Stock Performance: Global shares have experienced a rise, defying previous concerns, as expectations grow that the Federal Reserve will maintain current interest rates. Investors are also optimistic about China’s continuous policy stimulus, which is contributing to a more stable economic outlook.
China’s Policy Stimulus: China’s government is expected to implement further policy measures aimed at boosting the economy. One key development is the relaxation of restrictions on home buying, signaling a commitment to economic growth.
Property Developer’s Relief: Embattled property developer Country Garden has received approval from creditors to extend payments for an onshore private bond, providing relief and stabilizing the property sector.
Tech Sector IPO: The tech sector’s resilience will be tested this week with the initial public offering (IPO) of chip giant Arm Holdings, targeting a valuation between $50 billion and $54 billion. This IPO is expected to influence investor sentiment in the tech industry.
Payrolls Report Impact: Last week, global stocks rose following the release of the U.S. payrolls report for August. The report exceeded expectations, indicating a robust job market. However, concerns arose due to downward revisions of previous months and a decrease in wage growth, suggesting a more relaxed labor market.
Interest Rate Expectations: Despite strong job figures, futures now indicate a 93% chance that the Federal Reserve will keep interest rates unchanged this month. Additionally, there is a 67% probability that the entire tightening cycle is complete, providing stability to financial markets.
Central Bank’s Stand: Christine Lagarde, head of the European Central Bank, emphasized the importance of anchoring inflation expectations. Soft data has led the market to lean against an interest rate hike at the ECB’s September meeting.
Dollar and Currency Markets: The U.S. dollar remains resilient, maintaining its strength against the yen. Meanwhile, the euro has slightly rebounded but still hovers near recent lows.
Oil Prices Surge: Oil prices are trading near seven-month highs, driven by tightening supply. Saudi Arabia is widely expected to extend voluntary oil production cuts into October, impacting global oil prices.
Investors should closely monitor these developments as they navigate the dynamic global stock market.