(Bloomberg) Equities in Asia rose in thin trading with most markets on holiday, while US stock futures were flat as investors awaited news of a bid for First Republic Bank.
Stocks in Japan and Australia gained as trading was closed for Labor Day in other major bourses including Hong Kong, mainland China, Singapore and South Korea. Many markets in Europe will also be on holiday.
Moves in US futures were muted following a 0.8% jump for the S&P 500 Friday to cap a weekly gain as well as back-to-back monthly advances. The CBOE Volatility Index fell below 16 points for the first time since November 2021 as solid corporate earnings boosted sentiment.
The future of First Republic Bank weighed on markets, however. Regulators worked into the evening on Sunday in Washington after requesting a group of banks including JPMorgan Chase & Co. and PNC Financial Services Group Inc. submit bids for the embattled lender.
Treasuries fell slightly after a Friday rally. Australian and New Zealand 10-year notes were flat. The yen weakened while the greenback and the Australian dollar strengthened. A sudden drop for Bitcoin dragged the cryptocurrency further below $30,000 after a stellar run this year.
Interest rate decisions will be in focus this week. The Federal Reserve is expected to increase borrowing costs by 25 basis points to a range of 5% to 5.25%, a level not seen since 2007. The European Central Bank is also forecast to raise its key lending rates by 25 basis points. The Reserve Bank of Australia will likely keep interest rates on hold when it meets Tuesday.
“Earnings season is showing the demand in the market, which is a key engine of inflation, is still quite robust,” Hebe Chen, an analyst with IG Markets, said in an interview on Bloomberg Television. The Fed must also play down the chances for rates to fall later this year, “potentially putting a cap on the unrealistic expectations for a rate cut,” she said.
Apple Inc. headlines another busy week of earnings that includes Advanced Micro Devices Inc. and Ford Motor Co. In Asia, banks including HSBC Holdings Plc and Macquarie Group Ltd. will deliver their profit reports. In Europe, Volkswagen AG and energy giants BP Plc and Shell Plc are on the docket.
Elsewhere, oil prices declined and gold fell.