Equities Rally on Rate Cut Bets, SNB Surprises with Rate Cut – Europe Market Wrap

Global equities surged to all-time highs, with tech and commodity sectors leading the way in Europe, as traders gained confidence in the route to lower interest rates.

The STOXX 600 rose 0.6%, and S&P 500 futures indicated that US stocks would advance for the fourth consecutive day.

The Swiss currency fell sharply following the SNB’s surprise rate decrease. The franc plunged more than 1% against the dollar after the SNB cut its main rate by 25 basis points, a move that only a tiny number of experts expected.

Despite a recent resurgence in price pressures, Federal Reserve members maintained their estimate for three rate reduction this year, reigniting equity-market optimism. While Chairman Powell reiterated that policymakers would like to see more evidence that prices are falling, he also stated that it will be appropriate to begin relaxing “at some point this year.”

Treasuries climbed, decreasing the 10-year yield by four basis points, while the dollar made minor changes. Brent crude traded about $86 per barrel, while Bitcoin remained around $67,000. For the first time, gold climbed above $2,200 per ounce.

Traders increase rate-cut bets before BoE, pricing 75bps in 2024.