(Bloomberg) — Chinese stocks fell as a cut in China’s reference interest rate for mortgages failed to erase the gloom surrounding the world’s No. 1 mortgage. 2 Economy. The dollar followed the rise in US yields.
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While mainland and Hong Kong stock prices fell, Japanese stock prices reversed their early gains. Standard values for Australia and South Korea have also fallen. Nasdaq 100 futures fell on Monday as U.S. markets were closed for the holiday.
The move in Chinese stocks came after domestic banks cut the key benchmark interest rate for mortgages to a record level, and China is stepping up support for the real estate sector as demand recovers. It shows. China’s development stock index initially soared, but quickly recouped most of its gains.
Willer Chen, an analyst at Forsyth Barr Asia, said the five-year loan prime rate cut was “a good move by commercial banks, but the real estate issue is still not about mortgage rates.” Demand for real estate will increase, but we cannot expect much. ”
Chinese stocks’ gains on Monday fell short of expectations in the first trading session after the Lunar New Year holiday. Increased trading volumes in several domestic exchange-traded funds (ETFs) provided a clue that government-backed funds continue to support the market.
After the S&P 500 set a new record last week, global stock indexes are down about 1% from their all-time highs, while the region-wide Euro Stoxx 50 index remains near a 20-year high. Further gains in Japanese stocks have brought the Nikkei Stock Average to within about 1% of its 1989 peak.
The Thai baht fell after Prime Minister Sureta Thavisin called for an unscheduled central bank meeting to cut interest rates. The dollar rose against the Group of Ten (G10) countries. U.S. Treasury yields rose as trading resumed in Asian time after markets closed on Monday.
In Australia, BHP Group, the world’s largest mining company, reported underlying profits of $6.57 billion, below consensus expectations, and despite a weak housing market, demand from top customer China He said it was healthy.
In other corporate news, Capital One Financial Corp. has agreed to acquire Discover Financial Services in a $35 billion all-stock deal, creating the largest U.S. credit card company by loan value.
interest rate cut adjustment
Interest rate expectations remain firmly in focus. Swap trades currently price in about 90 basis points (bp) of the Federal Reserve’s rate cut in 2024, up from more than 150 basis points in early February. In Europe, the stake was reduced from 150 basis points to about 100 basis points.
“The market is adjusting to the idea that rate cuts are on the back burner and are probably less important than the initial price,” Vincent Jubins, global market strategist at JPMorgan Asset Management, said on Bloomberg TV. The increase was “driven by the decent revenue growth we saw in the fourth quarter,” he added.
As investors try to gauge the strength of the global economy, Wednesday’s gains from flag-bearer Nvidia could provide fresh impetus to stocks. The semiconductor giant has surpassed Amazon.com Inc.’s market capitalization on hopes that it will be a big winner in the development of artificial intelligence.
Other potential catalysts for markets this week include the Fed’s January meeting minutes to be released on Wednesday and euro zone inflation data to be released on Thursday.
Elsewhere, gold was little changed after rising slightly on Monday to trade around $2,018 an ounce. West Texas Intermediate crude oil prices rose slightly due to continued tensions in the Red Sea, a key trade route.
Some of this week’s main events:
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Reserve Bank of Australia February Meeting Minutes, Tuesday
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China loan prime rate Tuesday
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BHP Group Ltd. Tuesday’s earnings
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The European Central Bank releases an indicator of euro area bargained wage rates on Tuesday
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Rio Tinto Plc earnings, Wednesday
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Eurozone consumer confidence Wednesday
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Nvidia Corp Wednesday’s earnings
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US Federal Reserve Board (FRB) January Meeting Minutes, Wednesday
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Atlanta Fed President Rafael Bostic speaks Wednesday
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Eurozone CPI, PMI, Thursday
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European Central Bank publishes report of January 25 meeting on Thursday
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Fed President Lisa Cook and Minneapolis Fed President Neel Kashkar speak on Thursday
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Chinese real estate prices Friday
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European Central Bank Board Member Isabel Schnabel speaks on Friday
The main movements in the market are:
stock
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S&P 500 futures were down 0.3% as of 12:28 p.m. Tokyo time.
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Nasdaq 100 futures fell 0.4%
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Japan’s TOPIX fell 0.2%
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Australia’s S&P/ASX 200 falls 0.2%
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Hong Kong’s Hang Seng fell 0.2%.
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Shanghai Composite: Almost no change
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Euro Stoxx50 futures fall 0.3%
currency
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Bloomberg Dollar Spot Index little changed
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The euro fell 0.1% to $1.0767.
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The Japanese yen fell 0.1% to 150.29 yen to the dollar.
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The offshore yuan was little changed at 7.2078 yuan to the dollar.
cryptocurrency
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Bitcoin fell 0.5% to $51,660.1.
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Ether fell 1.7% to $2,918.18.
bond
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The 10-year Treasury yield rose 2 basis points to 4.30%.
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Japan’s 10-year bond yield rose 1 basis point to 0.740%.
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The Australian 10-year bond yield rose one basis point to 4.18%.
merchandise
This article was produced in partnership with Bloomberg Automation.
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