Global stocks rise as markets focus on key US economic data

Stocks climbed for the second day as markets shifted focus to crucial US economic data expected this week. Asian markets, including Hong Kong, Taiwan, Australia, and Korea, saw gains, while European and US futures also traded higher. Japanese markets were closed for a holiday.

After a volatile start last week, fears eased around the Federal Reserve delaying interest rate cuts. The Cboe Volatility Index, Wall Street’s fear gauge, retreated from its pandemic-era highs.

Nomura Holdings analysts noted that while uncertainty remains, there are signs of calmer markets ahead, with reduced fears of a US recession and a less aggressive Bank of Japan.

In contrast, China faces turbulence as authorities try to control a bond rally, with brokerages curbing domestic government debt trading to prevent financial instability.

 

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The yen surged last week following the BOJ’s rate hike, disrupting global markets as investors unwound risky trades. UBS earnings on Aug. 14 will shed light on how this volatility impacted clients.

Portfolio manager Taosha Wang highlighted the BOJ and Fed as key drivers of market activity, noting that US recession fears might be overblown.

This week’s major focus is the US consumer price index on Wednesday, expected to show a 0.2% rise from June. Modest inflation may not stop the Fed from cutting rates next month.

Over the weekend, Fed Governor Michelle Bowman expressed concerns about inflation and the strong labor market, suggesting she may not support a rate cut in September. Markets are still betting on a September rate cut and further easing this year.

In commodities, oil prices rose, extending last week’s gains, while gold edged higher.