Concerns about a slower rate cut are back, stocks mixed today

Monday’s US ISM industrial index beat expectations for both overall activity and price dynamics. It hit both bonds and stocks. The effect on stocks is not great and some markets are only reacting today. Other agenda items are taking center stage, but it looks like the topic of less dovish Fed policy will remain on the table.

Several representatives of the Fed will speak later in the afternoon and evening, and in recent days they have again begun to indicate that there is no rush to cut rates. In addition, preliminary inflation data from the German federal states is released, and the subsequent figure for Germany will be an indication of inflation in the eurozone for March.

The movement of shares in Europe is mixed in the morning, with the slightly red DAX and the falling Spanish market spoiling the balance. American futures are also in the negative so far. Longer European bond yields jumped higher, American ones are only holding positions after yesterday’s increase. Yesterday’s data added strength to the dollar and its exchange rate against the euro moved to 1.0740, where it is consolidating today.

The koruna weakens slightly in the morning to 25.33 per euro. The domestic purchasing managers’ index beat expectations at 46.2. In addition, according to the minutes of the last meeting of the CNB, the majority of the bank board chooses a more cautious approach with the easing of monetary policy. On the other hand, the expected trajectory of Western interest rates shifted higher, which is unfavorable for the koruna.