European markets are edging higher today after investor sentiment has been boosted by a dovish Federal Reserve. Even if Jerome Powell remained confident over growth, jobless rate and inflation for 2020, he expressed concerns over rising uncertainties in the mid-term that increase the chances of a rate cut. The central banker then reassured investors by confirming the Federal Reserve “will act as appropriate to sustain the economy”.
As expected, this statement boosted the risk-on mood on financial markets, sending global benchmarks higher and driving the greenback lower. The market reaction was sharp everywhere around the globe as the statement was even more dovish than expected, traders are now pricing a rate cut for the next July meeting. The Stoxx-600 extended this week’s rally, led by Miners and Energy shares. The best European performance is being brought by the FTSE-MIB index in Milan where prices are trading towards a 6-weeks high.
Photo by Bill Jelen.