European stocks rise after Wall Street closes higher

European stocks rallied on Thursday after Wall Street closed the previous session higher, as traders weighed strong US economic data and the minutes of the latest Federal Reserve policy meeting. state.

The Stoxx Europe 600 index was up 0.5% in early trades. Wednesday’s regional index recorded a four-day losing streak after closing lower in the previous four trading days, falling 1.3% on Tuesday. Last week, various countries in the bloc were forced to impose new coronavirus restrictions in response to the rising number of cases.

Germany’s Dax index rose 0.4%, as did France’s CAC 40 index. London’s FTSE 100 index rose 0.1% at the open.

The US blue-chip S&P 500 index ended the previous day up 0.2 percent, with the tech-focused Nasdaq Composite closing up 0.4 percent. Those moves follow new data showing that the weekly US jobless count has hit its lowest level since 1969.

Other data show a inflation gauge followed by the Fed, which posted its biggest year-on-year gain in October since the 1990s. The core personal consumption spending index rose 4.1 percent, in line with economists’ expectations but up from 3.7% in September.

Meanwhile, the minutes of the Fed’s November policy meeting indicated that officials believe “maintaining flexibility” is important regarding the withdrawal from the pandemic-era asset-buying stimulus program. worth $120 billion per month.

Officials, who are expected to start raising rates only after such a rate cut is over, noted that inflation could “take a long time to ease away from where they previously assessed. this”.

The US stock market and the Treasury market will remain closed on Thursday for the Thanksgiving holiday.

On Wednesday, the yield on the two-year U.S. Treasury note, which is sensitive to fluctuations in monetary policy, rose 0.03 percentage points to 0.64 percent. Bond yields are inversely proportional to price.

Tatjana Greil Castro, co-head of public markets at Muzinich & Co, said the Thanksgiving holiday is “an excuse for all the markets to grow very slowly” and “any data we see today” past won’t be visible until tomorrow, so we’ll see very little in terms of movement.”

Arguing that higher food and energy prices here will persist, she said inflation is likely to prove “fixed” in the long run.

In European government debt markets, yields on 10-year German bonds fell about 0.02 percentage points to minus 0.236 percent on Thursday. Minutes of the most recent meeting of the European Central Bank will be released later in the day.

Although the United Kingdom’s Fed, ECB and Bank of England have yet to start raising interest rates, South Korea on Wednesday raised borrowing costs for the second time in three months, following the Reserve Bank of New Zealand’s announcement. earlier in the week that they would tighten monetary policy.

In Asia, Hong Kong’s Hang Seng share index rose 0.2%. China’s CSI 300 index fell 0.4%.

In currency terms, the dollar index fell 0.2% after strengthening a day earlier. The euro, which hit its lowest point against the dollar on Wednesday since June 2020, rallied back above the $1.12 threshold.

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