Asian markets experienced a positive trend last night, buoyed by the previous week’s tech rally on Wall Street. Despite the closure of Tokyo’s market for a national holiday, other key indexes saw notable gains. Sydney’s S&P/ASX 200 rose by 0.8%, South Korea’s Kospi surged 1.2%, Hong Kong’s Hang Seng edged up 0.5%, and the Shanghai Composite increased by 0.8%. The optimism was tempered by caution as investors await the Federal Reserve policy meeting later this week.

European markets opened on a positive note this morning, continuing the upward momentum from the previous sessions. The FTSE 100 index in the UK opened 50 points higher at 8,124, while Germany’s DAX was up 62 points at 17,980. France’s CAC saw an increase of 38 points, opening at 8,049, and Italy’s FTSE MIB rose by 185 points to 33,857. This optimistic start is attributed to the positive closure of the tech rally on Wall Street and the anticipation of corporate releases from major companies like L’Oreal, TotalEnergies, and NatWest.

Economic Calendar

Earnings Calendar

Notable reports for Monday before the bell include DPZ, BEN, JKS, ON, RVTY, & SOFI. After the bell reports include AMKR, ACGL, BRX, CHGG, COUR, CCK, CVI, PLOW, ESI, EG, FFIV, FLS, HLIT, KFRC, LSCC, LTC, MED, MSTR, NXPI, PARA, PCH, QGEN, RMBS, SANM, SBAC, ST, SUI, WELL, WWD, & YUMC.

News & Technicals’

In Monday morning’s trading session in Asia, the Japanese yen experienced a notable depreciation, reaching a level of 160 against the U.S. dollar. This weakening trend has been consistent since the Bank of Japan’s decision to terminate its negative interest rate policy back in March, with the yen hovering around the 150 mark or lower when paired with the dollar. Despite this downward pressure, Japanese authorities have consistently issued warnings against precipitous fluctuations in the currency’s value. However, as of yet, they have refrained from making any definitive statements or taking concrete actions to support the yen, leaving market participants watching closely for any signs of intervention.

Over the weekend, the geopolitical landscape was marked by significant developments. The United Nations Secretary-General Antonio Guterres highlighted the transition into a new multipolar era characterized by the highest level of major power competition in decades. He emphasized the growing challenges such as complex conflicts, potential nuclear threats, and the climate emergency, all exacerbated by the ongoing tensions resulting from Russia’s invasion of Ukraine. Guterres’ remarks were part of his “New Agenda for Peace,” which calls for a renewed commitment to multilateralism and collective action to address these pressing global issues.

The financial world is poised on the edge of its seat as the U.S. Federal Reserve gears up for its latest interest rate announcement this Wednesday. This highly-anticipated update comes on the heels of a U.S. inflation report that delivered figures higher than many had forecasted last Friday. While the consensus among market analysts is that the Fed will hold the borrowing cost steady, investors are nonetheless preparing to scrutinize every word from Chair Jerome Powell’s post-announcement press conference. The market’s reaction to this delicate balance of anticipation and prediction could set the tone for economic trends in the coming months.

The hope for a continued tech rally coupled with worry of stubron inflation, bond yields and the pending FOMC is likely to keep traders on edge this week so look for continued big point swings as the bulls and bears battle for domance near the overhead price and technical resistance. 

Trade Wisely,

Doug