Asian stocks continued to rise on Thursday as investors welcomed more data pointing to a softening labor market, which gives the Federal Reserve room to cut interest rates. Figures showed that the private sector created fewer jobs than expected last month, while first-time and continuing claims for jobless benefits also topped forecasts. Additionally, a survey revealed that services sector activity contracted in June at the fastest pace in four years. These developments have led markets to price in nearly two rate reductions this year, starting in November. The S&P 500 and Nasdaq reached new record highs, while the Dow ended slightly lower. Tokyo, Hong Kong, Sydney, Seoul, Taipei, Manila, and Jakarta all saw gains in their stock markets. The euro edged up against the dollar after news that more than 200 centrist and left-wing candidates had pulled out of Sunday's legislative election runoff in France in a bid to beat the far right. The pound was enjoying support ahead of Thursday's general election in the UK, which is expected to see the opposition Labour Party win a landslide against the ruling Conservatives after 14 years in government.
Cooling inflation in Europe and softening US economic data have led to expectations of rate cuts by central banks, fueling a stock market rally on both sides of the Atlantic. Global government bond yields have fallen, reflecting growing expectations for central banks to lower interest rates. European stock markets experienced a rebound, with the Euro Stoxx 600, DAX, CAC 40, and FTSE all rising. The euro strengthened against the US dollar. Wall Street reached new highs following the release of the Federal Reserve's June meeting minutes and softened US economic data. The rally was driven by a decrease in government bond yields and expectations of multiple rate cuts by the central bank. However, political uncertainties in France and the UK may temper the rally, potentially causing European markets to underperform compared to their US counterparts. [9c6f998c]