FX.co ★ European Shares May Follow Wall Street Higher On Rate Cut Optimism

European markets are predicted to open strong following their US counterparts, who recently recorded three consecutive days of gains largely due to better-than-expected corporate earnings and buoyed by the prospect of interest rate cuts.

Asian stock markets also performed well, with investors cheering solid tourism data from China during its Labor Day holiday period, as well as easing property market restrictions. Shenzhen and Wuhan, for instance, have further relaxed their home purchase stipulations in an attempt to bolster sales.

Meanwhile, the Australian dollar retained a proximity to its two-month high against the US dollar as the Reserve Bank of Australia decided against adjusting interest rates. The bank did express worry about inflation being slower than anticipated.

Despite Japanese authorities issuing warnings about drastic yen fluctuations, the yen continued to fall against the dollar. Conversely, gold experience marginal decreases after showing strength in the previous trading session.

Thomas Barkin, president of the Federal Bank of Richmond, communicated feeling that the risks poised towards more inflation outweighed other financial perils. Barkin's New York colleague, John Williams, stressed that the timing of proposed rate cuts would be reliant on reviewing incoming data comprehensively.

Inglobal oil market, gains were also extended following Israel's recently launched airstrikes on Rafah and condemnation of a Hamas-proposed ceasefire for falling "far short of Israel's necessary requirements".

In terms of future market influence, eurozone retail sales figures, Germany's factory orders data and UK house price statistics are all likely to hold significant sway on investors. Turn their attention to US soil, it seems to be quiet in terms of economic activities.

On financial reporting, market watchers are eagerly awaiting releases from several industry leaders including Walt Disney Company, Duke Energy Corporation, and Occidental Petroleum Corporation.

In a previous night's activity, US stocks experienced growth buoyed by solid first-quarter earnings reports and hopes for interest rate adjustments before year's end. The Nasdaq Composite, for example, surged 1.2%, and the S&P 500 rose 1%, while the Dow Jones scraped half a percentage of increase to post its fourth consecutive daily profit.

European stocks also rose, with strong gains recorded as new data indicated an increase in eurozone investor confidence and a boost in private sector growth. The pan-European STOXX 600 rose half a percent, the German DAX climbed 1% and France's CAC 40 increased half a percent. UK markets were closed due to a bank holiday.