Stocks rally anew on US rate cut hopes; dollar steady

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NEW YORK/LONDON, May 7 - Global shares traded close to one-month highs on Tuesday, boosted by revived optimism that the Federal Reserve cuts U.S. interest rates once if not twice this year, while a weaker yen offset by a stronger euro kept the dollar steady.

The yield on benchmark 10-year Treasury notes slid to an almost a one-month low of 4.420%, while the dollar index , a measure of the U.S. currency against six peers, was off about 1.2% from nearly a six-month high on May 1. The strength of the U.S. housing market and potentially stalled progress on inflation means monetary policy may be less restrictive than officials believe, Minneapolis Fed President Neel Kashkari said in an essay that raises the possibility prices are"settling" at a level above the Fed's 2% target.

In Europe, the pan-regional STOXX 600 index , opens new tab jumped 1.14% to a one-month high as UBS , opens new tab shares rose 7.59% after beating expectations. The 10-year Treasury fell 5.2 basis points to 4.437%, while the two-year note, which reflects interest rate expectations, slid 1.5 basis points to 4.807%.

 

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