European markets climb as Fed rate cut optimism outshines trade war fears

  


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European markets were boosted by heightened hopes of Federal Reserve rate cuts. Photo by Ian Waldie/Getty Images

European markets climbed on Friday as renewed optimism of a Federal Reserve rate cut outshone trade war tensions.

The continent’s main indices made substantial gains, with the Stoxx 600












SXXP, +0.20%










  up 0.5%, the DAX












DAX, +0.31%










  rising 0.7% and the CAC












PX1, +0.18%










 gaining 0.5%.

What’s moving the market?

U.S. stocks were led higher on Thursday after New York Fed president John Williams said it “pays to act quickly to lower rates at the first sign of economic distress.”

Market expectations for a 50 basis point cut at the Fed’s July meeting rose as a result, according to CME’s FedWatch tool.

But the probability of that happening fell back after New York Fed spokesperson insisted Williams’ comments were part of an academic speech and not about policy actions.

European stocks seemingly ignored the caveat, reversing two days of losses, to trade higher on Friday.

Speaking to MarketWatch, Unigestion portfolio manager Olivier Marciot said the market was “mono-focused” and reacting to single issues and headline news on a daily basis.

He said: “We have seen previously that after a trade truce the market has forgotten about the risk and fallen into complacency.

He added: “At the moment it is all about central banks and everything being so dovish, so for now it is legitimate complacency.”

Which stocks are active?

The world’s third-largest advertising group Publicis












PUB, -7.93%










  trimmed its 2019 guidance as its continuing struggles in the U.S. weighed on performance in the second quarter. Shares in the French company, which has faced competition from Facebook and Google, fell 7.3%.

Budweiser brewer Anheuser-Busch InBev












ABI, +5.92%










  jumped 5.3% after the company said said it was selling its Australian subsidiary for $11.3 billion after calling off the IPO of its Asian business last week.

Oil and mining stocks rose on Friday after crude prices climbed on news that the U.S. Navy destroyed an Iranian drone the Strait of Hormuz, reigniting tensions. Antofagasta












ANTO, +1.69%










  led the way, jumping 2.8%.



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