During the European trading session on Thursday, November 7th, global stock markets rose, following the historic highs set by the US stock market earlier, while US Treasury bonds were under pressure as investors digested Trump's victory ahead of policy decisions by the Federal Reserve and other major central banks.

The market was slightly calm on Thursday as investors had been dealing with the broad impact of Trump's victory. His election forced investors to accept the prospect of economic policies that could lead to a reduction in interest rate cuts by the Federal Reserve and the possibility of fiscal expansion under full Republican rule.

European stock markets rallied on Thursday with the pan-European Stoxx 600 index opening up 0.5%, lifted by technology and resource stocks, while the market focused on policy decisions from the Federal Reserve and other major central banks including the Bank of England.

After Donald Trump's overwhelming victory in regaining the US presidency, European benchmark indices rose 1.9% in the previous trading day, but closed lower as investors assessed the possibility of tariffs.

Benedicte Lowe, stock derivatives strategist at BNP Paribas in Paris, said: "There are signs that the US elections will be polarizing for Europe, with potentially better performance if Harris wins and not so good performance if Trump wins. Our view is that there is still upside potential in European stocks, just with lower beta coefficients compared to US stocks."

While traders continue to assess the impact of Donald Trump's return to the White House on the Federal Reserve's interest rate path, US stock index futures maintained gains after the election.

S&P 500 index futures edged higher, with the US benchmark index rallying before on expectations of growth-boosting policies under the new president, leading to all three major Wall Street indices hitting historic highs.

Naomi Fink, Chief Global Strategist at Nikko Asset Management, said: "The market is rewarding the potential for corporate tax cuts and believes that the government's tendency towards industry deregulation is favorable for returns."

China's stock market sees a strong rebound.

Earlier, Asian stock markets also saw some gains, with China's blue-chip index rising by 3%.

Yue Su expects China to introduce a stimulus plan of over 10 trillion yuan, of which about 6 trillion yuan will be used for local government debt replacement and bank capital restructuring, and over 4 trillion yuan will be used to support special bonds for local governments in the real estate sector. She did not specify the implementation time of this stimulus plan.

The US dollar fell, with the dollar index dropping by 0.3%, marking its best single-day performance since 2022. This was due to the comments from Japan's chief currency official, Atsunori Mimura, indicating that authorities will take appropriate action against excessive currency fluctuations, leading to a stronger yen.

The euro rose by 0.3% to $1.0762, after falling by 1.8% earlier due to political turmoil in Germany. German Chancellor Olaf Scholz fired Finance Minister Christian Lindner, leading to the dissolution of the three-party coalition government, paving the way for early elections next year.

The bond market had a poor response.

The bond market had a poor response, with US bond yields retracting slightly after a sharp rise across the board on Wednesday. The 10-year benchmark yield remained steady at 4.42%, while the 30-year yield edged up to 4.61%. This helped the US dollar post its largest single-day gain in over two years on Wednesday, despite a slight decline on Thursday, with the dollar index falling by 0.3%.

As government execution aligns with legislative expectations regarding fiscal expansion, yields rise. Fink pointed out, "Currently, the US debt-to-GDP ratio is nearing a historical high of 120%, and the budget deficit has exceeded 6% of GDP."

"What we saw yesterday was a typical performance of the Trump trading pattern, but this will evolve quickly," said Arnaud Girod, Chief Economist and Cross-Asset Strategy at Kepler Cheuvreux in Paris. "It is impossible for U.S. bond yields to keep rising while the stock market is going up. My view is that the yields will stabilize."

Focus on the Federal Reserve decision.

The main economic event of the day was the Federal Reserve meeting. The market still remains confident about a 25 basis point rate cut that day, but expectations for further easing in December have slightly decreased. In the long run, Trump's tariffs and immigration policies could exacerbate inflation, which could hinder the rate cut path.

Later today, Federal Reserve Chairman Jerome Powell will face a tough test as concerns about inflation and market volatility triggered by Trump's second term arise. This action follows a half-point rate cut in September.

"What investors really want to know is: how will President-elect Trump's fiscal and tariff policies affect the Federal Open Market Committee's (FOMC) rate outlook," wrote Bloomberg economist Anna Wong in a research report. "FOMC members may be pondering over this question."

Ahead of the Federal Reserve meeting, the Bank of England will also hold a meeting. Expectations are for a 0.25% rate cut by the Bank of England, the second cut since 2020, but investors are keen on whether any future policy signals will be disclosed. The British pound rose by 0.3% to $1.2915, but fell by 1.24% on Wednesday.

The Norwegian central bank and the Swedish central bank will also hold meetings on Thursday, in line with market expectations. The hawkish Norwegian central bank kept rates unchanged at a 16-year high, while the Swedish central bank cut rates by 50 basis points.

Boosted by Trump's support for digital assets during the election campaign, Bitcoin hit a record high on Wednesday, only to drop by 1.1% on Thursday when it reached a peak of $76,499.99. Trump had vowed to make the U.S. the "global capital of cryptocurrencies."

After a volatile session on Wednesday, oil prices stabilized, with traders assessing the potential impact of Trump's victory on the crude oil market.

Gold remains under pressure after a sharp drop of over 3% on Wednesday, currently stabilizing near $2,640, far from the recent record high of $2,790.15.