Global stocks rose on Monday while US bond yields remained low after weak US jobs data reinforced expectations of a Fed rate cut this month. The S&P 500 hovered near record highs, while European and Asian shares also gained. In Japan, the yen fell and stocks surged after Prime Minister Shigeru Ishiba resigned, adding to uncertainty about the direction of Bank of Japan policy.
In France, Prime Minister Francois Bayrou is expected to lose a confidence vote, adding to political pressure on President Emmanuel Macron. While the French asset sell-off has eased, risks remain for the country’s stocks, bonds and debt ratings. The situation has heightened investors’ concerns about political stability in the eurozone.
Emerging markets were also volatile. Argentina’s ruling party’s landslide defeat in key regions added to pressure on local markets, while in Indonesia, stocks fell but the currency strengthened after Finance Minister Sri Mulyani was ousted. The political factors added a layer of global uncertainty to economic concerns.
In financial markets, the US dollar remained subdued despite rising rate cut expectations. US Treasury yields held steady after a big drop last week, while gold surged to new highs and oil rose more than 2% after OPEC+ slowed production plans. All of this makes this week critical with US CPI data and the ECB meeting set to be key market drivers.
