US equities up ahead of holiday Friday; BoE holds

Research evidence excerpt

US equities up ahead of holiday Friday; BoE holds

Deutsche Bank

Research

Economics Date

DBDaily 18 June 2026

US equities up ahead of holiday Friday; BoE

Phil Odonaghoe holds

Economist

+61-2-8258-1606

Back to the 90s for Fed communications; who’s who in the dot plot?

US equities were stronger Thursday, S&P up 1.1%, reversing Wednesday’s drop

after the Fed’s hawkish tilt. Gains were led by tech: NASDAQ up 1.9%. US10yr

yields down 3bps to 4.45%. Oil little changed, down 0.4% to USD79.21/bbl

(Brent).

US initial jobless claims steady, down 4k to 226k, but continuing claims up 24k to

1810k, above market and highest since late March. Philly Fed up ~11pts to 10.3

in June, in line with consensus, middle of volatile range over past two years.

ECB’s Lane: Last week’s tightening was “from a position of firmly neutral”; upper

end of ECB’s neutral range has “crept up from 2.25% to 2.5%”. ECB’s Escriva:

“uncertainty about second round effects regarding wages”, baseline subject to

“considerable uncertainty”.

BoE kept rates on hold at 3.75% as expected, though with two members voting

for a hike: Pill and Greene. Sanjay Raja notes though that recent data outturns,

coupled with the Iran/US peace deal, mean that risks around second-round

inflation effects have receded. Consistent with that, Sanjay sticks with his call for

an unchanged policy rate through the year, with rate cuts next year taking the

policy rate to a more neutral level of 3.25%.

Norges bank also kept rates on hold at 4.25% as expected, but signaled policy

tightening “at one of the forthcoming monetary policy meetings”.

Matt Luzzetti’s recap of Wednesday’s Fed meeting. In a return to 1990s-style

communications, Warsh significantly shortened the post-meeting statement –

from 341 words to 130 – and removed forward guidance.