European Shares Set To Rise As Rate Bets Firm Up

(RTTNews) - European stocks are likely to open higher on Thursday after yields on five- to 30-year U.S. Treasuries fell at least 10 basis points on Wednesday on dovish Fed bets.

Investors are currently pricing in the first 25 bps rate cut in March, followed by two more 25 bps cuts in May and June due to slowing inflation.

Overall, markets eye 5 cuts in 2024 and 3 more cuts in 2025 so that rates reach 3.00-3.25 percent in 2025Q3.

Meanwhile, preliminary insights from Mastercard SpendingPulseTM showed that U.S. retail sales increased 3.1 percent over the key holiday shopping season, markedly lower from last year's 7.6 percent rise as higher interest rates and inflation pressured consumer spending.

Asian markets traded higher, with Hong Kong's Hang Seng climbing more than 2 percent. The Japanese yen inched closer to a five-month peak it touched earlier this month as the dollar nursed steep losses against major currencies.

In an interview published on Wednesday, BOJ Governor Kazuo Ueda said he was not in a rush to unwind the central bank's ultra-loose monetary policy.

Gold climbed to its highest in more than 3 weeks while oil prices were little changed after Maersk and other major shipping companies resumed operations through the Suez Canal.

U.S. reports on weekly jobless claims and pending home sales may attract some attention later in the day, though trading activity is likely to remain subdued ahead of the New Year's weekend.

U.S. stocks eked out modest gains overnight as the yield on the ten-year note fell to its lowest level in five months after a strong auction, adding to optimism that the Fed will start cutting interest rates soon.

The Dow inched up 0.3 percent to reach a new record closing high, while the tech-heavy Nasdaq Composite and the S&P 500 gained 0.2 percent and 0.1 percent, respectively to hit their best closing levels in almost two years.

European stocks rose in thin post-Christmas trading on Wednesday, with real estate and technology stocks leading the surge.

The pan European STOXX 600 advanced 0.2 percent. The German DAX edged up 0.2 percent, France's CAC 40 finished marginally higher and the U.K.'s FTSE 100 added 0.4 percent.