Futures News - Risk appetite improved early Monday as market participants took comfort in China’s economic stimulus measures. They are also assessing last week’s market movements while awaiting key U.S. inflation and labor data.

Supporting optimism were varied statements from global central bank leaders at the Jackson Hole Symposium, along with the resumption of troubled Chinese real estate company Evergrande's stock trading after a 17-month halt.

In this context, S&P 500 futures maintained gains after rebounding from a one-week low, reaching around 4,420 with a 0.10% intraday increase.

Meanwhile, the U.S. 10-year Treasury yield fell near 4.23%, having risen for four consecutive weeks. This movement followed its highest level since 2007 and closed last week with a slight loss.

News emerging from China over the weekend suggests additional measures to stimulate economic activity, including a 50% cut in the current 0.1% stamp duty on stock trading.

A similar report from the Wall Street Journal (WSJ) cited sources familiar with China’s decision-making process, highlighting Communist Party Chairman Xi Jinping’s conservative stance on Western-style consumption-driven growth. Nonetheless, further stimulus measures are also being recommended.

Additionally, varying market participant concerns over the tightening monetary policies of major central banks have encouraged traders to remain cautious and attentive to market conditions.

In recent remarks, Federal Reserve (Fed) Chair Jerome Powell reaffirmed his stance on “higher for longer” interest rates, emphasizing the restrictive nature of such policy, though unable to pinpoint a neutral rate. Policymakers indicated that further measures are needed to restore price stability, stressing that economic uncertainty requires responsive monetary policy.

In this context, it’s worth noting that policymakers from other major central banks, including the ECB, BoE, and BoJ, also demonstrated hawkish inclinations. This leaves market participants to analyze market movements before Monday’s opening bell.

Elsewhere, U.S. Commerce Secretary Gina Raimondo’s visit to Beijing and meeting with China’s Commerce Minister Wang Wentao went smoothly, although Raimondo maintained U.S. national security measures.

Chinese stocks saw gains in this context, even as Evergrande resumed trading after a 17-month absence. Similar sentiment impacted Asia-Pacific markets, while putting pressure on the U.S. Dollar Index (DXY).

Looking ahead, risk catalysts will provide new momentum before the release of the Federal Reserve's (Fed) preferred inflation measure, the Core Personal Consumption Expenditures (PCE) for July. Additionally, monthly employment data will be crucial in shaping forward-looking views.

Disclaimer!

This analysis reflects views based on fundamental and technical perspectives from reliable sources and is not intended as advice or solicitation. Remember that this content aims to inform readers. Always perform independent research on forex information for use in your trading.

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