Watkins' Late Goal Sends England to Final Amid CPI Focus

Ollie Watkins' stoppage-time goal advanced England to the European Championship final against Spain. Stock markets reached record highs, led by big tech gains, as investors anticipate a rate cut with the US CPI expected to show a 3.1% annual increase. The yen remained weak, and the Bank of Korea held rates steady while dropping inflation warnings, mirroring New Zealand's recent stance.

Equities

The FTSE 100 index closed 0.7% higher on Wednesday, boosted by gains in precious metal miners. The rise came despite hawkish comments from Bank of England Chief Economist Huw Pill, which dampened expectations for an interest rate cut in August. The FTSE 250 index jumped 1.4%, led by a 10.4% surge in SSP Group's shares after the restaurant operator reaffirmed its fiscal year forecasts. Travis Perkins climbed 7.1% following the announcement of Pete Redfern as its next CEO, while IAG gained 3% after Morgan Stanley upgraded the British Airways owner to "Overweight" from "Underweight".

On the other hand, Barratt Developments saw its shares fall after forecasting a decline in homebuilding targets. The yield on Britain's two-year gilt hit a session high of 4.125% post-Pill's speech, reflecting the market's reaction to his comments.

In the US, the Nasdaq and S&P 500 both rallied to record high closes, driven by gains in Nvidia and other major stocks ahead of key inflation data and quarterly earnings reports. The S&P 500 crossed 5,600 for the first time, ending the session at 5,633.91 points, up 1.02%. The Nasdaq gained 1.18% to close at 18,647.45 points, while the Dow Jones Industrial Average rose 1.09% to 39,721.36 points.

Nvidia climbed 2.7%, contributing significantly to the Nasdaq's seventh consecutive record-high close. Micron Technology jumped 4%, and Advanced Micro Devices added 3.9%. Apple reached a record high, lifting its market value to $3.6 trillion with a 1.9% increase.

Intuit's shares dropped 2.6% after announcing plans to lay off about 10% of its workforce. In contrast, Illumina jumped over 6% after acquiring privately held Fluent BioSciences.

Forex & Commodities

The dollar dipped on Wednesday after Federal Reserve Chair Jerome Powell indicated that the US central bank is nearing a point where it may cut interest rates but needs further evidence of declining inflation. Ahead of the US Consumer Price Index (CPI) data release, expectations are that headline prices will show a 0.1% monthly rise and a 3.1% annual increase, while core prices are seen up 0.2% month-on-month. Powell's cautious comments, coupled with a 73% probability of a September rate cut, have kept traders vigilant.

The dollar index edged down 0.07% to 105.05, with the euro gaining 0.1% to $1.0823 despite political uncertainty in France. The dollar strengthened by 0.29% to 161.77 Japanese yen, close to a 38-year high due to the interest rate gap between the US and Japan. Sterling rose to a four-week high of $1.2842 after Bank of England Chief Economist Huw Pill suggested rate cuts might be on the horizon.

Gold prices increased by 0.5% to $2,381 an ounce, reflecting cautious investor sentiment ahead of key inflation data. Oil prices also moved higher, driven by strong US gasoline demand and a larger-than-expected draw in crude inventories. Brent futures rose 0.5% to $85.08 per barrel, and US crude climbed 0.85% to $82.10 per barrel. The New Zealand dollar dropped 0.75% to $0.6077 following dovish signals from the Reserve Bank of New Zealand, which kept rates steady but hinted at potential cuts. Bitcoin saw a slight decline, stabilising around $58,900.