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- Asian tech stocks stage historic rally
- Weak data in China raise hopes for more active stimulus measures
- US hyperscaler debt draws increasing scrutiny as credit spreads widen
- Tech selloff in US neared correction territory before partial recovery
- Survey shows dollar is expected to outperform through 2026 as Treasury rates rise
- Latam FX remains strong due to significant positive carry
The GMM is going on summer break starting next week and will return on August 24
Technology Stocks Lead Major Global Rally
Yesterday’s bounce in US technology stocks sparked a remarkable response in Asia overnight, as the KOSPI delivered an entire year’s return in a single day (+18%), the TAIEX surged by 8% and the Nikkei rose by 4%. These kinds of moves leave market participants scratching their heads, as they seem unsustainable. In response, stocks in Europe extended their gains for the week and US equity index futures were also higher. However, worries persist about Fed policy, as the US yield curve continued its bear steepening and the long bond yield traded near its highest level since 2007. There is a growing perception that the Fed may not move as aggressively as expected to counter inflation. This has resulted in upward pressure on yields in other government bond markets. Meanwhile, the crisis in the Middle East continues to simmer in the background, with the Strait of Hormuz still effectively closed and the volume of traffic through the Red Sea below normal.
