Shipping containers are seen at a port in Tokyo, Japan, March 22, 2017. Picture: REUTERS/ ISSEI KATO
Wall Street, which surged to record highs recently on the back of the US Federal Reserve's rate-cut signals, has shown nervousness this week as big banks reporting quarterly earnings — Citi, JPMorgan and Wells Fargo — have shown drops in net interest margins, a sign low interest rates are squeezing bottom lines.
Investors fear central banks may find it hard to rescue a world economy under pressure from a year-long trade spat — the latest sign of which came from Singapore whose exports sank by the most in six years in June. Those wagers have not budged even after a surprisingly strong US retail sales reading on Tuesday, robust June jobs data, and the biggest rise in New York manufacturing in more than two years. In fact, Chicago Fed president Charles Evans touted 50bps of easing this month.
This, alongside the trade uncertainty and soft equity markets, kept bonds well-bid — US treasury yields, which rose after the retail data, edged lower again. Another “safe” asset, German bonds, also saw a fall in yields.Fed expectations have not dented the dollar, however. It stood around a one-week high against a basket of currencies after the previous day’s 0.5% jump.
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