Premarket: Tech takes stocks higher as ECB prepares for rate cut

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Oil rebounds from near 3-year low

Share markets enjoyed a fourth straight day of gains on Thursday as the prospect of another ECB rate cut pinned shorter-term euro zone borrowing costs near to their lowest level since the end of 2022, and the euro to a 4-month nadir.

Chief European Economist at BNP Paribas Paul Hollingsworth said new inflation projections might actually come in higher than the last set in June, although they will have been finalised before this month’s dive in oil prices. European shares, which have not enjoyed the same strength of rebound this week as other parts of the world, were up a solid 1% with tech stocks jumping 2.5% after Magnificent 7 powerhouse Nvidia had surged on Wall Street on Wednesday.

The dollar was last up another 0.2% to 142.57 yen, having been pressured earlier by hawkish comments from a senior Bank of Japan official who called for raising rates at least to 1%. “We are now comfortable with calling a 25bp cut for September, but also open-minded to the idea that a weak U.S. payrolls report on 4 October would fully open up a 50bp cut in the November FOMC meeting.”The disappointment over core inflation figures had pressured Wall Street but again tech stocks came to the rescue, with AI darling Nvidia jumping 8%, helped by a media report that the U.S. government is considering letting the company export advanced chips to Saudi Arabia.

That left the 2-10-year yield curve flattening slightly and barely remaining positive at less than 1 bp.

 

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