Bullard said it wasn’t time to rethink monetary policy when the country is still in the pandemic
Wall Street stocks finished higher overnight as inflation fears eased after the president of the St. Louis Federal Reserve Bank, James Bullard, said it wasn’t time to rethink monetary policy when the country is still in the pandemic. As such, the S&P 500 rose 1%, the Dow Jones Industrial Average added 0.54%, and the tech-heavy Nasdaq Composite gained 1.41%.
Asian equities followed suit to climb nearly across the board, with tech stocks leading the gains as the mentioned Federal Reserve official helped to allay some of inflation fears that drove global markets lower earlier this month. The Shanghai Composite Index rose 2.40%, while the Nikkei 225 in Tokyo gained 0.67%, the Hang Seng in Hong Kong advanced 1.75%. The Kospi in Seoul was 0.86% higher and the S&P-ASX 200 in Sydney added 0.98%.
In Europe, stocks opened on a positive footing on Tuesday, with the pan-European STOXX 600 index rising 0.3% to an all-time high. Germany’s DAX gained 0.8%, hitting a record high as well. Eurozone government bond yields have been edging down for the third day in a row as inflation concerns recede. On the data front, the headline German IFO business climate index rose to 99.2 May versus last month’s 96.8, beating the consensus estimates of 98.2. The current economic assessment arrived at 95.7 as compared to last month’s 94.1 and 95.5 anticipated.
Meanwhile, the dollar slipped to fresh four-month lows as risk sentiment continued to improve. Against this backdrop, EURUSD rallied to fresh January highs around 1.2260. The upbeat German IFO data added to the positive tone surrounding the common currency as well. On the other hand, the ECB policymaker Yannis Stournaras said that the regional economy is still fragile.