Global Markets Surge to Record Highs on Economic Optimism

Via Syndicated Feed

Cover Image Attribute: Image by Csaba Nagy from Pixabay

 Global equities surged to record highs on Thursday (July 11), bolstered by the Federal Reserve's expectations of easing inflation in the United States and potential interest rate cuts. The optimism was fueled by robust economic data from Britain and positive developments in various international markets.
European markets saw gains of 0.4% to 0.7% in early trading, following new peaks set by Wall Street and Tokyo overnight. The MSCI's main all-country world index scaled its own record, reflecting widespread investor confidence.
Market stability was maintained across bond markets and the dollar, allowing the yen to weaken and lifting the sterling to a four-month high. According to Societe Generale's Kit Juckes, these movements were influenced by favorable GDP figures from Britain and anticipation surrounding the European soccer finals.
Overnight, Asian markets also experienced significant climbs, with Japan's Nikkei and Taiwan's stocks reaching new milestones, while Australia's ASX 200 closed near its all-time high. In the U.S., strong performances from technology giants like Nvidia propelled the Nasdaq and S&P 500 to fresh peaks.
"The main driver behind these market movements is the anticipation of interest rate cuts," noted Shane Oliver, chief economist at AMP in Sydney. He emphasized that positive inflation data would likely support the Federal Reserve's decision-making process.
Federal Reserve Chair Jerome Powell's recent remarks to lawmakers underscored the central bank's readiness to act based on economic indicators. Futures pricing currently implies a high probability of a rate cut as early as September.
Economists predict that the annual U.S. Consumer Price Index (CPI) slowed to 3.1% in June from 3.3% in May. Meanwhile, central banks in South Korea and Malaysia opted to maintain their interest rates, with signals pointing towards potential cuts in the near future.
Looking ahead, the U.S. earnings season kicked off with reports from Delta Air Lines and PepsiCo, setting the stage for further market movements. However, concerns lingered over China's economic performance amid ongoing trade tensions and disappointing data.
In Europe, the pound reached a four-month high of $1.2874 following better-than-expected British GDP data and the Bank of England's chief economist being less clear on the timing of rate cuts than anticipated. The euro also increased to $1.0847. Also, U.S. Treasuries remained steady in Europe, with two-year yields at 4.62% and benchmark 10-year yields at 4.29%.
In Asia, the yen fell to 161.7 per dollar after data showed Japan's core machinery orders unexpectedly dropped for the second consecutive month, casting doubt on expected interest rate hikes. Meanwhile, the New Zealand dollar found support at its 200-day moving average, trading at $0.6095, and the Australian dollar rose 0.2% to a six-month high of $0.6763.
In commodity trading, oil prices increased slightly due to indications of robust U.S. gasoline demand. Brent futures rose by 16 cents, or 0.2%, reaching $85.24 per barrel, while U.S. crude rose by 20 cents, or 0.25%, to $82.30 per barrel. Gold also saw a 0.5% rise, climbing to $2,381 per ounce. Following a decline last week, bitcoin has stabilized around $58,900.
IndraStra Global Staff has not edited this story, which is auto-generated from a syndicated feed.

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