Global stocks rise as China recovers;  Dollar Falls: Markets Overview

(Bloomberg) — Global shares advanced, led by a rebound in Chinese stocks as domestic unrest over Covid containment eased. The dollar and government bonds fell amid improved risk-on sentiment.

Most Read by Bloomberg

Shares rose in Hong Kong and on the mainland as some investors speculated that the protests could accelerate a shift away from Covid-Zero policies. Chinese government health officials were scheduled to hold a briefing at 3 p.m. on the implementation of virus prevention and control measures.

“There is growing speculation that there will be an imminent announcement of the end of the Covid-Zero policy and this is driving positive sentiment,” said Kiyong Seong, chief Asia macro strategist at Societe Generale SA in Hong Kong. “Markets will remain volatile as investors evaluate any change in policy.”

Traders were also encouraged by the lifting of China’s long-standing ban on the sale of shares by builders. U.S. futures rose after the S&P 500 pared its monthly gain during the Wall Street session.

Investors continue to analyze comments from Federal Reserve officials, such as the president of the Fed Bank of St. Louis James Bullard warned that markets may be underestimating the chances of higher interest rates. His counterpart in New York, John Williams, noted that policymakers need to do more to curb inflation, and Fed Vice Chairman Lael Brainard said a series of supply shocks kept inflation risks high.

One gauge of the dollar fell after two days of gains. The Japanese yen rose, as did an index of emerging market currencies.

Global bonds joined their U.S. counterparts in signaling a recession as the gauge measuring the global yield curve inverted for the first time in at least two decades. Treasury bond yields saw modest increases across the curve, while government bond yields also rose in Australia and New Zealand.

Elsewhere, oil continued its recovery from its lowest level in nearly a year on speculation that the Organization of the Petroleum Exporting Countries and its allies would deepen supply cuts to respond to weakening global demand.

Investors remained focused on developments in China on Tuesday and further on Fed chief Jerome Powell’s speech on Wednesday. Many economists expect him to reinforce bets that the Fed will slow the pace of rate hikes next month — while reminding Americans that its fight against inflation will continue into 2023.

“It’s a good time to start thinking about sharpening your pencil and thinking about what’s a good buy right now,” Terry Spath, founder and chief investment officer of Zuma Wealth Management, said on Bloomberg Television. She said the coming slowdown in the U.S. economy would be mild and that if there was a shallow recession, “we could actually see some bottoms in stocks.”

Stagflation is the main risk to the global economy in 2023, according to investors who said hopes of a market rally are premature after a brutal sell-off this year. Almost half of the 388 respondents to the latest MLIV Pulse survey said a scenario in which growth continues to slow while inflation remains high will dominate globally next year.

Key events this week:

  • Eurozone Economic Confidence, Consumer Confidence, Tuesday
  • US Conference Board Consumer Confidence, Tuesday
  • EIA crude oil inventories report, Wednesday
  • China PMI, Wednesday
  • Speech by Fed Chairman Jerome Powell, Wednesday
  • The Fed releases its Beige Book on 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 spoke Thursday
  • US unemployment, non-farm payrolls, Friday
  • Christine Lagarde of the ECB speaks, Friday

Some of the major moves in the markets:

Stock up

  • S&P 500 futures were up 0.3% as of 1:17 p.m. Tokyo time. S&P 500 down 1.5%
  • Nasdaq 100 futures rose 0.4%. Nasdaq 100 down 1.4%
  • Euro Stoxx 50 futures were little changed
  • Topix in Japan fell 0.7%
  • Australia’s S&P/ASX 200 rose 0.2%
  • The Hang Seng rose 3.9%
  • Shanghai Composite rose 2.2%


  • The Bloomberg Dollar Spot Index fell 0.4%
  • The euro rose 0.4% to $1.0379
  • The Japanese yen rose 0.2% to 138.66 per dollar
  • The offshore yuan rose 0.9 percent to 7.1841 per dollar
  • The Australian dollar rose 0.8% to $0.6702


  • Bitcoin rose 0.7% to $16,309.75
  • Ether rose 1.2% to $1,186.45



  • West Texas Intermediate crude rose 1.6% to $78.45 a barrel
  • Spot gold rose 0.5% to $1,750.85 an ounce

This story was created using Bloomberg Automation.

–With help from Rita Nazareth, Richard Henderson and Rick Stevens.

Most Read by Bloomberg Businessweek

©2022 Bloomberg LP

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *