(Bloomberg) — Global stocks rose, with European markets at record highs, lifted by the prospect of lower interest rates amid signs of moderating inflation across the developed world.
The Stoxx Europe 600 index rose 0.4% after data showed euro-area inflation easing to a three-year low in August. Coming after similar slowdowns in France, Germany and Spain, the print bolsters the case for the European Central Bank to cut rates again next month.
US equity futures also advanced, with contracts on the Nasdaq 100 adding 0.6% and the S&P 500 up 0.4%. Nvidia Corp. edged higher in premarket trading, following the previous day’s 6% drop, while other tech names, including Marvell Technology Inc. and Dell Technologies Inc. were boosted by forecast-beating results.
Bets for a Fed rate cut continue to dominate, putting stock markets on track for a second month of gains. Most recent data showing the central bank has managed to tame inflation without tipping the economy into recession. Data on core PCE, the Federal Reserve’s preferred inflation gauge, is due later Friday.
“Inflation is looking better and economic growth remains decent and that’s the environment we are in,” said Florian Ielpo, head of macro research at Lombard Odier Asset Management in Geneva.
Markets now expect the Fed to cut rates next month by as much as 50 basis point and by another half-point by year-end. Ielpo expects the monthly payrolls report due next week to be even more significant than today’s PCE reading.
“Inflation is a done deal so markets are more likely to pay attention to what’s happening to employment and growth,” he added.
Expectations for monetary easing have put Treasuries on course for their longest monthly winning streak in three years. But the wagers have weighed on the dollar, which edged lower against a basket of currencies and was set for its worst monthly performance this year.
In commodity markets, oil extended gains on positive US economic data and worsening supply disruptions in Libya. Iron ore edged higher after rallying by about 10% in 10 days to breach $100 a ton.
Key events this week:
- Eurozone unemployment, Friday
- US personal income, spending, PCE; consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 rose 0.3% as of 10:10 a.m. London time
- S&P 500 futures rose 0.4%
- Nasdaq 100 futures rose 0.6%
- Futures on the Dow Jones Industrial Average rose 0.1%
- The MSCI Asia Pacific Index rose 0.7%
- The MSCI Emerging Markets Index rose 0.5%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1082
- The Japanese yen was little changed at 145.03 per dollar
- The offshore yuan rose 0.2% to 7.0823 per dollar
- The British pound rose 0.1% to $1.3184
Cryptocurrencies
- Bitcoin fell 0.1% to $59,459.52
- Ether fell 0.7% to $2,522.32
Bonds
- The yield on 10-year Treasuries was little changed at 3.85%
- Germany’s 10-year yield declined two basis points to 2.26%
- Britain’s 10-year yield declined three basis points to 3.98%
Commodities
- Brent crude rose 0.3% to $80.17 a barrel
- Spot gold rose 0.1% to $2,524.38 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Winnie Zhu.
©2024 Bloomberg L.P.
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