World stocks at two-year high, US inflation data in focus

Feb 12, 2024

London: European shares opened with gains on Monday world stock were steady at their highest level in more than two years as investors waited US inflation data This week is to give clues about when US Federal Reserve Rates may be cut.
The S&P 500 rose above 5,000 points for the first time last week, boosted by technology stockAnd world equities have risen for three straight weeks, even as U.S. Treasury yields have risen recently as investors have lowered their expectations about how quickly the Fed might cut rates.
With most major Asian markets closed for holidays, analysts said they expected a quiet day in the markets as traders await US inflation data on Tuesday as well as British inflation data and euro zone gross domestic product on Wednesday. are doing.
“We are seeing the market temper expectations of a rate cut,” said Kiran Ganesh, multi-asset strategist at UBS. He said markets were pricing in fewer than five US cuts this year, down from six or seven at the start of the year.
“The equity market “We have been relatively immune to this as there are low expectations of an interest rate cut due to strong economic growth, which is certainly good for equities as well.”
Strong US jobs data in early February meant investors had reduced expectations of a rate cut at the Fed's next meeting, with the market seeing an 84.5% chance of rates remaining unchanged in March.
At 0857 GMT, the MSCI World Equity Index, which tracks stocks in 47 countries, was flat on the day, having hit its highest level since January 2022 earlier in the session.
The pan-European STOXX 600 was up 0.3%, having remained relatively flat in February but rising 1.4% in January.
London's FTSE 100 was little changed and Germany's DAX was up 0.2%.
Ganesh said the equity rally was “somewhat focused on a few names”, as enthusiasm for artificial intelligence boosts tech stocks.
“I don't think it should be a surprise if we see some period of consolidation over the next weeks or months,” he said. He said he is still “very positive” on the AI ​​trend.
The US dollar index was up about 0.1% at 104.130, and the euro was slightly lower at $1.0774, coming off a 10-day high hit earlier in the session.
yen stable
The Japanese yen, which has weakened on expectations of a US rate cut, was steady at 149.190 per dollar.
Investors have reduced expectations of a rate cut by the European Central Bank after two policymakers last week said the ECB needed more evidence that inflation is coming down before cutting rates.
Euro zone government bond yields, which had risen sharply last week, eased slightly on Monday, with the benchmark German 10-year yield falling by one basis point to 2.373%.
Oil prices fell after Israel said it had “ended” a series of attacks in southern Gaza, slightly easing concerns about supplies from the Middle East. Brent crude futures were down 0.5% at $81.82 a barrel and West Texas Intermediate crude futures were down 0.5% at $76.46 a barrel.
Gold fell marginally at $ 2,022.6 an ounce.
Markets in China, Hong Kong, Japan, South Korea, Singapore, Taiwan, Vietnam and Malaysia were closed for holidays.
Mainland China's financial markets are closed for the Lunar New Year holidays and will resume trading on Monday, February 19. Trading in Hong Kong will resume on February 14.

Related Post

Leave a Reply

Your email address will not be published. Required fields are marked *