Stocks, dollar rise before key US inflation data / Photo: © AFP
Stocks, dollar rise before key US inflation data
Major stock markets mostly rose and the dollar gained slightly Friday as investors awaited the release of key US inflation data that could cement expectations that the Federal Reserve will cut interest rates next year.
The personal consumption expenditures (PCE) index is the Fed's preferred gauge of inflation and a below-forecast reading is tipped to ramp up forecasts of several rate reductions in 2026, following an almost certain cut next week.
After much of Asia closed out their trading with gains, European indices traded higher around midday. Wall Street ended mixed on Thursday.
"With the December rate cut apparently in the bag, thoughts are turning to the pace and level of subsequent reductions next year," noted Richard Hunter, head of markets at Interactive Investor.
"Inflation remains the elephant in the room, however, and the Fed's hitherto cautious stance on monetary easing has so far been vindicated."
Debate swirls over the bank's plans for the next 12 months as US inflation remains stubbornly above target.
Stock market investors have in recent sessions struggled to match last week's healthy gains fuelled by comments from Fed officials indicating their preference for more rate cuts.
Optimism has been helped, however, by reports reinforcing the view that the US jobs market is softening, including from payrolls firm ADP which said that more than 30,000 posts were lost in November.
In Asia on Friday, Mumbai equities won a boost from a cut to interest rates by the Indian central bank, as low inflation provided room to help cushion the economy against US President Donald Trump's tariff blitz.
The rupee, which this week hit a record low against the dollar, rose.
On the corporate front, shares in Chinese group Moore Threads Technology, which makes chips for the artificial intelligence sector, soared more than 500 percent on its market debut in Shanghai after the company raised $1.1 billion in an initial public offering.
The blockbuster opening -- which came after the IPO was more than 4,000 times oversubscribed -- suggested there was plenty of confidence in the country's homegrown AI chip industry.
"The noise is real, but so is the signal: this IPO has become a barometer for faith in China's next-gen AI‑chip ambitions," said Dilin Wu, research strategist at Pepperstone.
In Europe, shares in Swiss Re slumped by more than seven percent at one point Friday after the reinsurance giant's profit target for 2026 and plans for share buybacks disappointed financial analysts.
"The 2026 group profit target of $4.5 billion is eight percent below our estimate and five percent below consensus," Vontobel analyst Matteo Lindauer wrote in a note to investors.
- Key figures at around 1115 GMT -
London - FTSE 100: UP 0.2 percent at 9,729.68 points
Paris - CAC 40: UP 0.5 percent at 8,159.39
Frankfurt - DAX: UP 0.7 percent at 24,048.07
Tokyo - Nikkei 225: DOWN 1.1 percent at 50,491.87 (close)
Hong Kong - Hang Seng Index: UP 0.6 percent at 26,085.08 (close)
Shanghai - Composite: UP 0.7 percent at 3,902.81 (close)
New York - Dow: DOWN 0.1 percent at 47,850.94 (close)
Euro/dollar: DOWN at $1.1647 from $1.1648 on Thursday
Pound/dollar: DOWN at $1.3333 from $1.3335
Dollar/yen: UP at 155.13 yen from 155.03 yen
Euro/pound: UP at 87.37 pence from 87.00 pence
Brent North Sea Crude: DOWN 0.1 percent at $63.17 per barrel
West Texas Intermediate: DOWN 0.2 percent at $59.55 per barrel
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