Market Summary
Stocks Edge Higher as AI Trade Continues and Fed Hike Bets Fall: Global equities are heading for further gains as investors continue to favour the artificial intelligence trade, while expectations for a September Federal Reserve rate hike decline. Nasdaq 100 futures are up 0.4% this morning, while S&P 500 futures are 0.1% higher at 7,812.8. The dollar has weakened against all G10 currencies after weaker U.S. economic data, with markets now pricing just a 28.7% probability of a September Fed hike. Friday's U.S. retail sales data showed the largest monthly decline in more than a year, reinforcing expectations that the Fed may have less need to tighten policy.
Oil Holds Near $88 as Middle East Risks Increase: Brent crude is trading around $88.35 a barrel, little changed this morning after fluctuating between gains and losses. Renewed Israeli attacks on Lebanon and the prospect of fresh U.S. sanctions on Iran have added to geopolitical uncertainty and heightened concerns around potential supply disruptions. With equities near record highs, markets remain focused on the Middle East as a potential catalyst for the next major move in risk assets.
Gold and Copper Gain as Dollar Weakens: Gold rose 0.4% to around $4,395 an ounce as a weaker dollar and falling Fed hike expectations supported demand for the precious metal. Copper also climbed toward a record high, with spot prices reaching $478 a ton, reflecting stronger risk appetite and optimism around global industrial and AI-related demand.
Yen Strengthens as Japanese Growth Slows: The yen strengthened to around 159.10 per dollar after data showed Japan's economic growth slowed unexpectedly. Japanese government bonds sold off, pushing the 10-year yield to its highest level since 1996. The combination of weaker growth and higher bond yields is keeping markets focused on the Bank of Japan's policy outlook and the potential path for further normalisation.
Economic Calendar
- Canada CPI
- China Retail Sales
- China Industrial Production
Key Market Moves Today
- S&P 500 Futures: +0.10% (7,812.8)
- U.S. 10-Year Yield: -1.19 bps (4.68%)
- Brent Crude: -0.12% ($88.35)
- Bitcoin: +0.71% ($63,462)
- Spot Gold: +0.40% ($4,395)
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