Investor appetite grows due to expectations about interest rates

Investor appetite grows due to expectations about interest rates

The world stocks were trading around one-month highs on Tuesday, boosted by renewed confidence in interest rate cuts in the United Stateswhile the weakness of the yen and the slight fall of the Australian dollar kept the dollar.

Last week saw a radical change in investor expectations about rates in the United States. The market went from forecasting one cut in 2024 to almost two, following monthly employment data that indicated the labor market is weakening.

Wall Street: investor appetite grows due to expectations about Fed interest rates

The day before, the downward trend in US stocks reversed, accelerated by the volatility of results. The benchmark S&P 500 index posted its biggest daily gain since February following Friday’s payrolls report, which added to Monday’s gains.

The futures of Wall Street They pointed to a stable start to the session later in the day, while the pan-European STOXX 600 gained 0.7%, helped by the banking sector’s gain on UBS’s 10% rise.

MSCI’s world equity index rose 0.1%, near its highest since April 10.

The statements of the president of the Fed, Jerome Powell in which he reiterated that the next rate movement will be downwards, further underpinned the environment created by last week’s US employment data, weaker than expected.

The US treasury bonds They continued their advance after the labor data. The yield on 10-year notes fell 3 basis points to 4.459%.

Expectations of lower rates have weighed on the dollar, although only slightly. European monetary authorities are preparing cuts for June, which will cap the euro, and rates are not expected to move much above zero in Japan this year, leaving a wide gap with the rest of the world.

The dollar appreciated 0.6% against the yen on Monday and another 0.3% on Tuesday, to 154.39 units, keeping markets in suspense over whether Japanese authorities could intervene again.

The Australian central bank left rates unchanged as expected, but the Australian dollar fell 0.4% to $0.6599 after policymakers failed to reinforce guidance on the risk of another hike. of types.

The pound sterling fell 0.1% to $1.255, and the euro was stable at $1.0767.

In terms of raw materials, oil prices fell around 0.3% and gold fell 0.4% to $2,315 an ounce, still close to recent all-time highs.

Source: Ambito

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