All eyes on Powell

A look at the day ahead in Asian and global markets

By Lewis Krauskopf, Correspondent, Markets

Last updated at 4:28 AM GMT time

Data refreshes every time you open this email. For more Asian market news, click here. Please send any feedback to morningbid@thomsonreuters.com” rel=”noopener” target=”_blank” style=”text-decoration: underline; color: #005da2;”>morningbid@thomsonreuters.com.

The global markets spotlight moves from Paris to Capitol Hill on Tuesday as Federal Reserve Chair Jerome Powell testifies before the U.S. Congress and a busy week of events revs up.

U.S. Federal Reserve Chair Jerome Powell delivers remarks during a press conference following the announcement that the Federal Reserve left interest rates unchanged, in Washington, U.S., June 12, 2024. REUTERS/Evelyn Hockstein

Politics were front and center on Monday as investors digested the surprise election in France that saw the leftist New Popular Front alliance unexpectedly coming first. French stocks <.FCHI> gave up early gains to drop 0.6% as investors mulled chances of a hung parliament, while the pan-European STOXX 600 index <.STOXX> ended little changed. 

The euro <EUR=> waffled against the dollar, at one point touching a multi-week high against the greenback before moving lower.

Graphics are produced by Reuters.

U.S. politics were also a hot topic, with President Joe Biden under pressure to drop out of the presidential race after his shaky debate performance. Biden refused to abandon his reelection campaign on Monday, but investors were preparing to game out scenarios if another Democratic candidate emerges.

Despite the political turmoil, the benchmark U.S. S&P 500 stock index <.SPX> and MSCI’s all-country index <.MIWD00000PUS> both logged record highs on Monday. 

 Japan’s Nikkei <.N225> hit a record intraday high on Monday before closing down 0.3%.

Meanwhile, mainland China and Hong Kong stocks ended lower on Monday, with the blue-chip CSI300 index <.CSI300> dropping 0.85% for its fifth-straight session of losses. 

Powell stands as the next test for assets. The Fed chief is set to deliver his semi-annual monetary policy testimony before the banking committee of the U.S. Senate. He will also be grilled by the other chamber of Congress the next day, appearing before a House of Representatives panel.

Investors have been solidifying their view for the Fed to start rate cuts in September, with roughly 75% odds of a cut at that meeting, according to Fed Funds futures pricing.

Will Powell give any hints? In Portugal last week, the Fed chair said the central bank still needs more data to ensure inflation has moderated sufficiently. Thursday’s consumer price index report will provide the next evidence on the path of inflation.

Morning Bid is sent every weekday morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here.

Want to stop receiving this email? Unsubscribe here. To manage which newsletters you’re signed up for, click here.

Reuters Terms & Conditions and Privacy Statement