(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

LONDON, Oct 8 (Reuters) - What matters in U.S. and

global markets today

By Mike Dolan, Editor-At-Large, Finance and Markets

Usually alternatives, stocks and gold are rising together as

investors seek to ride an inflationary expansion by taking on

AI-driven corporate risk with gold added to portfolios as a

hedge against loosening monetary and fiscal policy worldwide.

Monday's brief stumble on Wall Street looks to have been just

that and both U.S. futures and European stocks rallied on

Wednesday, with the STOXX600 and FTSE100 hitting new records.

French markets staged a recovery amid some sign of progress in

the government's impasse there and gold surged again after

topping $4,000 per ounce for the first time on Tuesday.

If rising stocks and gold seemed like an odd couple, they were

also joined by the peculiar sight this year of a rising dollar.

The dollar DXY index hit a near two-month high as Japan's yen

plunged again close to 153 per dollar on this week's leadership

change in Tokyo, dropping to its weakest since February.

With no sign of movement on re-opening government in Washington,

the focus remains on Federal Reserve signals - with minutes from

last month's rate-cutting meeting and a long list of speakers on

Wednesday's diary. On Tuesday, new Fed board member Stephen

Miran, who favors big rate cuts due to his view on a much lower

neutral rate than consensus thinking, said that calm bond

markets supported his take.

Futures are still pricing in a 95% chance of another

quarter-point rate cut later this month, with the longer the

government shutdown lasts the longer the drag on the economy at

the margin. And, adding some trepidation about runaway stocks,

the Bank of England warned on Wednesday about the risk of a

sharp reversal if investor moods soured on doubts about AI or

Fed independence.

* In keeping with easy policy settings around the world, the

Reserve Bank of New Zealand surprised with a 50-basis-point rate

cut and signaled more easing may follow, knocking the New

Zealand dollar down nearly 1% and dragging the Aussie lower in

sympathy. Markets had priced only a slim chance of a half-point

move and policymakers framed the step as getting "ahead of the

curve" to arrest a frail economy.

* Despite the bounce in French stocks and bonds, the euro

sagged to a one-month low. But caretaker French Prime Minister

Sebastien Lecornu struck a cautiously optimistic tone on

Wednesday, saying a deal could potentially be reached on the

country's budget by year-end, making the possibility of a snap

election less likely.

* Spot bullion burst above $4,000 per ounce for the first time,

now up more than 50% year-to-date as investors hedge policy and

growth uncertainty. Beyond its role as an inflation hedge and

geopolitical safety play, the rally has been underpinned by

central-bank accumulation, renewed ETF inflows and this year's

softer dollar, with some strategists casting gold as insurance

against an AI-fuelled bubble and debt-inflation endgame.

In today's column, I take a look at new projections that show

Europe's ageing bill will rise far less than in the U.S. or

China over the coming decades.

Today's Market Minute

* A race by crypto companies to sell tokens pegged to stocks is

raising alarm bells among traditional financial firms and

regulatory experts who warn that the fast-growing novel products

pose risks to investors and market stability.

* U.S. lawmakers are calling for broader bans on chipmaking

equipment to China after a bipartisan investigation found that

Chinese chipmakers had purchased $38 billion of sophisticated

gear last year.

* In better news for Britain's embattled finance minister Rachel

Reeves, the UK statistics office said government borrowing in

the previous and current fiscal years was a combined 3 billion

pounds ($4 billion), lower than previously reported after a

value added tax receipt data error was found. There were also

rising hopes that tweaks to self-imposed fiscal rules will

prevent excessive tax rises in next month's budget.

* The Federal Reserve says its interest rate cuts are aimed at

softening the impact of a looming labor market rupture.

Unfortunately, writes ROI markets columnist Jamie McGeever,

cheaper money is unlikely to achieve that goal, but what it

almost certainly will do is fuel the "everything" rally in

financial assets.

* Russia's heavy bombardment of Ukraine's natural gas

infrastructure ahead of winter is set to have a knock-on impact

on Europe's energy market as Ukraine draws more fuel from its

western neighbours. Read the latest from ROI energy columnist

Ron Bousso.

Chart of the day

With investors racing to gold as an inflation hedge and the

Federal Reserve resuming interest rate cuts, the New York Fed's

monthly household survey found that public inflation

expectations were rising again last month, with their view of

inflation a year from now rising to 3.4% from August's 3.2% and

the three-year-stuck at 3%. September's five-year-ahead expected

inflation reading also stood at 3% from the prior month's 2.9%.

All measures are far above the Fed's inflation target of 2% - as

are actual core inflation rates - raising questions as to just

why the central bank is cutting rates again.

Today's events to watch

* Federal Open Market Committee issues minutes from

September meeting

* Dallas Federal Reserve President Lorie Logan, Chicago Fed

President Austan Goolsbee, St. Louis Fed chief Alberto Musalem,

Minneapolis Fed boss Neel Kashkari and Fed Board Governor

Michael Barr all speak; European Central Bank President

Christine Lagarde; Bank of England chief economist Huw Pill

speaks

* International Monetary Fund managing director Kristalina

Georgieva previews next week's IMF-World Bank annual meetings

* U.S. Treasury sells $39 billion of 10-year notes

Want to receive the Morning Bid in your inbox every weekday

morning? Sign up for the newsletter

here

. You can find ROI on the

Reuters website

, and you can follow us on

LinkedIn

and

X.

Opinions expressed are those of the author. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.