Global stocks are set to close out a fourth straight month of gains, driven by hopes of a soft landing for the US economy and potential cuts in interest rates.
China led the charge in Asia, buoyed by strong corporate earnings and a robust yuan, which reached its highest level in over a year.
Meanwhile, US futures edged higher, though European markets remained cautious ahead of key inflation data from the Federal Reserve.
Investors worldwide are betting on a Fed rate cut after recent data showed inflation cooling without plunging the economy into a recession.
The US economy expanded slightly more than expected in the second quarter, thanks to stronger consumer spending, even as other sectors showed signs of slowing.
The US economy appears to be transitioning from very strong to strong, as data weakens while inflation eases in the US, according to Thomas Taw, BlackRock’s head of APAC investment strategy, who spoke with Bloomberg TV.
These expectations have driven US Treasuries to their longest monthly winning streak in three years.
However, the dollar has taken a hit, poised for its worst monthly performance this year.
Japan’s 10-year bond yield also ticked higher after inflation in Tokyo picked up in August, bolstering the case for further tightening in Japan’s monetary policy.
In China, officials are reportedly considering a plan to allow homeowners to refinance up to $5.4 trillion in mortgages, aiming to cut borrowing costs and spur consumer spending.
Focus on Jobs Data
With the release of core PCE data imminent, all eyes are on next week’s US employment figures.
The nonfarm payrolls report on September 6 will be closely watched for signs that could influence the Fed’s decision on interest rates.
Fed Chair Jerome Powell hinted at possible rate cuts during his recent Jackson Hole speech, setting the stage for potential global repercussions, particularly in Asia where analysts expect Indonesia and India to follow suit.
The dovish tone from Jackson Hole continues to resonate, with market attention now shifting to the US jobs report to assess if a soft landing remains on track, according to analysts from Barclays Plc.
In the business world, Chinese pharmaceutical giants WuXi AppTec and WuXi Biologics are under scrutiny as US House Republican leaders gear up to vote on measures targeting Chinese firms.
Meanwhile, the Bank of China posted declines in its first-half net income and commissions.
In commodities, gold dipped slightly, while oil prices climbed on positive US economic data and worsening supply disruptions in Libya.
Iron ore, after a 10% rally in just ten days, continued its ascent, breaking through the $100 per ton mark.
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