By Chris Prentice and Amanda Cooper
NEW YORK/LONDON (Reuters) -Global shares rose on Friday as investors clung to the view that U.S. interest rates may fall further this year, and U.S. gold futures hit a record high on uncertainty over whether country-specific U.S. import tariffs would apply to the most commonly traded sizes of gold bars.
A report that the U.S. and Russia plan a truce deal sent benchmark global oil prices down $1 a barrel to a session low. A tariff-hit economic outlook added to the pressure on crude.
The dollar was on track for a weekly loss after U.S. President Donald Trump moved to reshape the U.S. central bank on Thursday. He nominated Council of Economic Advisers’ Chair Stephen Miran for a short-term board seat after Adriana Kugler’s abrupt exit, narrowing his shortlist to replace Federal Reserve Chair Jerome Powell, whose term ends May 15.
Miran holds similar views to Trump, who has berated Powell for being “too late” in cutting rates, even though growth is holding up and inflation is ticking higher.
“It locks in a vote for rate cuts at all the meetings between now and the end of January,” said Ray Attrill, head of FX strategy at National Australia Bank in Sydney.
“Markets are already travelling with a very strong expectation that there will be a rate cut,” he added. “Though there’s a question mark over whether he’ll succeed in ratification in time for the September meeting.”
Bloomberg News reported that Fed Governor Christopher Waller was emerging as a leading contender for the chair.
The MSCI All-Country index was up 0.53%, just below record highs struck two weeks ago.
On Wall Street, the Dow Jones Industrial Average rose 0.53% to 44,201.25, the S&P 500 gained 0.72% at 6,385.95 and the Nasdaq Composite added 0.85% at 21,423.01.
In Europe, shares got a lift from a series of robust earnings and optimism that the hefty U.S. tariffs that kicked in on Thursday would be subject to negotiation.
The STOXX 600 index was up 0.15%. Largely upbeat corporate results and firming bets of more Fed rate cuts have helped European stocks rise from five-week lows last Friday.
Zurich’s SMI index edged higher as traders continued to shrug off Switzerland’s 39% U.S. tariff coming into effect.
“The effective shock (from tariffs) is there. So the question now is: How is it going to impact the economy and the data, and when? Because up to now, up to now, let’s be fair, it’s been less severe than most have anticipated,” Lombard Odier economist Samy Chaar said.
Overall tariffs may be lower than many had feared back in April, but they are at their highest in at least a century.
Relief over lower-than-expected duties may be short-lived as a result. For instance, the European Union now has a 15% tariff rather than the 50% that Trump had threatened, Chaar said.
“That’s the vulnerability in the market. … It is focusing on the good news, which is not getting the 50%, but getting the 15%. And then the problem is that 15% is actually a big shock and, at some point, it’s going to show in the data,” he said.
The U.S. Customs and Border Protection service released a ruling on its website on Friday, which the gold industry interpreted as meaning that country-specific U.S. import tariffs could apply to the most-traded sizes of gold bars in the U.S.
Gold futures hit a record $3,534.10 earlier in the session when the Financial Times first reported the news.
Among other commodities, Brent oil futures were down 0.33% at $66.21 per barrel and U.S. crude lost 0.5% to $63.56.
The benchmark U.S. 10-year note yield rose 3.7 basis points to 4.281%, after weak demand at a 30-year bond auction, the latest in a string of lackluster sales this week.
The dollar rose 0.45% to 147.24 yen.
The euro dipped 0.11%, while the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was up 0.25%.
(Additional reporting by Gregor Stuart Hunter in Singapore and Nikhil Sharma and Pranav Kashyap in Bengaluru; Editing by Kim Coghill, Saad Sayeed and Helen Popper and Richard Chang)
