Global stock markets edged higher following a strong session on Wall Street, driven by growing expectations that the Federal Reserve may soon signal a readiness to begin cutting interest rates.
The MSCI All-Country World Index was on track for its ninth consecutive day of gains, marking the longest winning streak since December. In Europe, the Stoxx 600 and U.S. futures saw modest advances, while yields on 10-year U.S. Treasuries remained steady. Meanwhile, the Japanese yen slipped, hovering around 147 per dollar.
This rally comes after the S&P 500 notched its eighth straight day of gains on Monday, although trading volumes have been subdued. Investors are exercising caution ahead of the Federal Reserve’s Jackson Hole economic symposium later this week, where central bankers are expected to provide insights into future monetary policy.
Kyle Rodda, a senior market analyst at Capital.Com Inc., noted that recent economic data has alleviated concerns about a slowdown in U.S. growth while also easing fears of re-accelerating inflation.
In Europe, attention is focused on upcoming eurozone inflation data, which could indicate whether price growth is slowing as expected. Olli Rehn, a member of the European Central Bank’s Governing Council, suggested that mounting risks to the growth outlook could bolster the case for a policy adjustment when the ECB meets next month.
On the corporate front, Alimentation Couche-Tard Inc.’s preliminary proposal to acquire 7-Eleven owner Seven & i Holdings Co. could be valued at over ¥5.63 trillion ($38.4 billion), based on the Japanese company’s market value following the news of the potential deal.
In other market developments, a gauge of Asian currencies reached its highest level since January, while oil extended its recent decline as the U.S. announced that Israel had accepted a cease-fire proposal in Gaza. Copper pared its recent gains, and gold topped $2,500 an ounce, buoyed by expectations of a potential Fed rate cut.
Key Events to Watch This Week:
- Eurozone CPI (Tuesday)
- U.S. Fed minutes, BLS preliminary annual payrolls revision (Wednesday)
- Eurozone HCOB PMI, consumer confidence (Thursday)
- ECB account of July rate decision (Thursday)
- U.S. initial jobless claims, existing home sales, S&P Global PMI (Thursday)
- Japan CPI (Friday)
- Bank of Japan Governor Kazuo Ueda’s special session at Japan’s parliament (Friday)
- U.S. new home sales (Friday)
- Fed Chair Jerome Powell’s speech at the Jackson Hole symposium (Friday)
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