On Thursday, strong corporate earnings helped European stock markets recover after a four-day losing streak, while the dollar gained value after US President Donald Trump denied allegations of a plan to remove Federal Reserve Chairman Jerome Powell from office.
Europe’s STOXX 600 index got off to a good start following record orders for Swiss engineering giant ABB and record profits of $13.5 billion from Taiwanese chipmaker TSMC. Increased expectations of an EU-US trade deal following talks in Washington also had a positive impact on markets.
Investors were also awaiting US retail sales and jobless claims data.
These data would provide more information on the impact of tariffs on the economy and would assess the European Commission’s budget increase proposal. However, movements in the currency market remained prominent in the short term. The dollar rose 0.4% against the euro to 1.16, and then returned to its previous levels following speculation that Trump would dismiss Powell, which Kit Juckes of Societe Generale described as “madness” on Wednesday. The Japanese yen also provided support to the dollar; Polls suggesting that Japanese Prime Minister Shigeru Ishiba’s coalition risks losing its majority in the upper house in the upcoming elections caused the yen to fall to 148.73. [Image caption: Data from Asia showed that Japan’s exports declined due to tariffs, and the Australian dollar fell 1% after weak employment data.] [Image cap: Data … There are also earnings to be announced by major companies such as PepsiCo (PEP). Netflix has outperformed the S&P 500 by 33% this year, and analysts say the company “should announce results well above expectations and raise its forecast.” Market Reaction: Wall Street futures signaled a slight open higher, while European stock markets rose 0.7% after a four-day decline. Japan’s Nikkei index and Taiwan and China’s stock markets also rose between 0.3% and 0.6%. Canadian retail giant Alimentation Couche-Tard withdrew its $47 billion takeover bid for Japanese Seven & Holdings. i’s shares fell more than 9%, dropping to their lowest level in three months.Trump’s quick dismissal of speculation about Powell brought some calm to the markets. However, he again criticized the central bank chairman for not cutting interest rates, keeping the door open to the possibility of removing Powell from office.
Interest Rate and Dollar Reactions
ING analyst Francesco Pesole said, “After yesterday’s fear, markets may have become more resilient to headlines like this.” “At that hour, we saw the reaction we expected: a steepening of the US interest rate curve and a sharp drop in the dollar.”
Short-term Treasury bonds fell on expectations that an ultra-dovish chairman who could replace Powell would lead to rapid and deep interest rate cuts.
Commodity Markets: Brent oil prices rose 0.4% to $68.78 a barrel, while safe-haven gold fell 0.5% to $3,331.
Short-term Treasury bonds fell 0.4% to expectations that an ultra-dovish chairman who could replace Powell would lead to rapid and deep interest rate cuts … $68.78 a barrel, while safe-haven gold fell 0.5% to $3,331.
Short-term Treasury bonds fell 0.4% to expectations that a ultra-dovish chairman who could replace Powell would lead to rapid and deep interest rate cuts.
Short-term Treasury bonds fell 0.4% to $68.78 a barrel, while safe-haven gold fell 0.5% to $3,331.
Short-term Treasury bonds: Short-term Treasury bonds fell 0.4% to $68.78 a barrel, while safe-haven gold fell 0.4% to $3,331.
Short-term Treasury bonds: Short-term Treasury bonds: Short-term Treasury bonds: Short-term Treasury bonds: Short-term Treasury bonds: Short-term Treasury bonds: Short-term Treasury bonds: Short-term Treasury bonds: Short
