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Global stock indexes edged higher on Thursday, while U.S. Treasury yields dipped slightly after a series of U.S. economic reports suggested slowing momentum.
Traders are eagerly awaiting Friday’s U.S. personal consumption expenditures (PCE) data, the Federal Reserve’s preferred inflation measure, which could clarify the U.S. interest rate outlook.
Thursday’s data bolstered the view that the Fed might soon cut interest rates. First-time applications for U.S. unemployment benefits fell, but the number of people on jobless rolls hit a 2-1/2-year high in mid-June. This indicates a mixed picture of the job market, influencing bond market movements.
Investors are also preparing for the U.S. presidential debate, the first of two ahead of the November election. The debate will air at 9 p.m. ET with President Joe Biden and former President Donald Trump going head-to-head.
Read: Election years could be profitable for political traders
The Japanese yen rose from a 38-year low against the U.S. dollar on Thursday, helped by softening U.S. economic data. However, investors remain vigilant for any signs of Japanese intervention to support the currency. Japan’s finance minister has indicated readiness to act if necessary, reflecting concerns about the yen’s impact on the economy.
The yen (USDJPY) strengthened slightly, trading at 160.77 per dollar. The dollar index (DXY), which measures the greenback against a basket of currencies, fell by 0.12% to 105.92, while the euro (EURUSD) gained 0.22%, reaching $1.0702. All three major U.S. stock indexes ended the day slightly higher.
See: Dow shares on the rise, trading at 39,253.80 on the VT Markets app.
The Dow Jones Industrial Average rose 36.26 points, or 0.09%, to 39,164.06. The S&P 500 gained 4.97 points, or 0.09%, to 5,482.87, and the Nasdaq Composite (IXIC) increased by 53.53 points, or 0.30%, to 17,858.68.
Micron Technology (MU) shares dropped 7.1% after a disappointing revenue forecast. This decline pulled down the semiconductor index by 0.6%. On the global front, MSCI’s gauge of stocks rose slightly, while the STOXX 600 index fell by 0.43%.
France, Italy, and Spain are set to release inflation data on Friday. Investor concerns about inflation have heightened following unexpected increases in inflation data from Australia and Canada earlier this week. Additionally, the first round of French parliamentary elections is scheduled for Sunday.
Picture: 10-year Treasury yields slip as seen on the VT Markets app.
In the U.S. Treasuries market, the yield on 10-year notes fell by 3 basis points to 4.286%, down from 4.316% on Wednesday. Brent crude oil futures rose by $1.14, or 1.34%, to settle at $86.39 a barrel. U.S. West Texas Intermediate crude futures gained 84 cents, or 1.04%, to settle at $81.74.
The decline in the U.S. Treasury yields indicates market expectations of potential rate cuts by the Federal Reserve. Maintaining a balanced portfolio with a mix of short-term and long-term bonds may help hedge against possible interest rate fluctuations.
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