Written by Harry Robertson and Uncle Banerjee
LONDON/SINGAPORE (Reuters) – European shares rose on Thursday after falling a day earlier, while Asian stocks fell as trading volume eased ahead of the U.S. Thanksgiving holiday.
The continent-wide STOXX 600 index rose 0.48% after falling 0.75% in the previous two sessions.
MSCI's broadest index of Asia-Pacific stocks outside Japan fell 0.52%, while Japan's Nikkei Stock Average rose 0.56%.
U.S. stocks and Treasuries ended trading, with U.S. S&P 500 index futures up 0.24% after the index fell 0.38% on Wednesday.
European markets were buoyed by gains in tech stocks after Bloomberg reported that the Biden administration's curbs on Chinese semiconductors may be less severe than expected.
Data on Wednesday showed that U.S. consumer spending rose in October, while the Federal Reserve's recommended inflation measure rose to 2.3% in October from 2.1% the previous month.
The prospect of higher tariffs on imports, as well as strong spending and inflation, could limit the scope for rate cuts next year.
“We continue to expect the FOMC to cut the funds rate by 25 basis points at its December meeting,” Commonwealth Bank of Australia economist Christina Clifton said, referring to the Federal Open Market Committee, which sets U.S. interest rates. “There is,” he said.
“However, if the monthly core inflation rate is strong again in November, it would cast doubt on the FOMC's view that inflation is trending down to 2% annually.”
The dollar index, which measures the value of the US currency against six rival currencies, rose 0.1% to 106.2, after falling 0.7% in the previous session.
Chris Turner, head of global markets at financial firm ING, said Wednesday's drop in the dollar may have been partly due to investors cashing in their November gains in U.S. stocks and bonds before the end of the month. said that it was high.
“Perhaps some of this movement happened in the more liquid market yesterday rather than waiting out the slow Thanksgiving period.”
In a surprise move, South Korea's central bank cut its benchmark interest rate for the second consecutive time at its meeting Thursday after inflation slowed more than policymakers expected. Following this decision, the won depreciated.
The yen fell 0.28% to 151.52 yen to the dollar, after rising to a one-month high earlier in the day. Asian currencies are heading for their strongest week since early September on rising expectations for a Bank of Japan interest rate hike next month.
The euro rose 0.13% after rising 0.7% in the previous session after European Central Bank Board member Isabel Schnabel said interest rate cuts should be gradual and move into neutral territory rather than accommodative. It fell to $1.0552. [FRX/]
