Global Markets React to Fed Chair's Dovish Pivot

The article discusses the recent statements made by Federal Reserve Chair Jerome Powell at Jackson Hole, indicating that interest rate cuts may be forthcoming due to a cooling labor market. The news sent U.S. stocks surging and Treasury yields falling. Other news includes Trump's tariffs on furniture, the surge in shares of Chinese automakers Dongfeng Motor Group and Nio, and the focus on Nvidia's earnings report and inflation data this week. The article highlights the significance of Powell's statements and the impact on financial markets.

European markets opened lower on Monday as investors assessed the economic outlook following Federal Reserve Chairman Jerome Powell's suggestion of a potential interest rate cut on Friday. The pan-European Stoxx 600 was down 0.2%, with Germany's DAX and France's CAC 40 also falling. Investors are closely watching shares of Orsted, which plummeted 18% after US authorities halted construction of one of its projects. Meanwhile, Keurig Dr Pepper's acquisition of JDE Peet's for $18.4 billion caused JDE Peet's shares to jump 17%. The week is expected to be relatively quiet on the economic data front until Friday, when inflation figures from key European countries will be released.

Asian stock markets rose on Monday, with Hong Kong's Hang Seng Index surging 2.11% and nearing a four-year high, led by gains in tech stocks and Chinese property developers. The Hang Seng Tech index jumped 3.11%, with Nio gaining 14.73% and ASMPT adding 6.74%. Mainland China's CSI 300 extended its gains for the fourth consecutive session, climbing 1.39%. The rally was sparked by Federal Reserve Chair Jerome Powell's signal that the central bank could begin easing monetary policy next month. Strong gains were also seen in Taiwan, South Korea, and Australia. The S&P/ASX 200 benchmark crossed the 9,000 mark, while Japan's Nikkei 225 rose 0.27%. India's benchmark Nifty 50 added 0.35%. Singapore's inflation came in at 0.6% in July, lower than expected.

The People's Bank of China has set the yuan's daily reference rate against the US dollar at its strongest level in over nine months. This move follows a dovish pivot by US Federal Reserve Chair Jerome Powell, who opened the door to an interest rate cut in September. The yuan's value has surged in response, with the offshore yuan reaching its strongest level since late July. Economists, such as Raymond Yeung of ANZ, believe that a rate cut by the Federal Reserve in September is now almost certain, and the market is focusing on the scale and pace of easing this year and beyond.

The city of Shanghai has relaxed its home purchase policies to boost the local real estate market. Residents can now own an unlimited number of properties outside the city's outer ring road, and the mortgage rate for second-home buyers has been reduced. This move aims to stimulate the housing market and address the economic slowdown.