Stocks par weekly loss on China reopening rally: Markets overview

(Bloomberg) — Global shares pared a weekly loss as Chinese stocks rallied on signs that authorities are trying harder to ease the impact of their Covid-Zero policy.

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Miners led gains in Europe as commodities rose. Hong Kong’s Hang Seng index was set for its biggest weekly jump since 2011, and U.S. futures advanced, with Nasdaq 100 technology contracts up 0.4 percent.

Investors were encouraged by news that U.S. auditors were ahead of schedule in on-site inspections of Chinese companies and that a system penalizing airlines for bringing virus cases into the country could be rolled back.

Treasuries were little changed ahead of US payrolls data in the US session. A key segment of the curve on Thursday reached an extreme inversion not seen since the 1980s. Such curve inversions have a history of previous economic downturns.

Swaps that refer to future Federal Reserve meetings show an expected peak interest rate above 5.14% around mid-2023.

The dollar weakened while the offshore yuan advanced.

While similar gains in Chinese stocks have fizzled in recent months, bulls are now betting that some of the world’s lowest valuations have left the nation’s stocks poised to jump at any hint of good news.

“What we’re suggesting is that China in the future will model the reopening on the back of Hong Kong,” Jack Siu, chief investment officer for Greater China at Credit Suisse Group AG, said on Bloomberg Television. “We’re still at least nine months away from today to reopen.”

Elsewhere, European gas and electricity prices jumped after Electricite de France SA issued another warning about its troubled nuclear fleet, increasing pressure on the region’s limited energy supplies this winter.

Key events this week:

Some of the major moves in the markets:

Stock up

  • The Stoxx Europe 600 was up 0.6 percent at 8:02 a.m. London time

  • S&P 500 futures rose 0.3%

  • Nasdaq 100 futures rose 0.4%

  • Dow Jones Industrial Average futures rose 0.2%

  • MSCI Asia Pacific Index fell 1.6%

  • MSCI Emerging Markets index fell 1.4%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.3%

  • The euro rose 0.2% to $0.9771

  • The Japanese yen rose 0.3% to 147.81 per dollar

  • The offshore yuan rose 0.8% to 7.2734 per dollar

  • The British pound rose 0.5% to $1.1212

Cryptocurrencies

  • Bitcoin rose 1.9% to $20,617.4

  • Ether rose 3% to $1,586.63

Bonds

  • The 10-year Treasury yield was little changed at 4.15%

  • Germany’s 10-year bond yield fell one basis point to 2.24%

  • Britain’s 10-year bond yield fell one basis point to 3.51%

Goods

  • Brent crude rose 1.8% to $96.40 a barrel

  • Spot gold rose 1% to $1,646.52 an ounce

–With help from Tommy Utoslahti.

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