San Francisco Frontiers - Stock markets rise on rate-cut hopes

Bitcoin jumped to $44,490.65, hitting the highest level since April 2022 on optimism the United States would soon allow broader trading of the biggest cryptocurrency, extending its bullish run.

Frankfurt's DAX stocks index hit a fresh record high, passing the 16,600 level for the first time, and Paris CAC 40 rose as sliding German factory orders added to hopes of an interest-rate reduction from the ECB.

"Risk-on sentiment is driving price action this morning amid growing expectations that the European Central Bank could cut rates early next year," said Victoria Scholar, head of investment at trading firm Interactive Investor.

"Markets are pricing in an almost 90-percent chance of a cut from the ECB in the first quarter of 2024."

Equity investors digested data pointing to a softening US labour market, rekindling hopes of a Fed rate reduction.

Tuesday's below-forecast job openings lifted optimism ahead of the closely watched non-farm payrolls report due Friday, which investors hope will confirm the economic slowdown sought by the Fed.

"Cooling job vacancy data from the US helped bolster expectations that we are at the pivot point of this rate hiking cycle -- though more news on the US labour market through the course of this week will provide a fuller picture," added AJ Bell investment director Russ Mould.

Markets rallied in November on growing hope that with inflation continuing to fall and other parts of the economy easing, the Fed will be able to slash rates in 2024, with some suggesting as soon as the first quarter.

The bank's statement after next week's scheduled policy meeting will be pored over by traders hoping for clues about decision-makers' thinking on rates in light of the recent data.

While the jobs figures reinforced rate cut hopes, Wall Street's three main indexes ended mixed on Tuesday.

They opened higher on Wednesday, however, with jobs data from payrolls firm ADP also coming in softer than expected.

Treasury yields also moved lower, with Briefing.com analyst Patrick O'Hare noting the rate of return on 10-year US government bonds is now down by 0.85 percentage points from its October peak.

"The sharp move lower in rates is essentially why everything has been coming up roses for the stock market since late October," he said.

Asia enjoyed some much-needed buying, with Tokyo up two percent and Sydney one percent higher.

Hong Kong, Sydney, Singapore, Seoul, Bangkok, Mumbai, Wellington, Taipei and Jakarta were also on the rise.

Shanghai fell, with sentiment dented after Moody's on Tuesday warned it had downgraded its outlook for China's credit rating owing to the country's rising debt levels and concerns over its battered property sector.

Elsewhere, oil prices fell further as traders continued to digest news of near-record US exports, which could offset pledges by Saudi Arabia and other major producers to cut output, according to analysts.

- Key figures around 1430 GMT -

New York - Dow: UP 0.3 percent at 36,249.12 points

London - FTSE 100: UP 0.5 percent at 7,527.33

Paris - CAC 40: UP 0.6 percent at 7,433.03

Frankfurt - DAX: UP 0.8 percent at 16,660.76

EURO STOXX 50: UP 0.7 percent at 4,483.22

Tokyo - Nikkei 225: UP 2.0 percent at 33,445.90 (close)

Hong Kong - Hang Seng Index: UP 0.8 percent at 16,463.26 (close)

Shanghai - Composite: DOWN 0.1 percent at 2,968.93 (close)

Euro/dollar: UP at $1.0804 from $1.0797 on Tuesday

Pound/dollar: UP at $1.2601 from $1.2595

Dollar/yen: UP at 147.20 yen from 147.15 yen

Euro/pound: UP at 85.73 pence from 85.72 pence

West Texas Intermediate: DOWN 2.3 percent at $70.65 per barrel

Brent North Sea crude: DOWN 2.0 percent at $75.69 per barrel

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N.Wilson--SFF