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Current Futures: Dow +10.00, S&P +4.00, NASDAQ +2.75

Investors’ optimism seems to be at a record high in the equity markets, as the Nikkei is heading towards the 10th consecutive day of gains, a record not seen since 2004.

The Japanese Nikkei is trading at a 6-week high, helped by the gains seen over the last two weeks of trading, TheLFB-Forex.com Trade Team noted. Moreover, the index broke above the 10,000-benchmark level tonight, a very important psychological barrier. Most stocks advanced in the Japanese index, but the strongest gains came from the Japanese financial sector, as it seems investors are pricing in better than expected results. 

However, regardless of the rally seen in the equity market, the macroeconomic reports continue to remain downbeat. During the Asian session, a release pointed out that corporate service prices fell 3.2% from a year earlier in June, the biggest decline on record. This report adds further evidence that the Japanese economy is heading towards a deflationary period, which will be another big hit the economy will have to withstand. Since the late 1990’s, Japan has tried to fight deflation, but until now, both the monetary and fiscal policies have failed to do so. Moreover, the Japanese central bank has had its hands tied behind its back, since the monetary policy had reached its limits a long time ago in Japan.  

Overnight, the Japanese Nikkei added 173.72 points (1.75%) to 10,118.27. The Australian S&P/Asx advanced 52.10 points (1.27%) to 4,141.90

Crude oil for August delivery was recently trading at $68.50 per barrel, up by $0.50. 

Gold for August delivery was recently trading higher by $0.60 to $956.60. 

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