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Israel Headlines & Fed Speak Dominate Market Sentiment

EMERGING MARKETS
  • Markets trade with a risk-off feel, as prices remain sensitive around Israeli headlines and any potential for escalation. Two-way missile fire between Israel and Lebanon has been at the fore thus far, which allowed the early London core global FI bid to develop further and briefly undermine the greenback.
  • There have been some comments from Fed's Bowman, who moderated her language on rates, stating that the Fed "may need" to raise rates further, potentially becoming less prescriptive on the need for further tightening.
  • The neutral rate of interest could be higher than pre-pandemic, San Francisco Fed President Mary Daly said Tuesday, weighing into a lively debate within the Federal Reserve system about what level of interest rates neither stimulates nor slows economic growth.
  • MNI (Beijing) - China will continue to face economic headwinds this year as consumption remains soft, the property sector fails to rebound and monetary and fiscal easing remains limited in its scope despite market positioning for further accommodative policies, economists and advisors told MNI.

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