Global shares mixed ahead of U.S. data, ECB meeting

by Jonathan Adams
Global shares drop

The pan-European STOXX 600 index dropped 0.1%, while futures on Wall Street were muted

Global shares were mixed on Tuesday ahead of this week’s U.S. inflation data and a key ECB meeting, while industrial metals prices extended recent gains on expectations of a global manufacturing rebound.

The pan-European STOXX 600 index dropped 0.1% in early trade, while futures on Wall Street were muted.

Stock markets seem to be in a holding pattern at the moment and I think that will continue until we get more clarity on inflation and the state of the economy, according to Dan Boardman-Weston, CIO at BRI Wealth Management.

Markets are waiting to see what the inflation print is and how that changes expectations for rate cuts going forward, Boardman-Weston added.

Traders are now pricing nearly 62 bps of cuts from the Fed this year, implying around two or three quarter-point reductions, down from nearly 150 bps at the beginning of the year.

For now at least, the main theme has been the continuation of last week’s trends, including more and more doubts about rate cuts this year, and growing fears about inflation, according to Deutsche Bank strategist Jim Reid.

It’s a similar story in Europe, where the focus is on Thursday’s ECB policy announcement, with markets expected to scour comments from President Christine Lagarde for clues that rates could be reduced in June.

Germany’s 10-year bund yield slipped to 2.415% on Tuesday after hitting a three-week high of 2.457% the day before, while the euro held firm at $1.0855.

The yen, meanwhile, continues to face heavy pressure as investors see any lags in global rate reductions as leaving the gap wide with Japan’s near-zero interest rates.

At 151.915 per dollar, the yen is a whisker from last month’s 34-year low of 151.975. Against the euro, the yen is at its lowest for three weeks at 164.97.

Meanwhile, industrial metals prices extended their gains on Tuesday amid expectations of a worldwide manufacturing rebound, while shares in the Asia-Pacific region advanced.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6%. Japan’s Nikkei 225 added 1.1%.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Trading and Investment News. The information provided on Trading and Investment News is intended for informational purposes only. Trading and Investment News is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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