Global stocks close to all-time highs; What investors will be watching
- China prices post steady climb; oil edges higher, gold falls
- Australian 10-year yield rises a fourth day, Treasuries steady
Stocks rose and the dollar was steady after economic data kept investors upbeat on the global economy following strong U.S. hiring figures and a G-20 meeting without market-moving surprises.
European and U.S. index futures were up as equities advanced across much of Asia, with the Shanghai stock market recovering from an earlier loss. Chinese producer prices showed robust demand in Asia’s largest economy, while Germany’s trade surplus was higher than estimated as May exports beat forecasts. The yen was near a two-month low. Bank of Japan Governor Haruhiko Kuroda said the economy was turning toward moderate expansion and reiterated that policy could be adjusted as needed. Oil rose and gold fell.
With global stocks close to all-time highs, investors are shrugging off political uncertainty and placing their faith in a continued earnings expansion on broadening global growth. U.S. employers added the most jobs in four months in June, though wage increases were sluggish, according to data Friday.
“The weaker wage growth buys the Fed more time to wait for inflation signals to pick up before increasing rates which supports the current market view of balance sheet announcement in September followed by a rate hike in December,” Stephen Innes, a senior trader at Oanda Corp. in New York, wrote in a note Monday. “Ultimately, the Goldilocks NFP is a win-win for the U.S. dollar and global equities.”
The G-20 summit made little headway on dominant foreign policy issues such as North Korea’s escalation of tensions. Meetings between U.S. President Donald Trump and the leaders of South Korea, Japan and China ended without a clear consensus about how to curb North Korea’s nuclear ambitions.
Here’s what investors will be watching:
- Federal Reserve Chair Janet Yellen’s testimony before Congress will be in focus later this week as investors look for guidance of when the U.S. central bank could start reducing its balance sheet. Other Fed speakers include Lael Brainard, while there’s plenty of data releases. Retail sales, industrial output and business inventories may sway GDP forecasts and CPI could signal if disinflation is intensifying.
These are the main moves in markets:
- The yen fell 0.2 percent to 114.20 per dollar as of 3:25 p.m. in Tokyo.
- The Bloomberg Dollar Spot Index was down 0.1 percent, as was the Canadian dollar after its 0.8 percent jump Friday. The pound rose 0.1 percent and the euro was little changed.
- The Korean won led advances in Asia, rising 0.4 percent to 1,149.40 per dollar, while the Indian rupee gained 0.1 percent to 64.54. The Mexican peso climbed 0.8 percent to 17.95 versus the greenback, its strongest this month.
- S&P 500 Index futures were up 0.2 percent and Euro Stoxx 50 futures rose 0.5 percent. The MSCI Asia Pacific Index rose 0.4 percent after hitting a five-week low Friday.
- Japan’s Topix Index added 0.5 percent. Australia’s S&P/ASX 200 Index gained 0.4 percent. Hong Kong’s Hang Seng Index rose 0.8 percent to its highest in a week.
- The Shanghai Composite Index was up 0.1 percent. China’s producer price index rose 5.5 percent on-year in June and the consumer price index climbed 1.5 percent, the same as in May and in line with expectations.
- The yield on 10-year Treasuries was steady at 2.39 percent after rising 24 basis points in the past two weeks. The yield on 10-year Australian government bonds rose one basis point to 2.74 percent.
- WTI crude strengthened 0.3 percent to $44.37 a barrel following its 2.8 percent slide Friday. Gold dropped 0.5 percent to $1,206.64 an ounce.