Caution in the markets: they look to China and the giants of Wall Street

The world stock markets They were trading sideways on Friday, as investors held off on placing further bets ahead of Beijing’s expected fiscal stimulus update this weekend.

Wall Street futures were lower, European shares were stable and MSCI’s broadest index of Asia-Pacific shares excluding Japan closed the week with losses after four consecutive weeks of gains.

World stock index near all-time highsafter the volatility unleashed at the end of the summer by fears of a recession in the United States was mitigated by the first interest rate cut by the Federal Reserve of this cycle, which reduced borrowing costs by 50 basis points.

This first round of US monetary policy easing opened the door for China to adopt monetary support measures without creating additional pressure on the weakened yuan. The Chinese Ministry of Finance indicated that it will announce major fiscal stimulus on Saturday.

“Stimulus is important for Chinese equities, but also for (global) risk sentiment more generally,” said Tessa Mann of insurance group WTW.

Beijing’s next moves, which investors around the world are counting on to boost activity everywhere from the iron mines of Australia to the luxury stores of London and Paris, could depend on whether the Fed continues to cut rates.

Consumer prices rose more than expected in September compared to August, indicating that the Fed may have applied a larger dose of relief than necessary to an economy that is not yet in crisis.

However, money markets continue to bet 85% on a rate reduction of 25 basis points on November 7, after data that showed the day before an increase in weekly applications for unemployment benefits and the passage of major hurricanes through United States, threatening its economy.

U.S. bank results will be released on Friday, providing the latest data on business activity and consumer confidence.

The dollar was trading steady, after hitting two-month highs overnight, as traders abandoned bets on another half-point rate cut.

The rate-sensitive two-year US Treasury yield has risen for two consecutive weeks, although it was down 3 basis points at 3.98% on the session. The yield on benchmark 10-year notes was trading stable at 4.092%, well above the level of around 3.6% at the beginning of September.

The pan-European STOXX 600 index was trading flat, near its 52-week high, as investors focused more on possible monetary easing by the European Central Bank than the monetary bloc’s economic slowdown.

In commodities, crude oil prices fell about 1% after gaining about 4% overnight, while spot gold rose 0.3% to $2,637.44 an ounce.