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Global markets fall: expectations for US rates cloud China’s announcement for the real estate sector

Global markets fall: expectations for US rates cloud China’s announcement for the real estate sector

World stock markets fall this Friday, after Federal Reserve hints interest rates won’t drop anytime soonwhile raw materials rebound thanks to optimism sparked by a series of measures adopted in China to stabilize its beleaguered real estate.

Wednesday’s data revealed a cooling in US consumer price inflationleading markets to forecast at least two rate cuts this year. However, the enthusiasm soon fades, as another report then indicates that the US labor market remains tight, while central bankers remain cautious about inflation.

The variable income sIt continues to aim for profits this week, but cuts them after these figures. Crude oil and gold benefit from evidence that price pressures have not worsened, while copper is heading for its best weekly performance in two months, as a shortage of material for immediate delivery has sent prices soaring.

Traders expect roughly two quarter-point cuts from the Fed this year, with November being the most likely starting point. Even though inflation has cooled for the first time this year, the Fed is sticking to the refrain of “rates have to stay here for a while,” says Fiona Cincotta, strategist at City Index. “That pours some cold water on the rate-cutting party.”

Global markets: this is how they are in the session

MSCI’s world stock index fell 0.1%, still close to this week’s all-time highs, while the pan-European STOXX 600, which also hit a record this week, fell 0.4%.

The day before, the Dow Jones Industrial Average touched 40,051.05 points, while the S&P 500 and Nasdaq indices also reached all-time highs before closing the day somewhat lower. Wall Street futures gained about 0.1% on the day.

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Chinese stocks rise as the government unveils a series of “historic” measures to shore up the real estate sector, which has lurched from crisis to crisis and hampered overall economic growth. Shanghai’s CSI 300 index gains 1% and Hong Kong’s Hang Seng hits its highest since August 2022, up 0.9%.

In the currency marketsthe dollar registers its biggest weekly fall against the euro in two and a half months. The euro is down 0.2% at $1.084, but still headed for a 0.7% weekly gain. The yen fell 0.3%, to 155.88 units, giving up part of the gains obtained after the publication of the US CPI this week.

In raw materials, crude oil prices declined by around 0.1%, although they are on track to close the week on the rise for the first time in the last three, thanks to signs of improvement in global demand.

Copper, which hit two-year highs this week, rose 0.7% to $10,500 a tonne, and gold gained 0.5% to $2,389 an ounce, pointing to its second straight weekly gain.

Source: Ambito

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