Nikkei Surges Over 2% as Stable Yen Calms Markets

The Nikkei index jumped over 2%, erasing last week's losses, as a stable yen reassured investors. Wall Street ended mixed ahead of key US economic data, with traders split on the likelihood of a 50 or 25 basis point Fed rate cut. UK wage data and comments from Federal Reserve Bank of Atlanta President Raphael Bostic are also in focus.

Equities

The FTSE 100 rose by 0.5% on Monday, driven by gains in resources-linked shares amid rising oil and metal prices. Energy stocks increased by 1%, supported by firming oil prices, which have been rising for five consecutive sessions. Precious metal miners also climbed approximately 2%, reflecting an advance in gold prices. BT Group shares surged 8.4% following the announcement that India's Bharti Enterprises will acquire a 24.5% stake in the telecom giant for about £3.2 billion, buying out its top shareholder. Meanwhile, Lancashire Holdings saw a 4.5% rise, extending its gains from the previous session.

On the other side of the Atlantic, Wall Street presented a mixed picture. The Dow Jones Industrial Average fell by 0.36%, while the S&P 500 remained flat, and the tech-heavy Nasdaq Composite rose by 0.21%. Investors are focused on upcoming US economic data, particularly the consumer price index (CPI) and retail sales figures, which are expected to influence Federal Reserve monetary policy.

In corporate news, Starbucks gained 2.58% following reports that activist investor Starboard Value, which holds a stake in the company, is pushing for steps to improve the coffee giant's stock price. KeyCorp shares jumped 9.1% after Canada's Scotiabank purchased a minority stake in the US regional lender in a deal worth $2.8 billion. In contrast, Hawaiian Electric saw a significant drop of 14.45% after the utility firm raised concerns about its financial stability.

Forex & Commodities

The yen fell against the dollar, trading at 147.10 yen, as investors looked ahead to key US economic data. This comes after a volatile week that saw significant currency moves driven by concerns over the US economy and the Bank of Japan's policy stance. The dollar was flat against the Swiss franc, while the euro edged up 0.16% to $1.0933. Sterling remained steady at $1.2763.

Gold prices dipped 0.4% to $2,461.71 per ounce as investors took profits following a rise to a one-week high. The market's focus is now on the upcoming US consumer price index (CPI) data, which could influence the Federal Reserve's next policy decision.

Oil prices surged by more than 3%, with Brent crude reaching $82.30 per barrel, its largest percentage gain in a single trading session this year. This rise was driven by escalating tensions in the Middle East, which could tighten global crude supplies. The US decision to send a guided missile submarine to the region has heightened concerns about a broader conflict, potentially leading to US embargos on Iranian crude exports.