Global Markets Steady as Investors Await Key US Inflation Data

Global stock markets showed resilience on Monday, with most Asian markets rising as investors shifted their focus to upcoming US inflation and retail sales data. This follows a tumultuous week dominated by fears of a US recession, sparked by disappointing jobs creation figures. Despite the initial shock, equities managed to recover, ending the week on a positive note.

Friday’s gains were bolstered by a report indicating fewer-than-expected unemployment claims, which eased concerns about a contracting US economy. However, market analysts cautioned that while some stability has returned, investors remain anxious ahead of the new round of economic indicators.

This week, the release of the consumer price index (CPI) and retail sales data could provide critical insights into whether the Federal Reserve will proceed with expected interest rate cuts. The consensus is that the Fed may lower rates by 25 basis points next month, with at least one more cut likely before January, as recent data suggests inflation is under control. However, Federal Reserve officials have expressed differing views on the timing and necessity of rate cuts. Governor Michelle Bowman emphasized caution, suggesting that inflation could rebound, while Boston Fed President Susan Collins indicated that rate cuts could be justified if inflation remains subdued.

Market expert Stephen Innes warned that a combination of higher-than-expected CPI and lower retail sales could trigger a significant market sell-off, particularly in the wake of last week’s job growth scare.

Major indexes in New York closed positively on Friday, setting the stage for a cautious yet hopeful start to the week in global markets. Across Asia, markets in Hong Kong, Sydney, Seoul, and several other regions posted gains, while Shanghai, Singapore, and Manila saw slight declines. European markets also opened higher, continuing the optimistic trend.