Global shares mostly rose on Thursday as investors anticipated more U.S. interest rate cuts. Major European markets, including France’s CAC 40 and Germany’s DAX, saw gains in early trading, while the U.S. shares were also expected to drift higher. Japan’s Nikkei 225 and Australia’s S&P/ASX 200 also posted gains, with Taiwan Semiconductor Manufacturing Co’s facilities likely receiving quicker relief after a recent earthquake. Analysts noted that the weaker-than-expected U.S. services purchasing managers index helped offset concerns about manufacturing activities and demand levels, providing comfort to the markets.
A report from Japan’s major labor union Rengo indicated that wage increases in this year’s negotiations have been solid, averaging more than 5%, the highest in three decades. The Federal Reserve has signaled that it may cut interest rates three times this year to help ease pressure on the economy. However, Fed officials are monitoring inflation levels and will only proceed with rate cuts if evidence shows that inflation is moving towards their target of 2%. The upcoming job market report for March from the U.S. government is expected to be a key economic data release for the week, with traders having adjusted their expectations for the number of rate cuts from the Fed this year.
Energy trading saw a decline in benchmark U.S. crude and Brent crude prices, with U.S. crude falling to $85.09 a barrel and Brent crude slipping to $89.03 a barrel. In currency trading, the U.S. dollar edged up against the Japanese yen and the euro, signaling some stability in the markets. Overall, the sentiment among investors is positive, with some preparing for fewer rate cuts from the Fed this year, aligned with officials who are cautious about making any moves ahead of the November election to avoid political implications. The continuous monitoring of economic data and market trends will be crucial in determining future market movements and investment decisions.
