(Bloomberg) — Global stocks rallied after China pledged fiscal stimulus and traders raised their bets on interest-rate cuts by major central banks.
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The Stoxx 600 index in Europe rose 1.2%, on track for a record close as luxury and mining stocks exposed to China gained. US futures advanced as Micron Technology Inc. surged 15% in premarket trading following a strong revenue forecast. Treasuries were flat and the dollar edged lower.
Growing expectations that the Federal Reserve and European Central Bank will push on with their easing path are buoying markets. Traders are waiting for a pre-recorded address by Federal Reserve Chair Jerome Powell and jobs data later Thursday.
“The message, over the last 10 days or so, from monetary and fiscal policymakers across the globe, has been clear and undeniable — the policy ‘put’ is well and truly back,” said Michael Brown, a strategist at Pepperstone Group Ltd. “The path of least resistance is likely to continue to lead to the upside, over both the short- and medium-term.”
The promises to support fiscal spending and revive growth by China’s top leaders on Thursday added to a slew of measures from Beijing this week that have supercharged local assets and fueled broader risk appetite.
Money markets have flipped to favor a half-point cut by the Fed in November, with traders now pricing almost 39 basis points of reductions after lackluster US consumer data earlier in the week.
On Wednesday, Federal Reserve Governor Adriana Kugler said she “strongly supported” the US central bank’s rate cut last week, adding it will be appropriate to make additional rate cuts if inflation continues to ease as expected.
The Fed’s preferred price metric and a snapshot of consumer demand will give more clues on the economy’s health on Friday.
China Doubts
In China, the CSI 300 Index was headed for its biggest weekly gain in almost a decade after the stimulus pledge. But questions remain over the long-term impact of the measures.
“I wouldn’t be surprised if tomorrow we are going to see a bit of a…
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