Global equities and bond yields started the week calmly. Following last week’s volatility in technology stocks, markets are focused on the earnings report to be released on Wednesday by the $5 trillion giant Nvidia. Investors are also awaiting US employment data to be released on Thursday, but this data is not expected to go beyond confirming the slowdown in the labor market.
In Europe, the STOXX 600 was slightly bullish, while US futures indices also traded in positive territory.
The probability of a rate cut in December has fallen below 50% due to the cautious tone in recent statements, putting particular pressure on interest rate-sensitive technology stocks.Asian Markets: China-Japan Tensions Lead to Sell-off
The sentiment was weaker in Asia. Japan’s Nikkei index fell 0.2% after China warned its citizens against traveling to Japan. Tourism and retail sector stocks saw losses of up to 10%.
In Australia, a drop in BHP shares kept the stock market flat, while Hong Kong and China indices fell by approximately 1%.
News that the Japanese economy contracted for the first time in six quarters and that the government is working on a $110 billion stimulus plan pushed bond yields higher.
The 20-year Japanese bond yield rose to 2.75%, its highest level in 26 years.US Markets: Main Agenda: Nvidia and Employment Data
On the US side, the Nvidia earnings report to be released on Wednesday is considered critical for market direction. The stock has gained more than 1,000% since ChatGPT’s IPO and became the first company to surpass a market capitalization of $5 trillion last month. The delayed employment report, to be released on Thursday, is expected to confirm the slowdown seen in private sector indicators. However, the Fed’s hawkish members are cautious about interest rate cuts, pointing to inflation risks.
The US 10-year Treasury yield is hovering around 4.13%, while Germany’s 10-year yield remains stable around 2.71%.
Currency, Commodities and Crypto
The US dollar rose slightly, keeping the euro just below $1.16.
Gold, per ounce Although it fell to $4.072, it has risen by 55% since the beginning of the year. Brent crude oil fell by 0.64% to $63.98 as loading resumed at a terminal in Russia.
In the crypto market, Bitcoin lost more than 10% last week, reflecting the weak trend in technology stocks. At the start of the week, it traded at $95,517, up 2%.
The main determinants of the markets this week will be Nvidia earnings report and US employment figures.
