Global Markets Rally Amid Fed Rate Cut Expectations

Global stocks were on track for a weekly gain by Friday, driven by expectations of rapid U.S. interest rate cuts which are set to reduce borrowing costs globally. This comes as a relief to strained bond markets, though it places downward pressure on the dollar. European shares experienced a slight decrease of 0.1%, while Nasdaq and S&P 500 futures were stable, with a marginal drop of 0.1% respectively, following the previous day's peak in Wall Street indexes. The MSCI All Country World Index anticipated a 1.8% gain for the week.

Gold was heading for its fourth consecutive weekly gain, trading near record levels, highlighting investor concerns about global economic stability. Stock exchanges across Asia saw substantial gains; Chinese stocks reached a 3-1/2 year high, fueled by optimistic expectations for growth in AI-related earnings.

Despite an increase in U.S. consumer prices in the latest report, the primary focus for markets remained the Fed's potential decision to cut interest rates, anticipated to be influenced by weak job figures from the previous week. Veronica Clark, a Citi economist, forecasted a total of 125 basis points in Fed rate cuts across the upcoming five meetings. The currency market remained steady while oil prices moved upward amid predictions of a significant record surplus by the International Energy Agency.