Stocks and bonds bask in rate cut hopes

World stocks hit a record high and bond markets rallied on Thursday as galvanized hopes of interest rates cuts in the United States and other major economies extended a powerful month-long global bull run.

Investors were still basking in the glow of Wednesday's mild U.S. inflation data as well as growing optimism in Asia that China was finally looking at the kind of measures that might ease its property crisis.

MSCI's benchmark world stocks index EURONEXT:IACWI, which tracks 47 countries, was up for a sixth straight day and the STOXX 600 SXXP was trying to take Europe's winning streak to 10 days, which would be the longest since August 2021.

Japan's yen was enjoying respite from the dollar while benchmark government bond yields US10Y(DE10YT=RR) - which drive the global cost of borrowing - hit one-month lows on bets the U.S. might now cut its interest rates twice this year.

"The prospect of the (U.S) inflation pressures easing was enough for the market to be quite enthusiastic, let's put it that way," Rabobank's Head of Macro Strategy Elwin de Groot said.

"Also, up until not too long ago, the market was focused on the U.S. outperforming Europe on many fronts. But now that has almost started to reverse," he added, pointing to another monthly improvement in euro zone industrial production data.

Overnight in Asia, Chinese and Hong Kong property shares had rallied after reports that Beijing was considering a plan for local governments to buy up millions of unsold homes across the country.

The CSI 300 real estate index 000952 and mainland property developers traded in Hong Kong HHSMPI jumped 3.5% and 4.9%, respectively, while the yuan USDCNH rose as the U.S. dollar sagged globally in the wake of the U.S. inflation data.

The dollar was at fresh multi-week lows against the euro and sterling in Europe. U.S. Treasury yields also extended their retreat, sinking to six-week troughs. That in turn helped the yen continue its recovery despite data showing the Japanese economy contracting more than expected.

The dollar slipped to 154.62 yen USDJPY in Europe from as high as 156.55 in the previous session.

In the main commodity markets, gold inched towards record levels and crude oil added to gains after rebounding strongly overnight from a two-month trough. Wider volatility gauges like the VIX VIX have also been sunk by the recent market surges.

"The expression of relief ripples through risky assets, with markets coming alive the moment we saw U.S. core CPI," Chris Weston, head of research at Pepperstone, wrote in a report.

"All in all, after three months of troubling price pressures, this is a report that will sit well with (Fed Chair) Jay Powell and Co."

Brent futures BRN1! rose 39 cents, or 0.47%, to $83.14 a barrel, while U.S. West Texas Intermediate crude (WTI) CL1! gained 42 cents, or 0.53%, to $79.05, adding to Wednesday's strong gains.