Chinese stocks in Hong Kong fell up to 2%, contributing to an overall Asian equity slump overnight. This was led by a decline in tech stocks. Japanese equities slipped on concerns over earnings due to the yen's advance—USDJPY is currently trading around 145.6. Futures for US and European equities edged higher overnight. After three sessions of weakening, the Bloomberg Dollar Spot Index steadied. Meanwhile, ahead of the country's central bank decision, the Thai baht climbed to its highest level since July 2023—the rate is expected to remain unchanged today.
Today will be an interesting US session as Fed minutes are released, providing the final piece of information before Jackson Hole on Friday. Investors will be looking for clues about the timing and size of interest rate cuts. There are just under 100 bps of cuts priced into the futures curves for this year right now—will that be 50, 25, 25?
Ten-year Treasury yields were little changed after declining 6 bps. Brent declined for a third day as news of the potential ceasefire continues, and gold hit a fresh record high of $2,531.75/oz.
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