Global stocks are trading just 1% below their all-time high as oil prices fall and the dollar weakens.
The global actions stabilized on Friday, standing at just 1% of their all-time highs, while the dollar languished near one-year lows ahead of a speech by the president of the United States Federal Reserve (Fed), Jerome Powellwhich markets will look to for guidance on the shape of rate cuts.
The broad European index Stoxx 600 rose 0.35% after Asian stocks were lower Japan fell by 0.1%, but the Nikkei Japan gained 0.4% as investors digested data from inflation and the comments of the governor of Bank of Japan (Boxwood), Kazuo Uedawhich signaled a willingness to raise interest rates if the economy and inflation turn out as forecast.
The world index MSCI rose a bit and, with the turmoil of early August in the rearview mirror, is now trading about 1% below its all-time high of mid-July. It could approach that milestone later in the day with futures S&P500 rising by 0.55%.
However, the main event of the week, certainly for bond and currency markets, is still to come: Powell’s keynote speech at the annual conference of the Kansas City Fed in Jackson Holewhich comes as US economic data gives the Federal Reserve the green light to cut interest rates.
Markets are already pricing in a 25 basis point rate cut in September and are expecting a cut at each of the three remaining Fed meetings this year, with one of them being a larger 50 basis point cut.
For the bond market, expectations of looming rate cuts have kept bond prices lower. US Treasury bonds supported and without losing the safe-haven gains they made in early August.
The benchmark 10-year Treasury bond yield fell 2 basis points to 3.843% (it was only above 4% for a very brief period in August, after spending almost all of 2024 there). Its German equivalent held steady at 2.24%.
He oil rose, but is still on track to end the week lower. Brent crude futures Oil prices rose 1% to $77.98 a barrel, though they are down more than 2% on the week as rising U.S. stocks and a weakening demand outlook China have increased pessimism.
Source: Ambito
