Wall Street set to open higher as traders bet on rate cuts
By Elizabeth Howcroft
London (Reuters) -European stocks rose on Tuesday and global shares were near their highest since April 2022 as traders bet on rate cuts in 2024, while the yen fell after the Bank of Japan stuck to its ultra-easy monetary policy.
In a widely expected move, the Bank of Japan kept its ultra-low interest rates unchanged. It also made no change to its dovish policy guidance, dashing traders' hopes it would tweak the language to signal a near-term end to negative interest rates.
The yen tumbled, with dollar-yen up 1.4% at 144.76 at 1158 GMT and euro-yen up 1.4% at 158.32. The Nikkei rose in relief, led by technology shares, and Japanese government bonds yields fell.
The supportive sentiment helped boost global markets more broadly, with the MSCI World Equity index up 0.1% on the day. Europe's STOXX 600 was up 0.2%, Germany's DAX was up 0.3% but London's FTSE 100 was flat on the day .
Wall Street was set to open a touch higher, with S&P 500 and Nasdaq futures both up around 0.1%.
The Bank of Japan's «dovish stance… is something that is supportive of sentiment and we've been seeing that playing out in equities which are just moving modestly higher», said Fiona Cincotta, senior markets analyst at City Index.
Cincotta said that lower liquidity may also be a factor in market moves, as traders take leave ahead of the Christmas holiday.
Meanwhile, traders were weighing up various hints about the trajectory for rates in the U.S. and euro zone.
European Central Bank member Francois Villeroy de Galhau said interest rates should be lowered in 2024 and that inflation should be back down to the ECB's 2% target by 2025 at the latest.
«This is not just a forecast, this is a commitment,» he said.
IMMINENT CUTS
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