Tuesday saw a rise in European stocks as investors around the world awaited U.S. inflation data later in the day, which may provide an indicator of whether or not interest rates will start to decline.
Are Intrest Rate High Enough To Control Inflation
Asian equities increased slightly over night, with gains expected for the second day in a row for the MSCI’s broadest index of Asia-Pacific shares outside of Japan.
Trader risk aversion was heightened in October by the Israel-Hamas conflict; however, global equities have rebounded about 5% this month as investors wagered that major central banks have completed a protracted cycle of rate hikes.
Policymakers, including U.S. Federal Reserve Chair Jerome Powell, have expressed uncertainty about whether interest rates are high enough to control inflation.
Government bond yields in the euro zone decreased as well. The 10-year German benchmark yield stood at 2.696.
European Central Bank President Christine Lagarde stated in an interview over the weekend that no change should be expected in the “next couple of quarters” when asked how long rates would need to stay at high levels to fight inflation.
Inflation Of US In October
According to official data released on Tuesday, wages in Britain increased somewhat slower in the three months leading up to September. Prior to this, wages increased at a record rate, which had the Bank of England concerned about inflation. Data on October’s inflation of U.S. consumer prices is expected at 1330 GMT.
According to Frederik Ducrozet, head of macroeconomic analysis at Pictet Wealth Management, “the bond market is driving pretty much everything.”
In terms of currencies, the euro was up 0.2% at $1.0716 while the U.S. dollar index was down less than 0.1% at 105.530.
In relation to the dollar, the yen was stuck at its lowest level in three decades, unable to find support as the Bank of Japan’s ultra-easy monetary policy settings continued to conflict with the possibility of higher rates for extended periods of time elsewhere.
Brent crude futures were trading at $82.60 a barrel and WTI crude futures at $78.37 after the International Energy Agency (IEA) increased its demand growth predictions, adding to the bullish sentiment following OPEC’s guidance the day before.