Global markets reacted enthusiastically to subdued inflation figures in both the UK and the US, with Wall Street experiencing a notable rally. The decline in inflation fueled investor confidence and strengthened expectations that central banks, including the Federal Reserve and the Bank of England, are poised to implement rate cuts this year. The FTSE 100 in London climbed 1.2 percent, led by gains in the real estate and homebuilding sectors. The pan-European Stoxx 600 index surged 1.3 percent, marking its best intraday performance since September 2024. Similarly, US indices saw robust increases, with the Dow Jones Industrial Average up 1.34 percent, the S&P 500 gaining 1.38 percent, and the Nasdaq Composite advancing 1.87 percent. The positive market sentiment was driven by lower-than-expected December core inflation data in the US and strong quarterly earnings reports from major US banks.
Global markets reacted positively to UK and US inflation data released on Wednesday. Wall Street breathed a sigh of relief after a surprise slowdown in inflation spurred a stock rally and a plunge in bond yields, reinforcing bets the Federal Reserve is on track to keep cutting rates this year.The blue-chip FTSE 100 closed up 1.2 per cent.
Investors increased their bets on the Bank of England cutting rates, putting an 84 per cent chance on a first quarter-point reduction on February 6th, the date of its next scheduled monetary policy announcement.Mortgages: If you’re coming off a fixed rate now is the time to consider switching Homebuilders led gains among the major FTSE sectors, jumping 5.7 per cent. Real estate advanced 3.6 per cent, while real estate investment trusts gained 3.9 per cent.Currys surged about 11 per cent after the electricals retailer raised its annual profit outlook after reporting a 2 per cent rise in underlying sales for the Christmas trading period.The pan-European Stoxx 600 jumped 1.3 per cent and snapped a three-day losing streak, and saw its best intraday percentage gain since September 2024. The rate-sensitive real estate sector was the biggest boost to the benchmark index, surging 3.3 per cent, while a 2 per cent gain in financial stocks also provided support. In France the Cac 40 ended 0.94 per cent higher for the day, and in Frankfurt the Dax index was up 1.7 per cent. Euro zone industrial production rose as expected in November but not enough to erase earlier losses. A poll showed the European Central Bank will extend back-to-back interest rate cuts at least until July in an effort to shield the weak euro zone economy.The Dow Jones Industrial Average rose 1.34 per cent, the S&P 500 gained 1.38 per cent and the Nasdaq Composite gained 1.87 per cent. The benchmark S&P 500 touched a one-week high, driven by lower-than-expected December core inflation data and robust quarterly earnings from major US banks. A Department of Labor report showed the consumer price index rose in line with expectations in December. Still, markets were focused on the core consumer price index figure, which advanced 3.2 per cent, lower than estimates of a 3.3 per cent rise. Traders were pricing in nearly even odds that the US Federal Reserve will cut interest rates twice by the end of 2025, with the first reduction to come in July. Goldman Sachs added 6.1 per cent after its fourth-quarter profit beat Street expectations as a rebound in dealmaking activity boosted its investment banking business. JPMorgan Chase was up 5.9 per cent at one point after posting its best quarterly profit since the third quarter of 2021, while
STOCK MARKET INFLATION INTEREST RATES FEDERAL RESERVE BANK OF ENGLAND GLOBAL MARKETS ECONOMIC GROWTH
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