Premarket: Global stocks see boost from rate-cut fever

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Steady U.S. dollar helps lift commodities

Global shares rose to one-month highs on Friday while the dollar held steady, giving commodities a boost, after softer U.S. jobs data gave investors confidence that interest rates will start to decline this year.

The STOXX 600 rose 0.9 per cent towards record highs on Friday, heading for one of its strongest weekly performances this year. U.S. stock futures were up 0.4-0.5 per cent. Markets will be closely watching April U.S. producer price index and the consumer price index out next week for signs that inflation has resumed its downward trend toward the Federal Reserve’s 2-per-cent target rate.

BOE Governor Andrew Bailey said there could be more reductions than investors expect, the latest sign of the growing divergence between Europe and U.S. rate outlook.Traders currently anticipate roughly 45 basis points of cuts this year from the Fed. In comparison, traders are pricing in 58 bps of easing from the BoE this year, while anticipating 70 bps of cuts from the ECB.

On Friday, the yen was last at 155.70 per dollar, with Japan’s Finance Minister Shunichi Suzuki repeating Tokyo’s recent warnings that it was ready to take action against disorderly currency moves.

 

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