Investors slowly regained confidence throughout the session as Europe and the US faced policy interest rate-deciding meetings over the next few days. Both regions are pricing in a -25 basis point rate cut.
Wall Street’s main benchmarks started the session moving down, however the DOW, S&P 500, and NASDAQ rose +0.5%, +0.8%, and +1.2%, respectively. Investors are now pricing in with near certainty a -25 bps interest rate cut as producer prices data came in higher-than-expected. PPI rose +0.2% in August, amounting to double consensus expectations. Moderna shares slumped -16.8% after it forecasted sales between US$2.5-3.5b, below consensus. Micron fell -4.2% after a bank downgraded the stock to underperform. The US 2-year treasury bond yield added +2 bps in the session to 3.66% while its 10-year counterpart gained +4 bps to 3.69%.
The pan-European STOXX 600 rose +0.8% while London’s FTSE 100 increased +0.6% as investors geared up for a key European Central Bank (ECB) meeting later in the day. The market is betting that the central bank will cut rates by -25 basis points as falling inflation signals a sufficiently weak economic outlook at current settings. Roche fell -3.4% after reports of its obesity medication signalled a higher than hoped level of side effects. Nordex increased +2.1% as the German wind turbine manufacturer announced a new order from Orsted.
Japan’s Nikkei 225 increased +3.4%, followed by Korea’s Kospi at +2.3%. Hong Kong's Hang Seng added +0.8% while China’s CSI 300 and Shanghai Composite fell -0.4% and -0.2% respectively. Australia’s ASX 200 jumped +1.1% in its best one-day performance in a month, the benchmark following Wall Street’s quick rise. The NZX 50 also rose +1.5%, with property name Argosy (+3.6%) leading the way.
WTI Crude added +2.6% to US$69.05/oz, Gold increased +1.8% to US$2,555.87/oz, Iron Ore ticked up +1.1% to US$92.30/MT.