Following Asian futures trading on Thursday and the S&P 500 closing Wednesday within 2% of its all-time high, a global gauge of equities increased for the sixth consecutive session. The Dow Jones Industrial Average and Apple Inc. both reached all-time highs.
European equity futures rose in tandem with Australian, South Korean, and Hong Kong stock markets. Japan was the aberration in the region, with a depreciation of the yen against the dollar of over 1%, despite an index of the dollar reaching its lowest level in four months.
In Wednesday’s dovish signaling, the Federal Reserve maintained interest rates and predicted that further easing would be forthcoming. As indicated in September, the dot plot depicted 75 basis points of reduction in 2024, which is a more pronounced rate of reduction. As of later today, traders are awaiting the outcomes of meetings at the European Central Bank and the Bank of England, which will determine whether developed-market counterparts are approaching a global easing cycle.
“The Fed has given the markets an early Christmas present,” said Kellie Wood, deputy director of fixed income at Sydney-based Schroders Plc. “A reduction is imminent, and markets are currently anticipating an easing cycle that is more rapid and severe.” Wood expects “strong performance across all markets” in a broad risk-on rally on Thursday.
A steep rally in Treasuries ensued in the aftermath of the meeting, which continued into Asian trading. After August, the 10-year yield fell below 4% for the first time. 140 basis points of easing wagers are reflected in swap contracts for the following 12 months.
