Asian investors started August in the same way they ended July, with gains across markets that followed Wall Street’s lead, fuelled by a general sense of optimism about the economic outlook.
Bets on the Federal Reserve calling it a day on its interest rate hiking cycle have been a key driver of buying for weeks as inflation continues to drop while the economy remains robust.
That has been compounded by China’s recent promises of stimulus measures to kickstart growth, as a string of data showed the country’s post-Covid recovery has all but puffed out.
Traders are now keeping a close eye on earnings this week from tech titans Apple and Amazon, and US jobs at the end of the week that could provide an idea about the Fed’s thinking.
The central banks of Britain and Australia are also due to announce rate decisions.
On Monday, Chicago Fed boss Austan Goolsbee left open the possibility of pausing or stopping interest rate hikes at the bank’s next policy meeting in September.
“Thus far we’re on the golden path and we’ve got to walk that line,” Goolsbee told Yahoo! Finance, referring to the path of lowering inflation without triggering a major recession.