U.S. rate futures have priced in a 95.9% probability of no rate change and a 4.1% chance of a 25 basis point rate cut at the March FOMC meeting.Fed Governor Christopher Waller said on Monday that his decision on whether to back an interest rate cut at the central bank’s March meeting will depend on upcoming labor-market data. “If these data support the idea of an improvement in the labor market in January that continued in February, along with additional progress toward 2% inflation, that could result in my ...

The S&P 500 Index ($SPX) (SPY) today is down -0.22%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.24%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.66%.  March E-mini S&P futures (ESH26) are down -0.25%, and March E-mini Nasdaq futures (NQH26) are down -0.67%. Stock indexes are falling today as uncertainty over American trade policy has sparked risk-off sentiment in asset markets.  After last Friday’s close, President Trump signed an executive order raising global tariffs under Section ...

Core Insights - Bitcoin has significantly underperformed since the release of the FOMC minutes for the January 28 meeting, while the US dollar index and bonds have rallied, indicating a shift in market sentiment [1][5]. Group 1: Federal Reserve Insights - The January FOMC meeting revealed a divided Federal Reserve, with most policymakers supporting the federal funds rate at 3.50–3.75%, while a couple advocated for a 25-basis-point cut due to concerns over restrictive policy and labor market risks [2]. - Some officials suggested that further rate cuts could be necessary if inflation decreases as anticipated, while others warned against easing too early given the elevated inflation levels, which could jeopardize the Fed's 2% inflation target [2][3]. - The minutes indicated a need for "two-sided" guidance, suggesting that rates might need to increase if inflation remains above target [3]. Group 2: Market Reactions - The recent macroeconomic data has led to increased expectations for rate cuts in 2026, although a rate cut in March is now considered unlikely following a stronger-than-expected payroll report [4]. - Market vulnerabilities were highlighted, with concerns about risks in private credit and the broader financial system, contributing to safe-haven buying in bonds and the dollar, while Bitcoin continues to face downward pressure [5]. - Equities showed modest gains, with the Dow Jones Industrial Average up 0.24%, the S&P 500 up 0.59%, and the NASDAQ up 1.00%, reflecting cautious optimism amid the Fed's signals [7].

Andrew Wishart, from Berenberg, said: “Parts of the inflation basket most sensitive to labour costs remain a little too high for comfort. As a result, March may prove too soon for the next rate reduction.”Despite market expectations of a rate cut in March rising, several economists have said the Bank of England will hold off on lowering borrowing costs until April.The FTSE 100 rose 1.1pc to 10,671.72, powered higher by gains in mining stocks.London-listed stocks have continued to climb higher, as slowing in ...

Market Overview - U.S. stock futures were slightly down as markets reopened, reflecting cautious sentiment among traders after recent volatility in the tech sector related to AI [1] - Bank of America's monthly global fund manager survey indicates an "uber-bullish" sentiment among investors regarding the economy and earnings for the year, despite concerns over potential overspending on AI infrastructure [1] Economic Indicators - Japan's GDP growth for Q4 was reported at an annualized 0.2%, significantly below the forecasted 1.6% gain, impacting the yen which eased 0.4% against the dollar [1] - In the UK, unemployment rose to 5.2%, the highest level in over ten years excluding the pandemic, leading to speculation of a potential interest rate cut by the Bank of England [1] Corporate Earnings - Walmart has joined the trillion-dollar club of company valuations, now ranking as the 12th most valuable publicly listed company globally [1] - Medtronic and Palo Alto Networks are among the companies set to report earnings this week, with Medtronic already beating quarterly profit estimates due to strong demand for heart devices [2]

Economic Overview - The yen trimmed losses from the previous day amid thin trading conditions due to holidays in Asia and the U.S. [1] - Key economic events this week include the release of the Federal Reserve's meeting minutes and advance figures on U.S. GDP [1][10]. U.S. Economic Sentiment - Kristina Clifton, a senior currency strategist, expressed a positive outlook on the U.S. economy, anticipating a high chance of a June interest rate cut, with a follow-up cut expected in July [2]. - The dollar index remained stable at 97.12 after a 0.2% gain in the previous session, while the euro fell by 0.06% to $1.1843 [5][10]. Currency Movements - The yen strengthened by 0.15% to 153.28 per dollar, while the British pound weakened by 0.07% to $1.3616 [6][10]. - The Australian dollar decreased by 0.07% to $0.7064, and New Zealand's kiwi fell by 0.08% to $0.6026 ahead of the Reserve Bank of New Zealand's policy meeting [8][11]. Inflation and Monetary Policy - U.S. consumer prices rose less than expected in January, providing the Federal Reserve with more flexibility for policy easing this year [6][10]. - Money market traders are pricing in 62 basis points of easing for the remainder of the year, indicating two quarter-point cuts and a 50% chance of a third cut [6][11]. - The next interest rate cut is likely in June, with an 80% chance of a 25-basis-point reduction [11]. Global Economic Indicators - Japan's economy showed minimal growth, with an annualized expansion of only 0.2% last quarter, which has implications for potential government stimulus [7][11]. - Minutes from the Reserve Bank of Australia's board meeting indicated concerns over inflation and employment risks shifting materially [9][11]. Cryptocurrency Market - Bitcoin experienced a slight increase of 0.05% to $68,881.72, while ether remained stable at $1,999.11 [9].

Group 1 - The State Street SPDR S&P Bank ETF (KBE) has reached a 52-week high, increasing by 52.66% from its 52-week low of $44.34 per share, indicating strong momentum for investors [1] - KBE tracks the S&P Banks Select Industry Index, which is a modified equal-weighted index reflecting the performance of publicly traded banking companies, with an annual fee of 0.35% [2] - The banking sector is gaining attention due to rising expectations of an interest rate cut in 2026, influenced by Kevin Warsh's nomination as Fed Chair, which may lead to a steeper yield curve benefiting the fund [3] Group 2 - KBE holds a Zacks ETF Rank 1 (Strong Buy) and has a high-risk outlook, suggesting potential for continued strong performance, supported by a positive weighted alpha of 22.27 [4]

Core Viewpoint - The Nifty PSU Bank index has reached a new high, driven by strong performance from State Bank of India (SBI), which reported better-than-expected earnings for Q3FY26, leading to increased investor demand for public sector banks [1][2]. Performance of Nifty PSU Bank Index - The Nifty PSU Bank index surged 3.6% to a new high of 9,193, surpassing its previous high of 9,175.55 [3]. - Over the past month, the index has outperformed the market with a 7% increase compared to a 0.5% gain in the Nifty 50 [3]. - In the last five months, the PSU Bank index has increased by 34%, while the benchmark index rose by only 3.8% [3]. Individual Stock Performance - SBI shares rose by 7% to reach ₹1,137 during intra-day trading [5]. - Other notable performers included Indian Bank (+4% to ₹904.85), Bank of India (+3.5% to ₹169.38), Bank of Maharashtra (+3% to ₹67.44), and Central Bank of India (+3% to ₹37.95) [5]. SBI's Financial Performance - SBI reported a 25% year-on-year growth in profit after tax, amounting to ₹21,028 crore for Q3FY26, marking its highest-ever quarterly profit [6]. - The bank's net interest income (NII) grew by 9% year-on-year to ₹45,190 crore, with a net interest margin (NIM) of 2.99% [7]. - Loan book growth was reported at 15.6% year-on-year, while deposits increased by 9% year-on-year [7]. Management Guidance and Market Outlook - SBI's management has raised its credit growth guidance for FY26 to 13-15% from the previous 12-14% [8]. - Analysts expect a healthy credit environment, with improved asset quality and benign credit costs [9]. - Brokerages have raised their earnings estimates for SBI, with target prices set at ₹1,300 and ₹1,250, reflecting strong growth and profitability expectations [9][11]. Economic Context - The Reserve Bank of India (RBI) has noted improving GDP growth and expects urban consumption to remain resilient due to policy measures and infrastructure spending [12]. - The RBI has raised its GDP forecast for FY26 to 7.4% and for Q1FY27/Q2FY27 to 6.9%/7.0% [13].

Group 1: Federal Reserve and Interest Rates - President Trump has been advocating for the Federal Reserve to cut interest rates, and his nominee to succeed Jerome Powell, Kevin Warsh, supports this view [1] - Federal funds traders predict an 81% chance of a rate cut by summer, with a 45% chance of a cut in April [1] Group 2: Impact on Real Estate Investment Trusts (REITs) - U.S. companies may benefit from lower borrowing costs after years of tight monetary policy, which is favorable for REITs [2] - REITs benefit from lower interest rates in three ways: they pay 90% of net income as dividends, their valuations rise as future cash flows are discounted using the 10-year Treasury yield, and lower borrowing costs improve their refinancing options [2] Group 3: Historical Performance of REITs - REITs have historically outperformed the S&P 500 during periods of prolonged low rates, as evidenced from June 2009 to November 2015 when the federal funds rate was below 0.21% [3] Group 4: Investment Opportunities in REITs - Not all REITs will perform equally in a declining rate environment, but there are standout opportunities available [4] - Realty Income, a significant player in the REIT sector, has properties valued at $61 billion and clients including Lowe's and Walmart [5] - Realty Income has a strong track record with 112 consecutive quarterly dividend increases and a year-over-year earnings growth of 17%, currently offering a monthly dividend yield of 5.2% [6]

Group 1 - The dollar index (DXY00) fell by -0.19% due to reduced liquidity demand from a rally in equity markets and negative carryover from weaker US labor market news, which increased the chance of a Fed rate cut at the next FOMC meeting to 19% from 8% [1] - The dollar reached a 4-year low when President Trump expressed comfort with its weakness, compounded by foreign investors withdrawing capital amid a growing budget deficit and political polarization [2] - The University of Michigan US Feb consumer sentiment index rose unexpectedly by +0.9 to a 6-month high of 57.3, while 1-year inflation expectations fell to a 13-month low of 3.5% [3] Group 2 - US Dec consumer credit increased by $24.045 billion, significantly surpassing expectations of $8.000 billion, marking the largest increase in a year [4] - Hawkish comments from Fed officials, including Atlanta Fed President Raphael Bostic emphasizing the need for restrictive monetary policy to achieve a 2% inflation target, supported the dollar [5] - Swaps markets are pricing in a 19% chance of a -25 basis point rate cut at the next policy meeting, with expectations of a -50 basis point cut by 2026 [6] Group 3 - The EUR/USD pair recovered from a 2-week low, finishing up by +0.37% after initial declines due to weaker German industrial production, but rebounded following better-than-expected German trade news [7]