Global Markets:
- Asian Stock Markets : Nikkei up 2.29%, Shanghai Composite down 0.05%, Hang Seng up 1.71% ASX up 0.80%
- Commodities : Gold at $2436.35 (0.37%), Silver at $28.18 (0.45%), Brent Oil at $80.63 (0.57%), WTI Oil at $77.49 (0.48%)
- Rates : US 10-year yield at 4.187, UK 10-year yield at 4.103, Germany 10-year yield at 2.403
News & Data:
- (USD) Core PCE Price Index m/m 0.2% vs 0.2% expected
- (USD) Personal Income m/m 0.2% vs 0.4% expected
- (USD) Personal Spending m/m 0.3% vs 0.3% expected
Markets Update:
Asia-Pacific markets surged on Monday, led by Japan’s Nikkei 225, following a key U.S. inflation report that raised hopes for an interest rate cut. The U.S. June personal consumption expenditures price index increased by 0.1% month-on-month and 2.5% year-on-year, aligning with economists’ estimates from a Dow Jones poll. The Nikkei 225 rose by 2.26%, and the Topix increased by 2.02%. If the Nikkei maintains its gains, it will end its eight-day losing streak. The Japanese yen also strengthened by 0.18% against the dollar, trading at 153.44.
Mitsubishi Motors was a top performer, jumping over 6% after reports indicated it would join the Honda-Nissan alliance to standardize in-vehicle software. This alliance, which sells over 8 million vehicles globally, aims to consolidate the domestic market into two main groups: Toyota Motor Group and the Honda-Nissan-Mitsubishi alliance. Conversely, shares of Eisai plummeted 13% after the European Medicines Agency did not approve its Leqembi treatment for Alzheimer’s disease, marking it the biggest laggard among the 10 declining Nikkei 225 stocks during a broad rally.
The Bank of Japan’s monetary policy meeting, starting July 30, is this week’s highlight. A Reuters poll predicts the central bank will raise rates by 10 basis points to 0.1%. ING analysts expect a 15 basis point hike and a simultaneous reduction in the bond-buying program, citing economic recovery and solid wage growth. Other regional data include China’s July PMI and Australia’s upcoming inflation data ahead of its Aug. 6 policy meeting.
South Korea’s Kospi rose by 1.3%, while the Kosdaq increased by 0.59%. Hong Kong’s Hang Seng index climbed 1.6%, but China’s CSI 300 fell 0.3% due to declining utilities stocks. Australia’s S&P/ASX 200 rose 0.80%, and Taiwan’s Weighted Index rebounded 1.04%. In the U.S., the Dow Jones Industrial Average gained 1.64%, the S&P 500 climbed 1.11%, and the Nasdaq Composite increased by 1.03% on Friday, driven by oversold sentiment, a robust GDP report, and expectations of Federal Reserve rate cuts, according to CFRA Research’s Sam Stovall.
Upcoming Events:
- 11:30 PM GMT – JPY Unemployment Rate
