Daily Dose, EU

Sterling Weakens on Technical Recession – Europe Market Wrap

Following a rally that propelled the S&P 500 back above 5,000, US stock futures increased slightly as investors got ready for the next set of data on the US economy that could influence rate bets.

The S&P 500 and Nasdaq 100 contracts rose 0.1%, while Europe’s STOXX 600 index soared to its highest level in more than a month. Investors who were disappointed by Tuesday’s higher-than-expected US inflation reading may have to wait a little longer for interest rate cuts, but positive earnings reports have provided some relief.

Treasuries also recovered as investors awaited other economic reports that could help determine the Fed’s rate path, including initial unemployment claims, industrial production, and retail sales.

In currencies, a gauge of the dollar overcame an earlier loss to trade flat. The pound sank after statistics indicated that the UK was in a technical recession in the second half of 2023, while UK bonds climbed.

Traders add to BoE bets after UK GDP and see 78 BPS of cuts in 2024.

UK’s Chancellor Hunt scales back tax cuts as UK slips into recession – Telegraph