Key Points:
- Stocks Boosted by Rate-Hike Outlook; Dollar Slip
- Traders weigh more moderate Fed increases after dovish minutes
European stocks gained and the dollar fell after Federal Reserve meeting minutes showed support for more moderate interest-rate increases.
The Stoxx Europe 600 Index extended its recent rally as the real estate sector outperformed, boosted by the prospects of slower rate hikes and analyst upgrades.
Trading volumes are lower due to the Thanksgiving holiday, with no cash US equity market trading. Wall Street futures rose after the S&P 500 closed at a two-month high Wednesday. Asia’s equities benchmark climbed.
Minutes from the Fed gathering earlier this month indicated several officials backed the need to moderate the pace of rate hikes, even as some underscored the case for a higher terminal rate. This adds weight to expectations the central bank will raise rates by 50 basis points next month, ending a run of jumbo 75 basis point increases.
Data Wednesday also showed US business activity contracted and unemployment applications rose as the economy cools.
OIL edged lower as the European Union considered a higher-than-expected price cap on Russian crude and signs of a global slowdown increased.
Gold rose for a third day on the Fed minutes. The precious metal has been hurt by the US central bank’s aggressive monetary-tightening policy to curb inflation, which has pushed up bond yields and the dollar and in turn sent bullion tumbling about 16% from its March peak.