Source: AFP
European and Asian markets were mostly higher on Wednesday ahead of the UK budget and Fed testimony and a pending eurozone interest rate decision, while bitcoin and gold remained higher a day after striking records.
London shares rose as traders awaited a tax-cutting budget at 12:30 GMT, when Conservative Prime Minister Rishi Sunak will seek to regain political momentum ahead of the UK general election.
Eurozone stocks and the euro rallied as investors eyed Thursday’s monetary policy decision from the European Central Bank, which is expected to freeze eurozone interest rates as sticky inflation prevents tapering.
Asian stocks were mostly higher in a volatile trading week ending on Friday with key US non-farm payrolls (NFP) data.
That should help the health of the world’s largest economy and the Federal Reserve’s interest rate outlook.
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Global oil prices gained ground on rising risk appetite and signs of strong US energy demand, dealers said.
“Calm is back”
“Financial markets were on the precipice of panic yesterday (Tuesday), but calm has returned as we await some key events,” XTB analyst Kathleen Brooks said.
Investors will also focus on congressional testimony from Fed Chairman Jerome Powell on Wednesday and Thursday as they look for clues as to when the bank might start cutting interest rates.
Most analysts expect the long-awaited cuts to begin later this year, as officials have expressed reservations about cuts too soon while awaiting further data on inflation.
Markets will also digest ADP’s private sector hiring report on Wednesday ahead of the all-important NFP numbers.
“Powell is expected to ask policymakers for patience before cutting interest rates,” noted Swissquote analyst Ipek Ozkardeskaya.
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“Sufficiently soft data would make Powell’s job easier on the first rate cut, while a stronger-than-expected set of data will keep observers wondering whether the Fed will need to cut rates any time this year.”
Bitcoin, gold
Bitcoin and gold retreated somewhat a day after the record.
Bitcoin settled at $67,185 after Tuesday’s record high of $69,191.
The world’s largest cryptocurrency has soared this week due to tight supplies and is moving towards increasing access to bitcoin investments.
Gold changed hands at $2,128.10 an ounce, not far from its all-time high of $2,141.79.
The precious metal has soared as a safe haven during times of geopolitical turmoil and rising inflation, and as markets anticipate cuts in U.S. interest rates, weighing on the dollar.
Wall Street fell on Tuesday, with the tech-heavy Nasdaq ending the day down 1.7 percent, trailing Apple and Tesla.
Apple shares fell on news that iPhone sales in China were weaker earlier this year, a reminder of ongoing trade tensions between the United States and China, said Stephen Innes of SPI Asset Management.
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While U.S. stock indexes are up sharply on a year-over-year basis, recent rallies have been largely based on a few large-cap stocks.
“The mantle of this year’s equity rally has passed to gold and bitcoin,” noted IG analyst Axel Rudolph.
Keys around 1120 GMT
London – FTSE 100: UP 0.3 per cent at 7,668.76
Paris – CAC 40: UP 0.1 percent at 7,940.17
Frankfurt – DAX: UP 0.1 percent at 17,708.55
EURO STOXX 50: UP 0.4 percent at 4,910.49
Tokyo – Nikkei 225: FLAT at 40,090.78 (close)
Hong Kong – Hang Seng Index: UP 1.7 percent at 16,438.09 (close)
Shanghai Composite: DOWN 0.3 percent at 3,039.93 (close)
New York – Dow: DOWN 1.0 percent at 38,585.19 (close)
EUR/USD: UP at $1.0875 from $1.0860 on Tuesday
Dollar/yen: DOWN to 149.76 yen from 149.97 yen
GBP/USD: UP at $1.2723 from $1.2707
Euro/pound: UP at 85.49 pence from 85.44 pence
![](https://images.yen.com.gh/images/17f95a0899d0072f.jpg?impolicy=cropped-image&imwidth=256)
![](https://images.yen.com.gh/images/17f95a0899d0072f.jpg?impolicy=cropped-image&imwidth=256)
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North Sea Brent crude: UP 0.7% to $82.59 a barrel
West Texas Intermediate: UP 1.1 percent at $78.98 a barrel
Source: AFP