Asian Stocks to Rise on China Policy; Dollar Gains: Markets Wrap

(Bloomberg) — Asian equities looked set to open higher on Monday with support from the biggest weekly advance in US stocks since June and China’s policy shifts on Covid and property.

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The dollar advanced after Federal Reserve Governor Christopher Waller said “we’ve still got a ways to go” before ending interest-rate hikes.

Shares climbed in Australia and futures pointed to gains in Hong Kong. Contracts for Japan indicated a modest pullback after a 3% surge in the Nikkei 225 on Friday. US futures declined.

A gauge of US-listed Chinese stocks soared more than 6% Friday after the easing of quarantine rules, intensifying bets that Beijing is shifting away from its stringent Covid Zero policy. Sweeping relaxation measures in the property sector over the weekend added to signs that President Xi Jinping is turning his attention on rescuing the economy.

The dollar’s gains Monday came after it slumped more than 1% on Friday and fell for a fourth straight week in its worst performance since 2020.

While Waller sees the hiking cycle continuing for some time, he said the Fed could start considering a downshift to a 50 basis-point move at the next meeting in December or the one after that.

The greenback had been easing amid signs of cooling in US inflation and the prospects of a dovish tilt by the Federal Reserve. The University of Michigan’s preliminary November survey on Friday showed US consumer inflation expectations increased in the short and long run while sentiment retreated.

That puts focus on Treasuries when they open Monday in Asia after cash trading was closed for Veterans Day on Friday.

Cryptocurrencies continued their selloff Monday amid FTX’s deepening woes. A swift plunge in value of FTX’s key crypto assets and unauthorized withdrawals of funds after it filed for bankruptcy suggests customers have little chance of recovering much of their deposits.

Investors will keep a wary eye on the Group of 20 summit in Indonesia, where US President Joe Biden and Chinese leader Xi are expected to meet. Biden’s hand has been strengthened by the Democrats defying political forecasts and historical trends to keep control of the Senate.

Key events this week:

  • US President Joe Biden plans to meet Chinese President Xi Jinping on the sidelines of the G-20, Monday

  • Fed’s John Williams moderates panel, Monday

  • China retail sales, industrial production, surveyed jobless, Tuesday

  • Former US President Donald Trump plans to make an announcement, Tuesday

  • US empire manufacturing, PPI, Tuesday

  • US business inventories, cross-border investment, retail sales, industrial production, Wednesday

  • Fed’s John Williams, Lael Brainard and SEC Chair Gary Gensler speak, Wednesday

  • ECB President Christine Lagarde speaks, Wednesday

  • Eurozone CPI, Thursday

  • US housing starts, initial jobless claims, Thursday

  • Fed’s Neel Kashkari, Loretta Mester speak, Thursday

  • US Conference Board leading index, existing home sales, Friday

Some of the main moves in markets:

Stocks

  • S&P 500 futures fell 0.4% as of 8:10 a.m. Tokyo time. The S&P 500 rose 0.9%

  • Nasdaq 100 futures fell 0.5%. The Nasdaq 100 rose 1.8%

  • Australia’s S&P/ASX 200 rose 0.5%

  • Nikkei 225 futures fell 0.5%

  • Hang Seng Index futures rose 1.1%

Currencies

  • The euro fell 0.3% to $1.0315

  • The Japanese yen fell 0.6% to 139.65 per dollar

  • The offshore yuan fell 0.2% to 7.1084 per dollar

  • The Australian dollar fell 0.4% to $0.6679

Cryptocurrencies

  • Bitcoin was little changed at $16,370.06

  • Ether rose 0.4% to $1,221.45

Bonds

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Source: https://finance.yahoo.com/news/stocks-set-rise-china-policy-221528666.html