Chinese Business

Stock markets rose slightly and the dollar extended recent losses Tuesday with all eyes on the latest US inflation print.

While traders expect Tuesday’s data to show the pace of price rises cooling in the world’s biggest economy, they still expect the Federal Reserve to continue hiking US interest rates by sizeable amounts in the coming months.

The dollar, which has reached multi-year highs against the yen and pound in recent weeks, is reversing direction after investors priced in more aggressive tightening of American borrowing costs.

“The last few days have seen a notable improvement in market sentiment,” noted Craig Erlam, senior market analyst at Oanda trading group. 

“It’s not always easy to pinpoint what’s driving such a turnaround but the fact that it’s happening in the days leading up to the US inflation report is certainly interesting.”

Erlam said a drop in the inflation rate could “trigger a broader risk rebound in the markets. 

“It may not be enough to tip the Fed balance in favour of a more modest 50 basis point rate hike next week but it may slow the pace of tightening thereafter.”

Analysts’ consensus is for inflation to slow to eight percent, driven mostly by falling gasoline prices. US inflation hit a 40-year high in June, touching 9.1 percent.

Markets are largely pricing in another 75-basis-point interest rate hike by the Fed at its next gathering.

This after the US central bank has already made consecutive hikes of that amount, while Fed boss Jerome Powell has indicated the increases would continue until inflation is tamed.

The European Central Bank last week raised its key interest rate by 75 basis points, a record-amount for the eurozone.

Inflation has soared around the globe this year owing to sky-high energy and food bills.

This has been caused to a large extent by supply constraints after economies reopened from pandemic lockdowns and in the wake of Russia’s invasion of Ukraine.

– Key figures at around 1100 GMT –

London – FTSE 100: UP 0.4 percent at 7,499.19 points

Frankfurt – DAX: UP 0.7 percent at 13,492.77

Paris – CAC 40: UP 0.6 percent at 6,371.48   

EURO STOXX 50: UP 0.7 percent at 3,671.60 

Tokyo – Nikkei 225: UP 0.3 percent at 28,614.63 (close)

Hong Kong – Hang Seng Index: DOWN 0.2 percent at 19,326.86 (close)

Shanghai – Composite: UP 0.1 percent at 3,263.80 (close)

New York – Dow: UP 0.7 percent at 32,381.34 (close)

Euro/dollar: UP at $1.0178 from $1.0120

Pound/dollar: UP at $1.1729 from $1.1680 

Euro/pound: UP at 86.77 pence from 86.64 pence 

Dollar/yen: DOWN at 142.11 yen from 142.82 yen  

Brent North Sea crude: UP 1.2 percent at $95.17 per barrel

West Texas Intermediate: UP 1.2 percent at $88.83 per barrel

Asian stocks largely continued a global rally on Tuesday, ahead of the release of key US consumer price data that is expected to show slightly slowing inflation in the world’s largest economy.

Stocks rose in Japan, Australia, Singapore and Taiwan, with South Korea and Shanghai also gaining after reopening following a public holiday. European stocks were steady at the open.

Hong Kong shares edged lower at the close, erasing modest gains made earlier in the day.

US consumer price index (CPI) data will be released on Tuesday, with analysts expecting inflation to slow to eight percent, driven mostly by falling gasoline prices. US inflation hit a 40-year high in June, touching 9.1 percent.

Easing inflation, however, is unlikely to slow the pace of the US Federal Reserve’s tightening of monetary policy, with another 75-basis-point interest rate hike expected at its meeting next week.

The Fed has already instituted two consecutive rate hikes of that amount, and in recent days bank chief Jerome Powell has indicated the increases will continue until inflation is tamed.

While the overall US inflation number is expected to slow, prices for food and housing are projected to have increased, raising the strain on household budgets.

“Risks remain skewed to the upside, due to an uncertain outlook for key inputs, including agricultural and energy commodities, as well as the pass-through of wage gains in a tight labour market,” according to Barclays US analysts Pooja Sriram and Jonathan Hill.

Last week, the European Central Bank also adopted a policy of monetary tightening, raising its key rate by a historic 75 basis points, with analysts expecting a similar-sized increase at the next policy meeting in October.

– ‘Locked in’ –

In Tokyo, stocks closed higher on Tuesday, with investors ending the session by tempering some of the gains with caution at the Nikkei’s rise over recent days.

Brokerage Okasan Online Securities said investors were looking “to square their positions” ahead of the US CPI data being released.

Seoul led the day’s gains in Asia, rising by 2.7 percent on Tuesday.

US stocks on Monday had ended bullish: the broad-based S&P 500 advanced 1.1 percent, continuing the upswing last week that snapped a three-week losing streak.

“Wall Street is locked into Tuesday’s inflation report that will likely show pricing pressure relief but will not change the Fed from maintaining an aggressive stance of tightening monetary policy,” said Edward Moya, senior market analyst at OANDA.

“Even if inflation falls below the 8 percent level, the Fed should still deliver a 75-basis-point rate hike at the September 21st policy decision.”

The euro stabilised to $1.0143 against the dollar on Tuesday, after a surge a day earlier that saw it gain 1.4 percent against the US currency and 1.6 percent against the yen, before paring those increases in later trading.

Oil prices climbed higher as Tuesday progressed — after an initial fall in the Asian morning — as a weaker dollar offset some of the concerns around demand destruction.

Other key data expected later this week includes US retail sales and industrial production on Thursday; China home and retail sales as well as industrial production on Friday; and Euro area CPI, also on Friday.

– Key figures at around 0815 GMT –

Tokyo – Nikkei 225: UP 0.3 percent at 28,614.63 (close)

Hong Kong – Hang Seng Index: DOWN 0.2 percent at 19,326.86 (close)

Shanghai – Composite: UP 0.1 percent at 3,263.80 (close)

New York – Dow: UP 0.7 percent at 32,381.34 (close)

London – FTSE 100: UP 0.1 percent at 7,480.97 points

Frankfurt – DAX: UP 0.3 percent at 13,437.53 points   

Paris – CAC 40: UP 0.6 percent at 6,369.77 points   

EURO STOXX 50: UP 0.5 percent at 3,664.98 points 

Euro/dollar: UP at $1.0143 from $1.0120  

Pound/dollar: UP at $1.1717 from $1.1680 

Euro/pound: DOWN at 86.57 pence from 86.64 pence 

Dollar/yen: DOWN at 142.28 yen from 142.82 yen  

Brent North Sea crude: UP 1 percent at $94.98 per barrel

West Texas Intermediate: UP 1.1 percent at $88.73 per barrel

Global brands including Prada and Remy Martin have cut ties with Chinese superstar Li Yifeng, after the actor was detained for soliciting sex workers.

Li becomes the latest in a line of artists to find themselves in legal trouble recently, as the government cracks down on China’s entertainment industry, stepping up efforts to rein in what it calls “chaotic fan culture” and celebrity excess.

State media said Li, 35, had recently been detained and charged by police in Beijing for “soliciting prostitution on multiple occasions”, and had allegedly confessed.

Global and local brands including luxury fashion house Prada, watchmaker Panerai and French cognac maker Remy Martin issued statements on Sunday saying they had dropped Li as their brand ambassador following the scandal.

The actor, who played revolutionary leader Mao Zedong in a 2021 biopic to mark the centenary of the Chinese Communist Party, is hugely popular, with more than 60 million followers on China’s Twitter-like platform Weibo.

Only last month, he was on the catwalk in Beijing showcasing Prada’s fall 2022 collection.

A spate of scandals in recent months have taken down China’s biggest entertainers including singer Kris Wu, who was arrested on suspicion of rape last August.

Actress Zheng Shuang was hit with a $46 million tax evasion fine last year.

In September last year, officials ordered broadcasters to shun performers with “incorrect political positions”, and to cultivate a patriotic atmosphere.

“We solemnly call on the vast number of TV art workers to regard morality and art as their life’s homework,” the China Television Artists Association said in a statement on Monday.

“No matter what achievements you have made… if you don’t keep yourself clean… the so-called fame will disappear, and the so-called future will be ruined,” it warned.

Asian stocks continued a global rally on Tuesday morning, ahead of the release of key US consumer price data that is expected to show slightly slowing inflation in the world’s largest economy.

Stocks rose in Japan, Australia, Singapore and Taiwan at the open, with Hong Kong, South Korea and Shanghai also gaining after reopening following a public holiday.

US consumer price index (CPI) data will be released on Tuesday, with analysts expecting inflation to slow to eight percent, driven mostly by falling gasoline prices. US inflation hit a 40-year high in June, touching 9.1 percent.

The ease in inflation, however, is unlikely to slow the pace of the US Federal Reserve’s tightening of monetary policy, with another 75-basis-point interest rate hike expected at its meeting next week.

The Fed has already instituted two consecutive rate hikes of that amount, and in recent days bank chief Jerome Powell has indicated that the increases will continue until inflation is tamed.

While the overall US inflation number is expected to slow, prices for food and housing are expected to have increased, raising the strain on household budgets.

“Risks remain skewed to the upside, due to an uncertain outlook for key inputs, including agricultural and energy commodities, as well as the pass-through of wage gains in a tight labour market,” according to Barclays US analysts Pooja Sriram and Jonathan Hill.

Last week, the European Central Bank also adopted a policy of monetary tightening, raising its key rate by a historic 75 basis points, with analysts expecting a similar-sized increase at the next policy meeting in October.

– ‘Locked in’ –

US stocks on Monday ended bullish: the broad-based S&P 500 advanced 1.1 percent, continuing the upswing last week that snapped a three-week losing streak.

“Wall Street is locked into Tuesday’s inflation report that will likely show pricing pressure relief but will not change the Fed from maintaining an aggressive stance of tightening monetary policy,” said Edward Moya, senior market analyst at OANDA.

“Even if inflation falls below the 8 percent level, the Fed should still deliver a 75-basis-point rate hike at the September 21st policy decision.”

The euro stabilised in early Asian trading to 1.0125 against the dollar on Tuesday, after a surge a day earlier that saw it gain 1.4 percent against the US currency and 1.6 percent against the yen, before paring those increases in later trading.

Oil prices on Tuesday were down by close to a percentage point, as investors continue to speculate on the effect of slowing demand in overheating major markets, especially in China, where a harsh zero-Covid policy continues to negatively affect economic activity.

In addition to US CPI figures on Tuesday, other key data expected later this week will include US retail sales and industrial production on Thursday; China home and retail sales as well as industrial production on Friday; and Euro area CPI, also on Friday.

– Key figures at around 0230 GMT –

Tokyo – Nikkei 225: UP 0.2 percent at 28,591.50 

Hong Kong – Hang Seng Index: UP 0.3 percent at 19,425.88

Shanghai – Composite: UP 0.1 percent at 3,266.39

New York – Dow: UP 0.7 percent at 32,381.34 (close)

London – FTSE 100: UP 1.7 percent at 7,473.03 points (close)

Euro/dollar: UP at $1.0125 from $1.0120  

Pound/dollar: UP at $1.1682 from $1.1680 

Euro/pound: UP at 86.67 pence from 86.64 pence 

Dollar/yen: DOWN at 142.52 yen from 142.82 yen  

Brent North Sea crude: DOWN 0.8 percent at $93.26 per barrel

West Texas Intermediate: DOWN 0.8 percent at $87.12 per barrel

Tokyo stocks opened higher on Tuesday, tracking gains on Wall Street, as investors priced in the expectation of further interest rate hikes to tame inflation.

The benchmark Nikkei 225 index was up 0.14 percent, or 40.60 points, at 28,582.71 in early trade, while the broader Topix index was up 0.15 percent, or 2.96 points, at 1,983.18.

“Investors felt encouraged to buy Japan stocks by rallies in the US market, but a wait-and-see attitude may emerge in later trade ahead of the release of the US consumer price index,” Mizuho Securities said in a commentary. 

Wall Street stocks ended with solid gains, continuing an upswing that snapped a three-week losing streak.

Investors are looking ahead to a critical release Tuesday on US consumer prices, followed by Thursday’s report on retail sales — the last major data ahead of the Federal Reserve’s interest rate move next week.

While inflation is expected to have eased in August, largely due to falling gasoline prices, it seems unlikely it will be enough to stave off a third consecutive three-quarter point rate hike from the Fed.

However, National Australia Bank analyst Tapas Strickland believes that “there appears to be a growing consensus that inflation has peaked in the US”.

The dollar fetched 142.62 yen in early Asian trade, against 142.82 yen in New York late Monday.

Among individual equities, game giant Nintendo soared 5.11 percent to 61,970 yen after it said domestic sales of its Splatoon 3 game for Nintendo Switch consoles surpassed 3.45 million in the three days since its September 9 launch.

That marks the best domestic sales level for any Switch software in the three days after launch, Nintendo said.

Sony Group barely moved after it said its music business has fully withdrawn from Russia, trading up just 0.04 percent at 10,765 yen about 40 minutes after the opening bell.

“As the war continues to have a devastating humanitarian impact in Ukraine, and sanctions on Russia continue to increase, we can no longer maintain a presence in Russia, effective immediately,” the company said in a statement sent to AFP.

Automaker Nissan was down 1.34 percent at 545.5 yen after it said Monday night that it would extend by three months a halt to production at its Saint Petersburg plant in Russia.

The decision means production will be on hold until the end of December, with the firm citing ongoing logistical difficulties for the move.

Airlines continued to rally following reports the Japanese government could significantly loosen Covid-linked border controls, with ANA Holdings trading up 2.83 percent at 2,778.5 and Japan Airlines up 2.04 percent at 2,653 yen.

Toyota was down 0.82 percent at 2,053 yen and Honda was off 2.02 percent at 3,639 yen, after a brokerage firm downgraded its estimate of the shares’ performances.

Stock markets rallied Monday, building on last week’s momentum as investors priced in the expectation of further interest rate hikes aimed at taming decades-high inflation.

The euro surged against main rivals, a day after German central bank chief Joachim Nagel signaled that the European Central Bank (ECB) would probably continue raising its key interest rate, an echo of a similar statement from Federal Reserve Chair Jerome Powell on Friday.

Investors worldwide are awaiting key US consumer price data for August, due Tuesday, with the annual inflation pace expected to ease to eight percent — still well above the Fed’s target of two percent.

That will be welcome relief, but is unlikely to be enough to sway the Fed from an expected three-quarter percentage point interest rate hike next week, the third consecutive increase of that size.

The ECB raised its key rate by a historic 75 basis points last week, and markets expect a similar-sized move at the October policy meeting.

Wall Street stocks ended with solid gains Monday — the broad-based S&P 500 advanced 1.1 percent — continuing the upswing last week that snapped a three-week losing streak.

Equities have been volatile of late as speculation about whether the Fed might ease up on its aggressive rate hikes in the near future sparks alternating hopes and fears. 

Fed officials have more or less ended the debate, saying while the increases may become smaller, the benchmark lending rate will not be coming down any time soon.

– Dollar loses ground –

The European single currency rocketed more than 1.4 percent against the dollar and 1.6 percent versus the yen before trimming gains.

The US dollar also fell sharply against the pound sterling and the Swiss franc.

In equities, Frankfurt led the way, closing more than two percent higher, followed by Paris and London not far behind after data showed the British economy rebounded slightly in July.

Tokyo closed with a gain of more than one percent thanks to a weaker yen. Markets in Hong Kong, mainland China and South Korea were closed for a public holiday.

Oil prices gained Monday but remain pressured by the possibility of global demand weakening as growth slows and China’s harsh zero-Covid policy continues to sap economic activity.

– Key figures at around 2100 GMT –

New York – Dow: UP 0.7 percent at 32,381.34 (close)

New York – S&P 500: UP 1.1 percent at 4,110.41 (close)

New York – Nasdaq: UP 1.3 percent at 12,266.41 (close)

London – FTSE 100: UP 1.7 percent at 7,473.03 points (close)

Frankfurt – DAX: UP 2.4 percent at 13,402.27 points (close)  

Paris – CAC 40: UP 1.95 percent at 6,333.59 points (close)  

EURO STOXX 50: UP 2.1 percent at 3,646.51 points

Tokyo – Nikkei 225: UP 1.2 percent at 28,542.11 (close) 

Hong Kong – Hang Seng Index: closed for public holiday

Shanghai – Composite: closed for public holiday

Euro/dollar: UP at $1.0120 from $1.0046 

Pound/dollar: UP at $1.1680 from $1.1587 

Euro/pound: DOWN at 86.64 pence from 86.84 pence

Dollar/yen: DOWN at 142.82 yen from 142.56 yen 

Brent North Sea crude: UP 1.24 percent at $94.00 per barrel

West Texas Intermediate: UP 1.14 percent at $87.78. per barrel

Stock markets rallied Monday, building on pre-weekend momentum as investors priced in the expectation of further interest rate hikes aimed at taming decades-high inflation.

The euro surged against main rivals, a day after German central bank chief Joachim Nagel signalled that the European Central Bank (ECB) would probably continue raising its key rate.

The European single currency rocketed more than 1.4 percent against the dollar and 1.6 percent versus the yen before trimming gains around midday.

The ECB raised the key rate by a historic 75 basis points last week, and markets expect a similar-sized hike at an October meeting.

Frankfurt led the way, closing more than two percent higher, followed by Paris and London not far behind after data showed the British economy rebounded slightly in July.

On Wall Street, stocks also advanced extending last week’s rally.

Tokyo closed with a gain of more than one percent thanks to a weaker yen. Markets in Hong Kong, mainland China and South Korea were closed for a public holiday.

Investors worldwide are awaiting key US inflation data for August, due Tuesday, with the consumer price index (CPI) expected to ease slightly to eight percent — still well above the Fed’s two-percent target.

Traders expect the Fed to impose another large rate hike next week, after two 75-basis-point increases already.

Clifford Bennett, chief economist at ACY Securities, said he expected stocks to “continue to drift higher” ahead of Tuesday’s CPI data.

The inflation print “may well see further improvement as petrol prices have continued to pull back”, he said. 

Oil prices gained Monday but remain pressured by the possibility of global demand weakening as growth slows and China’s harsh zero-Covid policy continues to sap economic activity.

– ‘Soft landing’ hopes –

US Treasury Secretary Janet Yellen on Sunday said she was hopeful the US economy could avoid a recession, but that the Fed would need to skilfully manage interest rates and also rely on “some good luck to achieve what we sometimes call a soft landing.

“My hope is we will achieve a soft landing, but Americans know it’s essential to bring inflation down and, over the longer run, we can’t have a strong labour market without inflation under control,” she told CNN.

Yellen said that while the US economy’s growth rate was slowing, the labour market remained “exceptionally strong”, with almost two openings for every jobseeker.

The release on Tuesday of the consumer price index will “provide some telling inflation data that will influence the market’s perspective on the Fed’s monetary policy approach”, analyst Patrick O’Hare of Briefing.com said.

– Key figures at around 1545 GMT –

London – FTSE 100: UP 1.7 percent at 7,473.03 points (close)

Frankfurt – DAX: UP 2.4 percent at 13,402.27 points (close)  

Paris – CAC 40: UP 1.95 percent at 6,333.59 points (close)  

EURO STOXX 50: UP 2.1 percent at 3,646.51 points

New York – Dow: UP 0.8 percent at 32,395.08 points  

Tokyo – Nikkei 225: UP 1.2 percent at 28,542.11 (close) 

Hong Kong – Hang Seng Index: closed for public holiday

Shanghai – Composite: closed for public holiday

Euro/dollar: UP at $1.0129 from $1.0046 

Pound/dollar: UP at $1.1699 from $1.1587 

Euro/pound: DOWN at 86.56 pence from 86.84 pence

Dollar/yen: DOWN at 142.45 yen from 142.56 yen 

Brent North Sea crude: UP 2.0 percent at $94.73 per barrel

West Texas Intermediate: UP 1.95 percent at $88.48 per barrel

Stock markets rallied Monday, building on pre-weekend momentum as investors priced in the expectation of further interest rate hikes aimed at taming decades-high inflation.

The euro surged against main rivals, a day after German central bank chief Joachim Nagel signalled that the European Central Bank (ECB) would probably continue raising its key rate.

The European single currency rocketed more than 1.4 percent against the dollar and 1.6 percent versus the yen before trimming gains around midday.

The ECB raised the key rate by a historic 75 basis points last week, and markets expect a similar-sized hike at an October meeting.

Paris and Frankfurt stock markets rose by more than two percent in mid-afternoon trading, with London not far behind as data showed the British economy rebounded slightly in July.

Tokyo closed with a gain of more than one percent thanks to a weaker yen. Markets in Hong Kong, mainland China and South Korea were closed for a public holiday.

Investors worldwide are awaiting key US inflation data for August, due Tuesday, with the consumer price index (CPI) expected to ease slightly to eight percent — still well above the Fed’s two-percent target.

Traders expect the Fed to impose another large rate hike next week, after two 75-basis-point increases already.

Clifford Bennett, chief economist at ACY Securities, said he expected stocks to “continue to drift higher” ahead of Tuesday’s CPI data.

The inflation print “may well see further improvement as petrol prices have continued to pull back”, he said. 

Oil prices gained more than one percent Monday but remain pressured by the possibility of global demand weakening as growth slows and China’s harsh zero-Covid policy continues to sap economic activity.

– ‘Soft landing’ hopes –

US Treasury Secretary Janet Yellen on Sunday said she was hopeful the US economy could avoid a recession, but that the Fed would need to skilfully manage interest rates and also rely on “some good luck to achieve what we sometimes call a soft landing”.

“My hope is we will achieve a soft landing, but Americans know it’s essential to bring inflation down and, over the longer run, we can’t have a strong labour market without inflation under control,” she told CNN.

Yellen said that while the US economy’s growth rate was slowing, the labour market remained “exceptionally strong”, with almost two openings for every jobseeker.

The release on Tuesday of the consumer price index will “provide some telling inflation data that will influence the market’s perspective on the Fed’s monetary policy approach”, analyst Patrick O’Hare of Briefing.com said.

– Key figures at around 1355 GMT –

London – FTSE 100: UP 1.5 percent at 7,462.13  points

Frankfurt – DAX: UP 2.2 percent at 13,368.57 

Paris – CAC 40: UP 2.1 percent at 6,341.10 

EURO STOXX 50: UP 1.96 percent at 3,640.18

New York – Dow: UP 0.7 percent at 32,387.10 

Tokyo – Nikkei 225: UP 1.2 percent at 28,542.11 (close) 

Hong Kong – Hang Seng Index: closed for public holiday

Shanghai – Composite: closed for public holiday

Euro/dollar: UP at $1.0116 from $1.0046 

Pound/dollar: UP at $1.1679 from $1.1587  

Euro/pound: DOWN at 86.60 pence from 86.84 pence

Dollar/yen: UP at 142.66 yen from 142.56 yen 

Brent North Sea crude: UP 1.5 percent at $94.20 per barrel

West Texas Intermediate: UP 1.4 percent at $88.02 per barrel

Stock markets rallied Monday, building on pre-weekend momentum as investors priced in the expectation of further interest rate hikes aimed at taming decades-high inflation.

The euro surged against main rivals, a day after German central bank chief Joachim Nagel signalled that the European Central Bank (ECB) would probably continue raising its key rate.

The European single currency rocketed more than 1.4 percent against the dollar and 1.6 percent versus the yen before trimming gains around midday.

The ECB raised the key rate by a historic 75 basis points last week, and markets expect a similar-sized hike at an October meeting.

London, Paris and Frankfurt stock markets were up about 1.5 percent nearing the half-way stage, with Tokyo closing with a gain of more than one percent thanks to a weaker yen.

Markets in Hong Kong, China and South Korea were closed for a public holiday.

Investors worldwide are awaiting key US inflation data for August, due Tuesday, with the consumer price index (CPI) expected to ease slightly to eight percent — still well above the Fed’s two-percent target.

Traders expect the Fed to impose another large rate hike next week, after two 75-basis-point increases already.

Clifford Bennett, chief economist at ACY Securities, said he expected stocks to “continue to drift higher” ahead of Tuesday’s CPI data.

The inflation print “may well see further improvement as petrol prices have continued to pull back”, he said. 

Oil prices gained one percent Monday but remain pressured by the possibility of global demand weakening as growth slows and China’s harsh zero-Covid policy continues to sap economic activity.

– ‘Soft landing’ hopes –

US Treasury Secretary Janet Yellen on Sunday said she was hopeful the US economy could avoid a recession, but that the Fed would need to skilfully manage interest rates and also rely on “some good luck to achieve what we sometimes call a soft landing”.

“My hope is we will achieve a soft landing, but Americans know it’s essential to bring inflation down and, over the longer run, we can’t have a strong labour market without inflation under control,” she told CNN.

Yellen said that while the US economy’s growth rate was slowing, the labour market remained “exceptionally strong”, with almost two openings for every jobseeker.

– Key figures at around 1100 GMT –

London – FTSE 100: UP 1.3 percent at 7,449.84 points

Frankfurt – DAX: UP 1.6 percent at 13,302.93

Paris – CAC 40: UP 1.3 percent at 6,292.35

EURO STOXX 50: UP 1.4 percent at 3,621.58

Tokyo – Nikkei 225: UP 1.2 percent at 28,542.11 (close) 

Hong Kong – Hang Seng Index: closed for public holiday

Shanghai – Composite: closed for public holiday

New York – Dow: UP 1.2 percent at 32,151.71 (close)

Euro/dollar: UP at $1.0145 from $1.0046 

Pound/dollar: UP at $1.1683 from $1.1587  

Euro/pound: FLAT at 86.84 pence

Dollar/yen: UP at 142.62 yen from 142.56 yen 

Brent North Sea crude: UP 1.1 percent at $93.86 per barrel

West Texas Intermediate: UP 1.0 percent at $87.66 per barrel

Asian and European markets rallied on Monday, building on the momentum of gains in the United States and elsewhere at the end of last week, as investors price in the expectation of further interest rate hikes aimed at taming inflation.

The euro surged in early trading, a day after German central bank chief Joachim Nagel signalled that the European Central Bank (ECB) would probably continue raising its key rate.

The European single currency rocketed more than 1.4 percent against the dollar and 1.6 percent versus the yen.

The ECB raised the key rate by a historic 75 basis points last week, and markets expect a similar-sized hike at an October meeting.

Nagel predicted inflation in Europe might peak at more than 10 percent in December.

London, Paris and Frankfurt all opened higher on Monday, with bourses in Japan, Australia, Singapore, Taiwan, Jakarta, Malaysia and Thailand also rising.

Markets in Hong Kong, China and South Korea were closed for a public holiday.

This week, investors worldwide will be closely watching US inflation data for August, due to be released on Tuesday, with the consumer price index (CPI) expected to ease slightly to eight percent — still well above the Fed’s two-percent target.

Traders expect the Fed to impose another large rate hike next week, after two 75-basis-point increases already.

“A downside surprise in US CPI is likely more of a concern and that could see the dollar weakening further,” Charu Chanana, a strategist at Saxo Capital Markets, told Bloomberg Television.

Clifford Bennett, chief economist at ACY Securities, said he expected stocks to “continue to drift higher” ahead of Tuesday’s US CPI data.

“(US CPI) may well see further improvement as petrol prices have continued to pull back,” he said. 

“Other components are still likely to be pointing higher, but fuel prices could well dominate this CPI number.” 

Oil began the week flat, as investors weigh the possibility of global demand weakening as growth slows and China’s harsh zero-Covid policy continues to sap economic activity.

On Monday, new data showed British GDP expanded by 0.2 percent in July, according to the Office for National Statistics. 

Concerns remain, however, about the overall health of the UK economy. 

“July’s GDP remains below the level seen in May, pointing to an overall contraction over the first two months of summer,” said Yael Selfin, chief economist at KPMG UK. 

– ‘Soft landing’ hopes –

US Treasury Secretary Janet Yellen on Sunday said she was hopeful the US economy could avoid a recession, but that the Fed would need to skilfully manage interest rates and also rely on “some good luck to achieve what we sometimes call a soft landing”.

“My hope is we will achieve a soft landing, but Americans know it’s essential to bring inflation down and, over the longer run, we can’t have a strong labour market without inflation under control,” she told CNN.

Yellen said that while the US economy’s growth rate was slowing, the labour market remained “exceptionally strong”, with almost two openings for every jobseeker.

In addition to the US CPI figures on Tuesday, traders will be closely watching UK CPI on Wednesday, and European CPI and China home sales, retail sales and industrial production data on Friday.

In Tokyo, stocks closed higher on Monday with gains by tech shares and a weaker yen boosting the market.

The dollar fetched 143.18 yen in Asian trade, against 142.56 yen on Friday in New York.

“A cheaper yen is positive for corporate performances, despite recent media reports” that highlight the negative aspects of the weak yen, said chief strategist Masayuki Kubota of Rakuten Securities.

On Friday, Bank of Japan chief Haruhiko Kuroda met Prime Minister Fumio Kishida, saying the rapid weakening of the currency was “undesirable”, an indication of possible upcoming action to arrest the fall.

– Key figures at around 0830 GMT –

Tokyo – Nikkei 225: UP 1.2 percent at 28,542.11 (close) 

Hong Kong – Hang Seng Index: closed for public holiday

Shanghai – Composite: closed for public holiday

New York – Dow: UP 1.2 percent at 32,151.71 (close)

New York – S&P 500: UP 1.5 percent at 4,067.36 (close)

New York – Nasdaq: UP 2.1 percent at 12,112.31 (close)

London – FTSE 100: UP 1.2 percent at 7,436.07 

Frankfurt – DAX: UP 1.4 percent at 13,268.26 

Paris – CAC 40: UP 1.0 percent at 6,275.81 

EURO STOXX 50: UP 1.2 percent at 3,612.75

Euro/dollar: UP at $1.0185 from $1.0046 

Pound/dollar: UP at $1.1691 from $1.1587  

Euro/pound: UP at 87.12 pence from 86.84 pence

Dollar/yen: UP at 142.77 yen from 142.56 yen 

Brent North Sea crude: UP 0.1 percent at $92.92 per barrel

West Texas Intermediate: DOWN 0.1 percent at $86.73 per barrel