Global Equities Recovering Amid Easing of Geopolitical Tension
Global stock markets are recovering slightly, with US futures pointing to a higher opening bell on Thursday as worry of a US military strike on Syria waned. The European shares were up. The German DAX rose by 0.55% while in France CAC increased by or 0.36%. US President Donald Trump is expected to respond to a suspected chemical weapons attack in Syria this week. A missile or air-to-ground attack could provoke a response from Russia, which sparked investor concern on Wednesday, with markets ending the day in the red.
According to the minutes of the Fed's March meeting, Federal Reserve policymakers agreed that further US rate hikes would likely be warranted amid optimism on US economic growth and confidence that inflation would meet the central bank's target. Traders are currently pricing in around a 90% chance of a rate hike in June.
The European Central Bank (ECB) will release the minutes from its March policy meeting. As always, investors will look for fresh clues regarding when policymakers plan to start winding down their asset purchase program, though the conversation regarding trade risks could also attract attention considering recent events.
Even though the ECB took no action in March, keeping its benchmark interest rates and asset purchase program untouched, it did tweak its forward guidance in a more hawkish direction. The Bank removed from its statement the so-called QE easing bias, the commitment that it stands ready to increase the size and/or duration of its purchases if the economic outlook becomes less favorable. This move was seen as laying the groundwork for policymakers to end their asset purchases completely later this year, triggering a spike higher in the euro.