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(Bloomberg) — Asian stock markets started the week on a mostly positive note, as China’s latest stock market-strengthening measures sparked optimism. Energy stocks rose as oil prices rose.
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China’s securities regulator announced over the weekend that it would stop lending some stocks to short sellers starting Monday. The move is a reinforcement of measures aimed at stemming the decline in Chinese stocks, which have seen the MSCI China Index fall by about 60% from its February 2021 peak.
“The very negative conditions leading to this could open the door to a technical rebound in Chinese stocks,” Homing Li, senior macro strategist at Lombard Odier, said on Bloomberg TV. “What we really need is a change in the inflation outlook for this country and sentiment across the private sector, so we’re a little bit more cautious.”
Mainland stocks were unable to match gains in Hong Kong stocks due to concerns over a proposal to require U.S. cloud companies to disclose the foreign customers for which they are developing AI applications. The proposal, expected to be announced on Monday, risks further escalating tensions between the two countries after some US lawmakers last week proposed legislation targeting Chinese biotech companies.
Real estate stocks had previously enjoyed a tailwind after the southern city of Guangzhou eased restrictions on home purchases. However, optimism began to fade after a Hong Kong court ordered the liquidation of China Evergrande Group. A Bloomberg Intelligence measure of Chinese real estate developers fell 1% in afternoon trading, after earlier rising to 3.8%.
“This could be an example for development companies that are in the process of restructuring,” said Willer Chen, an analyst at Forsyth Barr Asia in Hong Kong. “The outcome of the actual liquidation will influence creditors’ decisions in the future whether to proceed with liquidation or hold out in favor of a restructuring plan.”
European and U.S. stock futures edged lower as investors weighed risks from the Middle East conflict at the start of a busy week on the global policy outlook.
Brent crude oil and West Texas Intermediate crude oil rose for the fourth day in a row, hitting their highest levels since November in intraday trading. The United States says Iranian-backed extremists have killed three soldiers, and President Joe Biden has vowed to retaliate. Oil prices rose on Friday after Houthi rebels attacked a ship carrying Russian fuel.
The Australian and New Zealand dollars outperformed their G10 counterparts as higher commodity prices and China’s stock market support measures boosted investor sentiment.
signal of patience
In Asia, the US dollar and US Treasuries were both little changed. U.S. economic data was mixed on Friday, raising concerns that the Federal Reserve will show patience with the pace of rate cuts when it announces its next policy decision on Wednesday.
Win Hsin, global head of currency strategy at Brown Brothers Harriman, said no Fed policy changes are expected this week.
“While discussions about slowing and eventually ending quantitative tightening are likely to continue, we believe it is premature to announce any changes at this meeting,” he said in a note. said. “Dollar risks remain biased to the upside this week as there is room for future federal funds pricing to converge towards FOMC expectations.”
This week also sees a number of important data releases, from Tuesday’s European GDP, Wednesday’s China PMI and Australian inflation, to Thursday’s European inflation and Bank of England policy decision. Big tech companies like Microsoft and Apple are expected to provide more details about this earnings season when they release their earnings.
This week’s main events:
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Australian retail sales Tuesday
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Eurozone Economic Confidence, GDP, Consumer Confidence, Tuesday
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European Central Bank Directors Boris Vujicic and Philip Lane speak on Tuesday
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U.S. Conference Consumer Confidence Committee, Tuesday
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Microsoft and Alphabet are scheduled to report earnings on Tuesday.
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Australian CPI, Wednesday
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Japan’s industrial production, retail sales, Wednesday
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China Non-Manufacturing PMI, Manufacturing PMI, Wednesday
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French consumer price index, Wednesday
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German CPI, unemployment rate, Wednesday
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ECB Chief Economist Philip Lane speaks on Wednesday
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Fed interest rate decision, US employment cost index, Wednesday
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Boeing releases financial results on Wednesday
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The U.S. Treasury will issue quarterly refunds, and officials are expected to announce plans Wednesday for bidding on three-year, 10-year and 30-year bonds, as well as other borrowing plans.
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Japan PMI, Thursday
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China Caixin Manufacturing PMI Thursday
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Eurozone S&P World Manufacturing PMI, CPI, Unemployment Rate, Thursday
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Bank of England interest rate decision Thursday
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ECB Board Member Mario Centeno speaks on Thursday
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US ISM Manufacturing Initial Unemployment Claims, Thursday
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Apple Inc., Amazon.com Inc. and Meta Platforms Inc. to report earnings on Thursday
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German lawmakers will take final vote on 2024 federal budget amendments on Friday
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ECB Board Member Mario Centeno speaks on Friday
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US employment statistics, University of Michigan consumer sentiment, factory orders, Friday
stock
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S&P 500 futures were little changed as of 2:55 p.m. Tokyo time.S&P 500 little changed on Friday
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Nasdaq 100 futures were little changed.Nasdaq 100 falls 0.5%
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Japan’s TOPIX rose 1.1%
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Hong Kong’s Hang Seng rose 0.6%
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The Shanghai Composite fell 0.6%.
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Euro Stoxx50 futures fell 0.2%
currency
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Bloomberg Dollar Spot Index little changed
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The euro fell 0.1% to $1.0840.
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The Japanese yen was almost unchanged at 148.07 yen to the dollar.
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The offshore yuan was little changed at 7.1947 yuan to the dollar.
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The Australian dollar rose 0.2% to $0.6590.
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The British pound was almost unchanged at $1.2702.
cryptocurrency
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Bitcoin rose 0.4% to $42,137.47
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Ether remains almost unchanged at $2,263.73
bond
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The 10-year government bond yield was almost unchanged at 4.13%.
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Japan’s 10-year bond yield rose 1.5 basis points to 0.720%.
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Australian 10-year bond yield falls 3 basis points to 4.21%
merchandise
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West Texas Intermediate crude rose 0.4% to $78.34 per barrel.
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Spot gold rose 0.4% to $2,026.11 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Garfield Reynolds, Joanna Osinger and Ishika Mookerjee.
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