Market Wrap: 27 July 2023

Market Wrap: 27 July 2023

Stocks Rise, Dollar Slips as Rates Peak in Sight: 

  • ECB will raise rates by another quarter-point, survey shows
  • US data Thursday include GDP, initial jobless claims

Global stocks rose and the dollar slipped Thursday, as investors wagered the Federal Reserve has reached the end of its 16-month long policy-tightening cycle.

The Fed raised the federal funds rate to a 22-year high and while it signaled further hikes would be data dependent, many investors reckon it’s done hiking interest rates and trimmed bets on further increases this year. Meanwhile, a predicted 25-basis-point rate rise later Thursday from the European Central Bank could be one of its last moves this cycle.

The conviction over peaking US and European rates comes alongside a robust earnings earnings season so far, lending cheer to stock market bulls. The dollar slipped for the third straight day and Treasury yields were lower after Fed Chair Jerome Powell pointed to signs that the Fed’s hikes are working to curb price pressures.


“The market has digested the FOMC decision and the opinion is Powell isn’t more hawkish than before, therefore we’re back to the original peak rate expectation and timeline,” said Mingze Wu, a foreign-exchange trader at StoneX Group in Singapore.

The Stoxx Europe 600 index rose 0.6%, with almost all sectors gaining. Among individual movers, in what is the busiest day in the second-quarter earnings calendar, French lender BNP Paribas SA, consumer goods giant Nestle SA and retailer Carrefour SA rallied after beating estimates. Shell Plc fell despite pledging more buybacks as its profits fell from last year’s highs.

US equity futures pointed to a firmer Wall Street open, with contracts on the tech-heavy Nasdaq 100 up 0.9%. Facebook parent Meta Platforms Inc. gave sentiment toward Big Tech a boost, rising 5.8% in extended trading after issuing forecast-beating results and revenue forecasts.

Signs have also grown that the US economy is headed for a soft landing, lifting the Dow Jones Industrial Average for a 13th straight session Wednesday for its longest winning streak since 1987.

Second-quarter gross domestic product data later in the day is forecast to show a 1.8% expansion, slowing only marginally from the previous quarter.

Earlier in Asia, shares rallied, with Hong Kong’s Hang Seng Index up 1.5%, while Tokyo’s benchmark rose 0.7%. Chinese electric-vehicle maker XPeng Inc. soared 30% on news of a $700 million investment from Volkswagen AG.

Investors are now awaiting Friday’s Bank of Japan policy decision Friday, with the yen strengthening into a fourth day as traders positioned for possible guidance on when the central bank could shift away from its ultra-easy policies.

Key events this week:

  • ECB rate decision, Thursday
  • US GDP, durable goods orders, initial jobless claims, wholesale inventories, Thursday
  • Japan Tokyo CPI, Friday
  • BOJ rate decision, Friday
  • Eurozone economic confidence, consumer confidence, Friday
  • US consumer income, employment cost index, University of Michigan consumer sentiment, Friday

Some of the main moves in markets:


  • The Stoxx Europe 600 rose 0.5% as of 8:20 a.m. London time
  • S&P 500 futures rose 0.3%
  • Nasdaq 100 futures rose 0.8%
  • Futures on the Dow Jones Industrial Average were little changed
  • The MSCI Asia Pacific Index rose 0.8%
  • The MSCI Emerging Markets Index rose 0.5%


  • The Bloomberg Dollar Spot Index fell 0.1%
  • The euro rose 0.2% to $1.1109
  • The Japanese yen rose 0.2% to 139.94 per dollar
  • The offshore yuan rose 0.2% to 7.1414 per dollar
  • The British pound rose 0.2% to $1.2967


  • Bitcoin fell 0.5% to $29,434
  • Ether fell 0.2% to $1,876.4


  • The yield on 10-year Treasuries declined two basis points to 3.85%
  • Germany’s 10-year yield declined two basis points to 2.47%
  • Britain’s 10-year yield was little changed at 4.28%


  • Brent crude rose 0.8% to $83.60 a barrel
  • Spot gold rose 0.4% to $1,979.22 an ounce


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