Global stock markets were close to historical highs on Monday, but due to concerns surrounding China's economic growth and the potential political deadlock in France, investors were slightly cautious. This weakened optimism that the Fed would cut interest rates as early as September. On the product side, the operating income of 10-30 billion yuan products were respectively 401/1288/60 million yuan, with overall sales volume of 18,000 kiloliters, a year-on-year increase of +28.10%.

France's general election unexpectedly went to a second round.

European benchmark Stoxx Europe 600 index rose 0.4% as European stocks rose and early nervousness about the French election results subsided somewhat, with investors hopeful that political figures could form a moderate coalition to stem the far right. The euro regained lost ground.

Over the weekend, a left-wing alliance unexpectedly won the parliamentary elections, with the French New People's Front, including the Socialist Party, coming in first but failing to win enough seats to form a government. This could limit the influence of both the left-wing alliance and the National League party led by Marine Le Pen, both of which advocate increased public spending.

"Of course, this is a big surprise, but when you look at the market reaction today, it's been flat. The National League doesn't have a clear majority, and the far left doesn't either," said Nicolas Forest, chief investment officer at Candriam, in an interview with Bloomberg Television. He said that if President Macron "were to find a new alliance between the center and center-left, it wouldn't be noteworthy."

The most significant group will be the left-wing alliance, including the far-left group France Unbowed, which won 178 of the 577 seats in the National Assembly but still fell far short of the 289 seats needed for an outright majority. Macron's party came in second, and Le Pen's party was third.

Investors had been concerned that the far right might take over France after President Macron suffered a heavy defeat in last month's European parliamentary elections.

"The uncertainly surrounding the election has decreased, as neither the left nor the far right has obtained an absolute majority, and the prospect of significantly increasing public spending has decreased," said Bruno Schneller, managing director at Erlen Capital Management. "Nevertheless, political risk premiums may persist, and the market rebound is likely to be short-lived."

The spread between French and German government bonds held by investors narrowed to about 70 basis points, lower than last month's worst level, indicating a sign that panic has subsided.

"French government bonds are currently not attractive," Schneller said. He added that France's sovereign credit outlook is deteriorating due to high and rising debt ratios, large fiscal deficits and rising financing costs.

Important decisions announced by the People's Bank of China

Earlier in Asia, Chinese bond yields rose as the central bank launched new currency market operations to increase market liquidity. The People's Bank of China said that, in addition to traditional morning operations, temporary operations would be conducted during the afternoon session to enhance the precision and effectiveness of open market operations.

The People's Bank of China announced on its official website on Monday (July 8) that, in order to maintain the reasonable and abundant liquidity of the banking system, and to improve the precision and effectiveness of open market operations, the People's Bank of China will conduct temporary positive or reverse repurchase operations, depending on the situation. The time will be from 4pm to 4:20pm on working days, with an overnight maturity.

PBOC Governor Pan Gongsheng proposed during the Lujiazui forum on June 19th that short-term operating rates of the central bank may be explicitly designated as the key policy rate in the future. Naval reverse repo operation rates have basically assumed this role. Besides the need for explicit policy rates, it may also be necessary to appropriately narrow the interest rate corridor.

Mainland China and Hong Kong stocks closed lower, with major indices falling for the fifth consecutive trading day, amid disappointment among investors over weak economic recoveries, geopolitical tensions and capital outflows.

Markets are paying attention to Powell and CPI.

On the other side of the Atlantic, US equity index futures stabilized. Standard & Poor's 500 index futures and Nasdaq futures were both nearly unchanged. Later this week, Citigroup, JPMorgan and Wells Fargo will release their earnings, marking the start of the earnings season.

Investor confidence that the Fed will cut interest rates in September increased after Friday's employment report, with futures markets now indicating a 77 percent probability of a rate cut. The market is also forecasting a 53 basis point rate cut this year, up from about 40 basis points a month ago.

"Due to downward revision, three-month employment growth fell sharply to +177k, previously reported at +249k," wrote Goldman Sachs analyst, "We continue to anticipate that the Federal Reserve Board (FOMC) will cut interest rates for the first time in September, followed by quarterly rate cuts. Fed funds rates are expected to reach 3.25-3.5% over time."

US Treasuries had a slow start this week as traders prepared for Federal Reserve Chairman Jerome Powell's congressional testimony and US inflation data. Thursday's US Consumer Price Report is the focus, with overall inflation expected to drop from 3.3% to 3.1% and core inflation to remain at 3.4%. Inflation data for Germany will be released on the same day, while China will release consumer price and trade data this week.

Boeing has agreed to plead guilty to one count of conspiracy to commit fraud in another corporate news. The charge stems from investigations into two fatal Boeing 737 MAX crashes after the Department of Justice found that Boeing failed to comply with an earlier settlement over the crashes of its 737 Max jetliner.

Meanwhile, US President Joe Biden continues to salvage his beleaguered re-election campaign and fend off calls from Democratic lawmakers to step down. Despite disappointing reviews of his debate performances by voters, he achieved his best score to date in a battleground state tracker poll conducted by Bloomberg News.

Bitcoin and other cryptocurrencies fell together due to concerns that creditors of the collapsed Mt. Gox exchange might sell tokens.

In China, the central bank is attempting to strengthen its control over market rates by announcing more open market operations and tightening the range of short-term rates.

In commodities, oil prices edged lower after four straight weeks of gains, despite traders tracking a double threat to crude production from US hurricanes and Canadian wildfires.

Gold prices fell 0.8%, testing $2,370, from their recent high of nearly a month, and iron ore continued its decline since its one month high.