➤ Trump renews pressure on Fed to cut rates.
➤ Treasury, Bund yields fall.
➤ Italy's political turmoil continues.
➤ EU's Tusk says UK's Johnson's letter lacked "realistic alternatives" to the Irish backstop.
U.S. stock futures rose, alongside European shares, amid expectations for monetary and fiscal stimulus in the backdrop of a global slowdown.
Futures pointed to a higher opening for Wall Street as of 6:30 a.m. ET. European shares were trading higher, with the FTSE 100 adding 0.5% and France's CAC 40 rising 0.3%.
U.S. President Donald Trump renewed pressure on the Federal Reserve to cut rates as recession talks have grown louder after the latest U.S. yield curve inversion. Trump called on the Fed to lower rates by at least 100 basis points and possibly launch quantitative easing.
Yield curve inversions have historically been followed by recessions several months later, though a downturn has not occurred in every instance.
Nearly three-quarters of economists surveyed by the National Association for Business Economics said the U.S. will have entered a recession by 2021, with 38% of respondents stating that will happen by 2020 and 34% predicting 2021.
"We believe that recession fears are overdone," said Mark Haefele, global chief investment officer at UBS. "But investors should prepare for a more sustained period of lower interest rates."
There are reports about White House officials considering a temporary payroll tax cut to help the economy.
Separately, Boston Fed President Eric Rosengren said the U.S. central bank does not need to ease policy at the moment since the economy is still in "pretty good" shape.
However, Danske Bank Research wrote that the U.S. economic health required the Fed to deliver cuts over the next six months without committing to more easing.
The minutes of the Fed's last meeting will be released Aug. 21. Fed chair Jerome Powell is due to speak at the annual Jackson Hole conference Aug. 23.
In Asia, Japan's Nikkei 225 index rose 0.6% and South Korea's Kospi index climbed 1.1% as Japan reportedly approved the sale of advanced technology resources to South Korea, tempering its prior decisions to impose strict export controls, ahead of scheduled talks to soothe trade tensions.
The Shanghai SE Composite dropped 0.1% while Hong Kong's Hang Seng index fell 0.2%.
Sterling dipped 0.3% against the dollar as the European Council's Donald Tusk said U.K. Prime Minister Boris Johnson's letter lacked "realistic alternatives" to the Irish backstop plan. Johnson had urged Tusk to replace the Irish backstop plan in the existing Brexit deal with a pledge to introduce "alternative arrangements." Johnson hoped that would push negotiations forward and help avoid a disorderly departure from the EU.
The euro was little changed while the Japanese yen appreciated 0.3% versus the dollar.
The Chinese yuan weakened 0.2% against the dollar as the People's Bank of China set its first market-driven reference lending rate, effectively slashing companies' borrowing costs amid threats of an economic slowdown.
In the debt market, Treasurys edged higher as 10-year yields lost 4 basis points to 1.570%.
Italian bonds stayed under pressure amid elevated political uncertainty, with 10-year yields gaining 6 basis points, as Prime Minister Giuseppe Conte is due to speak before the Senate later in the day which could lead to a vote of no-confidence in him. If Conte loses the vote, President Sergio Mattarella could call for snap elections or seek a new cross-party alliance.
Yields on German Bunds with the same maturity also fell amid reports that the government was preparing a stimulus plan to boost the domestic economy and consumer spending and prevent large-scale unemployment in the case of a deep recession. The Deutsche Bundesbank warned that the German economy could weaken into a recession in the third quarter.
Among commodities, Brent crude oil was little changed while gold fell 0.2%.
More from S&P Global Market Intelligence:
August retail market: Retail sales jump; 5 companies go bankrupt
As China's loan growth slows again, analysts urge more stimulus from government
Analysts: AMS-Osram marriage could lead to closer relationship with Apple
Big tech fights back against French digital services tax
BHP CEO confident miner will thrive amid trade war and rising nationalism
The day ahead:
8:30 a.m. ET — Canada manufacturing sales (Econoday consensus: -1.9% monthly)
8:55 a.m. ET — U.S. redbook
4:30 p.m. ET — U.S. Fed's Mary Daly speaks
6 p.m. ET — U.S. Fed's Randal Quarles speaks
