SINGAPORE: Global markets rose on Monday as dovish comments from U.S. Federal Reserve Chairman Jerome Powell assured investors that the country’s economic growth was on track amid simmering trade tensions with China.
KEEPING SCORE: In Europe, Germany’s DAX gained 0.4 percent to 12,437.74. The CAC 40 in France was 0.4 percent higher at 5,451.37. British markets were closed for a summer bank holiday. Major U.S. indexes were set to open higher. S&P 500 futures added 0.2 percent to 2,883.75. Strong corporate earnings have boosted the benchmark index, which closed Friday at an all-time high. Dow futures rose 0.3 percent to 25,871.00.
ASIA’S DAY: Japan’s benchmark Nikkei 225 index added 0.9 percent to 22,799.64 and South Korea’s Kospi rose 0.3 percent to 2,299.30. Hong Kong’s Hang Seng jumped 2.2 percent to 28,271.27. The Shanghai Composite rebounded 1.9 percent to 2,780.90. Australia’s S&P/ASX 200 gained 0.3 percent to 6,268.87. Taiwan’s benchmark rose and Southeast Asian indexes were mostly higher.
DOVISH FED: U.S. Federal Reserve Chairman Jerome Powell sketched a positive picture of the U.S. economy on Friday and said the Fed’s incremental approach to raising rates has so far succeeded. “The economy is strong. Inflation is near our 2 percent objective, and most people who want a job are finding one. We are setting policy to do what monetary policy can do to support continued growth, a strong labor market and inflation near 2 percent,” Powell said, at an annual conference of central bankers in Jackson Hole, Wyoming. The chairman’s measured tone about the economy and his message that the Fed plans to stick with a gradual pace of rate hikes appeared to sit well with investors. The Dow Jones industrial average closed up 133 points ? about half a percentage point ? and bond prices rose as well.
TRADE TENSIONS: The United States and China have imposed 25 percent tariffs on $16 billion of each other’s goods including automobiles, factory equipment and other goods. On Thursday, U.S. and Chinese negotiators ended two days of meetings without breaking a deadlock over trade that has unnerved financial markets and disrupted global commerce. Lindsay Walters, a White House spokeswoman, said the delegations exchanged views on achieving a balanced economic relationship, without mentioning further talks. China’s Commerce Ministry said the talks were constructive and the sides would maintain contact, but didn’t give details.
ANALYST’S TAKE: “The lingering theme from last Friday had been the Jackson Hole symposium which was perceivably dovish, enthusing equity markets into the end of the week,” Jingyi Pan of IG said in a commentary. “Still, the watch lies with data as we head into the end of the month while keeping that keen eye on trade tensions after last week’s failed talks,” she added.
ENERGY: Benchmark U.S. crude dropped 21 cents to $68.51 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained 1.3 percent to settle at $68.72 per barrel on Friday. Brent crude, used to price international oils, shed 17 cents to $75.65 in London.
CURRENCIES: The dollar eased to 111.19 yen from 111.20 yen in late trading Friday. The euro slipped to $1.1611 from $1.1625. -AP