Daily Brief - 2 Apr 2024

Fed rate cut hopes cool down after surprising manufacturing boost

Bond traders are now less convinced the Federal Reserve will cut interest rates soon, thanks to some unexpectedly good news from the manufacturing sector in the US. For the first time since 2022, a key manufacturing index has shown growth, leading to a drop in expectations for rate cuts this year. Despite earlier hopes for a June rate cut, odds have fallen to 50-50 after strong economic signals and cautious words from the Fed's leaders. This shift in mood comes as new corporate bonds hit the market, showing businesses are still eager to borrow, and overall signs that the US economy might be stronger than thought. Meanwhile, experts keep an eye out for the next jobs report, which could add another twist to the tale.

UK shopping inflation hits 2-year low, fueling hopes for rate cuts

UK shop inflation has fallen to its lowest in over two years, providing a glimmer of hope for consumers and potentially paving the way for interest rate cuts. Last month saw the rate of price increases slow dramatically to 1.3%, a significant drop from February's 2.5%, thanks to supermarkets engaging in price wars to attract customers. Food inflation also continued its decline, reaching the lowest point since April 2022. Despite this positive trend, the British Retail Consortium warns of rising costs for retailers, which could threaten these gains. As grocers navigate these challenges, including spiking cocoa prices due to global shortages, the Bank of England remains cautious, holding rates at a high amidst ongoing economic pressures.

Google agrees to delete web browsing data as it settles ‘Incognito’ lawsuit

Google has agreed to delete billions of web browsing data records as part of a settlement over a class-action lawsuit that accused the tech giant of tracking users in Chrome's incognito mode without their consent. Filed in 2020, the lawsuit argued that Google collected data through its advertising technology even when users opted for privacy in incognito mode. As part of the settlement, Google will also improve its disclosures about data collection and allow users to block third-party cookies in incognito mode for the next five years. Although the lawsuit sought $5 billion in damages, the settlement doesn't involve any financial payment from Google. However, individuals can still pursue personal claims. This move is seen as a significant step towards ensuring transparency and protecting user privacy in the tech industry.