Asian Stocks to Rise on China Policy; Dollar Gains: Markets Wrap

(Bloomberg) — Asian equities were set to advance on Monday with support from the biggest weekly gain in US stocks since June and China’s policy shifts on Covid and property.

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Shares rose in South Korea and Australia, where iron ore miners and steel companies surged as the positive sentiment from China filtered through. Futures pointed to gains in Hong Kong.

Japanese stocks fell after rallying on Friday. Contracts for the S&P 500 and Nasdaq 100 declined as the dollar rose.

A gauge of US-listed Chinese stocks soared more than 6% Friday after the easing of quarantine rules, intensifying bets that Beijing is shifting away from its stringent Covid Zero policy. Sweeping relaxation measures in the property sector over the weekend added to signs that President Xi Jinping is turning his attention on rescuing the economy.

The dollar’s move Monday followed Federal Reserve Governor Christopher Waller saying that policy makers still had “a ways to go” before ending interest-rate hikes.

While Waller sees the hiking cycle continuing for some time, he said the Fed could start considering a downshift to a 50 basis-point move at the next meeting in December or the one after that.

A gauge of the greenback had slumped more than 1% on Friday and fell for a fourth straight week in its worst performance since 2020.

The greenback had been easing amid signs of cooling in US inflation and the prospects of a dovish tilt by the Federal Reserve. The University of Michigan’s preliminary November survey on Friday showed US consumer inflation expectations increased in the short and long run while sentiment retreated.

Treasury yields rose during morning trading in Asia after cash trading was closed for Veterans Day on Friday.

Cryptocurrencies remained under pressure amid FTX’s deepening woes. A swift plunge in value of FTX’s key crypto assets and unauthorized withdrawals of funds after it filed for bankruptcy suggests customers have little chance of recovering much of their deposits.

Investors will keep a wary eye on the Group of 20 summit in Indonesia, where US President Joe Biden and Chinese leader Xi are expected to meet. Biden’s hand has been strengthened by the Democrats defying political forecasts and historical trends to keep control of the Senate.

Oil advanced for a third session as investors weighed the outlook for Chinese demand as the market tightens heading into winter.

Key events this week:

  • US President Joe Biden plans to meet Chinese President Xi Jinping on the sidelines of the G-20, Monday

  • Fed’s John Williams moderates panel, Monday

  • China retail sales, industrial production, surveyed jobless, Tuesday

  • Former US President Donald Trump plans to make an announcement, Tuesday

  • US empire manufacturing, PPI, Tuesday

  • US business inventories, cross-border investment, retail sales, industrial production, Wednesday

  • Fed’s John Williams, Lael Brainard and SEC Chair Gary Gensler speak, Wednesday

  • ECB President Christine Lagarde speaks, Wednesday

  • Eurozone CPI, Thursday

  • US housing starts, initial jobless claims, Thursday

  • Fed’s Neel Kashkari, Loretta Mester speak, Thursday

  • US Conference Board leading index, existing home sales, Friday

Some of the main moves in markets:

Stocks

  • S&P 500 futures fell 0.2% as of 9:08 a.m. Tokyo time. The S&P 500 rose 0.9%

  • Nasdaq 100 futures fell 0.3%. The Nasdaq 100 rose 1.8%

  • Japan’s Topix fell 0.3%

  • South Korea’s Kospi rose 0.3%

  • Australia’s S&P/ASX 200 rose 0.2%

  • Hong Kong’s Hang Seng futures rose 1.1%

Currencies

  • The Bloomberg Dollar Spot Index rose 0.2%

  • The euro fell 0.2% to $1.0331

  • The Japanese yen fell 0.5% to 139.46 per dollar

  • The offshore yuan fell 0.1% to 7.1000 per dollar

Cryptocurrencies

  • Bitcoin fell 0.3% to $16,321.7

  • Ether rose 0.5% to $1,221.97

Bonds

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