From Bangkok Post: 2024-06-06 11:19:45

European Central Bank President Christine Lagarde announced a quarter-point cut to the benchmark interest rate, the first cut in five years, causing world stocks to hit an all-time high and the euro to rise. The bank signaled that inflation may not fall back to target until 2026, causing market uncertainty.

The pan-European STOXX 600 rose 0.6%, while the euro approached $1.089 against the dollar. The MSCI’s world index hit record highs, with Wall Street’s S&P 500 flat and the Dow Jones up 0.4%. Nvidia fell 0.8% after reaching a $3 trillion market valuation, as markets await a potential rate cut in September.

The ECB’s cautious approach to cutting rates comes after strong data releases and an increase in their inflation forecasts. This has raised doubts about future cuts, with the US Federal Reserve expected to hold off until September. Markets are now pricing nearly two quarter-point Fed cuts this year, with a 68% chance of a move in September.



Read more at Bangkok Post: Bangkok Post – Stocks hit records as ECB cuts rates