| Good morning. US equities just keep on climbing. India's growing faster than expected. The BOJ is still waiting on inflation. Here's what's moving markets. — Isabelle Lee Wall Street traders fearing another disappointing inflation report got a degree of relief after the Federal Reserve's favored price gauge, the personal consumption expenditures index, was in line with economists' expectations. Treasury yields slipped and US stocks moved higher, pushing the S&P 500 to yet another all-time high — its 14th record this year. The Nasdaq 100 rose almost 1% with Nvidia leading gains in megacaps. Bitcoin also rallied again Thursday, a day after the 10 new exchange-traded funds investing directly in the world's biggest cryptocurrency took in a net $673 million, handily beating their launch day record. Nearly a year after the US regional banking crisis first rocked markets, concerns linger in some corners of the market, especially around New York Community Bancorp. The lender took a $2.4 billion hit to earnings as it identified weaknesses with its loan review process and wrote down the value of past deals. It also named Alessandro DiNello as chief executive officer, succeeding Thomas Cangemi. Elsewhere in the financial services space, shares in B. Riley Financial plunged after the company posted a wider quarterly loss, halved its dividend and delayed filing its annual report while it studies transactions with a key client that have drawn attacks by short sellers. India's economic growth accelerated in the final three months of 2023, beating all forecasts by economists. Gross domestic product rose 8.4% from a year ago, the Statistics Ministry said Thursday, buoyed by strong private-sector investment and a pick-up in services spending. GDP figures for the previous two quarters were revised to above 8% as well. The news gives Prime Minister Narendra Modi a boost as he contests elections likely to kick off in April. Meanwhile, the country's Adani Group said cash balances have improved and it sees no refinancing risks in the near term as the conglomerate took more steps to shore up its finances following a withering short seller attack last year. Bank of Japan Governor Kazuo Ueda said the Bank of Japan's price target is not yet in sight, tempering market speculation that the bank's first rate hike since 2007 is just around the corner. "We will continue to seek confirmation whether the virtuous cycle between wages and price began to turn," Ueda said on Thursday after meeting with Group of 20 finance chiefs in Sao Paulo, Brazil. The G-20 meeting itself failed to produce a closing communique, as splits over the conflicts in Gaza and Ukraine prevented the finance chiefs from agreeing on one. China's Purchasing Manager Index surveys for February are likely to show activity pulling back due to disruptions from an eight-day Lunar New Year holiday. But don't read too much into it, said Eric Zhu of Bloomberg Economics. If history is any guide, the seasonal pattern in previous years when holidays fell in February, is for the PMIs to soften then rebound in March. PMI indicators are also expected out Friday in a bunch of other economies, including the US. Here's what caught our eye over the past 24 hours: - Scores of Palestinians were killed and injured during an outbreak of violence in which Israeli troops opened fire near trucks attempting to deliver aid in Gaza
- US sees China's threat from space growing at "breathtaking pace"
- Cocoa futures saw their biggest monthly rise in 22 years on crop fears
- Oil demand in US at four-year high is expected to hold steady in 2024, according to the EIA
- Pig-butchering scams have likely netted more than $75 billion
- What $1 million buys in world's most expensive property markets
The latest PCE inflation reading was something of a relief for markets sweating on the potential it would spark fresh hawkishness from US policymakers, but the rallies in response were fairly modest. The Federal Reserve's key gauge when it comes to meeting its inflation target still came in at the highest monthly reading for a year. The annual pace of 2.8% is substantially above the central bank's 2% target, too. The latest batch of Fed comments therefore again underscored that officials deem rate cuts remain some way off, even as they emphasize an expectation they will come. A glance at equities hovering near record highs underscores the narrative that the US is traveling too well to need rapid easing. San Francisco Fed boss Mary Daly, for one, sees "no imminent risk to the economy faltering." Financial conditions are getting looser and looser, which underscores the likelihood that the Fed can wait. The contrast with Europe, where the economy is looking weaker and financial conditions are noticeably tight, is illuminating. One key driver for that contrast is likely to be the fact that Europe's fiscal settings are far less accommodative than the US's epic budget deficit. Whatever the causes, the divergence makes it likely that the European Central Bank will lower rates well before the Fed does — even as swaps traders base case is for each of the two institutions to carry out their first cuts in June. Garfield Reynolds is Chief Rates Correspondent for Bloomberg News in Asia, based in Sydney. | 
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