed to its lowest level in over two decades.
Sanae Takai officially re-elected as Japan’s Prime Minister and is expected to accelerate budget deliberations. The International Monetary Fund urged Japan to avoid cutting consumption tax, warning that it could exacerbate fiscal risks. Former Bank of Japan board member Seiji Adachi expects the central bank to raise rates in April. See: 'Market Review: Fiscal Discipline Rebalancing and Yen Value Restoration.'
Progress has been made on the US-Japan economic agreement, with Japan set to invest $36 billion in US energy and critical mineral projects. Thanks to surging exports to China and the EU, Japan’s January export growth hit the fastest pace in more than three years.
According to the Financial Times, European Central Bank President Lagarde may step down early. Germany hinted at potentially backing a domestic candidate for the central bank governor role.
The Reserve Bank of New Zealand kept interest rates unchanged but signaled a potential hike later this year to address inflation risks.
UK January inflation rate dropped to a 10-month low, providing grounds for further interest rate cuts by the central bank. See: 'Market Review: Pound Sterling - Decline Has a Floor Amid Political Storms.'
OpenAI’s latest funding round is reportedly expected to exceed $100 billion. Meta (META.US) deepens collaboration with NVIDIA (NVDA.US), securing 'millions' of chips from the latter.
Apple (AAPL.US) is reportedly accelerating the development of AI-powered glasses, pendants, and AirPods with cameras, further transitioning towards AI-driven hardware.
Greater China News
The number of Chinese tourists visiting Japan in January continued to decline rapidly, impacting Japan's retail and tourism industries. Following an incident where a Hong Kong tourist was assaulted with a beer bottle at a Hokkaido restaurant early Wednesday, Chinese authorities once again urged citizens to avoid traveling to Japan.
The International Monetary Fund criticized China’s economic policies for causing domestic waste and harming other countries, calling for a shift toward a growth model driven by household consumption expenditure.
China’s Ministry of Commerce submitted a position paper on WTO reform, emphasizing the centrality of multilateral trade and development.
Chinese artificial intelligence startup MoonShot is seeking a new round of funding with a targeted valuation of $10 billion.
Alibaba (BABA.US) launched the latest version of its flagship artificial intelligence model Qwen3.5, aiming to gain an edge ahead of the release of DeepSeek's next-generation platform.
Tencent (00700.HK)$TENCENT (00700.HK)$reported that after the conclusion of its chatbot Yuanbao's red packet campaign, which distributed 1 billion yuan in cash, Yuanbao surpassed 50 million daily active users.
Ukraine’s Ministry of Foreign Affairs stated that Ukraine highly values maintaining close communication with China and plans to hold ministerial-level bilateral talks with China.
Faurecia and Chery (09973.HK)$CHERY AUTO (09973.HK)$ A multi-year project agreement has been reached with the high-end electric vehicle brand Zhi Jie, valued at hundreds of millions of euros.
Commodities and foreign exchange markets
The US Dollar Index rose for four consecutive sessions as unemployment benefit claims data indicated an optimistic economic environment. WTI crude oil futures hit their highest level since August of last year amid escalating concerns over the situation in Iran. Spot gold and silver prices moved higher.
Earnings reports and economic data highlights
US December Core PCE Price Index Year-over-Year (Previous: 2.8%, Forecast: 2.9%)
Final reading of the University of Michigan Consumer Sentiment Index for February in the US (Previous: 57.3, Forecast: 57.2)
The Fed's meeting minutes released a hawkish signal, with several policymakers hinting at the possibility of considering an interest rate hike. The latest unemployment benefits data also showed stabilization in the labor market, with attention now on the initial Q4 GDP figures to be released by the US on Friday. Overnight Highlights The S&P 500 index fell as Trump increased pressure on Iran, intensifying geopolitical concerns. Treasury prices edged up, with strong performance in inflation-protected bond auctions, allowing long-term bonds to recover losses. The US Dollar Index rose for the fourth consecutive session, while unemployment claims data suggested an optimistic economic environment. WTI crude oil futures reached their highest level since August of the previous year amid growing concerns over the situation in Iran. Spot gold and silver prices moved higher, while most London industrial metals declined. International News US industrial production in January saw its largest increase in nearly a year. The Fed’s meeting minutes from the same month issued a hawkish signal, with several policymakers suggesting that if inflation remains persistently above target, interest rates may need to be raised. A productivity boom driven by artificial intelligence could push up the neutral interest rate level. Last week, the number of Americans filing first-time claims for unemployment benefits recorded the biggest drop since November. Fed Governor Milan stated that as the labor market improves, the number of rate cuts this year will be fewer than expected. Overseas investors net purchased $1.55 trillion worth of long-term US financial assets last year, with nearly $409 billion flowing into US Treasuries. In contrast, China sold off its holdings, reducing its position in US Treasuries to the lowest level since 2008 by the end of last year. The US trade deficit widened in December, making the annual trade deficit one of the largest since 1960, but the trade gap with China narrowed to the smallest in over two decades...
Source: JPM Capital Management (Hong Kong) Co., Ltd.
Author: Terry Chow
Proofread by: Gloria Guo
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
338K Views
Report
Comments
Write a Comment...