An AI arms race has begun between the tech giants. The British index is supported by strong results of BP and Shell

According to the Fed’s rate monitoring tool, expectations for a rate hike in March are almost entirely factored into prices, while the probability of a rate hike in May jumped from 38% to 69%. The final rate is expected to be 5.00-5.25% in May, after which the central bank will take a long pause until the end of the year.

Microsoft Corporation (MSFT) and Alphabet Inc (GOOGL) are showing strong growth. An AI arms race has begun between the two technology heavyweights. One day after Google released its chatbot Bard, based on its LaMDA artificial intelligence, Microsoft held an event detailing plans to integrate ChatGPT into its Bing search engine as well as other products.

ECB spokeswoman Isabel Schnabel said yesterday that the slowdown in inflation in Europe is not yet due to ECB policy, with core inflation (excluding food and energy prices) remaining extremely high.

Yields on two-year UST (bonds), sensitive to interest rates, are slightly below the level last seen at the end of last year. Gold is inversely correlated to US government bond yields and the dollar index. Against the backdrop of further US Federal Reserve rate hike plans, higher UST yields are expected for a longer period of time, so it will be difficult for gold to regain its recent high levels.

Natural gas futures increased for a second straight day on Tuesday, adding just over 5% thanks to forecasts of cooler temperatures in the coming weeks. But analysts believe this is a temporary bounce and a new bottom is yet to come because storage levels are 9.4% higher than a year ago, and production has reached near-record levels of about 100 billion cubic feet a day, which has significantly weakened the fundamental outlook for gas.

Asian markets also traded without a single trend yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.03% yesterday, China’s FTSE China A50 (CHA50) fell by 0.14%, Hong Kong’s Hang Seng (HK50) ended the day up by 0.36%, India’s NIFTY 50 (IND50) lost 0.24%, and Australia’s S&P/ASX 200 (AU200) ended the day down by 0.46%.

The Australian dollar rose sharply after the RBA raised its interest rate target to 3.35% from 3.10%. The acceleration in the Consumer Price Index caused some concern among bank officials. The RBA’s accompanying statement said that the board expects that further interest rate increases will be needed in the coming months to ensure that inflation returns to target levels and that this period of high inflation is only temporary. The futures market is starting to lean toward another potential 25 bps hike in March.