By Harry Robertson and Ankur Banerjee
LONDON/SINGAPORE (Reuters) -European shares rose on Thursday after falling the day before, while Asian shares fell as trading volumes thinned ahead of the U.S. Thanksgiving holiday.
The continent-wide European index rose 0.48%, after falling 0.75% in the previous two sessions.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.52% but climbed 0.56%.
Trading in US stocks and government bonds was closed, but US futures rose 0.24% after the index fell 0.38% on Wednesday.
European markets were boosted by a rally in technology stocks after Bloomberg reported that the Biden administration’s clampdown on Chinese chips could be less severe than expected.
Data on Wednesday showed U.S. consumer spending rose in October, but the Federal Reserve’s preferred inflation measure rose to 2.3% in October, up from 2.1% the month before.
Together with the prospect of higher tariffs on imported goods, solid spending and inflation could narrow the room for rate cuts next year.
“We continue to expect the FOMC to cut the Funds rate by 25 basis points at its December meeting,” said Commonwealth Bank of Australia (OTC:) economist Kristina Clifton, referring to the United States Federal Open Market Committee. .
“However, another solid monthly core inflation rate in November will challenge the FOMC’s view of inflation falling to 2% per year.”
The , which measures the US currency against six rivals, was 0.1% higher at 106.2, after falling 0.7% in the previous session.
Chris Turner, global head of markets at lender ING, said Wednesday’s decline in the dollar was likely partly caused by investors cashing in on gains on US stocks and bonds in November before the end of the month.
“Presumably some of this activity occurred yesterday in the more liquid markets than in anticipation of the Thanksgiving thinned out conditions.”
In a surprise move, South Korea’s central bank cut interest rates for the second time in a row on Thursday after inflation slowed more than policymakers had forecast. The victory weakened after the decision.
The yen fell 0.28% to 151.52 per dollar after rising to a one-month high in the previous session. The Asian currency is heading for its strongest week since early September, thanks to growing expectations of a rate hike by the Bank of Japan next month.
The euro fell 0.13% to $1.0552, after rising 0.7% in the previous session, after European Central Bank board member Isabel Schnabel said interest rate cuts should be gradual and move towards neutral , and unaccommodating, terrain. [FRX/]
European bond yields fell as prices rose, a welcome change for the French government, which on Wednesday saw its borrowing costs rise to the highest level against Germany since 2012.
French Finance Minister Antoine Armand said Thursday that the government is ready to make concessions on its budget, which faces widespread opposition from both far-left and far-right politicians.
Investors watched inflation figures for eurozone countries and German states on Thursday, before figures for the entire bloc were released on Friday.
In commodity markets, oil prices rose after Israel said its ceasefire with Hezbollah had been violated, with futures up 0.37% at $73.1 a barrel.
rose 0.14% to $2,639 an ounce, but is on track for a nearly 4% decline in November, the weakest monthly performance in more than a year. [GOL/]
