Market players now expect the Federal Reserve to hike rates by 75 basis points rather than by 100 basis points
Wall Street stocks saw a relief rally on Friday in response of solid economic data that helped ease recession concerns among investors. US retail sales rose 1.0% last month while the data for May was revised up to show sales falling 0.1% instead of 0.3% as previously reported. The Dow Jones added 2.15%, the S&P 500 jumped nearly 2%, and the Nasdaq Composite gained 1.79%. Despite the Friday’s ascent, all the three indices finished the trading week with losses. The Dow slipped close to 0.2% while the S&P and Nasdaq fell 0.9% and nearly 1.6%, respectively.
Asian stock markets gained at the start of the week as fears of inflation have partly eased. Now, investors expect the Federal Reserve to hike rates by 75 basis points rather than by 100 basis points. Hong Kong’s Hang Seng index rose 2.55%, China’s Shanghai Composite added 1.55%, the Kospi in Seoul gained nearly 2%, while Australia’s S&P/ASX 200 rose by 1.23%. By the way, regional markets shrugged off fresh economic data out of New Zealand after the official report showed that inflation hit a 32-year high of 7.3% in the second quarter versus 6.9% in the previous quarter.
In Europe, stocks opened higher as positive tones were carrying over from the end of last week. The pan-European Stoxx 600 index gained 1.2% in early deals, with all sectors entering positive territory. US stock index futures are also keeping higher to start the day, with S&P 500 futures now up by 0.6%.
Meanwhile, the US dollar stays on the back foot as markets remain risk-positive at the beginning of the week. The USD index has been retreating for the third day in a row on Monday after peaking at fresh twenty-year highs around 109.30. Today, the greenback slipped below the 108.00 figure, shedding nearly 0.6% on the day in early European deals. Should the pressure intensify any time soon, the dollar index may target the 107.00 mark that represents the next near-term support.