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Today's investor sentiment was somewhat cooled following higher-than-expected PPI inflation and comments from Bostic, Daly, and Barr.
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US500 trades lower by 0.20% to 6040 points but remains above the key level of 5000. Meanwhile, US100 lost a bit more, down 0.70% to 17830 points.
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European indices closed with mixed sentiments, though most saw gains. Only the stock markets in Spain and Italy recorded losses. The biggest gainers were Austria's AUT20 (+1.40%) and the UK's UK100 (+1.10%).
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The dollar reduced its gains from the first part of the day and, at the time of publication, is even among the depreciating currencies. The EURUSD pair gained 0.02% to 1.0770.
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Federal Reserve Vice Chair for Supervision Michael Barr did not address interest rates. On Friday, he said that federal bank supervisory teams have intensified inspections of their supervised banks, considering the "elevated risk environment," drawing lessons from the bank collapses in March 2023.
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San Francisco Federal Reserve Bank President Mary Daly acknowledged significant progress in reducing inflation. However, Daly admitted that there is still more to be done to ensure price stability. She believes the time has not yet come for interest rate cuts.
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Atlanta Federal Reserve Bank President Raphael Bostic was a bit more dovish. Bostic said he supports starting interest rate cuts at some point this summer, although better inflation data could justify an earlier start.
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Coinbase (COIN.US) gained over 12% after extraordinary fourth-quarter results that exceeded Wall Street's expectations. The cryptocurrency broker reported a profit of $1.04 per share on revenues of $954 million.
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The University of Michigan's February inflation data came out slightly worse than expected but comparable to previous readings:
- Consumer Sentiment. Current: 79.6. Forecast: 80.0. Previously: 79.0
- Current Conditions Subindex. Current: 81.5. Forecast: 82.5. Previously: 81.9
- Expectations Subindex. Current: 78.4. Forecast: 77.0. Previously: 77.1
- Annual Inflation Expectations. Current: 3%. Forecast: 2.9%. Previously: 2.9%
- 5-Year Inflation Expectations. Current: 2.9%. Forecast: 2.8%. Previously: 2.9%
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In January, PPI unexpectedly rose by 0.3%, recording the biggest increase since August and surpassing Dow Jones economists' expectations of a 0.1% rise. Core PPI, excluding food and energy, also exceeded expectations with a 0.5% increase.
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US new home construction fell at the beginning of the year, the most since the start of the pandemic, indicating that the housing market recovery will be gradual. Many buyers are waiting for further decreases in mortgage interest rates. January data:
- Building Permits. Current: 1470K. Forecast: 1510K. Previously: 1493K.
- Housing Starts. Current: 1330K. Forecast: 1460K. Previously: 1460K.
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Cryptocurrencies are consolidating around their highs. Bitcoin is slightly up at $52,000, the Altcoin market (Total 3) is down 0.76% with a total capitalization of $534 billion. Ethereum records the largest drop, losing 1.70% to $2770.
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