Despite the release of some decidedly mixed economic data over the weekend – Japanese GDP fell short of expectations and China’s trade surplus contracted sharply in response to those US trade tariffs – Asian equity markets have been nudging their way higher through Monday’s trade. This is setting the scene for some optimism to be in play as Wall Street returns from its weekend break, with US markets potentially still to fully price in Friday’s messages of weaker jobs growth alongside Jerome Powell’s hints that further rate cuts can be warranted on the basis that they will feed inflationary pressures.
Looking ahead, economic data is relatively thin on the ground for today’s session, with US consumer credit for July being one of the stand out factors here. Expectations are for a month on month build, but if the broader population is becoming wary over the economic outlook then credit growth is likely to contract. This could have the potential to unsettle equities, although that growing conviction over the prospect of rate cuts later this month cannot be ignored.
Ahead of the open the market is calling the Dow up 35 at 26832 and the S&P up 6 at 2985.