Global stock markets rose on Wednesday as attention focused on Federal Reserve Chairman Jerome Powell, who will get his last chance to steer sentiment before the Fed’s December meeting.
The holiday rally appeared to have been ahead for some markets, with Asian stocks on track to close out their strongest month since 1998 and emerging-market stocks poised to cap their biggest monthly gain since 2009.
However, the dollar, hurt by expectations that U.S. interest rates are close to peaking, was headed for its biggest monthly loss in more than 20 years.
Powell will speak on economics at the Brookings Institution in Washington. They are likely to be his last public comments on monetary policy before the quiet period leading up to the Fed’s Dec. 13-14 meeting.
“I’m not sure markets are looking for a turnaround, but we think he’ll insist the Fed is nowhere near the end of its tightening cycle,” said James Rossiter of TD Securities in London.
Meanwhile, investors overlooked disappointing business activity data in China and escalating protests in some parts of the country over strict COVID-19 lockdowns, relying instead on a faster reopening of the world’s second-largest economy.
European stock markets rose and U.S. stock futures pointed to a firm opening for Wall Street.
MSCI’s broadest index of Asia-Pacific stocks excluding Japan gained more than 1 percent, touching its highest since September and on track to close out its best month since 1998. TheHang SengHong Kong improved more than 2%, although the JapaneseNikkeiyielded 0.2%.
Signs that U.S. inflation is peaking, meaning the Fed could slow the pace of its aggressive rate hikes, boosted government bond markets but weighed on the dollar.
The yield on 10-year U.S. Treasuries subtracted 2.5 basis points to 3.73 percent, with a cumulative loss of more than 30 basis points this month, marking its biggest monthly drop since March 2020.
*TheDollar Index, which compared the greenback with a basket of six major currencies, fell 0.4 percent to 106.40. In that month it has lost about 4.3%, its biggest one-month decline since June 2010.
The euro rose 0.4 percent to $1.0373, while the yen and sterling showed some firmer on the day.
* On the other hand, the prices of therawimproved by 2%.