ECB, Fed rate cut hopes lift global stocks, sterling sags
LONDON - A wave of central bank easing and positive soundings from the earnings season buoyed world stocks on Tuesday, while Britain’s pound fell before the expected confirmation of hard-Brexit advocate Boris Johnson as the country’s prime minister.
The auto industry also gained as German parts makers Hella and French peer Faurecia surged nearly 6% and tyre maker Continental rose 4% despite a profit warning, putting the sector on track for its best day since April 1. Among currencies, the dollar reached a two-week high after U.S. President Donald Trump and congressional leaders agreed on Monday to a two-year extension of the U.S. debt limit, ending the threat a government default later this year.
Concern that Britain will crash out of the European Union without a deal have grown since Johnson said he would pull Britain out on Oct. 31 “do or die”.“Johnson is expected to become the new prime minister, so there is a real chance of a hard Brexit,” said Takuya Kanda, general manager of research at Gaitame.Com Research Institute in Tokyo.
Germany’s 10-year bond yield, the benchmark for the euro zone, was up a basis point, but at minus 0.34% was near Monday’s two-week low and not far from the record low posted at the start of the month. FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. REUTERS/Toby Melville/File Photo
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