Stocks Rise While Treasury Selloff Abates – Europe Market Wrap

After the most recent US inflation statistics undermined the case for impending rate reduction by the Fed, stocks are closing the week on a more positive note.

After a steep selloff on Thursday due to an overshoot in producer price index data, Treasuries steadied and futures on the Nasdaq 100 and S&P 500 both climbed 0.2%.

Doubts over whether policymakers can let their foot off the monetary brake are creeping into generally buoyant markets, which have driven stock indices to new highs. European equities are on course for their eighth straight week of gains, the longest winning streak since 2018, buoyed by expectations that eurozone interest rates will begin to decline in the coming months.

Japan’s yen has weakened. Markets have essentially priced in a rate hike, but a gradual pace of tightening following that would lessen the yen’s yield edge over the dollar as the Fed stays cautious about cutting borrowing costs.

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