Global Markets Rise Slightly as Fed Rate-Cut Expectations Hiked
By Dow Jones Newswires StaffInvestors hiked expectations that the Federal Reserve will cut interest rates after non-farm payrolls data last week showed slow jobs growth in August, with some analysts raising the prospect of a bigger cut or another cut before year-end. The latest clues will come from August inflation data on Thursday and, ahead of that, producer prices on Wednesday.The European Central Bank is expected to leave its key interest rate unchanged on Thursday, while later on Monday French Prime Minister Francois Bayrou is expected to lose a confidence vote.Meanwhile, U.S. stock futures and global equities posted modest gains at the start of the week, the dollar eased, while benchmark oil prices rose despite the Organization of the Petroleum Exporting Countries and its allies agreeing to modest output hikes.U.S. futures for the S&P 500 were up 0.2%, futures for the Dow Jones Industrial Average rose 0.1% and Nasdaq stock futures rose 0.3% early in Europe.Asian shares mostly closed higher. Japan's Nikkei rose 1.5%, reflecting hopes that continuing political instability due to the departure of Japan's Prime Minister Shigeru Ishiba could delay the central bank's interest-rate hikes. Recent data also showed that the Japanese economy grew at a faster rate than initially estimated in the second quarter. South Korea's Kospi increased by 0.5%, mainland China markets closed up and the Hong Kong Hang Seng gained 0.8%.In Europe, the pan-European Stoxx Europe 600 climbed 0.3% in morning trading. France's CAC 40 increased 0.3% ahead of the confidence vote, and Germany's DAX climbed 0.7%. The U.K. blue chip FTSE 100 added 0.1%. European oil-and-gas companies were among the largest gainers in opening trade in Europe as oil prices gained on geopolitical concerns. BP was up 1.7% and Shell rose 1.2%, while France's TotalEnergies and Spain's Repsol were both up around 1.4%.U.S. Treasury yields stabilized after slipping on Friday following the weak nonfarm payrolls data. The two-year Treasury yield was recently up 1 basis point at 3.485%, while the 10- and 30-year yields were flat at 4.089% and 4.774%, respectively, according to Tradeweb data. Eurozone government-bond yields were marginally higher ahead of Thursday's ECB meeting.The dollar stayed at weaker levels following a near-three-week low on Friday after the nonfarm payrolls data cemented expectations for the Fed to cut interest rates by 25 basis points at its Sept. 17 meeting. The DXY dollar index against a basket of major currencies was flat at 97.767, having hit a low of 97.430 on Friday.Benchmark crude oil prices were up more than 1.5% in early trade as Russia's latest attack on Kyiv raised prospects of further U.S. sanctions on the Kremlin. Moscow launched its largest aerial bombardment of the war on Ukraine, hitting a government building in the heart of the capital for the first time. Asked Sunday if he was ready to move to the second phase of sanctioning Russia, President Trump said "yes."OPEC+ members on Sunday decided to lift crude production by 137,000 barrels a day in October, despite market concerns over a looming supply glut. However, the increase is modest--far below the larger monthly rises seen recently--and actual production is widely expected to fall short of pledged volumes.Write to Barcelona Editors at [email protected]