Market Close Highlights: Stocks Edge Higher Amid Inflation Data Watch

Market Close Highlights: Stocks Edge Higher Amid Inflation Data Watch
Market Close Highlights: Stocks Edge Higher Amid Inflation Data Watch
Market Close Highlights: Stocks Edge Higher Amid Inflation Data Watch
Market Close Highlights: Stocks Edge Higher Amid Inflation Data Watch

Market Close Highlights: Stocks Edge Higher Amid Inflation Data Watch

Market Close Highlights: Stocks Edge Higher Amid Inflation Data Watch

Market Close Highlights: Stocks Edge Higher Amid Inflation Data Watch

Key Highlights:

  1. European and US markets reopen with stocks showing modest gains.
  2. Inflation data and central bank speakers are in focus for interest rate signals.
  3. Potential issues loom as US switches to T+1 settlement rule.

As European and US markets reopened, stocks edged higher with traders keenly observing inflation data and central bank speakers for clues on the timing of potential interest-rate cuts. Europe’s Stoxx 600 remained largely unchanged but was on track for a 3.5% gain for May, while US share contracts rose by 0.3%. The 10-year Treasury yield decreased by two basis points, and the dollar held steady. Brent crude remained flat after two days of gains, despite escalating tensions in the Middle East following a clash between Egyptian and Israeli troops.

In the euro zone, consumer inflation expectations dipped in April, and the Federal Reserve’s preferred measure of underlying inflation is anticipated to show modest relief on Friday. European Central Bank (ECB) member Klaas Knot is scheduled to speak on Tuesday, with Federal Reserve officials Lisa Cook and Neel Kashkari also set to deliver speeches this week.

“We are very much on the inflation data watch for now,” said Marija Veitmane, senior multi-asset strategist at State Street Global Markets. “Stocks and risk will continue to be supported, but I don’t see change of leadership nor a broadening of the performance. Large-cap growth stocks will be leading.”

The ECB’s next meeting on interest rates is on June 6. On Monday, France’s Francois Villeroy de Galhau suggested the ECB should consider rate cuts in both June and July, though hawkish policymakers, including Executive Board member Isabel Schnabel, have opposed consecutive rate cuts.

As traders return from the long weekend, they are also cautious about potential issues related to the new T+1 settlement rule for US equities, which shortens the settlement time from two days to one. Concerns include international investors struggling to source dollars on time, global funds moving at different speeds relative to their assets, and a reduced window for correcting errors.

Elsewhere, Bitcoin saw a decline as traders monitored transfers by wallets belonging to the failed Mt. Gox exchange. Administrators of the exchange are accelerating efforts to return a $9 billion hoard of Bitcoin to creditors.

(This Content is reproduced content, original source belongs to Mimt)

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