European shares are holding near a 5-1/2 week high, while the dollar is languishing near its lowest point in two-and-a-half months on expectations that the U.S. Federal Reserve is done with interest rate hikes. The pan-European STOXX 600 index is little changed at 455.98 points, up over 5 percent this month and on track for its biggest monthly gain since January. Germany’s DAX is up 0.15 percent, while France’s CAC 40 and Britain’s FTSE 100 are slightly softer.
Wall Street futures are trading lower ahead of the release of the minutes of the Federal Reserve’s last meeting, which investors will use to determine the outlook for interest rates. Traders have nearly fully priced in the likelihood that the Fed will keep interest rates unchanged in December, and some have already started pricing in rate cuts as soon as March.
“Inflation relief and then loosening of financial conditions has provided relief for risk assets,” said Hani Redha, portfolio manager at PineBridge Investments. Stock markets have rebounded in November as data showed U.S. inflation might be easing, leading to bets that the Fed is done with monetary tightening and rate cuts may be on the way next year.
MSCI’s broadest index of Asia-Pacific shares outside Japan is 0.6 percent higher, reaching its highest level since Sept. 5. Japan’s Nikkei closed lower but remains close to the 33-year high it touched on Monday, making it the best performing stock market in Asia this year.
The yield on 10-year Treasury notes and the 30-year Treasury bond are both lower, suggesting that the market still anticipates inflation deceleration and rate cuts by the Fed next year.
The dollar index, which measures the U.S. currency against a basket of six major currencies, is down 0.1 percent at 103.30, having touched a near three-month low. The Japanese yen has strengthened, while China’s yuan has risen to its highest level since July.
“A softer dollar environment has seen Chinese authorities turn the screws on those with short renminbi positions,” said ING strategist Chris Turner. The Australian dollar has also reached a more than three-month high.
Oil prices have eased, with U.S. crude down 1 percent and Brent down a similar amount. Spot gold has risen to its highest level in more than two weeks, aided by the weaker dollar.
More detail via www.theepochtimes.com here… ( Image via www.theepochtimes.com )