(Bloomberg) — Asian stocks rose and gold hit a record high on hopes that China, the world's second-largest economy, will roll out more stimulus to fuel its economic recovery as the United States begins a cycle of monetary easing.
Most read articles on Bloomberg
The MSCI Asia Pacific index rose as shares in China, Hong Kong and South Korea rose. U.S. stock futures also rose.China cut one of its short-term policy rates on Tuesday while announcing plans for an unprecedented economic update from its three biggest financial regulators, sparking speculation that new stimulus measures are on the way.
Traders are hoping for new measures to revive Chinese growth and jump-start the global economy. A flurry of Chinese data on Friday added to the gloomy outlook, while U.S. data due later this week will give investors new insight into the pace and scope of further monetary easing by the Federal Reserve.
“A little bit more policy support would definitely help the Chinese stock market,” said Ken Wong, an Asian equity portfolio specialist at Eastspring Investments in Hong Kong. “Ultimately, getting consumers to spend and building that confidence will be key in China.”
The yen weakened after Bank of Japan Governor Kazuo Ueda suggested on Friday that authorities were in no rush to raise interest rates again. Spot trading of U.S. Treasuries was suspended in Asia due to a public holiday in Japan.
The Australian dollar benchmark was little changed and Australian government bonds fell after house prices weighed on inflation and expectations the central bank is likely to extend its policy pause on Tuesday.
This week the Swedish and Swiss central banks are due to hold monetary policy decisions and a host of Bundesbank speakers are due to speak, including regional presidents Raphael Bostic and Austen Goolsby. The Fed's preferred inflation measures, as well as data on U.S. personal consumption and income, are also due to be released.
Federal Reserve Governor Christopher Waller said on Friday he would likely support cutting interest rates by a quarter of a percentage point at each of the central bank's next two policy meetings, in November and December.
“What the market will probably be watching here is a very delicate balance in the data, where disinflation continues unimpeded but employment doesn't deteriorate too sharply,” Vishnu Varathan, head of economic strategy at Mizuho Bank, told Bloomberg TV.
Oil prices rose for a second straight week as attention shifted to the escalating conflict between Israel and Hezbollah. Any worsening Middle East conflict could spur further gains in safe-haven gold prices.
Meanwhile, the U.S. Commerce Department is said to be planning rules as early as Monday to ban Chinese- and Russian-made hardware and software for connected cars.Meanwhile, Sri Lankan dollar-denominated government bonds fell after the victory of left-wing candidate Anura Kumara Dissanayake in the presidential election put the country's International Monetary Fund bailout and debt deals at risk.
Meanwhile in Europe, French Prime Minister Michel Barnier said the new government may raise taxes on big corporations and the wealthy to fix soaring budget deficits and maintain confidence in bond markets. Chancellor Olaf Scholz's Social Democrats are likely to hold onto power in the eastern state of Brandenburg against the far-right Alternative for Germany, helping to avoid another embarrassing election defeat for him and his party.
Major events this week:
-
Malaysia CPI, Monday
-
Eurozone HCOB Manufacturing PMI, HCOB Services PMI, Monday
-
UK S&P Global Manufacturing PMI, S&P Global Services PMI, Monday
-
Australian interest rate decision, Tuesday
-
Nippon Jibun Bank Manufacturing PMI, Services PMI, Tuesday
-
Mexican CPI, Tuesday
-
Bank of Canada Governor Tiff Macklem speaks Tuesday
-
Australian Consumer Price Index, Wednesday
-
China medium-term lending rate, Wednesday
-
Sweden's interest rate decision Wednesday
-
Swiss interest rate decision on Thursday
-
ECB President Christine Lagarde to speak on Thursday
-
US jobless claims, durable goods and GDP revised Thursday
-
Federal Reserve Chairman Jerome Powell delivered a pre-recorded speech at the 10th U.S. Treasury Market Conference on Thursday.
-
Mexico interest rate decision Thursday
-
Japan Tokyo Consumer Price Index, Friday
-
China industrial profits, Friday
-
Eurozone consumer confidence on Friday
-
US PCE, University of Michigan Consumer Confidence, Friday
Some of the key market developments:
stock
-
S&P 500 futures were up 0.1% as of 9:04 a.m. Tokyo time.
-
Hang Seng futures fell 0.5%
-
Australia's S&P/ASX 200 fell 0.4%
-
Euro Stoxx 50 futures fell 1.4%
currency
-
The Bloomberg Dollar Spot Index was little changed.
-
The euro was little changed at $1.1160
-
The Japanese yen weakened 0.2% to 144.11 to the dollar.
-
The offshore yuan was little changed at 7.0464 yuan per dollar.
Cryptocurrency
-
Bitcoin rose 0.4% to $63,461.17.
-
Ether rose 0.2% to $2,578.54.
Bonds
merchandise
This story was produced with assistance from Bloomberg Automation.
–With assistance from Anand Krishnamoorthy.
Most read articles on Bloomberg Businessweek
©2024 Bloomberg LP
