European and U.S. futures climbed alongside Asian stocks following a strong session on Wall Street, driven by anticipation that the Federal Reserve may soon signal intentions to cut interest rates. The MSCI All-Country Stock Index is set for its ninth consecutive day of gains, the longest streak since December. Japanese, South Korean, and Australian shares rose, though Chinese stocks declined. Both Euro Stoxx 50 and U.S. futures advanced, with Treasury 10-year yields holding steady.
In the U.S., the S&P 500 saw its eighth straight day of gains, boosting investor sentiment. Asian currencies hit their highest level since January, and oil prices extended their recent decline as the U.S. announced that Israel had accepted a cease-fire proposal in Gaza.
Market optimism about potential Fed rate cuts is bolstering equity markets despite recent volatility and economic uncertainty. The MSCI Asia Pacific Index has risen in all but two sessions since August 6, reflecting expectations of an interest rate cut by U.S. policymakers in September.
Kyle Rodda, senior market analyst at Capital.Com Inc., noted that recent data has alleviated concerns about U.S. economic slowdown while avoiding fears of renewed inflation. This has positively impacted Asia ex-Japan equities, supported by a weaker dollar.
In Europe, increased risks to growth support the case for a policy adjustment by the European Central Bank next month, according to ECB Governing Council member Olli Rehn. Investors are also awaiting Eurozone CPI data later today.
Copper’s recent rebound slowed, while gold reached record highs, surpassing $2,500 an ounce due to Fed rate cut expectations. The yen weakened to around 147 per dollar.
In Asia, Australia’s central bank hinted at maintaining current interest rates, which are at a 12-year high, to manage inflation. Chinese banks kept their benchmark lending rates steady for August amid pressures on profit margins and a focus on financial stability.
Stock trading volume has decreased since early August, with traders hesitant to make large bets before the Fed’s Jackson Hole economic symposium. Central bankers are expected to be more divided than in recent years.
Jessica Amir, market strategist at Moomoo, commented that market sentiment is influenced by increasingly dovish Fed rhetoric and supportive economic data, setting the stage for a potential signal of rate cuts at Jackson Hole.
On the corporate front, Alimentation Couche-Tard Inc. has proposed a bid for Seven & i Holdings Co., potentially valuing the deal at over ¥5.63 trillion ($38.4 billion).
Key upcoming events include Eurozone CPI on Tuesday, U.S. Fed minutes and BLS payrolls revision on Wednesday, Eurozone HCOB PMI and consumer confidence on Thursday, and various U.S. and Japanese economic reports on Friday. Fed Chair Jerome Powell is set to speak at the Jackson Hole symposium.
Market Movements:
Stocks:
1.S&P 500 futures: unchanged
2.Nasdaq 100 futures: +0.1%
3.MSCI Asia Pacific Index: +0.3%
4.MSCI Emerging Markets Index: +0.2%
5.Japan’s Topix: +1.3%
6.Australia’s S&P/ASX 200: +0.2%
7.Hong Kong’s Hang Seng: -0.5%
8.Shanghai Composite: -1.1%
9.Euro Stoxx 50 futures: +0.2%
Currencies:
1.Bloomberg Dollar Spot Index: unchanged
2.Euro: $1.1074
3.Yen: -0.4% to 147.21 per dollar
4.Offshore yuan: -0.1% to 7.1439 per dollar
5.British pound: -0.1% to $1.2976
Cryptocurrencies:
1.Bitcoin: +3.4% to $61,094.19
2.Ether: +2.5% to $2,681.23
Bonds:
1.10-year Treasuries yield: +1 basis point to 3.88%
2.Germany’s 10-year yield: 2.25%
3.Britain’s 10-year yield: 3.92%
4.Australia’s 10-year yield: +4 basis points to 3.96%
Commodities:
1.Gold: -0.1% to $2,501.10 an ounce
2.WTI crude: -0.8% to $73.75 a barrel
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