Stocks Rise, Dollar Weakens, Bets Rise on Peak Inflation

By: MRT Desk

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Stocks Rise, Dollar Weakens, Bets Rise on Peak Inflation

The dollar fell against major currencies and European stock markets rose on Thursday as loosening U.S. inflation expectations bolstered investor confidence in easing price pressures.

The yen hovered around the four-month high it hit against the dollar on Tuesday after the Bank of Japan reversed monetary policy, fueling bets that the most pessimistic central bank of 2022 will scale back monetary stimulus.

Lower gasoline prices lowered U.S. consumers’ 12-month inflation expectations to 6.7% this month, their lowest since September 2021, data showed on Wednesday.

Meanwhile, consumer confidence had its highest reading since April, beating the expectations of economists polled by Reuters and triggering a rally on Wall Street that lifted battered European stocks on Thursday.

Although the U.S. Federal Reserve raised its main interest rate by 50 basis points in its seventh hike of the year in December, money managers expect the world’s most influential central bank to soften its stance as inflation declines.

“The view is that we are nearing the end of rate hikes and perhaps there will be a turnaround,” said Anish Grewal of Enora Global in London. “Markets are too relaxed about it,” he said, but “expectations are that we will arrive around September next year and be in rate-cutting mode.”

  • The pan-European Equity Index STOXX 600 It gained 0.3%, on track for a weekly improvement of close to 2%, although it remains on track for a double-digit annual loss. The S&P 500 futures and the NASDAQ advanced 0.2%.

*The Dollar Index, which compares the greenback to a basket of six major currencies, fell 0.4 percent, accumulating a decline of nearly 2 percent on the month.

  • The decline of the dollar favored the gold, which has climbed 1.4% so far this week, to $1,818 an ounce.
  • The prices of the petroleum They followed data showing a bigger-than-expected reduction in U.S. crude stockpiles, as a major snowstorm is expected to blanket much of the country and hit travel-related fuel demand.

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