The final week of September 2024 saw markets grappling with several major developments, including escalating conflict in the Middle East, a surprise election result in Japan, and ongoing speculation about central bank rate cuts.

U.S. markets were mixed, with stocks bouncing back late in the week after some daily price fluctuations. The S&P 500 managed to eke out another record close. Treasury yields continued their upward climb, nearly touching 3.8% on the 10-year before pulling back slightly after comments from Fed Chair Jerome Powell. Powell reiterated that the Fed will be data-dependent in its rate cut decisions going forward.

In Japan, markets were jolted by the unexpected election of Shigeru Ishiba as leader of the LDP and Japan's new Prime Minister. Japanese equities sank 6% on the news, as Ishiba is seen as more hawkish and likely to support faster normalisation of Bank of Japan policy. However, in his first comments as PM, Ishiba suggested monetary policy still needs to remain accommodative for now. The yen strengthened nearly 2% on the leadership change.

China remained in focus as more details emerged about its stimulus plans. Talk of a massive 2-10 trillion yuan fiscal package boosted Chinese stocks, with the CSI 300 surging over 8% Monday for its largest daily gain in 16 years. Commodities like iron ore also rallied on the China news. However, some scepticism remains about how quickly the stimulus will translate into real economic impact.

In Europe, a batch of softer inflation prints, especially in Germany, increased expectations the European Central Bank will cut rates at its October meeting. The euro fell against the dollar. ECB President Christine Lagarde did not provide any new policy signals in her latest remarks.

Oil prices saw some volatility, initially rising on supply concerns related to conflict between Israel and Iran-backed groups in Lebanon and Yemen. However, prices fell back sharply later in the week on reports Saudi Arabia and Russia may abandon production cuts.

The week ahead brings a host of crucial economic data, most importantly the U.S. non-farm payrolls report Friday. After some mixed signals from Fed officials, the jobs numbers will be closely watched for clues on the Fed's next moves. Other key releases include global PMI data and inflation figures from the Eurozone.