San Francisco Frontiers - Markets up as traders prepare for Powell speech

Positive data last week eased concerns about the health of the US economy after markets were hammered earlier this month due to recession fears and a Japanese interest-rate hike.

Traders are now turning their attention to the annual symposium of central bank chiefs later this week in Jackson Hole, Wyoming.

The highlight will be Friday's speech by Federal Reserve chairman Jerome Powell, with investors hoping that he will flag an interest rate cut for the Fed's next policy meeting in September.

"Investors and analysts alike will be paying close attention to any signals from Fed officials about the future direction of US interest rates," said Luca Santos, currency analyst at ACY Securities.

"There's growing speculation that... Powell might hint at the possibility of starting rate cuts as early as September. But the size of the cut is still up in the air."

Santos said a "modest" cut of 0.25 percentage points seems likely while a larger 0.50-point reduction "would need stronger evidence of a weakening US job market".

All three main indexes on Wall Street rose Friday, leaving them back near the record highs touched before their August 5 rout as investors grow confident the US economy will avoid recession as the Fed cuts rates.

Gains continued Monday with the major US markets all up in early trading.

Asian markets wavered after a positive start to Monday while European stocks were up following a mixed open.

- Gold shines -

Bets on a series of Fed rate cuts weighed on the dollar, with the yen among the big gainers as traders assess the chances of another Bank of Japan hike at its next meeting.

The currency rose sharply Monday against both the dollar and the euro.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said the "big players are increasing bets that the Bank of Japan will continue hiking the rates despite the sharp market reaction".

Gold was propelled to a new all-time high on Monday, fuelled by expectations for Fed cuts that will make the precious metal more attractive to investors.

Gold had climbed to unprecedented heights on Friday, breaking above the $2,500 barrier for the first time.

Oil prices were down again after last week's losses, on the back of demand worries as China's economy struggles to recover.

Investors are also keeping tabs on talks to mediate a ceasefire between Israel and Hamas in Gaza amid fears of a wider war in the crude-rich Middle East.

Major oil producer Iran has threatened to retaliate against Israel for last month's killing of Hamas political leader Ismail Haniyeh in Tehran, which has been widely blamed on Israel.

US Secretary of State Antony Blinken met Prime Minister Benjamin Netanyahu and other Israeli leaders Monday to try to unblock the process for an end to hostilities.

- Key figures around 1340 GMT -

New York - Dow: UP 0.3 percent at 40,784.83 points

New York - S&P 500: UP 0.2 percent at 5,563.94

New York - Nasdaq Composite: UP 0.1 percent at 17,643.86

London - FTSE 100: UP 0.4 percent at 8,344.63

Paris - CAC 40: UP 0.8 percent at 7,508.47

Frankfurt - DAX: UP 0.5 percent at 18,414.93

EURO STOXX 50: UP 0.7 percent at 4,872.99

Tokyo - Nikkei 225: DOWN 1.8 percent at 37,388.62 (close)

Hong Kong - Hang Seng Index: UP 0.8 percent at 17,569.57 (close)

Shanghai - Composite: UP 0.5 percent at 2,893.67 (close)

Euro/dollar: UP at $1.1035 from $1.1022 on Friday

Pound/dollar: UP at $1.2946 from $1.2945

Dollar/yen: DOWN at 146.48 yen from 147.60 yen

Euro/pound: UP at 85.23 pence from at 85.14 pence

West Texas Intermediate: DOWN 0.3 percent at $76.46 per barrel

Brent North Sea Crude: DOWN 0.4 percent at $79.40 per barrel

J.Peterson--SFF