The MSCI Asia ex-Japan index on Monday climbed to its highest since February 2023 while mainland stocks in China got off to a solid start after returning from the extended Labour Day break, in a sign that fragile investor sentiment is finally turning.
Even the long wait for a solid rebound in the Chinese economy seems to be bearing fruit, with a private gauge showing the country’s services activity expanded, albeit at a slower pace. Growth in new orders accelerated and business sentiment rose solidly last month.
Elsewhere, U.S. earnings have, on the whole, been strong and company guidance generally bullish, the Fed appears reluctant to raise rates again and signs of softer economic data are keeping hopes of rate cuts this year alive.
Global and emerging market financial conditions eased significantly last week, and are now the loosest since March 22, Goldman Sachs’ financial conditions indicators show.
A slew of Fed speakers are on the docket this week, and investors betting on an eventual rate-easing cycle this year expect policymakers to sing from the same hymn sheet as Powell after Friday’s benign U.S. jobs report.
