Global equity markets have been performing strongly, driven by central bank rate cuts, especially in major economies. Several factors are influencing this upward trend:
Interest rate cuts by central banks: The People’s Bank of China (PBoC) has taken decisive action by stimulating the money supply. This led to a sharp increase in Asian markets, especially China.
Other central banks including Switzerland also cut interest rates by 25 basis points. This general trend of lowering interest rates around the world will help reduce credit costs. which supports various businesses【6†sources】【7†sources】
By making capital cheaper and more accessible. US Economic Stability: US Second Quarter GDP Growth remained steady at 3% annually. This strong economic performance reassured markets and alleviated fears of an economic slowdown.
However, investors are closely monitoring the Federal Reserve’s desired measure of inflation, which It is the PCE (Personal Consumption Expenditure) index, which may influence future interest rate policy. 【6†source】【7†source】 Impact on the foreign exchange market:
The US dollar weakened. As a result, the euro and British pound strengthened. The euro rose to 1.1180, while the British pound rose to 1.3400. The weaker dollar was driven by investors’ expectations of a US interest rate hike. Slower【7†Source】
Overall, the reduction in borrowing costs due to central bank policies has ignited optimism in global markets, particularly in Asia and Europe. The next key data point, the PCE, will be crucial in determining the next direction of the U.S. market.
