Market comment | Fed made inter-meeting 50bps interest cut

Summary

The Fed cut 50bps interest rate and the ECB pivoted suggesting it is ready to take appropriate measures, while the G7 pledged a coordinated action. However, risky assets failed to gain much traction, while market risk measures such VIX remained high.

Key points

• Key points:
• Fed fund futures still price in additional rate cut.
• The ECB pivoted and seems prone to implement stimuli.
• February’s preliminary Eurozone core inflation inched up to 1.2% YoY in line with expectations.
• Safe haven yields pared increase, with the 10Y yield returning to levels below 1.1%.
• Equity markets rebounded in Europe, but the Fed action failed to spur an additional upward move in U.S. equity markets.

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