Asian stocks rose as investors focused on China's policy meeting following the official announcement of an ambitious 5% growth target. Traders were also awaiting testimony from Federal Reserve Chairman Jerome Powell.
Hong Kong's stock market rebounded on Wednesday, led by Chinese tech giants Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Jingdong Shopping Center. It rose sharply ahead of the fourth quarter results. Mainland Chinese stocks erased previous losses.
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Homing Li, senior macro strategist at Lombard Odier, said that in China, “short-term trends are primarily driven by a tug-of-war between ongoing positional competition among foreign investors and the national team's efforts to counter it.” It will happen,” he said. Regarding the National People's Congress, it said, “There is some disappointment among investors with the outline of the fiscal and credit measures that have been proposed.''
A press conference with senior officials on Wednesday could provide more details about the government's efforts to boost consumption. Central bank governor Ban Gong-sheng will brief reporters along with the secretaries of the commerce and finance ministries and the new head of securities regulators.
Elsewhere, Japan's biggest banks expect the central bank to lift negative interest rates within two weeks and are positioning themselves accordingly. Mitsubishi UFJ Financial Group's view is far more definitive than the swap market, where Bank of Japan Governor Kazuo Ueda has about a 50% chance of changing policy this month.
HSBC Holdings strategists, including Gerald van der Linde, said in a note: “While the end of Japan's low interest rates is imminent and this is the consensus view, it is still important for the Bank of Japan and the yen “It could lead to high levels,” he said. “This could be bad news for the market, negatively impacting exporters' earnings and affecting equity flows in the region as mainly Asian funds have been inflowing into Japan in the past few months. may be given.”
In corporate news, JM Financial fell sharply in the Mumbai market after India's central bank banned the company from lending for stocks and bonds, including financing for initial public offerings.
U.S. benchmark indexes lost momentum on Tuesday after gains sparked concerns about soaring valuations, amid widespread caution before Chairman Jerome Powell heads to Capitol Hill for his semi-annual testimony. Mr. Powell is expected to reiterate in his testimony that there is no urgency to cut interest rates. Wall Street also weighed data showing the U.S. services sector is cooling, even as orders and business activity pick up.
The S&P 500 fell 1% and the Nasdaq 100 nearly doubled. Tesla Inc.'s two-day decline widened to 11%, and Apple Inc. suffered its fifth consecutive quarterly loss. US stock contracts rose in Asian trading.
The yield on the 10-year US Treasury note firmed on Wednesday after falling six basis points to 4.15% in the previous session, with Australian and New Zealand yields following suit. The dollar gauge was little changed.
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Meanwhile, Bitcoin remained stable. It hit its highest level in more than two years on Tuesday, but quickly fell back as traders took profits. Gold was also little changed after surging to record highs in the previous session on expectations of a US interest rate cut and geopolitical tensions. Such a move could send mixed messages about risk appetite across global markets.
In commodities, the report showed U.S. inventories continued to expand, with oil firming up after a selloff, suggesting supply may outstrip demand.
This week's main events:
- Canadian interest rate decision Wednesday
- Eurozone retail sales Wednesday
- US ADP Employment, JOLTS Jobs, Wednesday
- Federal Reserve Chairman Jerome Powell testifies before the House Financial Services Committee on Wednesday
- Fed issues beige book on Wednesday
- Fed's Neel Kashkari (Minneapolis) and Mary Daley (San Francisco) speak Wednesday
- China trade, foreign exchange reserves, Thursday
- European Central Bank interest rate decision Thursday
- U.S. new jobless claims, trade, Thursday
- President Joe Biden delivers State of the Union address on Thursday
- Federal Reserve Chairman Jerome Powell testifies before the Senate Banking Committee on Thursday
- Cleveland Fed President Loretta Mester speaks Thursday
- Eurozone GDP, Friday
- US nonfarm payrolls, unemployment rate, Friday
- New York Fed President John Williams speaks on Friday
- ECB Executive Board Member Robert Holzmann speaks on Friday
The main movements in the market are:
stock
- S&P 500 futures were little changed as of 2:16 p.m. Tokyo time.
- Japan's TOPIX rose 0.5%
- Australia's S&P/ASX 200 rose 0.1%
- Hong Kong's Hang Seng rose 1.8%
- The Shanghai Composite rose 0.1%.
- Euro Stoxx50 futures little changed
- Nasdaq 100 futures rose 0.3%
currency
- Bloomberg Dollar Spot Index little changed
- The euro was almost unchanged at $1.0853.
- The Japanese yen was almost unchanged at 149.93 yen to the dollar.
- The offshore yuan was almost unchanged at 7.2119 yuan to the dollar.
- The Australian dollar rose 0.2% to $0.6517.
cryptocurrency
- Bitcoin rises 3.1% to $65,301.39
- Ether rose 5.4% to $3,713.78
bond
- The 10-year government bond yield was almost unchanged at 4.15%.
- Japan's 10-year bond yield rose 1.5 basis points to 0.710%.
- Australian 10-year bond yields fell 8 basis points to 4.01%.
merchandise
- West Texas Intermediate crude rose 0.3% to $78.36 per barrel.
- Spot gold remained largely unchanged.
This article was produced in partnership with Bloomberg Automation.
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