World stocks chave onsolidated near record highs while the dollar has crept up as traders ready for the European Central Bank’s latest interest rate decision as well as new US inflation data.
High-flying tech shares lifted Japan, Taiwan and South Korea’s bourses to record peaks on Thursday, and Europe has had a steady morning before what is set to be a second hold in a row in the euro zone’s two per cent rates from the ECB after lunch.
With that and closely watched US consumer price inflation data coming, most traders were keeping their powder dry.
The euro hovered at $US1.1690 after soaring nearly 13 per cent versus the dollar in 2025, while the bond vigilantes have not yet managed to decisively push politically strained France’s borrowing costs above Italy’s.
ABN AMRO strategist Benoit Begoc said with the ECB widely expected to hold rates, the focus is on whether it keeps the door ajar for further cuts and its new set of economic forecasts this meeting.
“I think the question will be why are you not cutting rates more?” Begoc said.
“We know we have some deflationary pressures and there is no big rise in consumer confidence, so what is the rationale behind that?”
Before Thursday’s ECB decision and media conference, the pan-European STOXX 600 edged up 0.3 per cent while Germany’s 10-year bond yield eased to 2.65 per cent having touched 2.80 per cent – its highest since March – just last week.
In the commodity markets, oil prices also dipped after gaining more than one per cent on Wednesday when Poland’s downing of suspected Russian drones triggered fresh talk of sanctions a day after Israel attacked Hamas leadership in Qatar.
Safe-haven gold edged away from its recent record highs and bellwether metal copper took a breather from its more than 20 per cent rally since US President Donald Trump’s trade tariffs shook global markets in April.
Wall Street futures pointed to more gains there later after a stunning 36 per cent leap in the shares in data services giant Oracle had fuelled the latest records for the S&P 500 and Nasdaq.
A benign reading on US producer prices had also helped as the money markets priced in more of a chance of three interest rate cuts from the Federal Reserve in 2025.
August’s consumer price index data is due later on Thursday.
A Reuters poll expects headline CPI to rise 2.9 per cent from a year earlier, the biggest increase since January, while the core measure likely held at 3.1 per cent.
Overnight in Asia, Japan’s Nikkei gained 1.2 per cent to hit a record as tech, energy and utilities firms jumped. South Korean shares rose 0.9 per cent.
In Tokyo, SoftBank rose almost 10 per cent after the roaring gains for its Stargate Project partner Oracle.
That 36 per cent leap had been the biggest one-day gain since 1992 for the 48-year-old tech giant.
In foreign exchange, movement was largely muted, with the US dollar struggling for direction and the main six currency dollar index a touch above a seven-week trough.
Ten-year Treasury yields edged up 2 basis points to 4.0531 per cent, having fallen four basis points on Wednesday after the PPI data and as a solid 10-year note auction alleviated some concern about investor appetite for long-term US debt.
An even more telling gauge will be the Treasury’s $US22 billion sale of 30-year bonds on Thursday.
The 30-year yield rose 2 bps to 4.7028 per cent, having come down more than 30 basis points since it briefly topped 5 per cent a week ago.
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