Stock markets around the world are currently in a holding pattern as investors eagerly await more clarity on inflation and the state of the economy. According to Dan Boardman-Weston, CIO at BRI Wealth Management, this uncertainty is likely to persist until there is more information on these key factors.
Expectations for U.S. rate cuts have been decreasing this year due to strong economic activity and persistent inflation. Traders are now pricing in about 62 basis points of cuts from the Federal Reserve in 2024, a significant drop from the start of the year.
In Europe, all eyes are on Thursday’s ECB policy announcement, with markets eager to hear from President Christine Lagarde about potential rate cuts in June. Germany’s 10-year bund yield dipped to 2.397% on Tuesday, while the euro held steady at $1.0868.
Meanwhile, industrial metals prices are on the rise, buoyed by expectations of a global manufacturing rebound. Shares in the Asia-Pacific region also saw gains, with MSCI’s broadest index increasing by 0.7%. In China, copper futures hit a record high, while other metals such as zinc and tin reached multi-month peaks.
In the midst of these market movements, spot gold reached a record high for the eighth consecutive session, supported by central bank buying and geopolitical tensions. According to analysts, the rally in gold may continue in the short-term due to various factors driving its upward movement.
Overall, the current market environment is characterized by uncertainty and anticipation as investors closely monitor economic indicators and central bank policies for signals on future market trends.
(Reporting by Tom Westbrook and Samuel Indyk; Additional reporting by Mai Nguyen; Editing by Himani Sarkar, Mark Potter and Tomasz Janowski)
