The Stoxx 600 index increased by 0.9%, ending a three-day losing streak. Resources stocks, including as mining behemoths Rio Tinto Plc, Glencore Plc, and Anglo American Plc, saw gains as metals prices surged. A luxury stock index that is mainly dependent on Chinese consumers increased as well. Oil prices dropped after earlier reaching their highest levels since November on anticipation of supply curbs from the OPEC+ producers group, keeping energy shares stable.
Although US markets will be closed on Monday in observance of Labour Day, futures rose after the S&P 500 Index recorded its best week since June.
The US jobs report released on Friday indicated a slowly cooling labour market, giving the Federal Reserve flexibility to hold off on raising interest rates this month. This has lifted market sentiment. The news of a weekend rise in home sales in two of China’s largest cities, an early indication that government attempts to mitigate a historic housing downturn are working, helped the markets extend their gains on Monday.
Beijing and Shanghai are expected to gain the most from the statement made by the government on Thursday that cut down-payment requirements across the country. A Bloomberg barometer of Chinese developer shares increased by as much as 8.7% on Monday, while the Hang Seng index increased by more than 3% before cutting gains.
Mark Haefele, chief investment officer at UBS Global Wealth Management, stated that the company has been searching for more significant property rescue measures for some time to support mood and consumer confidence. This seems to be materialising more strongly at this point.
WTI crude prices remained stable at $85.53 per barrel after rising last week as a result of Russia’s statement that it would extend export restrictions. Traders anticipate Saudi Arabia, which along with Moscow sets the tone for the OPEC+ alliance, to follow suit and extend its voluntary curbs through October.
With rate-makers clearly split on whether policy has to be tightened further this month in light of above-forecast inflation and lacklustre growth, bond rates in the euro zone edged higher. Many bond investors in the US believe the Fed’s 18-month tightening cycle is finally coming to an end, and their predictions were strengthened by last week’s jobs report.
“The incoming data supports our view of a’softish’ landing for the US economy,” UBS’ Haefele added.
According to the most recent Markets Live Pulse survey, however, this year’s US stock market rise is robust enough to sustain another leg higher for bond yields.
This week, it is anticipated that the central banks of Australia and Canada would leave interest rates steady.
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