# World stocks cling to upbeat mood, dollar stalls
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-04-11
Category: TRADING
Category URL: https://financedigest.com/category/trading
Meta Title: Global stocks rally on hope of easing interest rates and
Meta Description: World stocks surge as investors anticipate lower interest rates amidst positive economic data and central bank decisions. Stay updated on market trends.
URL: https://financedigest.com/world-stocks-cling-to-upbeat-mood-dollar-stallshtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-04-11t101115z2lynxmpej3a08lrtroptp4britain-eu-markets-1736814173034-compressed.jpg)

By Dhara Ranasinghe

LONDON (Reuters) -World stocks rallied on Tuesday as traders held onto hope that interest rates will soon peak and fall later this year, even if the latest U.S. [jobs data](https://www.financedigest.com/stocks-mixed-dollar-gains-after-robust-inflation-jobs-data.html "Stocks mixed, dollar gains after robust inflation, jobs data") supported the case for a May hike by the Federal Reserve.

[Trading was largely sluggish as many markets](https://www.financedigest.com/the-benefits-of-social-trading-in-a-volatile-market.html "The benefits of social trading in a volatile market") reopened after a long holiday weekend.

[European stocks](https://www.financedigest.com/european-stocks-hit-six-week-high-on-hopes-for-rate-hike-slowdown.html "European stocks hit six-week high on hopes for rate hike slowdown") added 0.5% , U.S. equity futures pointed to a positive [Wall Street](https://www.financedigest.com/wall-street-stocks-power-higher-as-treasury-yields-and-dollar-ease.html "Wall Street stocks power higher as Treasury yields and dollar ease") open and Japan’s blue-chip Nikkei rallied over 1%.

Bolstering the case for global inflation easing further this year, [data showed China’s consumer inflation](https://www.financedigest.com/dollar-dips-ahead-of-inflation-data-later-this-week.html "Dollar dips ahead of inflation data later this week") hit an 18-month low and factory-gate price declines sped up in March as demand remained weak.

Investor morale in the [euro zone](https://www.financedigest.com/euro-zone-inflation-seen-just-above-ecbs-target-in-2025-poll-shows.html "Euro zone inflation seen just above ECB’s target in 2025, poll shows") meanwhile improved in April after a surprise dip in March, a survey showed.

South Korea’s central [bank held rates steady for a second consecutive meeting](https://www.financedigest.com/banking-stability-worries-go-behind-closed-doors-at-imf-world-bank-meetings.html "Banking stability worries go behind closed doors at IMF-World Bank meetings") on Tuesday, while the Bank of Canada is expected to leave rates unchanged when it meets on Wednesday.

Friday’s non-farm payrolls suggested [labour markets remain resilient](https://www.financedigest.com/spains-labour-market-resilient-as-unemployment-drops-in-nov.html "Spain’s labour market resilient as unemployment drops in Nov"), boosting expectations for a 25-basis-point (bps) U.S. [rate increase](https://www.financedigest.com/how-to-increase-repeat-purchase-rates-in-ecommerce.html "How to increase repeat purchase rates in eCommerce") in May. Markets [price in a roughly 70% chance of a May hike](https://www.financedigest.com/sony-hikes-ps5-price-on-economic-pressures-rising-rates.html "Sony hikes PS5 price on economic pressures, rising rates"), having last week priced such a move as a coin toss.

It seems that we are currently in an environment that the world is looking at a [soft landing](https://www.financedigest.com/stocks-dollar-gain-on-soft-landing-hopes.html "Stocks, dollar gain on soft landing hopes") and the need not to over-tighten policy,” said Nordea chief analyst Jan von Gerich.

The payrolls number was strong enough to suggest that the [economy](https://www.financedigest.com/stocks-yields-fall-data-suggests-u-s-economy-cooling.html "Stocks, yields fall; data suggests U.S. economy cooling") could avoid a deeper recession but not too strong to suggest the Fed needs to tighten by much more.

Traders still price in rate [cuts by year-end as the economic](https://www.financedigest.com/dollar-skids-after-soft-u-s-economic-data-impact-of-opec-cuts-fades.html "Dollar skids after soft U.S. economic data; impact of OPEC+ cuts fades") growth outlook weakens, exacerbated by banking turmoil.

An analysis in the International Monetary Fund’s latest World Economic Outlook suggested that current high rates “are likely to be temporary” and predicted that, once inflation is brought under control, rates in advanced economies would eventually return to [pre-pandemic levels](https://www.financedigest.com/fraport-sees-2023-passenger-traffic-at-80-90-of-pre-pandemic-levels.html "Fraport sees 2023 passenger traffic at 80-90% of pre-pandemic levels").

The International Monetary Fund’s latest global [economic outlook](https://www.financedigest.com/analysis-russians-feel-little-economic-pain-now-long-term-outlook-darkens.html "Analysis: Russians feel little economic pain now, long-term outlook darkens") is out later on Tuesday.

U.S. March [inflation data](https://www.financedigest.com/dollar-trims-gains-vs-euro-after-u-s-inflation-data.html "Dollar trims gains vs euro after U.S. inflation data") on Wednesday could provide the next steer for markets on the rate outlook.

I don’t think the [Fed should be hiking rates](https://www.financedigest.com/fed-rates-up-boe-up-ecb-up-stocks-up.html "Fed rates up, BoE up, ECB up, stocks up") again but the reality is that they probably will do one more 25bp hike,” said Guy Miller, chief market strategist at Zurich Insurance Group.

The reason for that is that core inflation is still running at high levels and the [services sector](https://www.financedigest.com/tomorrows-world-how-cloud-computing-will-impact-the-financial-services-sector-in-2016.html "TOMORROW’S WORLD: HOW CLOUD COMPUTING WILL IMPACT THE FINANCIAL SERVICES SECTOR IN 2016") is very robust.

STABILITY

[Investor sentiment](https://www.financedigest.com/6-months-to-go-until-brexit-and-investor-sentiment-remains-bold.html "6 months to go until Brexit and investor sentiment remains bold") has also been boosted by signs that turmoil in the banking sector is easing.

Deposits at U.S. commercial banks rose near the end of March for the first time in about a month, showing signs of stabilizing after the two largest bank failures since the financial [crisis](https://www.financedigest.com/how-the-2023-banking-crisis-unfolded.html "How the 2023 banking crisis unfolded") rocked the banking system and rattled depositors, Federal Reserve data on Friday showed.

In Europe, UBS shares rose just over 1% after JP Morgan raised its target price, while the [Swiss parliament held an extraordinary session to discuss last month’s UBS-Credit Suisse](https://www.financedigest.com/swiss-franc-grapples-with-safe-haven-identity-crisis-after-credit-suisse.html "Swiss franc grapples with safe-haven identity crisis after Credit Suisse") deal.

My feeling is that it’s not over – we’re just beginning to feel the pain of these much [higher interest rates](https://www.financedigest.com/dollar-jumps-as-powell-flags-higher-terminal-rate.html "Dollar jumps as Powell flags higher terminal rate"). And banks may be okay for now, but the [credit risk](https://www.financedigest.com/aon-assists-freddie-mac-to-reach-5bn-risk-transfer-milestone-for-u-s-mortgage-credit-business.html "AON ASSISTS FREDDIE MAC TO REACH BN RISK TRANSFER MILESTONE FOR U.S. MORTGAGE CREDIT BUSINESS") is still to impact both them and the economy,” said Zurich’s Miller, referring to recent pain in markets.

The dollar was broadly softer, giving up some of its post-payrolls gains. It eased 0.4% to 133 yen, after jumping 1.1% on Monday. The euro was up 0.5% at $1.091.

Bitcoin [touched a fresh 10-month high at $30,438 before pulling back](https://www.financedigest.com/putting-the-human-touch-back-into-banking-magazine.html "“Putting the human touch back into banking”-Magazine") to $30,148, after breaking free of recent ranges on Monday. The digital token had been stuck between about $26,500 and $29,400 for the previous three weeks.

In Asia, Japanese government bond yields mostly fell, after new Bank of Japan [Governor Kazuo Ueda](https://www.financedigest.com/japanese-yen-gains-as-ueda-set-to-be-named-next-boj-governor.html "Japanese yen gains as Ueda set to be named next BOJ governor") vowed on Monday to maintain the bank’s ultra-loose monetary policy.

The 10-year JGB yield fell to as low as 0.445%, its lowest since April 4, after hovering at 0.465% in the previous session.

Most 10-year European government [bond yields rose as markets played catch-up with the rise](https://www.financedigest.com/wall-st-stocks-fall-bond-yields-rise-as-china-drops-quarantine-rule.html "Wall St stocks fall, bond yields rise as China drops quarantine rule") in U.S. yields following Friday’s [jobs data](https://www.financedigest.com/stocks-sag-as-hawkish-fed-cools-china-rally-awaits-us-jobs-data.html "Stocks sag as hawkish Fed cools China rally; awaits US jobs data").

U.S. [Treasury yields](https://www.financedigest.com/wall-st-flutters-treasury-yields-ease-as-powell-resumes-testimony.html "Wall St flutters, Treasury yields ease as Powell resumes testimony") edged down on Tuesday, however, with rate sensitive two-year yields 4 bps lower at 3.96%.

Elsewhere, [oil prices gave up early gains with Brent crude](https://www.financedigest.com/oil-near-flat-as-us-crude-stock-draw-contends-with-economic-concerns.html "Oil near flat as US crude stock draw contends with economic concerns") futures last down 0.17% at $84.02 a barrel. U.S. WTI futures dipped 0.1% to $79.63.

(Reporting by Dhara Ranasinghe; additional reporting by Selena Li in [Hong Kong](https://www.financedigest.com/screening-of-winnie-the-pooh-horror-film-cancelled-in-hong-kong.html "Screening of ‘Winnie the Pooh’ horror film cancelled in Hong Kong") and Junko Fujita in Tokyo; editing by Simon Cameron-Moore and Mark Heinrich)


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---