China Boosts Asian Stocks with Trillion-Yuan Bond Issue
China’s Stimulus Measures Bolster Asian Markets
China’s approval of a trillion-yuan sovereign bond issue has sparked optimism in Asian stock markets. Investors view this move as a sign of forthcoming stimulus, leading to a surge in market confidence. Additionally, the US dollar has reached a two-week high due to higher-than-expected inflation, resulting in increased rate forecasts.
Positive Performance in Asia-Pacific Shares
Mirroring the positive sentiment, MSCI’s broadest index of Asia-Pacific shares, excluding Japan, has risen by 0.9%, while Japan’s stock market has experienced a 1.1% increase. In the bond market, yields have stabilized after breaching 5% on Monday, with the benchmark yield remaining firm at 4.82% during Tokyo trade.
Global Markets Respond to Positive Earnings and Economic Data
Wall Street indexes have benefited from solid earnings and positive US economic data, resulting in a surge in stock market performance. However, weaker-than-forecasted purchasing managers surveys in Europe have caused a decline in oil and euro prices. Despite this, US and European stock futures remain steady during early Asian trade.
China’s Bond Issue and ETF Purchases Boost Sentiment
China’s top parliament has approved a 1 trillion yuan bond issue, with the funds allocated for rebuilding disaster zones and enhancing infrastructure. The announcement of state-owned investment company Central Huijin’s ETF purchases has also boosted market sentiment. Historically, Central Huijin’s ETF purchases have driven significant market rallies, with gains of over 20% in 2013 and 2015.
Anticipating Rate Hike in Australia
The Australian dollar has experienced a 0.6% increase, reaching a two-week high against the US dollar. This surge follows the release of third-quarter inflation data, which exceeded forecasts at 5.4%. As a result, the likelihood of a rate hike next month has increased to 60%. Analysts from ANZ predict a 25 basis points increase in the cash rate to 4.35%.
Oil Prices Affected by Weak European Economic Data
Commodity trade has seen a decline in oil prices due to weak economic data from Europe. Currently, oil futures are steady at $88.13 a barrel, as gains made following the Middle East conflict are being unwound. The geopolitical situation in the Middle East requires more decisive factors to determine the market’s direction.
Bitcoin’s Resurgence Amidst ETF Speculation
Bitcoin has experienced a 15% surge in value this week, mainly driven by speculation surrounding exchange-traded fund applications from BlackRock and other institutions. This surge follows a period of stagnation and numerous scandals, including the collapse of FTX exchange. Bitcoin is currently valued at $34,340, while gold is being traded at $1,973 an ounce.
US Securities and Exchange Commission Declines to Comment
The US Securities and Exchange Commission has declined to comment on the speculation surrounding Bitcoin and ETFs. The current exchange rate is $1 to 7.3090 yuan.
