Stocks in Asia fluctuated following signs China would further relax its Covid restrictions, while Treasuries flashed warning signs of recession. The dollar strengthened in an indication of demand for havens.
(Bloomberg) — Stocks in Asia fluctuated following signs China would further relax its Covid restrictions, while Treasuries flashed warning signs of recession. The dollar strengthened in an indication of demand for havens.
Equities in Japan, Australia and South Korea dropped, along with futures for US and European benchmarks. Stocks in Hong Kong rose after media reports that mask-wearing requirements would be scrapped. Shares in mainland China seesawed.
The dollar resumed gains after a small decline Wednesday. The offshore yuan held below the 7 level to the greenback as investors continued to balance China easing Covid restrictions and a dimming outlook for the global economy.
Bonds rose in Australia, with the 10-year yield falling 3 basis points to 3.33%. Treasury yields of the same maturity rose after a sharp decline in the prior session.
Read: Bruising Stock Reversal Shows How Fed’s Pivot May Come Too Late
Chinese regulators asked the nation’s biggest insurers to buy bonds being offloaded as retail customers pull their cash from fixed-income investments, according to people familiar with the matter.
Iris Pang, chief economist for Greater China at ING Groep NV, said China’s economy would face further strain next year despite relaxed Covid restrictions.
“The manufacturing sector in 2023 is not going to look good because of the very weak export sector and a likely recession in the US and Europe,” she said in an interview with Bloomberg Television. “We can’t be too optimistic for retail sales to boost growth in 2023. It may happen in the second half but not in the first half.”
Elsewhere in markets, oil rose after a four-day drop as investors weighed the impact of China’s moves to ease virus curbs against a looming US slowdown.
Gold was little changed after rising 0.9% in the previous session on weakness in Treasury yields, with traders looking to Friday’s US producer price report to gauge the Federal Reserve’s next monetary policy moves.
Key events this week:
- ECB President Christine Lagarde speaks, Thursday
- US initial jobless claims, Thursday
- China PPI, aggregate financing, money supply, new yuan loans, Friday
- US PPI, wholesale inventories, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 fell 0.1% as of 12:16 p.m. Tokyo time. The S&P 500 fell 0.2%
- Nasdaq 100 futures fell 0.2%. The Nasdaq 100 fell 0.5%
- The Topix Index fell 0.7%
- The S&P/ASX 200 Index fell 0.6%
- The Hang Seng Index rose 2.7%
- The Shanghai Composite Index was little changed
- Euro Stoxx 50 futures fell 0.3%
Currencies
- The Bloomberg Dollar Spot Index rose 0.2%
- The euro was little changed at $1.0502
- The Japanese yen fell 0.1% to 136.82 per dollar
- The offshore yuan fell 0.2% to 6.9770 per dollar
Cryptocurrencies
- Bitcoin was little changed at $16,839.01
- Ether rose 0.2% to $1,233.97
Bonds
- The yield on 10-year Treasuries advanced three basis points to 3.45%
- Australia’s 10-year yield declined three basis points to 3.33%
Commodities
- West Texas Intermediate crude rose 1% to $72.72 a barrel
- Spot gold fell 0.2% to $1,782.98 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rita Nazareth and Stephen Kirkland.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
