ASX set to open higher; $A keeps climbing

European stocks gained and the US dollar continued to fall on the back of Federal Reserve meeting minutes that showed support for more moderate interest-rate increases.

The Stoxx Europe 600 Index extended its recent rally as the real estate sector outperformed, boosted by the prospects of slower rate hikes and analyst upgrades. Dr. Martens shares plunged the most on record after the bootmaker’s sales and earnings missed expectations. An index of global stocks advanced for a third day.

Trading volumes are lower due to the Thanksgiving holiday, with Wall Street closed but futures rose after the S&P 500 closed at a two-month high. The Australian sharemarket is set to rise, with futures at 4.57am AEDT pointing to a gain of 12 points, or 0.2 per cent, at the open, On Thursday, the ASX added 0.1 per cent.

A gauge of US dollar strength fell further on Thursday, taking declines into a third day. The Australian dollar continued to climb on greenback weakness. At 5.09am AEDT, it is 0.5 per cent higher at 67.65 US cents.

European bonds rallied as traders trimmed wagers on rate increases by the European Central Bank, with risk-sensitive Italian debt leading the gains. There is no trading in Treasuries due to the US holiday.

Minutes from the Fed gathering earlier this month indicated several officials backed the need to moderate the pace of rate hikes, even as some underscored the case for a higher terminal rate. This adds weight to expectations the central bank will raise rates by 50 basis points next month, ending a run of jumbo 75 basis point increases.

“It was the start of a more different and dovish narrative from the Fed,” said Sunaina Sinha Haldea, global head of private capital advisory at Raymond James. “Is it a pivot? No, but are we seeing a slowdown in rate hikes and that path downwards towards rate cuts coming through? Yes. I think we will look back and say this was the peak of it.”

“A few” ECB officials favoured a smaller increase in interest rates in October to tackle record inflation, an account of their last meeting showed. Those who preferred a less aggressive step cited the fact that the hike was accompanied by other monetary-tightening measures, according to the account, published Thursday.