Global stocks rose on Friday as investors firmed up bets on a US interest rate cut at the end of July after a speech by a top Federal Reserve official further cemented expectations for one, fuelling appetite for risk assets and capping the dollar. European shares opened higher across the board, but had given up gains by midday in London. The pan-European STOXX 600 index turned flat after rising as much as 0.7%, as a slump in Italy’s stock index and European bank stocks weighed.

Financial markets reacted quickly, with Fed fund rate futures at one point pricing in an almost 70% chance of a 50 bp cut. The odds eased to around 40% after the New York Fed said Williams’ speech had not been about immediate policy direction.

MSCI’s All-Country World Index, which tracks shares in 47 countries, was up 0.3% after earlier peaking at 0.5% up. But it was still on track to break a six-week streak of weekly gains.

E-mini futures for the S&P 500 index were 0.2% higher, indicating a higher opening on Wall Street later in the day.

Williams’ comments boosted appetite for riskier assets and markets are now looking for signs of the start of a full easing cycle when the Fed meets at the end of the month, said Piotr Matys, emerging markets strategist at Rabobank. Matys said he believed the Fed would make a precautionary rate cut at the end of this month, but that it would not be the start of a full cycle of cuts.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.84%, bouncing back from the previous day’s losses, while Japan’s Nikkei advanced 2%. Elsewhere in Asia, the Shanghai Composite Index rose 0.8%, Australian stocks added 0.75% and South Korea’s KOSPI gained 1.4%.

For the week, the MSCI ex-Japan index climbed a modest 1%, as riskier assets were partly capped by U.S. President Donald Trump’s reiteration of his threat to impose further duties on Chinese imports.

The two sides resumed talks recently to seek an end to a year-long trade war that has rattled financial markets and slowed global growth. But most analysts do not expect an agreement any time soon, with some predicting a strong risk of further tariff escalation.

Although central banks around the world have embarked on policy-easing in a bid to support their respective economies, investors are left to ponder whether the stimulus will be enough to offset the effects from heightened U.S.-China trade tensions, said Han Tan, market analyst at FXTM. The dollar index against a basket of six major currencies stood about 0.2% higher at 97.016 after losing roughly 0.5% overnight to a two-week low of 96.671 in the wake of the comments from the Fed’s Williams. The euro was 0.34% lower at $1.1237 after climbing 0.45% the previous day.

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