Investors are embracing risk assets despite climbing global bond yields, with stocks and credit markets showing resilience. A stronger-than-expected US jobs report fueled bets the Fed will raise rates in September, pushing the dollar higher and weighing on the S&P 500. However, credit premiums remain subdued and downside protection across risky assets is still relatively cheap. JPMorgan notes sharply deteriorating liquidity in Treasuries but little comparable stress in stock-index futures or corporate-bond ETFs. Financial conditions remain easy, with credit spreads remarkably tight as companies' earnings grow over 20% year-on-year.

The ECB is expected to deliver a second interest-rate hike on Thursday, with focus on whether officials are open to a third step later in the year. US central bank watchers will examine producer and consumer price readings. Meanwhile, Donald Trump continues lobbying for a rate cut. In Europe, spiraling natural gas prices and political risks are accelerating yield rises, with French, Italian and UK longer-term borrowing costs hitting multi-year highs. Gas prices have surged over 120% since the Iran war began, fueling fears the ECB must keep lifting rates. Goldman Sachs strategist Timothy Moe maintains a bullish 12,000 target for South Korean Kospi shares, arguing investors underestimate the AI boost for memory chipmakers despite a 27% plunge from June record highs.