Global markets are in a mixed state ahead of U.S. Federal Reserve Chairman Jerome Powell's speech today and the release of U.S. growth data. Concerns over recession and rising tensions in the Middle East continue to affect investor risk appetite. Notably, mortgage rates in the U.S. have dropped to their lowest since September 2022, fueling expectations of forthcoming rate cuts by the Fed and revisions in OECD growth forecasts.
Yesterday, the average mortgage rate for a 30-year loan fell to 6.13%, leading to an 11% increase in mortgage applications, the highest in two years. Despite a 4.7% decline in new home sales in August, the figures exceeded expectations.
Fed officials maintain their verbal guidance, with Board Member Adriana Kugler expressing strong support for recent decisions, indicating that further cuts may be warranted if inflation trends continue positively. Market pricing suggests a robust expectation for a 75 basis point cut by year-end, with a 61% probability of a 50 basis point cut in November.
On the corporate front, Micron Technology's stock surged nearly 14.8% in futures trading after the company raised its revenue forecast for Q1 2025 to between $8.5 billion and $8.9 billion, surpassing expectations of $8.3 billion.
Additionally, the OECD has revised its global growth forecast for this year upward by 0.1 percentage points to 3.2%, citing a continuing disinflation process and improved real incomes. The OECD's 2025 growth forecast for the U.S. has been lowered by 0.2 percentage points to 1.6%.
As a result of these developments, the U.S. 10-year Treasury yield is currently at 3.79%, while the dollar index stabilizes at 100.9. Gold prices reached a high of $2,670.38 per ounce yesterday, currently trading at $2,661, up 0.1% from the previous close. Brent crude oil prices continue to decline, currently at $71.1 per barrel, down 2.5% from yesterday's close.
In Europe, stock markets showed a downward trend yesterday, with attention now shifting to European Central Bank President Christine Lagarde's upcoming speech. The OECD has maintained its growth forecast for the Eurozone at 0.7% for this year but has lowered its 2025 forecast by 0.2 percentage points to 1.3%.
In the UK, growth forecasts for 2024 were raised from 0.4% to 1.1%, with 2025 expectations increased from 1.0% to 1.2%. Meanwhile, the Swedish Riksbank cut its policy rate by 25 basis points to 3.25%.
In Asia, the markets are showing positive movements, particularly in technology stocks following Micron's optimistic revenue projections. The People's Bank of China announced plans to inject 1 trillion yuan into major state banks, although no specific timeline was provided.
Analysts will closely watch today's economic data releases, including the U.S. GDP for Q2, durable goods orders, and the unemployment claims, along with speeches from Powell and Lagarde, which could significantly influence market trends.