Yahoo Finance LIVE: FTSE 100 down and Wall Street up as US economy grows faster than expected
How major markets are performing on Wednesday
European stock markets were mixed on Wednesday, while Wall Street advanced, as the pound continued its rally and the US economy grew faster than expected.
In London, the FTSE 100 (^FTSE) closed 0.4% lower on the day, held back by a stronger pound, which hit a three-month high against the dollar during the session.
Meanwhile the CAC (^FCHI) gained 0.4% in Paris and the Frankfurt DAX (^GDAXI) surged 1.1%, touching a four-month high after data showed consumer prices in the state of North Rhine-Westphalia fell 0.3% month-on-month in November and to 3% year-on-year.
German inflation was less than expected in November, boosting hopes that the European Central Bank (ECB) will start cutting interest rates soon.
The consumer price index for Europe’s largest economy came in at 2.3%, lower than the 2.5% predicted by analysts. Overall eurozone inflation numbers will be published on Thursday.
Across the pond, the S&P 500 (^GSPC) climbed 0.3%, and the tech-heavy Nasdaq (^IXIC) was also 0.3% higher. The Dow Jones (^DJI) advanced 0.1% by the time of the European close.
It came as the US economy grew by 5.2% in the three months to September, better than estimates of 4.9%.
Consumer spending also grew during the period, albeit at a slower than forecast pace of 3.6%
Sterling (GBPUSD=X) was more than 0.2% higher against the US dollar at $1.2715 on Wednesday morning while it was was more than 0.1% up against the euro (GBPEUR=X) at 1.1562, at the time of writing.
The currency has gained 4.7% verses the global reserve currency over the last month as investors have increased bets that the US Federal Reserve will begin cutting interest rates soon.
Pressure on the dollar has continued to rise after a Fed official said monetary policy is well positioned to slow the US economy and get inflation back to target.
The comments from Fed governor Christopher Waller fuelled expectations that interest rate hikes are over. He went on to say that if disinflation starts to become a concern, then rates could be cut in response.
Read more: UK mortgage take up rises as interest rates hit pause
He told a conference: "I am encouraged by what we have learned in the past few weeks — something appears to be giving, and it’s the pace of the economy.
”Economic data from October are consistent with the kind of moderating demand and easing price pressure that will help move inflation back to 2%"
Sterling stood at its highest level since August at $1.27 on Wednesday morning, with demand also reflecting more warnings from Bank of England policymakers that UK interest rates need to stay higher for some time in order to tame inflation.
Meanwhile, global bonds are rising at their fastest pace since the 2008 financial crisis, according to new analysis, as traders bet that interest rate cuts are looming.
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