Back to the Blog Main Page
12/06/24
199
Shares In Europe Higher as Fed Rate Cut Hopes Bolstered by Cool US Data
On Wednesday, European shares rose as rate-sensitive sectors such as real estate jumped after a cool U.S. inflation reading fueled hopes that the Fed may start its policy easing cycle soon.
The STOXX 600 pan-European index closed 1.2% higher after declining for the past 3 sessions, the biggest single-day percentage jump since Jan.
Global sentiment stayed positive after data showed U.S. consumer prices did not change in May while underlying inflation pressures declined last month.
The head of investment strategy for RBC Wealth Management, Frederique Carrier, said he expected the headline inflation number to behave this time and that he was encouraged about the core number.
After the data, traders increased bets that the Fed would trim interest rates by Sept.
Gains amongst major STOXX 600 sectors were led by rate-sensitive real estate with a gain of 2.7%, while technology rose 2.4%.
European automakers like BMW and Volkswagen dropped about 1% each on worries about Chinese retaliation after the European Commission said it would impose duties on electric vehicles imported from China.
Porsche Holding, the luxury German manufacturer fell 7.2%.
Last week, European equities reached record highs after the ECB’s first rate cut in 5 years but have since declined due to domestic political tremors.
Promotions
