A gauge of Asian stocks climbed as Chinese shares rebounded from the selloff sparked by nationwide unrest over Covid curbs. The dollar weakened against most major currencies as demand for haven assets eased.
(Bloomberg) — A gauge of Asian stocks climbed as Chinese shares rebounded from the selloff sparked by nationwide unrest over Covid curbs. The dollar weakened against most major currencies as demand for haven assets eased.
Hong Kong’s benchmark share index rose more than 3% and its mainland counterpart advanced about 2% after a heavy police presence in major cities deterred a repeat of the weekend’s demonstrations. Some investors speculated that the protests may hasten a shift away from Covid-Zero policies while others took heart from the lifting of a multi-year ban on share sales by builders.
Chinese government health officials were due to hold a briefing at 3 p.m. on the implementation of Covid prevention and control measures.
Stocks remained lower in Japan while those in Australia eked out small gains. US futures rose slightly after after the S&P 500 pared its monthly gain during the Wall Street session.
Fed Bank of St. Louis President James Bullard said markets may be underestimating the chances of higher rates. His New York counterpart John Williams noted policymakers have more work to do to curb inflation. Fed Vice Chair Lael Brainard said the string of supply shocks is keeping inflation risks elevated.
A gauge of the dollar fell following two days of gains. The Japanese yen rose, as did an index of emerging-markets currencies.
Treasuries were little changed. Benchmark government yields made small gains in Australia and New Zealand.
Elsewhere in markets, oil and gold both steadied.
Investors remained focused on developments in China Tuesday, and further ahead to Fed chief Jerome Powell’s speech Wednesday. Many economists expect he’ll cement bets that the Fed will slow its pace of rate increases next month — while reminding Americans that its fight against inflation will run into 2023.
“It’s a decent time to start considering sharpening your pencil and think about what is a good buy right now,” Terri Spath, founder and chief investment officer of Zuma Wealth Management, said on Bloomberg Television. She said that the coming slowdown in the US economy would be mild and that if there’s a shallow recession “we can actually see some bottoms in stocks.”
Stagflation is the key risk for the global economy in 2023, according to investors who said hopes of a rally in markets are premature following this year’s brutal selloff. Almost half of the 388 respondents to the latest MLIV Pulse survey said a scenario where growth continues to slow while inflation remains elevated will dominate globally next year.
Key events this week:
- Euro area economic confidence, consumer confidence, Tuesday
- US Conference Board consumer confidence, Tuesday
- EIA crude oil inventory report, Wednesday
- China PMI, Wednesday
- Fed Chair Jerome Powell speech, Wednesday
- Fed releases its Beige Book, Wednesday
- US wholesale inventories, GDP, Wednesday
- S&P Global PMIs, Thursday
- US construction spending, consumer income, initial jobless claims, ISM Manufacturing, Thursday
- BOJ’s Haruhiko Kuroda speaks, Thursday
- US unemployment, nonfarm payrolls, Friday
- ECB’s Christine Lagarde speaks, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.2% as of 12:11 p.m. Tokyo time. The S&P 500 fell 1.5%
- Nasdaq 100 futures rose 0.2%. The Nasdaq 100 fell 1.4%
- Japan’s Topix fell 0.6%
- Australia’s S&P/ASX 200 rose 0.1%
- The Hang Seng Index rose 3.5%
- The Shanghai Composite rose 1.9%
Currencies
- The Bloomberg Dollar Spot Index fell 0.3%
- The euro rose 0.2% to $1.0358
- The Japanese yen rose 0.2% to 138.72 per dollar
- The offshore yuan rose 0.6% to 7.2069 per dollar
- The Australian dollar rose 0.4% to $0.6676
Cryptocurrencies
- Bitcoin rose 0.4% to $16,266.03
- Ether rose 1% to $1,183.48
Bonds
- The yield on 10-year Treasuries advanced one basis point to 3.69%
- Australia’s 10-year yield advanced seven basis points to 3.58%
Commodities
- West Texas Intermediate crude rose 0.5% to $77.61 a barrel
- Spot gold rose 0.3% to $1,746.06 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rita Nazareth, Richard Henderson and Rik Stevens.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
