Global Markets Rise On Trade Thaw, ECB Cuts Rates And Buys Bonds, Hong Kong Down On LSE Deal Scrutiny

Global markets rise on trade hopes and stimulus plans, the S&P 500 is striking distance from new all-time highs.
Thomas Hughes
Europäische Zentralbank in Frankfurt
Europäische Zentralbank in Frankfurt

The U.S. Futures Are Up In Early Thursday Trading

The U.S. futures are up in early Thursday trading after a series of positive developments on the trade-war front. The latest news is a message from President Trump that the latest round of tariffs would be delayed by two weeks. The delay is intended as a gesture of goodwill in response to a similar move from China earlier this month. In related news, Treasury Secretary Steven Mnuchin says Trump could make a deal at any time but he’s trying to get the best deal for American workers.

The tech-heavy NASDAQ Composite is in the lead in early trading with a gain of 1.05%. The Dow Jones Industrial Average and S&P 500 are both up about 0.80%. Shares of chipmakers are up about 0.35% while Apple and other FAANG names are up closer to 0.50%.

On the data front, U.S. consumer prices rose faster than expected. At the headline level, consumer inflation rose 0.1% for the month and is up 1.7% YOY. At the core level, CPI is up a whopping 2.4%, the strongest gain in years, and well above the Fed’s 2.0% target. If anything, this data suggests the FOMC should raise rates not cut them.

EU Markets Up On ECB Stimulus

The EU markets are broadly higher after the ECB unveiled its latest round of stimulus. The bank’s chief says it will cut the target rate by 10bps sending it deeper into negative territory. Mario Draghi also says the ECB will renew its bond-buying program at the rate of 20 billion euros per month. The news was more than what some traders were expecting and sent the EUR/USD to a new low. The EUR/USD pair looks set to continue lower, today’s U.S. CPI is helping the move.

The French CAC is in the lead with a gain near 0.65% while the DAX is close behind. The UK FTSE 100 trails with a gain of 0.19%. Trading in the UK was dampened by the release of the government’s plans for a hard-Brexit. The plan reveals an expectation for cross-channel disruptions and increases social turmoil.

In stock news, shares of AB-Inbev rose nearly 3.0% because it is still exploring an IPO of the Asian division. Shares of WM Morrison are up 4.5% after the grocery retailer reported first-half profits are up 49%.

Asia Mixed, LSE Deal Is In Focus

Asian markets are mostly higher after the Thursday session as trade hopes fuel optimism. The Nikkei and Shanghai both closed with gains near 0.75% while the ASX finished the day with an advance of 0.25%. The Hong Kong Hang Seng was the only index to fall shedding -0.25%. The HKEX bid for London’s stock exchange has come under scrutiny from lawmakers. The Korean Kospi is closed for a holiday.

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