Markets Today: Shares Rebound on US Rate Cut Bets, FTSE 100 Eyes Gains

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Asia Market Wrap - US Rate Cut Bets Boost Equities

Asian markets got a boost on Monday as hopes for lower interest rates eased worries about the US economy, though doubts about the long-term reliability of US policies lingered.

Wall Street dropped on Friday due to higher US unemployment and slower job growth, increasing hopes for a Fed rate cut to help the economy. While the weak data raised concerns about stock prices, it also strengthened belief that the Fed might step in to keep the recovery going after three months of rising stocks, fueled by confidence in the economy handling President Trump's tariffs.

The MSCI Asia-Pacific index (excluding Japan) rose 0.7%, helped by a 1.1% jump in South Korean stocks.

Japan's Nikkei dropped 1.4%, partly due to the yen strengthening on Friday, while Chinese blue-chip stocks stayed unchanged.

Upbeat US Earnings Season Continues

Wall Street is feeling positive thanks to strong earnings reports. So far, about two-thirds of S&P 500 companies have shared their results, and 63% have done better than expected. Earnings growth is now estimated at 9.8%, up from 5.8% in early July.

This week, companies like Disney, McDonald's, Caterpillar, and major pharmaceutical firms are set to report their results.

European Open - European Shares Higher

European stocks inched up on Monday, bouncing back slightly after Friday's big drop. The STOXX 600 index rose 0.2% by early morning, following its steepest fall in over three months.

Switzerland's SMI index dropped 1.5% as markets reopened after a long weekend. Swiss Business Minister Guy Parmelin said the country might revise its offer to the US after facing heavy tariffs last week, which experts warn could lead to a recession.

Swiss pharmaceutical giants Novartis and Roche fell 1.3% and 2.3%, respectively, after President Trump urged 17 major drug companies to lower US prescription prices. Swiss luxury brands Richemont and Swatch, heavily affected by tariffs, also dropped over 1.5% each.

UBS shares fell 2.5% after the bank agreed to pay $300 million to settle US cases over mortgage-linked investments.

On a positive note, Lloyds rose 6.3%, leading the STOXX 600, after the UK's Supreme Court overturned a ruling on motor finance commissions, benefiting banks.

On the FX front, The U.S. dollar gained some strength on Monday, rising 0.2% to 98.88 against a group of currencies after dropping over 1.3% on Friday. It was also up 0.3% against the yen, trading at 147.91, though still 3 yen below Friday's high.

The euro slipped 0.2% to $1.1561, while the British pound stayed mostly steady at $1.3276.

Currency Power Balance

Source: OANDA Labs

In July, the dollar jumped 3.4%, its biggest monthly gain since April 2022, as markets grew more comfortable with Trump's trade policies and the economy stayed strong despite tariffs.

Gold continues to hold the high ground this morning as rate cut bets are likely underpinning the precious metal.

For a full and comprehensive analysis on GOLD (XAU/USD) read Gold's (XAU/USD) Price Forecast: Mixed Signals Ahead of NFP, A Return Above $3300/oz or Further Downside Ahead?

Oil prices slid as OPEC+ decided on Sunday to increase oil production by 547,000 barrels per day in September. This is part of ongoing efforts to boost output and regain market share amid worries about supply issues related to Russia.

This increase reverses OPEC+'s biggest production cuts earlier than planned and adds extra output for the UAE, totaling about 2.5 million barrels per day, or 2.4% of global demand.

Economic Data Releases and Final Thoughts

Looking at the economic calendar, it is a quiet one.

The US session brings factory orders and core durable goods data. Both of which should not have a material impact on market moves. Developments around trade deals and updates around the firing of the head of the Bureau of Labor Statistics (BLS) may have a bigger impact on the US Dollar.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Day - FTSE 100 Index

From a technical standpoint, the FTSE 100 index struggled last week before finding support near the key confluence level around 9048.

The improved sentiment this morning sees the FTSE making a move higher with immediate resistance at 9136 before the 9168

Immediate support rests at 9048 before the 9000 handle comes into focus.

FTSE 100 Four-Hour Chart, August 4. 2025

Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

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