(Bloomberg) — Chinese stocks underperformed in the region as investors paused gains after the Chinese government refused to implement further economic stimulus. Shares also rose in other parts of Asia.
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The CSI300 index fell as much as 5%, almost erasing yesterday’s gains, while Hong Kong stocks rose 1.7% after Tuesday’s steepest decline in 16 years. Shares in Australia and Japan rose on Wednesday after a rally in tech stocks buoyed Wall Street and bets that the Federal Reserve would cut interest rates stabilized.
The New Zealand dollar fell and bonds rose after New Zealand’s central bank cut its benchmark interest rate by 50 basis points. This is the second consecutive rate cut since the Reserve Bank of New Zealand began its easing cycle with a quarter-point rate cut in August.
There were growing concerns that the recent surge in economic stimulus was not enough to convince investors of a sustained rise in the country’s stock market. Late Tuesday, news reports citing Premier Li Qiang suggested China needs to introduce policies to stabilize growth and expectations, a further sign that the Chinese government is trying to foster confidence among investors. It is.
Timothy Mo, chief Asia-Pacific equity strategist at Goldman Sachs, said Tuesday’s selloff in Hong Kong stocks was “like a liquidation event to clear the market of some of the overinflated stimulus hopes.” It is considered to be a thing.” “Now that the level settings are complete, you can probably find the floor from here.”
Elsewhere in Asia, India will announce interest rate decisions later today, while South Korea will join the FTSE Russell benchmark bond index, with months of restrictions on official campaigns and an overhaul of financial market infrastructure expected.
Expectations for US interest rate cuts
U.S. Treasuries have been selling for the past four sessions, but after calming down on Tuesday, there was little change, although last week’s U.S. jobs report, which weighed on interest rate cut expectations, amplified. US 10-year Treasury yields fall 1 basis point to just above 4% as inflation data is released later this week, while on the front end as investors parse Federal Reserve officials’ comments Yields have fallen even further.
Boston Fed President Susan Collins said interest rate cuts should be done carefully and based on data. Atlanta’s Rafael Bostic said the economy remains strong, but the threat to the labor market is increasing while inflation risks are decreasing. Governor Adriana Kugler said authorities should remain focused on bringing inflation to target with a “balanced approach” that avoids a slowdown in employment.
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“The U.S. numbers are not very strong and the Fed’s contribution to the global rate cutting cycle is likely to end,” said Mark Hefele of UBS Global Wealth Management. “Therefore, we maintain our belief that investors should take a position in lower interest rates.”
This week’s main events:
Fed Minutes, Wednesday
Fed’s Rory Logan, Rafael Bostic, Austan Goolsby and Mary Daly speak Wednesday
US CPI, new unemployment claims, Thursday
Fed’s John Williams and Thomas Barkin speak on Thursday
JPMorgan and Wells Fargo kick off earnings season for big Wall Street banks on Friday.
US PPI, University of Michigan Consumer Sentiment, Friday
Fed’s Laurie Logan, Austan Goolsby and Michelle Bowman speak on Friday
The main movements in the market are:
stock
S&P 500 futures were little changed as of 10:07 a.m. Tokyo time.
Nikkei 225 futures (OSE) rose 1.1%
Japan’s TOPIX rose 0.5%
Australia’s S&P/ASX 200 rose 0.6%
Euro Stoxx50 futures rose 0.2%
currency
Bloomberg Dollar Spot Index little changed
The euro was almost unchanged at $1.0977.
The Japanese yen was almost unchanged at 148.28 yen to the dollar.
The offshore yuan was little changed at 7.0688 yuan to the dollar.
The Australian dollar was almost unchanged at US$0.6745.
cryptocurrency
Bitcoin fell 0.3% to $62,188.62.
Ether remains almost unchanged at $2,440.98
bond
10-year government bond yield unchanged at 4.01%
Japan’s 10-year bond yield remains almost unchanged at 0.925%
Australian 10-year bond yield unchanged at 4.17%
merchandise
This article was produced in partnership with Bloomberg Automation.
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