The recent release of U.S. core inflation data has caused some turbulence in the global markets. While Asian shares bounced on Thursday, tracking a tech-driven rally on Wall Street, the dollar managed to hold onto gains after the data showed a slight surprise on the upside. This surprise dashed hopes of a significant rate cut by the Federal Reserve next week, leading investors to adjust their expectations.
Investors are eagerly awaiting a policy decision from the European Central Bank later in the day. A rate cut is almost certain, but the question that lingers is whether there will be further moves in October and December. The uncertainty surrounding the ECB risk event has put Europe in a state of alert, with EUROSTOXX 50 futures jumping 1.3% and FTSE futures gaining 1.1%.
MSCI’s broadest index of Asia-Pacific shares outside Japan rallied 1.5%, with the Nikkei jumping 3.3% due to a weaker yen. Meanwhile, Nasdaq futures turned higher, gaining 0.3%. In the foreign exchange market, the dollar traded near a four-week high versus the euro, while short-dated U.S. Treasuries experienced a sell-off. Oil prices extended gains on fears of production shutdowns due to Hurricane Francine, with Brent crude futures rising 0.7%.
The disappointment over core inflation figures initially pressured Wall Street, but tech stocks, particularly AI darling Nvidia, came to the rescue. Nvidia jumped 8% following a media report suggesting that the U.S. government is considering allowing the company to export advanced chips to Saudi Arabia. Regional tech-heavy share markets followed suit, with Taiwan adding 2.8% and South Korea gaining 1.7%.
Gold prices were 0.2% higher at $2,517.89 an ounce, just below its record high of $2,531.60. Oil prices also saw an increase, with Brent crude futures rising to $71.09 a barrel. This surge comes after hitting a low of $68.69, the lowest level in almost three years.
Overall, the global market trends are influenced by a variety of factors such as economic data releases, central bank decisions, geopolitical events, and investor sentiment. It is important for investors to stay informed and adapt to the changing market conditions in order to make sound investment decisions.