Chinese stock markets experienced a notable uptick following a fiscal briefing over the weekend in which the Finance Ministry reaffirmed its commitment to providing more assistance to the beleaguered property sector. In a clear signal of intent, there was also an indication that the government may increase borrowing to bolster the economy.
On this day, Chinese equities surged, alongside gains in South Korea and Australia, while Japan’s markets were closed for a public holiday. However, shares in Hong Kong faced a downturn. Concurrently, the Chinese yuan lost value against the US dollar, reflecting a trend that similarly affected the Australian and New Zealand dollars. US stock futures also exhibited a slight decline.
Investors are eagerly awaiting China’s forthcoming policy briefings, particularly from the Communist Party-controlled parliament which oversees budgetary matters. These sessions are expected to unveil further stimulus measures. A broad array of initiatives released in late September previously catalyzed a significant rally in Chinese markets.
Economist Erin Xin from HSBC Holdings highlighted that Beijing has demonstrated increased urgency and determination to meet its economic targets for the year. With expectations of a comprehensive fiscal package potentially reaching several trillion RMB, the timing of these forthcoming announcements holds weight for market participants.
On Friday, prior to the fiscal briefing, investors had been cautiously anticipating additional government intervention to sustain the momentum generated by the previous stimulus. The CSI 300 Index, which tracks onshore equities, recorded its most substantial weekly drop since late July. Meanwhile, correlated assets such as the Australian and New Zealand dollars faced a similar downward trajectory.
Carlos Casanova, an economist with Union Bancaire Privee, commented on the need for investors to remain patient concerning the scale of the impending financial support, suggesting that more concrete details might surface by the end of the month. Nonetheless, he expressed skepticism about policy makers adopting a “whatever-it-takes” approach to revitalize the economy.
In the United States, the S&P 500 index reached above 5,800 on Friday, marking a milestone with its 45th record in 2024, pushed higher by strong performances from major banks following an unexpected rise in net interest income reported by JPMorgan Chase & Co.
The US dollar gained ground, buoyed by a two-week trend of strengthening and as traders adjusted their forecasts concerning the pace of Federal Reserve interest rate reductions. The Treasury yield curve steepened for the second consecutive day, with the two-year note yielding 3.96% and the 10-year bond rising by four basis points to 4.1%. In Asia, cash Treasuries remained closed due to Japan’s holiday.
This week will be pivotal, with key data releases expected from China, including growth rates and retail sales figures, as well as inflation data in New Zealand, Canada, and the UK. Central banks in Thailand, the Philippines, and Indonesia will also convene to make policy decisions, with the European Central Bank’s meeting coming later.
Upcoming significant events this week include:
– China’s trade balance on Monday
– Indian CPI figures on Monday
– UK unemployment and earnings data on Tuesday
– Eurozone industrial production figures on Tuesday
– Canada’s CPI release on Tuesday
– Earnings announcements from Goldman Sachs, Bank of America, and Citigroup on Tuesday
– An interview with Donald Trump by Bloomberg’s editor-en-chief at the Economic Club of Chicago on Tuesday
– New Zealand CPI on Wednesday
– Interest rate decisions from central banks in Thailand, the Philippines, and Indonesia on Wednesday
– UK inflation data on Wednesday
– Earnings reports from ASML and Morgan Stanley on Wednesday
– Australia’s unemployment figures on Thursday
– Eurozone inflation and ECB rate decision on Thursday
– US retail sales and jobless claims on Thursday
– Earnings from TSMC and Netflix on Thursday
– Japanese CPI on Friday
– China’s GDP, retail sales, industrial production, and home price data on Friday
– UK retail sales figures on Friday
Market movements have varied widely:
– S&P 500 futures remained stable as the Tokyo session progressed.
– Nikkei 225 futures showed little change.
– Australia’s S&P/ASX 200 rose by 0.4%.
– Hong Kong’s Hang Seng index fell by 0.7%.
– The Shanghai Composite Index showed a 0.6% increase.
In currency movements:
– The Bloomberg Dollar Spot Index climbed by 0.1%.
– The Euro dipped 0.1% to $1.0924.
– The Japanese Yen remained stable at 149.17 per dollar.
– The offshore yuan decreased by 0.2% reaching 7.0868 per dollar.
In the cryptocurrency arena, Bitcoin saw minimal fluctuations, remaining around $62,716.13, while Ether stood near $2,458.17.
In bond markets, the yield on 10-year Treasuries held steady at 4.10%, while Australia’s 10-year yield rose by four basis points to 4.26%.
In commodities, West Texas Intermediate crude oil decreased by 1.5% to $74.42 a barrel, and spot gold fell 0.4% to $2,646.23 an ounce.
This story incorporates insights provided by Bloomberg Automation, underscoring dynamic shifts across global financial landscapes and emphasizing the importance of upcoming economic indicators for market stakeholders.