US Fed Warsh speaks overnight

• US Fed Chair Warsh’s speech at the ECB Forum in Sintra failed to deliver the hawkish tone that markets had been expecting. He reiterated that the Fed would not provide forward guidance but noted that inflation risks have eased in recent months.
• However, he reaffirmed the Fed’s commitment to its 2% inflation target, prompting markets to slightly pare back expectations for near-term rate hikes.
• US equities finished mostly lower overnight, led by weakness in the technology sector, while most other sectors were little changed. US Treasury yields were also broadly steady.
• Elsewhere, developments in Middle East peace talks remained constructive, although several key issues still need to be resolved. Brent crude extended its recent decline, falling back to around US$71/bbl, broadly in line with pre-conflict levels.