Stock Rally Extends as Fed Bets Ease, Euro Drops: Markets Wrap
(Bloomberg) — A global stock rally extended into Asia and Treasuries rose after softer US jobs data eased pressure on the Federal Reserve to keep raising interest rates. The euro fell.
MSCI’s Asia Pacific equities index gained 1% after a tech-led rally on Wall Street helped the Nasdaq 100 Index to a record close on Friday. Japanese shares rallied 2.5%, while Taiwan Semiconductor Manufacturing Co. climbed 3% on a potential collaboration with Elon Musk’s Terafab.
A decline in oil prices also helped sentiment. Brent crude for December delivery slipped 0.7% to about $101.50 a barrel after Saudi Arabia cut prices of its benchmark grade to Asia as flows expand. Treasuries rose modestly across the curve, with the benchmark 10-year yield falling two basis points to 5.25%.
The euro fell to its weakest level against the dollar since May 2025 as reports that Spanish government officials are preparing for an early election added to investor concerns over political and fiscal risks across the region. The shared currency slid as much as 0.8% to $1.1161. A Bloomberg gauge of the US currency rose 0.3%. German bond futures rose, while those for French debt declined.
Oil’s decline is further bolstering sentiment after Friday’s US jobs report showed employers added fewer workers than forecast, prompting money markets to price in less than a 25% chance of an October Fed hike. The reprieve for bonds came against a months-long rout fueled by persistent inflation concerns, government spending and surging corporate borrowing to finance the artificial-intelligence buildout.
“Until now, everything was about rates, rates, rates,” said Ryoutarou Sawada, a senior analyst at Tokai Tokyo Intelligence Laboratory. “We’ve reached a point where the market can breathe a little easier. The market’s direction has improved considerably in some respects.”
What Bloomberg’s Strategists Say…
“EUR/CHF is edging lower in early Monday trading, a sign that macro investors are bracing for another difficult session for European bonds. Regional stress led by French debt is only part of the problem, with Japan and the US both set to auction long-dated notes this week. Add in EUR/USD that just touched a cyclical low.”
— Mark Cranfield, Markets Live strategist. Click here for the full analysis.
Elsewhere, A Brazilian exchange-traded fund in Japan rose 7.6% after Flávio Bolsonaro unexpectedly finished ahead of President Luiz Inácio Lula da Silva in the first round of the country’s presidential election. Futures on the real also gained.
Gold gave up earlier gains to fall 0.1% to about $4,140 an ounce.
Sentiment toward technology shares remained buoyant with futures contracts on the Nasdaq 100 Index rising 0.2%. European equities were also set for a modest gain at the open.
Investors are also on the alert for signs of contagion in Europe’s government bond market after a selloff last triggered memories of the region’s debt crisis 15 years ago.
Up until last week, the bonds of euro-area members had largely retreated in lockstep for much of the year — the result of an energy shock that’s fueled inflation fears and forced the bloc’s central bank to hike interest rates.
France was the clear underperformer as budget squabbling and a contentious election added to the global headwinds.
“Bond and currency markets are clearly signaling investor discomfort about the rising instability of the French government and erosion in the country’s fiscal anchor ahead of the elections in 2027,” said Homin Lee, senior macro strategist at Lombard Odier.
Corporate Highlights:
Schneider Electric SE is nearing a deal to acquire US-based engineering software developer PTC Inc. for more than $20 billion, according to a source familiar with the matter. SoftBank Group Corp. chief Masayoshi Son — one of AI’s fervent believers — said that even he’s worried about safety risks as machines quickly gain more abilities. Nippon Paint Holdings Co. is buying Akzo Nobel NV’s decorative paints business in Southeast Asia for $1.35 billion.
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 12:38 p.m. Tokyo time Nikkei 225 futures (OSE) rose 2% Japan’s Topix rose 1.1% Australia’s S&P/ASX 200 rose 0.1% Hong Kong’s Hang Seng was little changed Euro Stoxx 50 futures rose 0.3% Currencies
The Bloomberg Dollar Spot Index rose 0.3% The euro fell 0.7% to $1.1177 The Japanese yen was little changed at 158.00 per dollar The offshore yuan was little changed at 6.7114 per dollar Cryptocurrencies
Bitcoin rose 0.5% to $86,282.71 Ether rose 0.6% to $2,723.03 Bonds
The yield on 10-year Treasuries declined one basis point to 5.26% Japan’s 10-year yield declined one basis point to 3.080% Australia’s 10-year yield was little changed at 5.34% Commodities
West Texas Intermediate crude fell 1.1% to $90.08 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from Aya Wagatsuma, Thomas Kutty Abraham and Ruth Carson.
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