Global Markets Trade Cautiously Following the Asia Holiday
On Tuesday, the Japanese yen weakened 0.3% against the dollar to ¥153.05 per dollar. Prime Minister Sanae Takaichi is under pressure.
Quick overview
- Europe's main equity indices are rising, with Germany's DAX up 0.90% and France's CAC 40 gaining 0.50%.
- U.S. markets are reopening after Presidents' Day, but investor caution persists amid mixed signals from U.S.-Iran negotiations affecting oil prices.
- Japan's Nikkei 225 fell 0.42% following a contraction in GDP, prompting calls for more fiscal stimulus as the yen weakened against the dollar.
- U.S. equities show modest gains, with the S&P 500 up 0.18%, while oil prices remain volatile amid ongoing geopolitical tensions.
Europe’s main equity indices are edging higher, while the United States returns to trading after the Presidents’ Day holiday.
Tuesday’s global session is unfolding calmly, with low trading volumes across Asian markets due to the Lunar New Year holiday. At the same time, the reopening of U.S. markets is fostering caution among investors, particularly amid ongoing negotiations between the U.S. and Iran, which have generated mixed signals in oil prices.
Germany’s DAX is up 0.90%, while France’s CAC 40 gains 0.50%. Both the eurozone and the UK—where the FTSE 100 rises 0.78%—remain constrained by the lack of reference pricing from the closure of markets in China, Hong Kong, Singapore, Taiwan, and South Korea.
In Australia, the S&P/ASX 200 rises 0.24%, although the Australian dollar weakened after the Reserve Bank of Australia signaled it would not rush into rate hikes.
Meanwhile, the pan-European STOXX index is stabilizing after a slight decline on Monday, rising 0.67% ahead of upcoming industrial production data.
Japan Slides on Weak GDP Data
After Japan’s economy contracted for the first time in six quarters—shrinking 0.4% in the third quarter due to falling exports linked to higher U.S. tariffs under the administration of Donald Trump—the Nikkei 225 fell 0.42%.
On Tuesday, the Japanese yen weakened 0.3% against the dollar to ¥153.05 per dollar. Prime Minister Sanae Takaichi is under pressure to push for more aggressive fiscal stimulus, while the Bank of Japan (BoJ) is set to meet in March, where interest rates are expected to remain low.
Rate-hike expectations have softened following the GDP data, with markets now pricing in just 4 basis points for March and 16 basis points for April. This week’s Japan inflation data will be key in determining whether pressure on local markets deepens or begins to ease.
U.S. Market Remains Cautious
U.S. equities are posting modest gains, with the S&P 500 up 0.18% and the Nasdaq higher by 0.10%.
At the same time, negotiations between the United States and Iran aimed at easing oil-market tensions are keeping investor sentiment cautious. West Texas Intermediate (WTI) crude is up 0.95%, while Brent futures slipped 0.5% during the Asian trading session, after rising 1.33% on Monday.
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