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Federal Reserve Board Chairman Jerome Powell walks up to speak during a news conference. Photo: Mark Wilson/Getty Images
The market has stopped paying much attention to Fed Chair Jerome Powell's long-range forecasts and the Fed's future guidance and will merely be looking for confirmation of its expectations at this week's Fed meeting.
The big picture: Not only does the market see virtually no chance the Fed continues to hold, futures prices show investors see it as more likely that Powell and company cut rates at every meeting this year than that rates stay at their current level.
Why it matters: Though no rate changes are expected, with meetings this week from the Fed, Bank of England and Bank of Japan, investors are expecting that central banks will again pivot and signal another round of coordinated global policy easing is coming to flood the world with more capital and liquidity.
Go deeper: From April — The Federal Reserve looks to be laying the groundwork for interest rate cuts
Fed fund futures prices show investors see a rate cut by year end as a virtual certainty.
Ukraine sold 1 billion euros of 7-year bonds in its first offer to international markets under new president, and former comedian, Volodymyr Zelensky who was elected in April.
The bond issue could not have come at a better time. Ukrainian bond yields spiked last year as emerging-market debt sold off broadly, and as Zelensky rose in polls, because of uncertainty about his economic strategy and ability to deal with Russia.
Why it matters: Ukraine's latest offering comes amid a flurry of new bond issuance, particularly from emerging markets, as declining interest rates in the U.S. and Europe (where German government bond yields have hit all-time lows) are encouraging countries to load up on new debt.
The big picture: Emerging market countries and corporate entities have already issued a record amount of debt and look poised to increase the total further this year. Higher debt will put increased stress on balance sheets in the event of a global economic downturn.
Investors aren't buying the idea of a potential Organization of Cocoa Exporting Countries, and cocoa prices sank late last week after rallying to an 11-month high.
Driving the news: Ghana and Ivory Coast reached an agreement not to sell cocoa for less than $2,600 a ton for the harvest that will begin in October 2020. The two African nations account for 60% of the world's cocoa production. That sent cocoa prices to $2,552 Wednesday.
What's next? Ivory Coast and Ghana say they are setting the price floors to improve pay in the industry, but to make a real impact, Ivorian President Alassane Ouattara and Ghana's Nana Akufo-Addo should focus on processing cocoa, rather than just growing it, Reuters' Ed Cropley writes for Breaking Views.
UBS placed the chief economist of its Wealth Management division on leave after a Chinese financial group suspended business with the bank because of comments about swine flu in China. No one is quite sure what about the remarks was offensive and the man leading the charge that they were "distasteful and racist" refused to explain how.
Ford is looking into building more cars in China, instead of exporting them from the U.S., as tariffs on imports of U.S.-made vehicles to China reach 40%.
The stock market has lost about $3 trillion of value because of the trade war, J.P. Morgan’s global head of quantitative and derivatives strategy Marko Kolanovic says. He argues that stocks were rising at an above-trend pace, but have stalled for 18 months. "If one takes that the average annual return of U.S. equities was around 7%, the estimated cost of the trade war so far is about $3 trillion…the market damage is about 100 times the tariffs collected, so it’s clearly not making the country richer."
Puerto Rico reached an agreement with bondholders on restructuring around $35 billion of its debt, which accounts for close to 50% of the bankrupt island’s total.
Details: The agreement calls for forgiveness of more than a 60% for all $35 billion, a 36% haircut on pre-2012 general obligation or “GO” bonds and a 27% haircut on public authority bonds that carry a constitutional payment guarantee.
But, but, but: Puerto Rican Gov. Ricardo Rosselló's top finance adviser, Christian Sobrino, tells the Wall Street Journal that the government doesn't support the proposal because it's based on a fiscal plan that cuts pension benefits.