By Marc Jones and Alun John
LONDON (Reuters) – U.S. shares held steady after European equities hit a record high, and gold prices were near an all-time peak as investor focus flipped back to where global interest rates and tech stocks are heading after days of trade war angst.
Britain’s pound took a tumble as the Bank of England cut interest rates by another quarter point, but Europe’s shares were buoyant again as encouraging signs from drugmaker AstraZeneca and miners helped the STOXX 600 index climb 0.9%. [.EU]
All three main U.S. share benchmarks were marginally higher in early trading, with the S&P 500 gaining 0.2% to 6,073, and the Nasdaq a whisker higher at 21,767. [.N]
Shares of industrial and aerospace giant Honeywell fell 3.5% after it said it would split into three independently listed companies and forecast downbeat sales and profit for 2025.
Amazon’s earnings are due later, with the pressure on to deliver on lofty expectations for cloud computing after lacklustre reports from Microsoft and Alphabet this week. [.N]
Also helping set the tone ahead of Friday’s nonfarm payrolls, was data showing the number of Americans filing new applications for unemployment benefits increased moderately last week, a move consistent with gradually easing labour market conditions.
That did little to disrupt current pricing which points to about 45 basis points worth of rate cuts from the U.S. Federal Reserve by year-end..
President Donald Trump’s view on current Fed policy is one area of investor interest, and U.S. Treasury Secretary Scott Bessent said on Wednesday that while Trump wants lower interest rates, he will not ask the Federal Reserve to cut rates.
The U.S benchmark 10-year yield was last up around 1 basis point at 4.43%, while the bigger movers in bond markets were British gilts which were volatile after the BoE decision. The 10-year gilt yield stabilised around 2 bps lower at 4.42%. [GB/]
The UK central bank also halved its forecast for growth this year to 0.75% – reflecting weak business and consumer sentiment – although forecasts for annual growth in 2026 and 2027 were revised fractionally higher to 1.5% from 1.25%.
“I think the Bank will want to get itself back in the middle of the pack” of other European central banks, said Royal London’s head of rates and cash, Craig Inches, given that Britain is seeing the “wrong” kind of inflation and growth is “on its knees”.
UNCERTAIN WORLD
While uncertainties remain about Trump’s plans for global trade, the economy and diplomacy, markets seem for the most part relieved that things haven’t been worse, particularly with regard to tariffs.
China’s central bank again set a stronger-than-expected yuan mid-point fixing overnight, though the currency still weakened after Beijing sought the World Trade Organization’s intervention to rule on Trump’s latest 10% tariffs on Chinese imports.
The onshore yuan last stood at 7.2870 per dollar, while its offshore counterpart was steady at 7.288. China’s CSI300 blue-chip index rose more than 1%.
Investors were also trying to work out how to react to a Russian state media report that preparations for a meeting between Russian President Vladimir Putin and Trump were at an advanced stage.
The news further boosted European stocks, barring defence names.
In currencies, the dollar was also firmer, up 0.2% against a basket of major currencies despite touching an eight-week low against the yen in Asia after the Bank of Japan’s Naoki Tamura advocated continued interest rate hikes.
The euro fell 0.3% to $1.0372, while the BoE cut pushed sterling down nearly 1% to below $1.24.
In commodities, oil prices rose, steadying from a selloff the previous day when a large build in U.S. crude and gasoline stockpiles signalled weaker demand and worries about a new China-U.S. trade war fuelled fears of softer economic growth.
U.S. crude rose 0.4% to $71.29 a barrel, while Brent was up 0.5% at $74.99.
Gold eased from a record peak it struck on Wednesday and was last at $2,854 an ounce. [GOL/]
(Reporting by Marc Jones and Alun John; Editing by Emelia Sithole-Matarise)
