Asian equity markets started the week on a firmer note on Monday, supported by softer oil prices, cooling US labour data and growing expectations that the Federal Reserve will keep interest rates unchanged at its upcoming meeting.
Regional sentiment was broadly positive, with MSCI’s broadest index of Asia-Pacific shares outside Japan rising about 0.4%, while Wall Street futures also pointed higher as investors positioned for the upcoming earnings season.
Energy prices were a key driver of sentiment. Brent crude slipped around 0.6% to near four-month lows at US$71.70 a barrel, while US crude fell about 0.5% to US$68.38, after OPEC+ agreed to raise output targets by 188,000 barrels per day from August on top of earlier increases.
The decline in oil added to the impact of a softer-than-expected US nonfarm payrolls report, leading markets to scale back expectations of an imminent Fed rate hike. Futures pricing now implies roughly a 78% chance the Federal Reserve will hold rates steady at its July 29 meeting.
Focus has now shifted to the release of the Federal Reserve’s latest meeting minutes due later this week, alongside a series of central bank speeches that may provide further clues on the policy outlook.
In Asia, chip-related optimism continued to underpin sentiment, with South Korea’s market extending gains on expectations of strong earnings from semiconductor heavyweights. Japan’s Nikkei, however, eased slightly in early trade after recent strength.
Attention is also turning to corporate earnings, with analysts expecting a strong reporting season driven by artificial intelligence demand. Samsung Electronics is in focus this week, with forecasts pointing to a sharp jump in quarterly profit driven by memory chip pricing strength and tight supply conditions.
In broader markets, US futures advanced, led by gains in technology contracts, while European equity futures were mixed in early trade, reflecting cautious optimism ahead of key data releases including the US ISM Services survey.
Currency markets were relatively steady, with the US dollar index stabilising after recent losses, while gold held near recent highs following a strong rebound last week.
Overall, the tone across global markets remained cautiously constructive, with easing inflation pressures from energy markets and growing confidence in a steady Fed policy stance helping to support risk appetite at the start of the week.
