Asian stocks rose, and the dollar weakened on Monday after global equities saw their best week in nine months. This shift comes amid expectations that the US economy will avoid a recession and that cooling inflation will lead to a cycle of interest rate cuts.
The prospect of lower borrowing costs pushed gold above $2,500 an ounce for the first time, while the dollar dipped against the euro. According to Reuters, the yen also strengthened, impacting Japan’s Nikkei index.
Federal Reserve members Mary Daly and Austan Goolsbee signalled the possibility of easing in September, and upcoming minutes from the last policy meeting are expected to support this dovish outlook.
The expectation of a softer landing for the US economy has S&P 500 futures up by 0.2% and Nasdaq futures up by 0.3%, building on last week’s gains. EUROSTOXX 50 futures also added 0.2%, while FTSE futures eased by 0.1%.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.0%, after rallying 2.8% last week. Japan’s Nikkei fell by 1.2% as the yen rose, following a nearly 9% gain last week. Chinese blue chips firmed by 0.4%.
In currency markets, the dollar dropped by 1.0% to 146.20 yen, moving further away from last week’s peak of 149.40. The euro strengthened to $1.1030, just below last week’s high of $1.1047.
