Global stocks advance in quiet trading
Stocks traded higher on Thursday, supported by rising confidence that the Federal Reserve will cut interest rates in December. Activity across financial markets remained subdued due to the Thanksgiving holiday in the United States, but sentiment stayed positive as investors looked past recent volatility driven by concerns over artificial intelligence spending.
European equities edged up, with the STOXX 600 gaining 0.1%, mirroring stronger performances in Asian trading sessions. Analysts said that expectations of a rate cut next month, combined with strong earnings season results, continue to support the broader market outlook.
Chris Beauchamp, chief markets strategist at IG, said that the economic backdrop remains the key driver: “As long as your main engine is going nicely, then a lot of the worries about valuations just get pushed up to the back foot.” He added that renewed anxiety about AI-related investment remains “the market’s kryptonite at the moment.”
Dollar steadies as traders position for Fed signals
The dollar posted a slight 0.1% rise against a basket of major currencies, though it remains weaker on a weekly basis. Sterling pulled back from four-week highs following Wednesday’s UK budget, while the euro also traded lower. Currency investors continue to adjust positions as policymakers signal that borrowing costs may fall sooner rather than later.
A record 43-day US government shutdown delayed key data releases, leaving traders relying more heavily on central bank commentary. Recent remarks from officials including San Francisco Fed President Mary Daly and Governor Christopher Waller have strengthened expectations of a December cut.
According to CME FedWatch, traders now estimate an 85% probability of a rate reduction next month, compared with 30% just a week earlier. George Boubouras of K2 Asset Management said labour market signals are soft enough to counter inflation pressures, noting that market expectations for longer-term inflation remain anchored.
Yen volatility keeps intervention fears in focus
The Japanese yen strengthened to 156.375 per dollar, recovering from earlier lows. Market participants are closely watching whether authorities in Tokyo may intervene following repeated warnings aimed at curbing currency weakness.
Prime Minister Sanae Takaichi dismissed concerns that Japan could see a loss of confidence comparable to the UK under former leader Liz Truss. Meanwhile, sources indicated the Bank of Japan is preparing for a potential rate hike as soon as next month.
Cryptocurrency and commodities mixed
Bitcoin rose 1.1% to $91,143 and is on course to break a four-week losing streak. Gold eased 0.17% to $4,156 an ounce after posting gains in the previous session. Investors continue to balance haven demand, shifting interest-rate expectations and currency movements.
