Europe鈥檚 stock markets rose Wednesday following a record-breaking Wall Street performance after US Federal Reserve chief Jerome Powell hinted at interest-rate cuts later this year.
London, Frankfurt and Paris also rebounded from recent losses sparked by French post-election uncertainty.
Traders shrugged off a mixed Asian showing and awaited further comments from Powell.
The dollar traded mixed.
Although his semi-annual Senate testimony on Tuesday did not indicate when Fed interest-rate cuts may come, analysts are predicting the first in September and a second before year鈥檚 end.
鈥楶owell placed emphasis on needing 鈥榞reater confidence鈥� that inflation was moving back towards target but also acknowledged the risk of leaving interest rates high for too long, pointing to cooling labour market conditions and the risk of unduly weakening economic activity,鈥� noted Lindsay James, investment strategist at Quilter Investors.
鈥楾he Fed鈥檚 preferred measure of inflation, core PCE inflation, now providing a more reassuring message, together with the signs of a cooling economy, (means) that investors鈥� expectations of two rate cuts... are reasonable鈥� by the end of the year.
James stressed however that the US central bank would refrain from any move in rates in November, in order to show impartiality close to a US presidential election.
Powell is set to testify before a House committee later Wednesday, and investors will also be eyeing US consumer inflation data due Thursday for further insight that price rises are still easing as hoped.
鈥楾hursday鈥檚 CPI data could be crucial in determining whether the probability of a September rate cut increases further from the current 70 per cent,鈥� said SPI Asset Management鈥檚 Stephen Innes.
In Asia on Wednesday, Hong Kong stocks finished in the red after earlier rising more than one per cent. Shanghai closed lower, and Sydney, Mumbai and Manila were also down.
But Tokyo stocks advanced with the benchmark Nikkei 225 reaching an all-time high. Seoul was flat, while Taipei, Wellington, Bangkok, Singapore, Jakarta and Kuala Lumpur all rose.