European Stocks Soar to Record Heights: Will Interest Rate Cuts Fuel the Rally
- European stocks closed at an all-time high on September 27th, driven by a series of economic stimulus measures in China and accelerating expectations for further interest rate cuts...
- The STOXX Europe 600 index rose 0.5%, while the core price index in US personal consumption expenditure (PCE) statistics showed month-on-month growth that was slower than market expectations.
- In the European bond market, German bonds rose as inflation slowed more than expected in Spain and France.
European Stocks Reach All-Time High Amid Economic Stimulus and Interest Rate Cuts
European stocks closed at an all-time high on September 27th, driven by a series of economic stimulus measures in China and accelerating expectations for further interest rate cuts in Europe and the US.
The STOXX Europe 600 index rose 0.5%, while the core price index in US personal consumption expenditure (PCE) statistics showed month-on-month growth that was slower than market expectations. Additionally, consumer spending experienced only a slight increase, suggesting that the economy is slowing down.
In the European bond market, German bonds rose as inflation slowed more than expected in Spain and France. This development increased expectations in money markets that the European Central Bank (ECB) will cut interest rates again next month.
British bonds also saw a slight increase, with traders pricing in a 146 basis point (bp, 0.01%) rate cut by the Bank of England by next September. This represents a 6bp rise from the previous day.
European Market Overview (as of 6pm in London)
| Stock | Closing Price | Previous Business Day Change |
|---|---|---|
| STOXX European Stocks 600 | 528.08 | +2.47 (+0.47%) |
| UK FT100 | 8,320.76 | +35.85 (+0.43%) |
| German DAX | 19,473.63 | +235.27 (+1.22%) |
| France CAC | 40,779.19 | +49.70 (+0.64%) |
Bond Yields
| Bond | Latest Yield | Previous Business Day Change |
|---|---|---|
| German government bond 2-year | 2.08% | -0.05% |
| German government bond 10-year | 2.13% | -0.05% |
| UK 10-year bond | 3.98% | -0.03% |