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ASX 200, AUD/JPY: Fed policy pivot hopes drive rapid rebound
A far softer tone on the interest rate outlook from some Federal Reserve members has certainly left its mark, resulting in a solid rebound in beaten-up long bonds and long duration assets. Given the potential flow through to the real economy, cyclical plays such as the AUD and ASX 200 have also performed well, staging an abrupt about-face as US money markets pared rate hike bets for this year while adding to rate cut bets in 2024. But given escalating geopolitical risks in the Middle East, the knowledge monetary policy works with significant lags and clear intent from the FOMC to keep policy sufficiently restrictive ... (full story)