The bags European stocks were trading early on Friday with different directions, after the caution of the markets Asian stocks slowed the recent rally in equities, a move attributed to profit-taking after a busy week.
The surprising drop in rates of the swiss central bank Thursday helped markets reach new highs as traders realized that The world’s major central banks would not necessarily wait for the US Federal Reserve to lower rates before doing the same.
Wall Street had risen on Thursday and the three major indices extended their streak of record highs, but the mood turned more cautious in Asia.
He Chinese yuan fell sharply, hitting a four-month low, in a move that analysts attributed to growing expectations that there will be more monetary easing to shore up the country’s economy. Chinese stocks fell, dragging down broader markets.
The MSCI World Equity index lost 0.1% on the day, but rose 1.9% for the week as a whole, on track to record its biggest weekly rise so far this year.
The European STOXX 600 rose 0.1%, hitting a new all-time high, while London’s FTSE 100 rose 0.9%. The MSCI Europe index fell 0.2% and the French CAC 40 also lost 0.2%.
In a busy week for markets, traders were confident not only because of Switzerland’s rate cut on Thursday, but also because the Bank of England was more pessimistic than expected. The Bank of England said the economy was “moving in the right direction” to start cutting rates.
For its part, the United States Federal Reserve said at its meeting on Wednesday that recent high inflation readings had not changed the underlying “story” of a slow easing of price pressures.
“I think there could be some profit-taking at the end of the week, simply because of the amount of data we’ve seen and the fact that we’ve seen more positive surprises,” said Baylee Wakefield, multi-asset fund manager at Aviva.
The dollar index rose 0.4% to 104.400, on track for its best week since the first week of the year.
“Basically, the dollar is going to have its best week since January, and that’s because markets are now accepting that other major central banks will cut their interest rates faster than the Federal Reserve, especially as strong U.S. economic data This week’s United States is further proof of that,” said Aviva’s Wakefield.
Jobless claims unexpectedly fell, existing home sales rose by the most in a year in February and U.S. business activity held steady in March, data this week showed. For the first time in two years, an indicator of future economic activity in the United States turned positive in February.
He euro fell 0.4% to $1.0819
Bundesbank President Joachim Nagel said the likelihood of the European Central Bank cutting rates before the summer is increasing.
The pound lost 0.6% to $1.258, hurt by statements by Bank of England Governor Andrew Bailey in an interview with the Financial Times, in which he stated that expectations of further interest rate cuts this year as a whole were not “unreasonable.”
Eurozone government bond yields recorded a weekly decline. The benchmark German 10-year yield fell 3 basis points to 2.371%.
The prices of Petroleum They fell to the possibility of a ceasefire in Gaza. The strength of the dollar and lower demand for gasoline in the United States also weighed on prices.
He gold It fell 0.7% to $2,166.31 an ounce, after reaching an all-time high of $2,222.39 on Thursday.
Source: Ambito
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