Global equities rose on Thursday as Asian and European markets surged, building on a week‑long rally sparked by U.S. data that heightened expectations of a series of interest‑rate cuts. The optimism stems from the belief that the Federal Reserve will resume monetary easing, given signs that the U.S. economy is slowing. Recent reports have reinforced this view: job creation fell short of forecasts, new job postings have declined sharply over the past year, and the Labor Department’s producer‑price index (PPI) dropped in August, contrary to expectations. The weaker PPI eases concerns that a renewed tariff war could reignite inflation, giving the Fed more leeway to cut rates and address labor‑market weakness.
All eyes now turn to Thursday’s consumer‑price index (CPI) report, which is expected to play a decisive role in shaping the Fed’s rate‑cut trajectory. Stephen Innes of SPI Asset Management noted that the PPI reading confirms inflation worries are not materialising and that producers are absorbing some tariff costs to stay competitive.
Positive data have propelled the S&P 500 to another record high on Wall Street, with most Asian markets following suit. Tokyo’s Nikkei 225 climbed more than 1% to a second consecutive record, driven by a 10% jump in SoftBank shares. Seoul, Shanghai and Singapore also posted gains, while London and Paris rose and Frankfurt remained flat. In contrast, Hong Kong, Sydney and Manila recorded losses. Jakarta surged after the Indonesian government announced a $12 billion stimulus injection.
Market participants are watching these trends closely. Vincenzo Vedda, global chief investment officer at DWS, predicts five rate cuts by September 2026. As the global economy evolves, investors will keenly await the upcoming CPI report to gauge the path of interest rates and its impact on markets.
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