World stocks extend rally, central banks seen on hold
By Nell Mackenzie and Wayne Cole
LONDON/SYDNEY (Reuters) -Wall Street futures looked set to surpass last week's peaks on Monday, urged on by rising Japanese stock markets and ahead of a week brimming with central bank meetings, major economic data and corporate earnings.
U.S. stock index futures rose, indicating further momentum in the S&P 500 after chip and mega-cap stocks drove the benchmark index to a record high last week.
Nasdaq futures extended their rally with gains of 0.6%, while S&P 500 futures firmed 0.3%.
Chipmakers, including Nvidia (NASDAQ:NVDA) and Advanced MicroDevices, were among the beneficiaries of the AI-driven rally.
That helped to send Japan's benchmark Nikkei stock index up 583.68 points, its highest close since February 1990, with gains for January to almost 9%.
Yet MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.6%.
The index has been pressured by weakness in China's markets, which hit five-year lows last week and sparked speculation state funds were having to support stocks.
«The wide majority of macro economic data shows we are in a recovery period but that markets have yet to price this in,» said Florian Ielpo, head of macro at Lombard Odier Investment Managers, referring to markets in general and the U.S. in particular.
Rates have declined by 1.5%, which should ease costs, but growth rates remain lower than in the past 20 years, said Ielpo.
«We've priced in sub-priced growth at the dawn of a recovery,» Ielpo said.
ECB IN NO RUSH
The European Central Bank (ECB) meets on Thursday and is expected to hold monetary policy steady.
Futures have priced in 40 basis points of easing by June, with a first cut in May implied at a 76% chance.
«There may not be a policy shift but we
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