(Bloomberg) – A gauge of global stocks rose, led by a rebound in Chinese stocks as nationwide unrest over Covid curbs eased. The dollar and Treasuries fell amid improved risk-on sentiment.
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Shares rallied in Hong Kong and on the mainland as some investors speculated that the protests could hasten a shift away from Covid-0 policies. Chinese government health officials are scheduled to hold a briefing at 3 p.m. on the implementation of virus prevention and control measures.
“There is growing speculation that an announcement about the end of the Covid-0 policy is imminent and that is boosting sentiment,” said Kiyong Seong, Asia lead macro strategist at Societe Generale SA in Hong Kong. positivity”. “Markets will remain volatile as investors assess any policy change.”
Traders were also buoyed by China’s lifting of a multi-year ban on share sales by construction companies. U.S. futures rose after the S&P 500 pared its monthly gains in Wall Street trading.
Investors continued to analyze comments from Federal Reserve officials, with Fed President Bank of St. Louis James Bullard warned that the market may be underestimating the opportunity for higher interest rates. His New York counterpart John Williams noted that policymakers have more work to do to rein in inflation, and Fed Vice President Lael Brainard said a string of supply shocks is raising inflation risks. high.
A measure of the dollar fell after two days of gains. The Japanese yen rose, as did the emerging market currency index.
Global bonds have joined U.S. bond firms in signaling a recession, with yield curve measures around the world inverting for the first time in at least two decades. Treasury yields rose modestly above the curve while government bond yields also rose in Australia and New Zealand.
Elsewhere in the market, oil extended its recovery from near-a-year lows on speculation that the Organization of the Petroleum Exporting Countries and its allies would deepen supply cuts to meet global demand. demand is weakening.
Investors remained focused on developments in China on Tuesday, and beyond on a speech by Fed chief Jerome Powell on Wednesday. Many economists expect him to bet that the Fed will slow the pace of rate hikes next month – while reminding Americans that their fight against inflation will last until 2023.
“This is the right time to start considering sharpening your pencils and thinking about what a good buy right now is,” said Terri Spath, founder and chief investment officer of Zuma Wealth Management. She said the upcoming slowdown in the US economy will be mild and that if there is a shallow recession “we could really see some bottom in equities.”
Stagnant inflation is the main risk to the global economy in 2023, with investors saying hopes of a rebound in markets are premature after this year’s brutal sell-off. Nearly half of the 388 respondents to the latest MLIV Pulse survey said a scenario where growth continues to slow while inflation remains high will dominate the world next year.
This week’s main events:
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Euro Area Economic Confidence, Consumer Confidence, Tuesday
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US Council Consumer Confidence, Tuesday
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EIA Crude Oil Inventory Report, Wednesday
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China PMI, Wednesday
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Speech by Fed Chairman Jerome Powell, Wednesday
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Fed releases Beige Book on Wednesday
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US Wholesale Inventories, GDP, Wednesday
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S&P Global PMI, Thursday
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US Construction Spending, Consumer Income, Initial Jobless Claims, ISM Manufacturing, Thursday
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BOJ’s Haruhiko Kuroda speaks on Thursday
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US unemployment rate, nonfarm payrolls, Friday
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Christine Lagarde of the ECB speaking on Friday
Some key moves in the market:
share
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S&P 500 futures were up 0.3% at 1:17 p.m. Tokyo time. S&P 500 down 1.5%
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Nasdaq 100 futures rose 0.4%. Nasdaq 100 drops 1.4%
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Euro Stoxx 50 futures were little changed
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Japan’s Topix drops 0.7%
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Australia’s S&P/ASX 200 up 0.2%
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Hang Seng Index up 3.9%
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Shanghai Composite up 2.2%
currency
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Bloomberg Dollar Spot Index drops 0.4%
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The euro rose 0.4% to $1.0379
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Japanese yen rose 0.2% to 138.66 per dollar
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Offshore yuan rose 0.9% to 7.1841 per dollar
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Australian Dollar up 0.8% to $0.6702
electronic money
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Bitcoin up 0.7% to $16,309.75
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Ether up 1.2% to $1,186.45
bonds
Goods
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West Texas Intermediate crude rose 1.6% to $78.45 a barrel
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Spot gold rose 0.5% to $1,750.85 per ounce
This story was made possible with support from Bloomberg Automation.
–With support from Rita Nazareth, Richard Henderson and Rik Stevens.
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