Stock Markets Mixed in Europe, Asia Amid Fed Rate-Cut Hopes. Bond Yields Drop.
Asian markets gained on Wednesday and Europe opened lower after retail sales data and remarks from Federal Reserve speakers revived hopes for interest-rate cuts sooner rather than later.
Hong Kong’s Hang Seng Index rose 2.7%, and Japan’s Nikkei closed 0.2% higher. Over in Europe, Germany’s DAX slipped 0.3%, as did France’s CAC 40 and the U.K.’s FTSE 100. Futures for the Dow Jones Industrial Index and the S&P 500 were little changed. Contracts tied to the Nasdaq were up 0.2%.
The…
Asian markets gained on Wednesday and Europe opened lower after retail sales data and remarks from Federal Reserve speakers revived hopes for interest-rate cuts sooner rather than later.
Hong Kong’s
Hang Seng Index
rose 2.7%, and Japan’s
Nikkei
closed 0.2% higher. Over in Europe, Germany’s
DAX
slipped 0.3%, as did France’s
CAC 40
and the U.K.’s
FTSE 100.
Futures for the
Dow Jones Industrial
Index and the
S&P 500
were little changed. Contracts tied to the
Nasdaq
were up 0.2%.
The prospect of lower interest rates and the boom in technology stocks in the optimism that artificial intelligence will boost profits is helping markets worldwide. Weaker-than-expected retail sales data and a slew of Fed speakers fanned hopes for rate cuts on Tuesday. U.S. markets are closed for the Juneteenth holiday.
“Fed policymakers appear to be creeping closer to bringing in a rate cut this year but are warning that patience will still be required,” said Susannah Streeter, head of money and markets at
Hargreaves Lansdown
.
The message from policymakers Tuesday was that “if conditions continue to ease as expected, an easing of policy later this year would be appropriate.”
U.S. government bonds reflected expectations for a reduction in rates. The 10-year Treasury yield fell to 4.227% from about 2.3% early Tuesday. The two-year Treasury yield was at 4.725%, compared with 4.78% before the retail sales release.
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The Bank of England announces its next interest-rate decision on Thursday. While it is expected to keep policy unchanged, a drop in U.K. inflation to the 2% target in May was a positive sign that it may lower borrowing costs later this year.
Write to Brian Swint at brian.swint@barrons.com
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