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US inflation and Middle East risks in focus

The new week begins quietly before attention turns to the Reserve Bank of Australia’s interest-rate decision on Tuesday and a run of major US data releases. July’s US consumer inflation (Wednesday) and producer inflation (Thursday) will provide fresh indications for Federal Reserve policy, while Germany and France also publish inflation data on Wednesday and Friday, respectively. Growth comes into focus later in the week, with the UK releasing second-quarter gross domestic product on Thursday and Switzerland and the euro area following on Friday. US retail sales and the University of Michigan Consumer Sentiment Index round out the week on Friday. Markets will also continue to monitor developments in the Middle East as uncertainty persists over the reopening of the Strait of Hormuz. Japanese markets are closed on Tuesday for the Mountain Day holiday.

  • Date
  • Auteur Shane Strowmatt, Senior Investment Writer
  • Temps de lecture 5 minutes

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Equity markets were propped up at the end of last week after data released Friday showed US nonfarm payrolls fell by 23,000 in July, defying expectations for job growth, while May and June employment was revised down by a combined 103,000 jobs. The unemployment rate edged down to 4.1% from 4.2% in June, but the decline reflected 264,000 people leaving the labour force, lowering participation to 61.4%, near a five-and-a-half-year low. The data reduced market expectations for a Federal Reserve rate increase in September, though next week’s inflation report will remain important for the policy outlook. US equities advanced on Friday following the weak labour market data: The Dow Jones Industrial Average gained 0.3% to 54,036.93 points, while the S&P 500 rose 0.6% to 7757.64 and the Nasdaq 100 added 1.2% to 29,722.30.

Asian equities advance after US jobs data

Asian equities also mostly gained on Monday, buoyed by the weaker-than-expected US labour-market data and tempered expectations for Fed rate hikes. Japan’s Nikkei 225 rose 2.1% and South Korea’s Kospi gained 0.5%, supported by a recovery in semiconductor shares following a difficult week for the sector. Chinese markets were mixed, with mainland China’s CSI 300 falling 0.5% and Hong Kong’s Hang Seng Index rising 0.5%, while Australia’s S&P/ASX 200 fell 0.3%, although lithium shares and Treasury Wine Estates advanced. West Texas Intermediate (WTI) futures rose 0.3% to USD 78.44 per barrel and Brent crude oil futures gained 0.5% to USD 83.94 per barrel as uncertainty persisted over the reopening of the Strait of Hormuz.

German exports reach record high

German exports rose 0.9% in June to a record EUR 139.3 billion, while imports increased 4.4% to EUR 123.9 billion, Destatis reported on Friday. Export growth was driven by a 1.3% increase in shipments to EU countries, partly offset by a 14.2% decline in exports to the US. The trade surplus narrowed to EUR 15.4 billion from EUR 19.3 billion in May and EUR 16.4 billion in June last year, as imports grew more rapidly than exports. The Euro Stoxx 50 rose 0.3% to 6523.86 points, while Germany’s DAX gained 0.7% to 26,319.45 on Friday.

Swiss consumer confidence improves

Swiss consumer confidence improved to -32.8 points in July from -35.8 in June, although it remained close to historically weak levels, SECO said on Friday. The index was 2.0 points below its level a year earlier, as households assessed both their past and expected financial situations more negatively. Expectations for the wider economy also deteriorated marginally, while the reading remained above March’s -42.9, its lowest level since early 2024. The Swiss Market Index rose 0.2% to 14,544.91 on Friday.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Alcon.

Economic data in focus: Sentix investor confidence for the eurozone (10:30), Bundesbank monthly report (12:00).
 

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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