The expectation of more Fed rate cuts is providing resilience for stock markets, with investors gaming a solid finish to the year for risk assets. Trump tariffs, economic data and geopolitical risks are being overlooked as the AI bandwagon rolls on. For Chinese stocks, rebounding industrial profits are set to give them a bright start.”— Mark Cranfield, MLIV macro strategist. Click here for the full analysis.
US stocks saw dip buying on Friday while the Treasury yield curve marginally steepened as the personal consumption expenditures price index, the Fed’s preferred measure of inflation, came in as expected. Traders maintained expectations of a high likelihood the central bank will cut the funds rate again next month in a bid to help bolster a cooling labor market, according to swaps data compiled by Bloomberg.
Focus in Asia will shift to Chinese equities amid signs policies to address overcapacity and deflation in the economy are taking hold ahead of the Golden Week holiday that begins Wednesday.
Chinese Industrial profits in August climbed 20.4% from a year earlier, the first increase in four months, according to data released Saturday by the National Bureau of Statistics. Factory deflation eased for the first time in six months.
Elsewhere this week, the Reserve Bank of Australia is expected to keep interest rates on hold, with traders parsing Governor Michele Bullock’s comments for clues to whether the central bank will cut again. Chinese factory and services activity readings are due as well as the Reserve Bank of India policy decision.
Corporate News:
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Nidec Corp. discovered more suspected cases of improper bookkeeping, including some involving a Swiss subsidiary.
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Sony Financial Group Inc. shares are untraded at open and are set to rise on debut on the Tokyo Stock Exchange on Monday after being spun off from Sony Group Corp.
