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The People's Bank of China announced today a cut in the reserve requirement ratio for financial institutions and lowered short-term borrowing costs. Another pro-growth signal sustained the euphoria in Chinese assets—CH50cash contracts are trading 1.8% higher.
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Wall Street, despite optimistic macro data, is experiencing mixed sentiments during Friday's session. The Russell 2000 (+0.9%) and Dow Jones (+0.45%) are in positive territory, while the S&P 500 and Nasdaq are recording declines (respectively: -0.03% and -0.4%).
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The Fed's preferred inflation indicator (PCE) came in below expectations on a year-over-year basis (2.2%, expected: 2.3%, previous: 2.3%).
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European indexes close the week in green. The German DAX adds 1.2%, French CAC 40 rises by 0.64%, British FTSE 100 gains 0.43%, and the domestic WIG20 is trading 0.7% higher.
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The readings of the University of Michigan Consumer Sentiment Index also turned out positive (70.1, expected: 69.3, previous: 67.9). Short-term and long-term inflation expectations remained unchanged (respectively 2.7% and 3.1%).
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CPI inflation in France falls to 1.2% y/y (expected: 1.6% y/y; previous: 1.8% y/y), while HICP drops to 1.5% y/y (expected: 1.9% y/y; previous: 2.2% y/y).
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CPI inflation in Spain also came in significantly lower (1.5% y/y, expected: 1.9% y/y, previous: 2.3% y/y). However, Spanish GDP increased on a year-over-year basis (3.1%, expected: 2.9%, previous: 2.6%).
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Such low CPI readings in Europe may give the ECB the green light to revise its relatively conservative path of rate cuts in the Eurozone, which at this moment seems to weigh on the already weak economic activity in the EU.
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The strongest currency today is the Yen, which appreciated the most among G7 currencies after Shigeru Ishida won the seat of Japan's Prime Minister, known for his support of the BoJ's hawkish policy. USDJPY is down 1.55%, while EURJPY and GBPJPY are falling by 1.75%.
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The cryptocurrency market is seeing significant gains today. Gala is up 7.6%, Dogecoin rises by 7.5%, and Bitcoin adds 1.9%, soaring above 66,000 USD.
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Precious metals are ending the week with a slight correction: gold retreats by 1%, silver by 1.65%, and platinum by 0.45%.
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