Global equities held steady on Friday as investors closely examined China’s most recent economic stimulus measures before later focusing on U.S. jobs data to see whether the Federal Reserve will hike interest rates this month.
With supplies becoming more scarce placing a floor under prices, oil was poised to end a two-week losing streak and move closer to $90 a barrel.
The dollar was on course to end a six-week winning streak ahead of the crucial U.S. non-farm payrolls numbers, which are due before the opening bell on Wall Street. This week’s declines in U.S. Treasury yields weighed on the currency.
Top banks paved the way for additional lending rate cuts, and Beijing also reduced the amount of money institutions must store in foreign exchange reserves as part of its stepped-up economic stimulus programme.
The MSCI All Country stock index increased by 0.13%, bringing its year-to-date gain to more than 13% after a setback in August when bond yields spiked.
When the Fed meets again in November, there is a 50/50 possibility that rates will be raised as momentum in the labour market begins to wane, according to Kevin Thozet, a member of Carmignac’s investment committee.
The likelihood of a U.S. recession is continually delayed by the economy’s strong resilience. It suggests that the idea of a soft landing is gaining ground and that the possibility of the Fed acting excessively is decreasing. One explanation for the markets’ good behaviour is this, according to Thozet.
Guy Miller, chief market strategist at Zurich Insurance Group, predicts that the Fed will put interest rate hikes on hold this month as equities are supported by expectations of a soft landing for the American economy following a series of rate increases.
“The momentum component is really significant. However, there is a struggle going on between the fundamentals, which are becoming worse, and the soft-landing brigade, which has significant momentum.
He continued, “Growth is weakening, which is one of the reasons the Fed is going to pause.
Additionally, given the weak state of the euro zone economy, many have doubts that the European Central Bank will raise rates when it meets this month.
The 600-company STOXX index in Europe increased 0.3%, bringing its yearly gain to approximately 7.8%.
Futures on U.S. market indexes were a little firmer.
China is “PROACTIVE.”
Beijing’s efforts to boost the slumping economy’s poor consumption and crisis-hit property sector are the focus of all attention.
A private-sector survey released on Friday revealed that China’s factory activity unexpectedly rebounded to increase in August, exceeding expectations. Supply, domestic demand, and employment all increased, indicating that government initiatives to promote growth may be having some success.
Futures on U.S. market indexes were a little firmer.
China is “PROACTIVE.”
Beijing’s efforts to boost the slumping economy’s poor consumption and crisis-hit property sector are the focus of all attention.
A private-sector survey released on Friday revealed that China’s factory activity unexpectedly rebounded to increase in August, exceeding expectations. Supply, domestic demand, and employment all increased, indicating that government initiatives to promote growth may be having some success.
The benchmark 10-year U.S. note yield increased to 4.1122%.
The greatest drop in two-year Treasury yields since mid-March has occurred this week, when they dropped around 20 basis points to 4.86%. These yields are extremely sensitive to rate forecasts.
U.S. crude increased by 0.3% to $83.86 a barrel, while Brent was up 0.3% to $87.06.
Gold’s spot price increased by 0.1% to $1,942 per ounce.
Bitcoin lost all of its previous week’s gains in value, closing at $25,974 as of this writing after falling 5% over night as a result of the Securities and Exchange Commission’s (SEC) decision to postpone a decision on several applications for spot bitcoin ETFs.