10 September 2024
US equities advanced on Monday after last week’s selloff. Investors await today’s presidential debate and Wednesday’s CPI inflation data. The S&P 500 ended 1.2% higher.
US Treasuries traded mixed and the yield curve slightly flattened, ahead of inflation prints due later this week. 10-year yields edged down 1bp to 3.70%, as 2-year yields were up 2bp to 3.67%.
European stock markets rebounded on Monday, partially reversing the equity sell-off at the end of last week. The Euro Stoxx rose 0.9%, led by materials and energy shares. The German DAX rose 0.8%, and the French CAC was up 1.0%. In the UK, the FTSE-100 increased 1.1%.
European government bonds were range-bound as investors await US CPI data and the ECB policy meeting later this week. 10-year German yields ended flat at 2.17%, as 10-year French yields stayed at 2.88%. In the UK, 10-year gilt yields edged 3bp lower to 3.86% ahead of key UK labour market data.
Asian stock markets ended a volatile session lower on Monday following US equity weakness last Friday, with tech shares leading losses in the region. Japan’s Nikkei 225 closed 0.5% lower as Korea’s Kospi slipped 0.3%. Chinese equities also fell on lingering macro concerns, with Hong Kong’s Hang Seng and China’s Shanghai Composite ending down 1.4% and 1.1%, respectively. Elsewhere, India’s Sensex bucked the regional trend to edge 0.5% higher.
Crude oil prices rose on Monday after last week’s declines, amid the better market risk sentiment and as investors monitor the tropical storm’s potential impact on US supply. WTI crude for October delivery settled 1.5% higher at USD68.7 a barrel.
In Mexico, headline inflation fell to 5.0% yoy in August, from 5.6% yoy in July, below market expectations. Core inflation edged down to 4.0% yoy in August compared to 4.1% yoy in July, aided by rising disinflation in the service sector, pointing to scope for further gradual easing in the near-term.
In China, August inflation readings surprised to the downside. Food prices pushed headline CPI inflation slightly higher to 0.6% yoy in August from 0.5% yoy in July, but softer core inflation reflected continued weak domestic demand. Meanwhile, PPI fell 1.8% yoy in August, compared to a 0.8% yoy drop in July.
In China, exports should stay healthy, aided by its competitiveness in green-tech products.
In the UK, the unemployment rate is expected to edge down to 4.1% in the three months to July, from 4.2% in the three months to June. Private sector underlying wage growth should ease further in July, pointing to softer service sector inflation in coming months.
In the US, the backdrop to the first presidential debate between Trump and Harris show a “toss up” in the seven key swing US states according to latest opinion polls.
In Brazil, core inflation has risen since early 2024, driven by higher goods inflation associated with recent currency weakness.
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