European stocks edged higher on Thursday while the dollar held steady, as investors priced in an 85% probability of a Fed rate cut next month. A muted, holiday-shortened trading week kept volatility low across asset classes.
Market Highlights
- STOXX 600 +0.2%, led by defence & tech; healthcare lagged.
- Optimism remains anchored in a strong U.S. earnings season and expectations of near-certain December rate cuts.
- Analysts warn that renewed concerns over AI spending remain the “market’s kryptonite.”
Currencies & Crypto
- USD/JPY strengthened to 156.37, with markets watching for potential intervention and a possible BOJ rate hike next month.
- Bitcoin +0.7% to $90,800, on track to snap a four-week losing streak with a ~3% weekly gain.
- Gold slightly lower at $4,159/oz.
- GBP eased after budget-driven gains; EUR flat at $1.1593.
Macro Backdrop
With U.S. data still catching up after the 43-day shutdown, markets lean heavily on Fed commentary. Recent remarks from Fed officials continue to support rate-cut expectations, keeping risk sentiment steady.