Written by Amanda Cooper and Wayne Cole
LONDON/SYDNEY (Reuters) – Global stocks rose on Monday after U.S. inflation data showed hope for further policy easing next year and relief that Washington avoided a government shutdown.
After the huge success of recent central bank decisions, this week we'll only see the minutes of a few of them, no Federal Reserve speeches, and US statistics taking a backseat.
The main market themes remain largely unchanged, with the dollar supported by a relatively strong economy and rising bond yields, which weigh on commodities and gold.
European markets have come under criticism in recent weeks as investors doubled their holdings of US stocks and the dollar.
which was down 0.15%, is expected to fall 4% this quarter, compared with a 3% rise in , its worst quarterly performance in two-and-a-half years.
The euro has hit two-year lows in recent weeks and is on track for a 6.5% quarterly decline against the dollar, its lowest since the second quarter of 2022.
Investors are increasingly pessimistic about the outlook for the eurozone economy, especially after President-elect Donald Trump threatens to impose steep tariffs on regional exports to the country.
“Although we have adjusted the direction of the EUR/USD slightly lower for next year, the dollar remains weak as much of President Trump's agenda is a risk, including tax cuts and regulation, trade wars, mass deportations, and controversial foreign policy. “Geopolitical tensions could push the dollar higher,” said Nordea strategist Jan von Gerlich.
Political turmoil in Germany and France, the Eurozone's main growth drivers, is weighing on investor confidence in Europe, while the U.S. economy is buoyed by rising employment, moderately declining inflation, and solid business activity. Doesn't really show any signs of weakness. This pushed the S&P 500 to an all-time high this year.
“While the US economy remains resilient, trends are becoming increasingly divergent in the wake of the election of President Donald Trump,” strategists at asset management firm Edmond de Rothschild said in a note.
strong stock
Asia rose 1.2%, with the automaker index rising 1.3%, helped by signs of progress on a potential merger between the two countries. honda (NYSE:) and Nissan (OTC:).
The MSCI All World Index has risen 16% since the beginning of the year, but was up 0.2% on the day.
Nasdaq futures rose 0.3% and rose 0.5% ahead of the start of trading on Wall Street. Last week, the S&P 500 fell about 2% and the Nasdaq fell 1.8%, although the latter is still up 30% since the beginning of the year.
U.S. interest rate futures suggest a rate cut of about two quarter points is priced in next year, which would put the benchmark rate in the range of 3.75-4.0%. Just two weeks ago, this forecast was closer to the 3.50-3.75% range.
As a result, the 10-year Treasury yield soared, rising about 42 basis points in two weeks to about 4.54%, its biggest rise since April 2022.
In the foreign exchange market, the currency rose about 2% this month and remained at around 107.96, the highest level in two years. The euro fell 0.2% to $1.0409, falling below $1.04, just off its two-year low last week.
The dollar rose 0.1% against the yen to 156.55 yen.
Oil prices rose modestly, along with other risk assets, but a strong dollar remains a burden, along with concerns about Chinese demand following last week's weak retail sales. [O/R]
Futures rose 0.2% to trade at $73.07 a barrel and rose 0.3% to $69.62.
