19/09/2024 Evening Reports
Global stocks surged after the Federal Reserve’s 50 basis-point interest rate cut reignited investor confidence. US futures soared, with the S&P 500 and Nasdaq 100 poised for strong gains. Europe’s Stoxx 600 also advanced, while a weaker dollar and rising cryptocurrencies reflected renewed market optimism.
The Fed’s aggressive move, the first rate cut in over four years, signaled more reductions ahead, boosting hopes of a soft landing for the US economy. Meanwhile, the Bank of England maintained rates, urging caution on easing too quickly, and Asian markets rallied as well.
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HSBC Warns of Euro Weakness if Fed Opts for Aggressive Rate Cut
The euro may face downward pressure if the Federal Reserve moves forward with a larger-than-expected 50 basis point rate cut on Wednesday, according to analysts at HSBC. They suggest that such a decision from the Fed could push the European Central Bank (ECB) to adopt more aggressive monetary easing, heightening risks for the eurozone’s economy.
In a note, HSBC analysts said that while the Fed’s swift policy easing could limit the total number of rate cuts required, the ECB’s more cautious approach might lead to prolonged economic risks, particularly for growth and employment. Although the euro has the potential to climb above the key $1.12 level in the short term, HSBC warns that the currency could face a decline due to these pressures.
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