Global equities were set for a small weekly gain on Friday following a Wall Street rally overnight, as rising bets the Federal Reserve will skip a rate increase next week overshadowed worries about U.S. markets being drained of cash.
MSCI’s broad index of global shares <.MIWD00000PUS> edged 0.1% higher, on track for a weekly rise of 0.6%.
Europe’s STOXX 600 (.STOXX) index fell 0.3%, dragged lower by chemicals stocks after Britain’s Croda International (CRDA.L) issued a weak profit outlook. U.S. stock futures , fell 0.1%, indicating some softness after the S&P 500 (.SPX) entered a technical bull market the day before.
Traders now lay 73% odds on the Fed keeping rates steady on June 14, in a range of 5%-5.25%, pausing its most aggressive hiking cycle since the 1980s.
Bets for a pause were supported by data on Thursday that showed the number of Americans filing new jobless claims surged to a more than 1 1/2-year high, indicating a loosening labour market that could further quell inflation.
Investors also hope the Fed will pause its rate rise campaign as a quirk of the U.S. debt ceiling negotiations has posed a potential a threat to market liquidity.