Global equity indices rose on Friday, with U.S. stocks rallying after a jump in Netflix and Alphabet shares, while the dollar gained against the yen as the Bank of Japan governor repeated the central bank will maintain its very loose monetary policy. Netflix rose after positive earnings results while Google after announcing job cuts. However, the Dow and S&P 500 still posted losses for the week.
Fed officials dialed back fears of overly aggressive policy moves. Benchmarks climbed on Friday after Fed Governor Christopher Waller said policy looks pretty close to sufficiently restrictive. Earlier, Philadelphia Fed President Patrick Harker repeated his view for more incremental steps in rate hike, while Kansas City Fed chief Esther George said the economy can avoid a sharp downturn. Earlier this week, higher rates and hawkish comments from Fed and European Central Bank officials had weighed on risk sentiment.
European stocks also closed higher on Friday but with weekly losses as investors were cautious of the earnings season and upcoming central bank decisions. In Spain, Cellnex jumped nearly 10% after a report that American Tower and Brookfield are considering a possible bid. Denmark’s Orsted dropped more than 8% after earnings fell short and scrapped plans for a large windfarm in the US.
ECB’s Knot said about rate hikes “It will not stop after a single 50 basis point hike, that’s for sure.” He continued saying “Core Inflation has not yet turned the corner in the euro area”. In this way Knot signaled that there will be multiple half percentage points of rate hikes by ECB.
Oil contracts rose, and WTI crude ended with weekly advance. Traders were encouraged by Chinese demand that is picking up after the nation abandoned covid restrictions. For the week, Brent increased by 2.8% and WTI saw a rise of 1.8%. Oil was also supported by hopes that the U.S. Fed will soon change to smaller rate hikes, which could brighten the U.S. economic outlook.
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