London (AFP) – European and Asian stock markets mostly rose Wednesday following a resumption of Wall Street’s rally, but gains were muted as investors await the last tranche of US data before next week’s Federal Reserve meeting. With a cut to US interest rates expected, trading has softened ahead of key indicators this week that could still play a role in the central bank’s planning over the next year.
Most in focus are the private jobs report from payrolls firm ADP on Wednesday and Friday’s personal consumption expenditure (PCE) index — the Fed’s preferred gauge of inflation. “The justification for a rate cut next week centres around weakness in the (US) jobs market,” noted Joshua Mahony, chief market analyst at trading group Scope Markets. “While we are seeing confidence return for the US tech stocks, fears around an AI bubble will undoubtedly play a key role for investors going forward,” he added.
Money markets have put the chances of a December 10 cut at around 90 percent, with another three forecast by the end of next year, weighing on the dollar. The pound was up 0.5 percent against the dollar on UK data showing stronger than expected activity from the British services sector. Stronger sterling weighed on London’s benchmark FTSE 100 stock index, which features major companies earning in dollars.
Optimism over US rate cuts has meanwhile won an additional boost from reports that President Donald Trump’s top economic adviser Kevin Hassett — a proponent of more reductions — is the frontrunner to take the helm at the Fed when Jerome Powell’s tenure ends in May. While a number of bank decision-makers have thrown their hat in the ring for a reduction, there remain differences on the policy board about the need to target the soft labour market or stubbornly high inflation.
Elsewhere on Wednesday, the Indian rupee weakened past 90 per dollar for the first time, extending declines through the year as New Delhi struggles to strike a trade deal with the United States.
– Key figures at around 1050 GMT –
London – FTSE 100: DOWN 0.2 percent at 9,680.66 points
Paris – CAC 40: FLAT at 8,073.80
Frankfurt – DAX: UP 0.2 percent at 23,751.63
Tokyo – Nikkei 225: UP 1.1 percent at 49,864.68 (close)
Hong Kong – Hang Seng Index: DOWN 1.3 percent at 25,760.73 (close)
Shanghai – Composite: DOWN 0.5 percent at 3,878.00 (close)
New York – Dow: UP 0.4 percent at 47,474.46 (close)
Euro/dollar: UP at $1.1665 from $1.1622 on Tuesday
Pound/dollar: UP at $1.3283 from $1.3209
Dollar/yen: DOWN at 155.52 yen from 155.86 yen
Euro/pound: DOWN at 87.81 pence from 88.00 pence
Brent North Sea Crude: UP 1.3 percent at $63.26 per barrel
West Texas Intermediate: UP 1.5 percent at $59.52 per barrel
© 2024 AFP
