LONDON - Global stocks rose on Friday as investors firmed up bets on a U.S. interest rate cut at the end of July after a speech by a top Federal Reserve official further cemented expectations for one, fuelling appetite for risky assets and capping the dollar.
In oil markets, crude surged after the United States said its navy had destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows, raising concerns about supply disruptions out of the region. Financial markets reacted quickly, with Fed fund rate futures at one point pricing in an almost 70% chance of a 50 basis point cut. The odds eased to around 40% after the New York Fed said William’s speech had not been about immediate policy direction.
“Despite a rather lackluster earnings season so far, investors are focusing on the prospect of a considerably easier monetary policy, which is why we see stocks ready to open higher this morning,” said Konstantinos Anthis, head of research at ADSS.MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1%, bouncing back from the previous day’s losses, while Japan’s Nikkei advanced 2%.
The two sides resumed talks recently to seek an end to a year-long trade war that has rattled financial markets and slowed global growth. But most analysts do not expect an agreement any time soon, with some predicting a strong risk of further tariff escalation. In commodities, U.S. crude oil futures reversed a large part of the previous day’s deep losses, briefly rising 1.45% to $56.10 per barrel before easing back to $55.81, up 0.9%.
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