Stocks Set for Stable Asia Open;  Crude Oil Spikes: Market Overview

(Bloomberg) — Stocks looked poised for a solid start in Asia on Tuesday as investors appreciated China’s promise of accelerated stimulus and turned to support the yuan. The first OPEC+ supply cut in more than a year boosted crude.

Most Read by Bloomberg

Futures were little changed for Japan and rose for Australia and Hong Kong. U.S. futures rose ahead of the resumption of Wall Street trading after a holiday. European shares fell on the deepening energy crisis.

China announced on Monday a reduction in the amount of foreign currency deposits that banks must set aside as reserves, a move to support the national currency after it fell to a two-year low. The offshore yuan was little changed in early trade.

Officials also said they would accelerate the introduction of stimulus in the third quarter. Beijing is ramping up support for an economy weighed down by a Covid lockdown, slump in the property sector and power shortages.

Crude oil is trading around $89 a barrel after OPEC+ agreed to cut 100,000 bpd in October. The decision comes amid risks to demand from a wave of monetary tightening in the US, Europe and the Asia-Pacific region to combat high inflation.

The next rate hike is coming in Australia, where economists expect the central bank to raise the key rate by another 50 basis points. Tightening global financial conditions are putting pressure on stocks and bonds – the Asia-Pacific equity index is at its lowest level in more than two years – and fueling demand for the safe-haven dollar.

The dollar could find more support if “more negative headlines emerge regarding the energy crisis in Europe and/or the Covid situation in China,” Carol Kong, strategist at Commonwealth Bank of Australia, wrote in a note.

The dollar index eased but remains within sight of a record high. The pound rose as markets digested Liz Truss’ victory in the race to succeed Boris Johnson as UK prime minister. The euro also found some relief after falling to a two-decade low rocked by Europe’s energy woes.

Bitcoin moved below the $20,000 level and gold posted modest gains.

What to watch this week:

  • Interest rate decision in Australia, Tuesday

  • Apple event to unveil new iPhones, watches, Wednesday

  • Bank of England Governor Andrew Bailey at the Finance Committee on Wednesday

  • The Fed’s beige book on regional economic activity, Wednesday

  • Cleveland Federal Reserve President Loretta Mester is scheduled to speak on Wednesday

  • European Central Bank rate decision Thursday

  • Fed Chairman Jerome Powell speaks at a Cato Institute conference in Washington on Thursday

  • Reserve Bank of Australia Governor Philip Lowe spoke at the event Thursday

  • China PPI, Aggregate Funding, Money Supply, New RMB Loans, Friday

  • Emergency meeting of EU energy ministers on emergency intervention in electricity markets, Friday

Some of the major moves in the markets:

Stock up

  • S&P 500 futures were up 0.4 percent on Friday as of 7:28 a.m. in Tokyo. The S&P 500 fell 1.1% on Friday

  • Nasdaq 100 futures rose 0.4% from Friday Nasdaq 100 fell 1.4% on Friday

  • Nikkei 225 futures were little changed

  • S&P/ASX 200 futures rose 0.1%

  • Hang Seng futures added 0.3%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.1%

  • The euro was at $0.9946, up 0.2%

  • The Japanese yen was at 140.51 per dollar, up 0.1%

  • The offshore yuan was 6.9425 to the dollar

Bonds

Goods

  • West Texas Intermediate crude was at $89.09 a barrel, up 2.6%

  • Gold was at $1,711.84 an ounce, up 0.1%

Most Read by Bloomberg Businessweek

©2022 Bloomberg LP

Source link

Leave a Reply

Your email address will not be published.