We have a look ahead of the day from Saikat Chatterjee.
China's disappointing monthly activity data suggests the world's No. 2 economy is losing steam more quickly than anticipated and sets the scene for a cautious start to the week
July retail sales, fixed production and industrial investment were all weaker than anticipated as COVID 18 went into live. Investors hoping for more stimulus may have to wait longer as Beijing policymakers want to allow July Reserve Requirement ratio to take effect before taking further action.
Nevertheless, weak data has stalled the upward march of Asian stocks and pulled global shares towards last month's lows. March futures suggest a cautious start to the week for European and U.S. stock markets.
The U.S. 10-year Treasury yields are down 11 bps in the last two sessions as their prices rise, with geopolitical uncertainty after the collapse of the Afghan government supporting safe-haven assets.
While weak U.S. sentiment readings wiped off a week's gain for the dollar against its major rivals, positioning data suggests more upside for the greenback.
You bet on long-term after a lot of it has grown since March 2020. Minutes of Federal Reserve's final policy meeting due this week will likely provide more fodder for dollar bulls, especially if more policymakers signal a likely tapering soon.
That Central Banks are moving to exit emergency stimulus should be clear this week, with New Zealand expected to become the first major economy to raise interest rates.
On Wednesday, money markets have priced in a full quarter point rate hike and a 25% probability of a 50 bps hike. Norway's central bank could also give indication of the timing of its own rate rise, possibly in autumn.
Earnings season meanwhile winds down with some impressive readings: U.S. stocks report a 150% year on year earnings growth and European shares measure a 90% earnings growth
What's the usual direction of markets in Monday : key developments that should provide more direction to markets on Monday?
- auctions: US 7 - mth T-bills and 6 - mth T-bills, US data on foreign buying of Rs. Treasury in June (data issued by American government).
- U.K. home asking prices fall first time this year - Rightmove.