Domestically, India’s annual inflation for July edged up to 4.45%, though it is still seen as unlikely to trigger a rate increase by the Reserve Bank of India in the coming months.

On the corporate front, Laurus Labs, Lenskart, Adani Energy, and Groww will be added to the MSCI Global Standard Index effective September 1, potentially drawing passive inflows of about $598 million, $352 million, $310 million, and $256 million, respectively. Eternal, Adani Enterprises, and Adani Ports are also poised to benefit from higher MSCI index weights, while Reliance Industries and Jio Financial may face passive outflows.

Early laggards in the session included Cupid (-1.2%), Thyrocare (-4.5%), and Ather Energy (-3.5%).

Still, the lack of specific details on major easing steps reinforced expectations that large-scale monetary stimulus is unlikely in the near term. Separately, the PBOC refrained from conducting seven-day reverse repos for a third straight session on Thursday, while announcing plans to inject up to CNY 600 billion per day through overnight reverse repos on August 14 and August 17–19.

Growth in non-residential building construction also picked up (13.3% vs 12.7%), making up 29.3% of overall activity. At the same time, residential building work accelerated further (8.7% vs 6.1%), contributing 22.8% of total output.

By contrast, growth in special trade activities slowed markedly (17.6% vs 24.6%), although this segment still represented 12.9% of total construction activity.

While the 0.1 percentage point rise is relatively small, it will be closely watched by investors and policymakers as they assess the resilience of Sweden’s job market amid evolving global and regional economic conditions. Market participants often view monthly labor data as an early indicator of shifts in domestic demand and business confidence.

The July reading, coming just one month after unemployment had eased to 6.4% in June, may signal emerging headwinds or seasonal effects, though further monthly data will be needed to determine whether this marks the beginning of a broader trend or a temporary pause in labor market improvements.

Additional downward pressure came from lower crude oil prices, following forecasts of softer global oil demand in 2026, which weighed on the broader edible oils complex. Malaysia also reduced its September crude palm oil reference price, though not sufficiently to bring the export duty below 10%.

Even so, a weaker ringgit helped limit losses by making Malaysian palm oil more competitive in international markets. Export prospects improved as well, with cargo surveyors estimating that Malaysian palm oil shipments increased between 2.6% and 14.8% in the first ten days of August. In key buyer India, expectations of stronger festive-season demand offered additional support, after the country’s edible oil imports in July rose to a ten-month high.

Even so, concerns over tightening supply continued to support prices amid expectations of constrained global mine output. Chilean state-owned producer Codelco is reportedly bracing for lower copper production this year after encountering setbacks at both operating mines and development projects. The company has scrapped its earlier target of producing 1.34 million metric tons in 2024, after revising last year’s output to 1.307 million tons.

At the same time, traders remained wary of possible US import tariffs on copper, which have been diverting metal away from international markets and into US warehouses, further influencing the global supply landscape.

The PBoC noted that capital-intensive sectors such as real estate and infrastructure have cooled, while emerging “new productive forces” tend to be more asset-light, thereby reducing traditional loan demand. The bank further emphasized that the ongoing global monetary policy recalibration does not amount to a “drastic U-turn,” cautioning that history shows rapid tightening following large-scale easing typically inflicts more severe shocks on financial markets.

Electronic technology stocks climbed 1.2%, after a 1.1% rise on Wednesday. Taiwan Semiconductor Manufacturing Company (TSMC) — the world’s largest contract chipmaker and a heavyweight that represents more than 40% of the market’s total capitalization — advanced 0.8%. Hon Hai Precision Industry jumped 2.7%, while Unimicron added 0.8%.

Foxconn Technology, the world’s largest contract electronics manufacturer, rose 0.5% after reporting a 35% year-on-year increase in second-quarter profit, beating analyst expectations, supported by persistently strong demand for AI-related products.

Sentiment was further buoyed by an upbeat session on Wall Street overnight, as easing inflation tempered expectations of an interest rate hike by the Federal Reserve at its upcoming policy meeting.

On monetary policy, respondents expect the Official Cash Rate (OCR) to increase to 2.73% by the end of the September quarter, up from 2.34%, and to climb further to 3.21% over the following year. The survey was conducted after the RBNZ’s monetary policy decision in May 2026.

The Q3 reading marks a continuation of the downward trend in expected inflation, with both the current and previous quarters showing moderating expectations compared with their respective prior periods. This movement keeps inflation expectations within a range broadly consistent with typical central bank target zones, suggesting that price outlooks are stabilizing after earlier periods of stronger inflation.

Analysts monitoring New Zealand’s macroeconomic backdrop will likely view the Q3 2026 figure as a sign that disinflation dynamics remain intact, potentially easing pressure on future policy tightening if the trend persists. The quarter-over-quarter comparison framework underscores that the softening in expectations is not a one-off shift, but part of an ongoing adjustment in the inflation outlook.

At the same time, producer prices in Japan continued to climb at an elevated pace in July, keeping cost pressures on businesses high. Producer inflation increased 7.2% year-on-year, easing only marginally from 7.3% in June, which had marked the fastest pace since March 2023.

The BOJ has recently attributed the rise in producer prices in part to higher oil costs following the conflict in the Middle East, as well as to increases in nonferrous metal and machinery prices driven by stronger global demand associated with the artificial intelligence boom. Tight labor market conditions have also sustained upward pressure on wages as firms compete to attract and retain workers.

At the same time, the USDA lowered its 2026 corn yield estimate to 180.7 bushels per acre from 183, undershooting market expectations of 182.4 bushels per acre and reflecting the impact of extreme heat and dryness in parts of the Midwest. Even so, higher planted area lifted projected production to 16.013 billion bushels, slightly above the previous forecast and reinforcing expectations for the second-largest crop on record.

Looking ahead, forecasts for cooler temperatures and ample rainfall in August and September could improve crop conditions and bolster yield prospects.

Elsewhere, U.S. stock futures were mixed after Wall Street ended mostly higher overnight, supported by softer inflation data that eased concerns over further Federal Reserve rate hikes. On the domestic front, losses were partly contained by reports that the government plans to reclaim a portion of state-owned enterprises’ dividends to build a fiscal buffer fund. Among notable laggards were ESSA Industries (-4.2%), Adaro Andalan (-2.8%), Merdeka Battery (-2.7%), and Sumber Alfaria Trijaya (-2.2%), reflecting selling pressure across sectors.

Even so, increased planted acreage lifted projected output by 44 million bushels to a record 4.519 billion bushels, up 6% from 2025 and surpassing the previous record set in 2021. The larger crop also pushed projected 2026/27 ending stocks up to 320 million bushels, from a prior estimate of 310 million.

Recent heat and dryness have offered some support to prices, but forecasts for cooler temperatures and ample rainfall in August and September could improve yield prospects. On the demand side, China provided fresh support, with the USDA confirming a sale of 244,000 metric tons of US soybeans for delivery in the 2026/27 marketing year.

Shipping disruptions have sharply reduced LNG flows from the Gulf, significantly delaying cargoes from major exporter Qatar and complicating Europe’s efforts to rebuild gas inventories ahead of winter. Analysts expect European gas prices to retain a solid floor until storage levels show more decisive signs of replenishment before the heating season begins. At the same time, intense summer heatwaves across Southern and Central Europe have boosted gas-fired power generation to meet soaring cooling demand, further diverting supplies away from storage.

In Hong Kong, however, gains were limited as investors continued to weigh weakness in technology shares and persistent geopolitical risks. The tech sector remained in focus as markets digested Tencent’s second-quarter earnings and monitored ongoing developments in China’s artificial-intelligence industry.

Performance among major technology names was mixed: Z.AI Co. rose 2.0%, MiniMax added 1.2% and SMIC climbed 2.0%, while Tencent fell 2.6% and AIA edged down 0.3%. Investors also kept a close eye on upcoming corporate earnings and further news from China’s technology sector.

He noted that while estimates of the nominal neutral interest rate are inherently uncertain, they nonetheless indicate that the current policy stance is restrictive. At the same time, overall financial conditions are being shaped by more than just the cash rate. The housing sector, for example, has softened by more than would be expected from interest rate increases alone, reinforcing the drag on activity. In contrast, robust global demand associated with AI-related investment and higher bond yields abroad could provide some offset.

Kent said the central bank will continue to assess these opposing forces as it refines its economic outlook and frames its future policy decisions.

The central bank left the cash rate unchanged at 4.35% this week, after a total of 75 basis points of increases since February. However, Governor Michele Bullock cautioned that policymakers remained concerned inflation might not ease as much or as quickly as hoped, and reiterated that they were prepared to raise rates again if necessary. Money markets are pricing in roughly a 75% probability of a hike to 4.60% by December, which investors largely view as the likely endpoint of the current tightening cycle. Focus now turns to Governor Bullock’s testimony before parliament on Friday.

On the domestic front, Japan’s producer prices rose 7.2% in July, slightly slower than June’s 7.3% increase and below market forecasts of 7.4%. Meanwhile, the Bank of Japan, in its summary of opinions from the July meeting, underscored mounting risks of faster inflation, with one policy board member indicating that the pace of interest rate hikes could be stepped up.

In China, focus remained squarely on Semiconductor Manufacturing International Corp., scheduled to report earnings later on Thursday, with net profit forecast to more than double from a year earlier. Within the sector, notable gainers included Cambricon Technologies (up 1.4%), SMIC (up 2%), Zhongji Innolight (up 3.8%), Eoptolink Technology (up 3.1%) and NAURA Technology (up 1.9%). By contrast, energy shares underperformed, with PetroChina (down 3.6%) and CNOOC (down 2.5%) among the weakest names.

The central bank kept its cash rate unchanged at 4.35% this week, following a cumulative 75-basis-point increase since February. However, Governor Michele Bullock cautioned that policymakers were still concerned inflation might not ease as much as hoped and signaled they were prepared to raise rates again if necessary. Markets are currently pricing in roughly a 75% probability of a further increase to 4.60% by December, which would likely mark the end of the tightening cycle. Investor focus now turns to Governor Bullock’s testimony before parliament scheduled for Friday.