Asian stock markets showed broad gains on Monday, aided by a holiday in Japan that reduced recent volatility. Investors are now focusing on significant upcoming economic data from the U.S. and China to assess global growth trends.

A crucial point for the Federal Reserve will be the U.S. consumer price data release on Wednesday. Economists predict a 0.2% rise in both the headline and core inflation figures, with the annual core inflation expected to slow to 3.2%. Analysts at Barclays noted that such figures could reinforce the Fed's belief in ongoing disinflation, potentially allowing for a rate cut in September. However, a core inflation rate still above the target might argue against a larger 50-basis-point cut or an intra-meeting cut.

Additionally, analysts expect a strong 0.8% month-on-month increase in headline retail sales, indicating continued consumer resilience driven by solid income and wealth fundamentals. Alongside July retail sales, data on industrial output, housing starts, and several regional manufacturing and consumer sentiment surveys are also anticipated.

Currently, the futures market reflects a 49% probability of the Fed implementing a 50-basis-point cut in September, a decrease from 100% a week prior when Japanese equities saw a significant drop. Nikkei futures were trading at 35,570 compared to a cash close of 35,025, though not yet fully recovered from last week's downturn. The MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.3%, driven by a 1.5% increase in Taiwan, while Chinese blue chips remained stable.

In Europe, EUROSTOXX 50 futures increased by 0.5% and FTSE futures by 0.4%. In the U.S., both S&P 500 and Nasdaq futures rose by 0.1% in light trading. So far, approximately 91% of the S&P 500 companies have reported earnings, with 78% surpassing expectations. This week, reports from Walmart and Home Depot will provide insights into the status of U.S. consumer health. China's retail sales and industrial production figures, due Thursday, are expected to highlight continued economic underperformance, emphasizing the need for additional stimulus.

In currency markets, the dollar rose 0.3% to 147.08 yen, recovering from last week's low of 141.68 yen, while the euro remained steady at $1.0919. Bank of America FX strategist Shusuke Yamada suggested that the rush to unwind yen carry trades, which involve borrowing at low rates to invest in higher-yield assets, is largely over, with speculative yen short positions having decreased by 60%. Yamada anticipates the dollar reaching 155.00 yen by the end of the year due to structural outflows from corporate foreign direct investment and retail ownership of international equities.

Data from the IMM exchange showed a reduction in net short positions in dollar/yen to 11,354, down from 184,000 in early July.

In commodity markets, gold held steady at $2,424 an ounce after a slight dip last week. Oil prices edged up following a 3.5% increase last week, fueled by concerns over potential supply disruptions due to escalating tensions in the Middle East. Israeli Defense Minister Yoav Gallant spoke with U.S. Defense Secretary Lloyd Austin, indicating that Iran's military activities suggest preparations for a large-scale attack on Israel. The Pentagon unusually disclosed that Austin had ordered the deployment of a nuclear-powered guided missile submarine to the Middle East. Brent crude gained 22 cents to $79.88 a barrel, while U.S. crude rose 38 cents to $77.22 per barrel.