Frankfurt, Germany – European stocks saw an increase as anticipation grew for a potential interest rate cut by the European Central Bank, with a focus on market expectations for monetary policy adjustments this year. Tech shares drove gains in the Stoxx 600 index, following a surge in the sector that led to all-time highs on Wall Street. Leading the charge was Nvidia Corp., which reached a milestone as the first computer-chip company to achieve a $3 trillion market cap.
Market optimism was driven by technology’s continued dominance, according to Matt Stucky, a senior portfolio manager at Northwestern Mutual Wealth Management. Investors awaited insights from the ECB later in the day, particularly from President Christine Lagarde’s press briefing, to gain clarity on the direction of monetary policy. Expectations for further rate cuts this year have become more subdued due to robust economic growth, inflation, and wage increases.
In the US, attention turned to the upcoming jobs report as private payrolls data revealed sluggish growth, while the services sector showed strong expansion. Global government bonds saw a fifth consecutive session of gains, signaling increasing bets on rate cuts. The US dollar faced pressure after Canada’s decision to lower borrowing costs, intensifying focus on the American rate trajectory.
Northwestern Mutual’s Stucky highlighted growing confidence in the ability of the Fed to implement rate cuts in the latter part of the year, especially with actions from the Bank of Canada and anticipated moves by the ECB. This momentum suggests a coordinated global easing cycle may be on the horizon.
Across Asia, Indian equities rose after Prime Minister Narendra Modi secured crucial support from coalition allies. In Japan, the yen’s volatility continued amidst statements from the Bank of Japan, while China’s property stocks faced uncertainty amid doubts about Beijing’s sector support efforts.
Commodities saw oil prices rising for a second day, despite concerns raised by Saudi Arabia over demand outlook. Industrial metals like copper, zinc, and nickel experienced gains, pointing to positive market sentiment. Key events expected include Eurozone retail sales and GDP data, as well as US initial jobless claims and trade figures.
In market movements, European and Asian stocks recorded gains, with currencies remaining relatively stable. Cryptocurrencies and bond yields saw mixed trends, while commodities like Brent crude and spot gold displayed modest increases. Overall, market dynamics are shaping up amidst shifting global economic conditions, signaling potential changes in policy and investor sentiment in the coming months.