Volkswacht Bodensee - London, Frankfurt hit new records as rate hopes boost markets

Traders tracked gains in New York and Europe as they cheered fresh US data indicating the labour market was beginning to soften, giving central bankers room to ease monetary policy.

The forecast-beating figures showing that unemployment claims rose to their highest level since August followed last Friday's news that far fewer new posts were created in April than expected.

US Treasury bond yields, a proxy for interest rates, moved lower.

The readings soothed worries that borrowing costs would remain elevated through the year after a series of above-estimate inflation readings in the first four months.

Still, speculation is growing that the Fed will cut rates in September, though analysts urged caution as decision-makers were keen to see evidence that prices are being brought under control.

San Francisco Fed chief Mary Daly said Thursday that while the current policy was keeping a rein on the economy, it could take "more time" for inflation to come down to officials' two percent target.

"The data is noisy and thus we cannot yet say that a change in trend has occurred, but the next few weeks are going to be important, further increases from here would encourage the market to price a new Fed easing cycle with more confidence," said National Australia Bank's Rodrigo Catril.

Earlier Thursday, the Bank of England hinted that it could shift lower in the summer after keeping rates on hold at a 16-year high.

While inflation came in slightly hotter than anticipated, BoE boss Andrew Bailey said he was "optimistic that things are moving in the right direction".

The European Central Bank is expected to cut its rates in June.

The positive developments saw markets in London and Frankfurt finish at record highs on Thursday.

And with Wall Street enjoying a strong day, Asian investors went into Friday on a high -- as did European investors.

Hong Kong continued an impressive run that has seen it enter a bull market after climbing more than 20 percent from its January lows.

The gains were boosted by news that city officials were considering a plan to exempt individuals from paying tax on their dividends from stocks bought via the stock connect with mainland bourses.

There were also gains in Tokyo, Sydney, Seoul, Mumbai, Singapore, Taipei, Wellington and Manila. Shanghai was flat.

London spiked to a new record high as data showed Britain exited a recession with stronger-than-expected growth in the first quarter of 2024.

Frankfurt also hit a new all-time high, while Paris extended its own gains.

Oil prices extended gains as investors tracked developments in the Middle East, with Hamas on Friday saying its team at Gaza ceasefire talks in Cairo had left, adding that the "ball is now completely" in Israel's hands.

State-linked Egyptian outlet Al-Qahera News reported Thursday that representatives of both camps had left after two days of negotiations aimed at finalising a ceasefire deal.

- Key figures around 0715 GMT -

Tokyo - Nikkei 225: UP 0.4 percent at 38,229.11 (close)

Hong Kong - Hang Seng Index: UP 2.1 percent at 18,923.45

Shanghai - Composite: FLAT at 3,140.77 (close)

London - FTSE 100: UP 0.4 percent at 8,411.40

Dollar/yen: UP at 155.68 yen from 155.47 yen on Thursday

Euro/dollar: DOWN at $1.0773 from $1.0785 on Wednesday

Pound/dollar: UP at $1.2530 from $1.2524

Euro/pound: DOWN at 85.96 from 86.09 pence

West Texas Intermediate: UP 0.9 percent at $79.94 per barrel

Brent North Sea Crude: UP 0.7 percent at $84.49 per barrel

New York - Dow: UP 0.9 percent at 39,387.76 (close)

O.Schlaepfer--VB