Markets in Asia and Europe opened higher on Friday, 18 July, buoyed by strong U.S. economic data and corporate earnings, though caution lingered in Japan ahead of a key political vote. Investors remained focused on global rate expectations, energy developments, and central bank signals.
Asia rallies as U.S. data lifts sentiment
Most Asian indices started the day in positive territory, with the MSCI Asia-Pacific index (excluding Japan) rising by 0.7%, reaching its highest level since late 2021. Gains were driven by optimism from Wall Street’s overnight rally, which followed robust U.S. retail sales, a drop in jobless claims, and solid corporate results.
Chinese and Hong Kong stocks saw moderate advances, rising between 0.4% and 0.8%, while Taiwan’s market continued its upward path, helped by further strength in TSMC shares after record quarterly profits. In India, benchmarks opened firmer, supported by improved global risk sentiment, although ongoing pressure in the IT and financial sectors remains a concern.
Japan was the regional outlier. The Nikkei 225 slipped by approximately 0.3% as investors turned cautious ahead of the upper house election this Sunday. The yen also weakened further, approaching two-month lows, amid unease over the political future of Prime Minister Shigeru Ishiba’s coalition.
European bourses signal steady optimism
European markets followed suit, with equity futures pointing to a higher open. The EURO STOXX 50 futures rose by around 0.4%, supported by strong corporate earnings out of the U.S., including a surprise beat by Netflix. Germany, France, and the Netherlands were all expected to open on a firm footing, while London’s FTSE 100 was projected to see more modest gains.
The euro area continues to benefit from stabilising macro indicators and a growing view that the European Central Bank may hold interest rates steady for the remainder of the year.
Currency and commodity conditions are stable
Oil prices climbed in early trading after EU sanctions targeting Russian exports and fresh drone attacks on production sites in Iraqi Kurdistan raised concerns over supply. The U.S. dollar maintained strength, backed by resilient American data and reduced expectations for an immediate Federal Reserve rate cut. Gold edged slightly lower as investors returned to risk assets.
Key themes driving markets today
Investors are watching for German producer price data, upcoming remarks from the Bundesbank, and any further movement in global monetary policy rhetoric. In Japan, election-related developments could bring added volatility. Meanwhile, progress in U.S.–India trade discussions and shifts in geopolitical risk will likely shape sentiment heading into the weekend.
REFH – Newshub, 18 July 2025
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