Monday's Markets Update (June 12, 2023)

13 Jun 2023 by rate3

On Monday, the NY Fed reported a decrease in inflation expectations, with traders expecting the FOMC to pause. As a result, the NASDAQ (o: 13326, c: 13461, +1.0) rose, while BTC (o: 25933, c: 25894) remained stagnant due to a lack of liquidity.

At the one-year forecast horizon, the median expectations for inflation decreased by 0.3 percentage points to reach 4.1%, marking the lowest level since May 2021. However, at the three-year and five-year forecast horizons, the median expectations for inflation rose by 0.1 percentage points to reach 3.0% and 2.7% respectively.

Other Markets Updates:

India: In May, Country's annual inflation rate fell to 4.25%, the lowest since April 2021. This was below market expectations of 4.42% and well within the Reserve Bank of India's (RBI) target range of 2% to 6%. The decline in inflation was driven by a slowdown in food inflation, which fell to 2.91% from 3.84% in the previous month. Inflation for other categories also slowed, including transport and communication (1.1%), housing (4.84%), and fuel and light (4.64%). On a monthly basis, consumer prices rose at a steady pace of 0.51%.

Australia: In June 2023, the Westpac-Melbourne Institute Consumer Sentiment Index rose by 0.2% month-over-month (mom), unexpected beating market expectations of a flat reading. The index has steadied near recession lows after plunging by 7.9% in May. The significant difference in the index's performance before and after the Reserve Bank of Australia (RBA) raised cash rates by 25 basis points (bps) in early June suggests that the rate hike has had a positive impact on consumer sentiment.