Global equities are on track to reach fresh record highs following a significant tech-led rally in US markets, with investors eagerly awaiting key inflation data for insights into the Federal Reserve’s monetary policy stance. European and US stock futures edged higher, while the MSCI All Country World Index extended its longest winning streak since January.
Ahead of the release of the US consumer price index (CPI) data, the S&P 500 shrugged off signals from Federal Reserve Chair Jerome Powell indicating that interest rates would remain elevated for an extended period. Despite a mixed reading on producer inflation, market sentiment remained buoyant, with investors closely monitoring the upcoming CPI report.
“Market sentiment hinges on tonight’s US CPI report,” remarked Kyle Rodda, a senior market analyst at Capital.com in Melbourne. “While promising, if it were to occur and represent a more than three-year low for core CPI, a greater downside surprise would be required to dispel fears about sticky and re-anchored inflation.”
In Asia, a gauge for benchmarks gained momentum after reaching a two-year high on Tuesday, led by Taiwan Semiconductor Manufacturing Co. However, shares in Japan ended the day with marginal changes, while mainland China experienced a slight dip in stock prices. Hong Kong markets remained closed due to a holiday.
The offshore yuan witnessed a modest uptick, reflecting gains observed in other China-sensitive currencies such as the Australian dollar and Thai baht. These movements underscore the market’s sensitivity to developments in the Chinese economy and its implications for global trade and growth.
As investors navigate evolving market dynamics and anticipate the release of crucial economic data, the resilience of global equities amid ongoing volatility reflects cautious optimism regarding the trajectory of monetary policy and economic recovery worldwide. Source: BLOOMBERG
