As China and US interest rates rise, Prior to important readings on U.S. services, Chinese trade, and inflation later in the week, a holiday in the United States made for a sluggish start.
The Federal Reserve stopped hiking U.S. interest rates on Monday, and markets bet Beijing’s gradual easing of policy support would be sufficient to stabilize the Chinese economy. Asian shares also edged up on Monday.
Prior to important figures on U.S. services, Chinese trade, and inflation later in the week, the week got off to a slow start due to a holiday in the United States.
Beijing is also anticipated to take more policy measures, like as easing limitations on property purchasing.
The successful extension of payments for an onshore private bond by troubled property developer Country Garden’s creditors has caused relief.
After rising 2.3% last week, MSCI’s largest index of Asia-Pacific shares outside of Japan added 0.1% to its gains. After increasing 3.4% last week, the Nikkei in Japan increased by 0.2%.
Data indicating businesses achieved record profits in the June quarter helped the wider Topix increase 3.7% last week to its highest level in 33 years.
The Topix, however, still only has a price to earnings ratio of 14, as opposed to 29.5 for the Nasdaq and 23 for the S&P 500.
The initial public offering of chip giant Arm Holdings, which is looking for a price in the range of $47 to $51 and valuing the business between $50 billion and $54 billion, will test investor confidence in the IT industry this week.
Early on Monday, little change was seen in the S&P 500 and Nasdaq futures.
After a positive August payrolls report boosted hopes for a halt to rate hikes, stocks had strengthened on Friday.
According to Goldman Sachs analysts, the Fed funds rate increase in July marked the end of the cycle.
At both the September and November FOMC meetings, we still anticipate the same course of action.
The futures market now projects a 93% chance of rates remaining unchanged this month and a 67% chance that the entire tightening cycle has ended, which suggests that the market seemed to concur. Following the release of the jobs report, Treasuries initially rose, but selling soon set in, leading to higher longer-dated rates on Friday.
The euro appeared fragile at $1.0772, only a hair’s breadth from its most recent low and significant support around $1.0765. [USD/]
In the commodities market, gold gained from the reduced likelihood of a U.S. rate increase to reach $1,939 an ounce. [GOL/]
Due to tightened supply and expectations that Saudi Arabia would extend a voluntary 1 million barrel per day oil production reduction into October, oil prices were approaching seven-month highs. [O/R]
While U.S. crude increased 44 cents to $85.99 per barrel, Brent firmed 35 cents to $88.90.
