European shares gain, Aussie jumps, yen teeters near 160
Updates at 0827 GMT
By Samuel Indyk and Ankur Banerjee
LONDON, June 26 (Reuters) -European stock markets were higher on Wednesday as the market braced for a French election and a key U.S. inflation reading, while the yen lurked just shy of 160 per dollar level, keeping traders on alert for possible intervention.
Risk sentiment in Europe was broadly positive after a rebound in Nvidia shares on Tuesday, following three straight days of selling, and as investors focus on the monetary policy outlook and the prospect of further rate cuts.
"Fears of a big imminent market wobble are now receding," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Markets are still sensitive to risks before the first round of voting in the French legislative election on Sunday, but remained focused on monetary policy where further interest rate cuts from the European Central Bank this year seem likely.
"The key driver for markets today is all around central banks and a close second is political uncertainty," said Nathan Sweeney, chief investment officer of multi-asset at Marlborough.
"If you think about Europe in general, the ECB has started the rate-cutting journey. Companies are very sensitive to interest rates so it can really help to bolster their earnings."
The pan-European STOXX 600 .STOXX was last up 0.5% to its highest level since June 13, shortly after French President Emmanuel Macron announced the snap election.
France's CAC 40 .FCHI was up 0.4%, Germany's DAX .GDAXI gained 0.9% and Britain's FTSE 100 .FTSE rose 0.6%.
Money market traders are pricing in around 45 basis points of further easing from the ECB this year, implying almost two more quarter-point rate cuts, following a 25 bps move earlier this month.
ECB policymaker Ollie Rehn said bets for two more rate cuts this year were "reasonable".
U.S. equity futures edged higher, while MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS crept up to 567.86, just shy of the two-year high of 573.38 it hit last week.
Japan's Nikkei .N225 and Taiwan stocks .TWII rose, led by chipmakers, tracking the rally in the tech-heavy Nasdaq .IXIC on Tuesday, with Nvidia NVDA.O surging more than 6%, snapping out of a three-session tailspin that had erased about $430 billion from its market value.
On the U.S. monetary policy front, Federal Reserve officials urged patience on interest rate cuts, with governor Lisa Cook saying the central bank was on track for a rate cut if the economy's performance met her expectations. But Cook declined to say when the Fed would be able to act.
Fed Governor Michelle Bowman reiterated her view that holding the policy rate steady "for some time" would probably be enough to bring inflation under control.
The comments, along with data showing a stable housing market, kept expectations in check over when and by how much the Fed would cut rates.
"(The) worst thing the Fed could do is ease and then the data continues to firm the inflation numbers back around," said Rob Carnell, ING's regional head of research for Asia-Pacific.
Markets were pricing in 47 basis points of easing this year, with a rate cut in September pegged at 66% probability, CME FedWatch tool showed.
Traders await Friday's release of the U.S. personal consumption expenditures (PCE) price index, the Fed's preferred inflation measure, with economists polled by Reuters expecting the annual growth to ease to 2.6% in May.
AUSSIE SURGES, YEN TEETERS NEAR 160
In the currency market, the Aussie rose more than 0.5% to as high as $0.66885 after hotter-than-expected inflation data, leading markets to narrow the odds on another rate hike as early as August.
The dollar index =USD, which measures the U.S. currency against six peers, was slightly higher at 105.78, while the euro EUR=EBS softened to $1.0695.
The yen JPY=EBS was fetching 159.88 per dollar and has been trading in tight ranges as it stalks the crucial 160 level that some traders say might bring about another round of intervention.
The yen touched a 34-year low of 160.245 per dollar on April 29, prompting Tokyo to spend roughly 9.8 trillion yen in late April and early May to support the currency.
The latest slide in the yen has come in the wake of the Bank of Japan's (BOJ) decision this month to hold off on reducing bond-buying stimulus until its July meeting.
The BOJ though is dropping signals that its quantitative tightening plan in July could be bigger than markets think, and may even be accompanied by an interest rate hike.
In commodities, oil prices rose, with Brent futures LCOc1 0.15% higher at $85.12 a barrel, while U.S. West Texas Intermediate futures CLc1 were up 0.26% at $81.03 per barrel.
Gold prices eased to $2,313 per ounce, but remain up 12% this year, having touched a record high of $2,449.89 last month. GOL/
World FX rates YTD http://tmsnrt.rs/2egbfVh
Asian stock markets https://tmsnrt.rs/2zpUAr4
European shares in positive territory https://reut.rs/3XKwGlP
Aussie dollar jumps after strong inflation print https://reut.rs/3zcpogc
Reporting by Samuel Indyk and Ankur Banerjee; Editing by Shri Navaratnam, Himani Sarkar and Alex Richardson
To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA
Actifs liés
Dernières actualités
Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.
Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.
Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.