European markets closed higher Thursday, rounding off a bumper month as investors assessed euro zone inflation data that suggests pressures from rising prices are easing.
The regional Stoxx 600 closed up 0.5% at a 10-week high.
It takes gains for the index to 5.87% for November, according to LSEG data, its best performance since January and a sharp reversal from three consecutive monthly losses.
EUROPEAN MARKETS
| TICKER | COMPANY | PRICE | CHANGE | %CHANGE |
|---|---|---|---|---|
| .FTSE | FTSE 100 | 7554.47 | 40.75 | 0.54 |
| .GDAXI | DAX | 16759.22 | 0 | 0 |
| .FCHI | CAC 40 Index | 7526.55 | 0 | 0 |
| .FTMIB | FTSE MIB | 30403.9 | 282.13 | 0.94 |
| .IBEX | IBEX 35 Idx | 10223.4 | 0 | 0 |
U.S. stocks have also seen a turnaround in November, typically a strong month for equity markets, and are heading for their best month of the year.
Market sentiment has been boosted by expectations of interest rate cuts in major economies next year, as inflation continues to fall. Global stocks are set to mark their best month for three years, Reuters reported, citing MSCI’s world stocks index.
Euro zone inflation came in at 2.4% on an annual basis in November, according to preliminary Eurostat data, lower than the 2.7% expected by analysts surveyed by Reuters and a decline from October’s reading of 2.9%.
In the U.S., the personal consumption expenditures price index — the Federal Reserve’s favored gauge — was in line with expectations at 0.2% for the month and 3.5% year-on-year.
Bonds have also marked a turnaround by rallying in November. Yields, which move inversely to prices, have tumbled in the U.S. and Europe amid perceptions of increased dovishness among central bankers and signs of a “soft landing” for the U.S. and global economy.
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Oil and gas stocks were last up by around 1%, as investors await announcements from the OPEC meeting on Thursday. Production cuts are expected at the policy meeting, which is being attended by members of the Organization of Petroleum Exporting Countries and its allies, including Russia.
THU, NOV 30 20239:36 AM EST
U.S. stocks open slightly higher
Here’s how the major indexes opened on Thursday:
- The S&P 500 gained about 0.1%.
- The Dow Jones Industrials Average added 180 points, or nearly 0.5%.
- The Nasdaq Composite jumped 0.1%.
— Pia Singh
THU, NOV 30 20239:16 AM EST
Fed’s John Williams sees interest rates high ‘for quite some time’
New York Federal Reserve President John Williams said Thursday he expects the central bank will have to hold interest rates at a “restrictive” level to get inflation back to target.
“I expect it will be appropriate to maintain a restrictive stance for quite some time to fully restore balance and to bring inflation back to our 2 percent longer-run goal on a sustained basis,” Williams said in prepared remarks.
However, he also said he thinks the Fed is “at, or near, the peak level” of where it needs to set the fed funds rate, the central bank’s benchmark for short-term lending. Williams added that he expects inflation to recede to about 2.25% in 2024 before it gets back to target the following year.
THU, NOV 30 20236:38 AM EST
Euro down after euro zone inflation falls more than expected
The euro traded lower against the British pound and the U.S. dollar after euro zone inflation came in at 2.4%, below the 2.7% level predicted by economists polled by Reuters.
The euro was 0.55% down against the greenback at $1.091 at 11:35 a.m. London time, and it stood 0.06% below sterling at 0.863, as investors assessed what the figures mean for potential interest rate cuts from the European Central Bank next year.
Joe Tuckey, head of FX analysis at Argentex Group, said that the most recent central bank forecasts for average inflation of 3.2% in 2024 and 2.1% in 2025 may not be too high, and that the latest reading provides a “challenging landscape for any remaining ECB hawks.”
Fresh outlook are due at the ECB meeting in mid-December.
″Markets are now beginning to price for an April cut, and the price action for EURUSD in the coming weeks will be partially driven by the rate cut timing from the ECB vis-a-vis that of the Federal Reserve,” Tuckey said in emailed comments.