Global stock market rally continues, European stocks open higher, the dollar's decline narrows, U.S. Treasury bonds rise, gold falls

The global stock market rally continues to expand, with U.S. and European stock index futures rising. Strong June U.S. retail sales growth alleviates market concerns about the health of the U.S. economy. U.S. unemployment claims have fallen for the fifth consecutive week, reaching the lowest level since mid-April, indicating resilience in the labor market.

On Friday, the 18th, both the S&P 500 and Nasdaq 100 index futures rose by 0.2%, after both indices set new closing highs on Thursday. European futures rose by 0.4%. Asian stock markets increased by 0.4%. Cryptocurrencies rose after the U.S. Congress passed the first federal bill regulating stablecoins.

• European stocks opened higher, with the Euro Stoxx 50 index up 0.39%, the German DAX index up 0.48%, and the UK FTSE 100 index up 0.32%. Burberry rose over 3%, as the company's first-quarter comparable retail sales exceeded market expectations. Defense stock Saab rose over 6%, as the company raised its full-year organic revenue forecast. GlaxoSmithKline's stock price fell 5.6% after its drug Blenrep failed to gain support from the U.S. FDA advisory committee.

• Both the S&P 500 and Nasdaq 100 index futures rose by 0.2%.

• The U.S. dollar spot index changed little. The euro rose 0.2% to $1.1618.

• The yen fell 0.1% against the dollar, to 148.75.

• The yield on the 10-year U.S. Treasury bond fell two basis points to 4.43%.

• The yield on the 10-year Japanese government bond fell three basis points to 1.520%.

• Bitcoin rose 0.9% to $120,522.73.

• Spot gold fell 0.1% to $3,335.24 per ounce.

• West Texas Intermediate crude oil rose 0.4% to $67.84 per barrel.

Economic Data Boosts Market Optimism

Positive economic indicators provide strong support for the market, and investors are confident about the upcoming second-quarter earnings reports from U.S. companies. Chris Zaccarelli of Northlight Asset Management stated:

"As long as the economy continues to expand and the unemployment rate remains low, people will continue to consume, and this flywheel can continue to generate higher profits, which is the engine driving stock prices up."

There are differing opinions within the Federal Reserve regarding the timing of interest rate cuts. Fed Governor Christopher Waller believes policymakers should cut rates this month to support a labor market showing signs of weakness. San Francisco Fed President Mary Daly stated that it is reasonable for policymakers to plan for two rate cuts this year, emphasizing that the central bank should not wait too long to act.

However, Fed Governor Adriana Kugler holds a different view, stating that officials should continue to keep rates stable "for a period of time," citing that tariffs are beginning to push prices up and inflation is accelerating

The Dollar is Under Pressure but the Decline is Narrowing

The dollar fell against most G10 currencies following Waller's comments about interest rate cuts. Carol Kong, a strategist at the Commonwealth Bank of Australia in Sydney, stated:

"If concerns about U.S. policy-making further undermine investor confidence in dollar assets, the dollar remains vulnerable to decline."

U.S. Treasury yields fell across the board, and cryptocurrencies rose after Congress passed the first federal legislation regulating stablecoins. Japanese stock markets and government bond yields also declined as investors focused on the important elections taking place this weekend.