World stocks hit new all-time highs on Thursday as traders eagerly awaited U.S. data that is expected to show inflation easing and potentially lead to the Federal Reserve starting its long-awaited interest rate cut cycle as soon as September.
The day was filled with activity as traders kept an eye on the upcoming U.S. CPI figures, the kickoff of Wall Street earnings season, robust GDP data from Britain, European soccer success, and central banks adjusting interest rates.
Europe’s main bourses saw gains of 0.4%-0.7% in the morning, following records set in the U.S. and Tokyo, leading MSCI’s main all-country world index to reach a new peak with a nearly 14% gain for the year.
Bond markets and the dollar remained steady, with the yen weakening against the dollar and sterling climbing to a 4-month high. Societe Generale’s Kit Juckes noted the post-election optimism for sterling following strong GDP numbers and England’s soccer victory.
Overnight, Japan’s Nikkei and Taiwanese stocks reached record highs, while Australia’s ASX 200 closed near its all-time peak. Wall Street heavyweights like Nvidia helped push the Nasdaq and S&P 500 to new highs.
The prospect of interest rate cuts was cited as the main driver for the market’s momentum, with U.S. Federal Reserve Chair Jerome Powell indicating that “more good data” could lead to a rate cut in September.
Economists predicted a slowdown in annual U.S. CPI to 3.1% in June from 3.3% in May. Central banks in Korea and Malaysia held rates steady but hinted at potential rate cuts in the future.
As U.S. earnings season kicked off, companies like PepsiCo and Delta Air Lines reported disappointing numbers. China’s yuan rallied from a low to 7.2701 per dollar, while China stocks struggled amid disappointing data and tariff concerns.
In Europe, sterling reached a 4-month high after strong GDP data, and the euro also ticked higher. The yen slipped against the dollar, and the New Zealand and Australian dollars saw gains.
Commodity trade saw oil prices edge higher on strong U.S. gasoline demand, while gold crept higher and bitcoin steadied around $58,900.
Overall, the global markets were buzzing with activity as traders awaited key data releases and earnings reports, with the prospect of interest rate cuts driving market optimism.
