Market Analysis

Global stocks were nearing record highs on Thursday as anticipation grew over the European Central Bank's expected interest rate cut, the first in nearly five years. The pan-European STOXX 600 edged up 0.3%, with the MSCI world index also nearing a new peak. Wall Street's S&P 500 and Nasdaq hit new records following Nvidia's surge, making it the world's second-most valuable company after Microsoft.

The euro continued its upward trend, gaining 0.1% on top of a 2% increase over the past month, approaching $1.0880. All 82 economists surveyed by Reuters anticipate the ECB to lower its key rate from 4.0% to 3.75%, although future rate cuts remain uncertain amid recent stronger-than-expected economic data, including higher inflation driven by service sector prices and wage growth.

Michael Metcalfe of State Street Global Markets noted the highly anticipated nature of the ECB's move, suggesting future guidance could be less clear. With robust economic indicators complicating future decisions, market reactions and the euro's trajectory are now under scrutiny.

Elsewhere, the Bank of Canada preceded the ECB in cutting rates, with the U.S. Federal Reserve expected to hold off until September. Bond markets reflected cautious sentiment, with German 2-year bond yields down slightly, while U.S. Treasury yields remained near recent lows amidst signs of cooling in the labor market.

Commodities saw Brent and West Texas Intermediate crude oil prices rise, while gold and silver also posted gains ahead of key economic data releases, including the U.S. nonfarm payroll report due later in the week.

Paraphrasing text from "Reuters" all rights reserved by the original author.