With the US Fed keeping a hold on a rate hike and the next meeting in November – more than a month away – the odds of an easing by MAS in its October monetary policy meeting has increased, he said.
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Morgan Stanley said the dollar will suffer more losses as the greenback fell for a second day after the Federal Reserve refrained from tightening policy and lowered its long-term path for interest rates.
European markets are likely to follow suit, with financial spreadbetters predicting Britain’s FTSE 100 will open up as much as 0.6 percent, and Germany’s DAX and France’s CAC 40 will start the day about 0.8 percent higher.
The Dow Jones industrial average was up 118.58 points, or 0.65 per cent, to 18,412.28, the S&P 500 had gained 12.05 points, or 0.56 per cent, to 2,175.17 and the Nasdaq Composite had added 33.20 points, or 0.63 per cent, to 5,328.38.
MSCI’s all-country world stock index was up 1.3 per cent, while Europe’s Stoxx 600 was up 1.8 per cent. The Housing Price Index rose 0.5%, besting the 0.3% estimate. It also projected a less aggressive rise in rates next year and in 2018, and cut its longer-run interest rate forecast to 2.9 percent from 3.0 percent.
“The market got what it expected/wanted”, said Daniel Morris, senior investment strategist at BNP Paribas Investment Partners in London. Traders now see more than 50% chance that the Fed will raise rates at its policy meeting in December, according to the CME Group’s FedWatch tool.
Earlier, the euro touched its highest level against the dollar in almost a week at $1.1250.
Turning to United States markets, the Dow Jones industrial average and S&P were up 0.7 percent and 0.6 percent respectively, while the dollar softened 0.7 percent to $1.1251 against the euro.
The pound rose 0.2 percent to $1.3057 as of 12:14 p.m. London time, after falling to $1.2946 Wednesday, the lowest since August 16.
The major gainer against the dollar was the Norwegian crown, which rose more than 2 percent after Norway’s central bank left its main interest rate unchanged and suggested further rate cuts may not be needed because of a pickup in the economy.
Silver prices, however fell 0.5 per cent to Dollars 19.74 an ounce, after jumping 3.1 per cent on Wednesday, the most since July.
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US crude (WTI) futures advanced 0.9 percent to $45.75 after soaring 2.9 percent on Wednesday.
