Oil breaks US$100, Wall Street retreats and bond yields rise, inflation is becoming the market’s biggest risk again Global markets are starting Thursday in a more defensive position. Brent crude has broken above US$100 a barrel , U.S. Treasury yields are pushing higher, and Wall Street fell for a third straight session as investors reassess whether central banks may need to keep tightening rather than easing. For Malaysian investors, the key chain today is increasingly clear: Oil → inflation → interest rates → bond yields → USD/MYR → Bursa valuations. 30-second market snapshot Market / Asset Latest 🇺🇸 S&P 500 7,636.36, -0.48% 🇺🇸 Dow Jones 52,380.66, -0.77% 🇺🇸 Nasdaq 26,253.34, -0.64% 🇲🇾 FBM KLCI 1,714.34, virtually flat 💵 USD/MYR ~4.06 🇺🇸 U.S. 10Y Treasury ~4.84% 🇺🇸 U.S. 2Y Treasury ~4.42% 🥇 Gold ~US$4,396/oz 🛢️ Brent crude US$101.21/bbl 🛢️ WTI crude US$96.05/bbl ₿ Bitcoin ~US$79,300 🇯🇵 Nikkei ~64,760, -0.6% this morning Brent jumped about 3.4% Wednesda...
Asian equities advanced on Monday, led by Chinese stocks, as investors positioned for a dovish US Federal Reserve pivot and awaited Nvidia’s earnings later this week — a key test for lofty AI-driven valuations.
The MSCI Asia-Pacific ex-Japan Index rose 1.5%, with Chinese blue chips up 1.4% to their highest since mid-2022. The rally in China has pushed the index almost 10% higher in August, despite persistent weakness in domestic demand and corporate pricing power, highlighting the liquidity-fuelled nature of gains.
Elsewhere, Japan’s Nikkei gained 0.4%, South Korea climbed 1.1%, and Australia added 0.2%.
Fed Pivot Drives Sentiment
Federal Reserve Chair Jerome Powell’s speech at Jackson Hole bolstered expectations of monetary easing:
Futures now price an 84% probability of a 25bps cut in September, with at least 100bps of cumulative cuts by mid-2026.
The dovish tilt pressured Treasury yields, with the 10-year yield holding at 4.268% after a sharp drop on Friday.
The dollar eased, supporting commodities and EM currencies.
Still, risks loom. JPMorgan’s Bruce Kasman warned that tariffs and sticky service inflation could push core inflation toward a 4% annualised rate, challenging long-dated Treasuries. The US will also auction US$183bn in new debt this week, testing market appetite.
Nvidia: The Market’s Litmus Test
All eyes now turn to Nvidia’s earnings (Wed, Aug 27):
Consensus: 48% EPS growth on US$45.9bn revenue.
Options market signals a ~6% swing in shares post-results.
Key watchpoints: China shipment outlook and details of its deal to pay the US government 15% of certain chip revenues.
Given Nvidia’s US$4tn market cap, even modest surprises could ripple across global equities.
Adding to the policy backdrop, President Trump last week announced a US$8.9bn US stake (9.9%) in Intel at a discounted price — signalling Washington’s intent to build domestic chip capacity alongside Nvidia’s global dominance.
Currencies and Commodities
USD/JPY: The dollar steadied at ¥147.36, after sliding 1% on Friday.
EUR/USD: Firm at 1.1703, bouncing from 1.1583.
ECB: Expected to hold rates in September, though further cuts could be debated in autumn if growth weakens.
Gold: Supported by a weaker dollar, holding at US$3,365/oz.
Oil: Prices steadied as sanctions on Russian supply persist. Brent: US$67.77, WTI: US$63.78.
Investment Takeaways
China Rally: Liquidity-driven, but fundamentals remain weak; investors should be selective, focusing on policy-supported sectors.
Nvidia Earnings: A pivotal event for AI trade momentum and global equity sentiment.
Rates & FX: Fed pivot supports Asian currencies and EM inflows, but sticky US inflation could limit upside.
Commodities: Gold and oil benefit from softer dollar, but inflation data this week could spark volatility.
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