US jobless claims surge, while Dow hits new high
US equities continue to rally ahead of next week's expected Fed cut, with expectations bolstered by a surge in jobless claims, says Chris Beauchamp, Chief Market Analyst at investing and trading platform IG.
Dow hits new high
Today’s CPI reading cleared the decks for a September rate cut, though the weekly claims figure provided the fuel for the real move higher in US markets. Coming off the back of last week’s payrolls, the signs are there that the employment picture in the US is now definitively weakening. The Fed’s rationale for acting next week got a lot stronger today, and we are seeing plenty of buying in advance of next week’s meeting.
ECB caution lifts euro
While the dollar took another beating following the US data, there is cause to think that the euro is due to strengthen further. Upward revisions to eurozone inflation forecasts by the ECB suggest that another rate cut is a distant prospect. Notably while French stocks rallied despite this week’s confidence vote, German equities have continued to struggle thanks to the stronger currency, being left behind by most other major indices.
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