Fed Bets Cause Stock Rally to Continue as Dollar Weakens – Asia Market Wrap
Stocks rose and the Dollar sank as dismal US consumer data and the appearance of a pro-rate-cutting official as the probable Fed chairman led markets to price in an almost definite reduction in borrowing costs.
The MSCI All Country World Index extended its rebound for the fourth day, reducing the gauge’s losses from this month’s selloff to 1.3%. Asian stocks rose 1.4% as Wall Street rallied. The momentum appeared to be sustainable, with futures for the S&P 500 and European shares indicating more gains.
Treasuries reversed some of their gains from the previous session, when news that White House National Economic Council Director Hassett had emerged as the frontrunner for the next Fed chair boosted bond prices. The Dollar fell versus the majority of its Group-of-10 peers. Gold, which normally benefits from rate cuts, rose 0.9% to $4,166 per ounce.
The UK budget is Europe’s most significant risk event. Reeves must announce steps that will satisfy both the MPs who have put PM Starmer on notice and the gilt investors who have been demanding a premium on UK debt compared to the US, Germany, and Japan.
Elsewhere in commodities, oil held steady after closing at its lowest in a month news of the peace deal in Ukraine.
