(Bloomberg) — Chinese stocks tumbled in volatile trading after a Treasury Department briefing over the weekend disappointed investors and a fall in factory prices heightened concerns about the economy.
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Domestic stocks swung between gains and losses, and Hong Kong shares fell along with US stock futures. The Chinese yuan depreciated against the dollar, and the Australian and New Zealand dollars also depreciated. Cash Treasury is closed in Asia due to Japanese public holidays.
China’s Finance Minister Lan Huo’an vowed more support for the real estate sector at a much-anticipated weekend press conference, but failed to provide any headline financial stimulus figures, disappointing some investors. Focus now turns to the next major policy briefing in the coming weeks by the Communist Party-led parliament, which oversees the budget, for details on further aid.
“Investors will definitely have to be more patient when it comes to the size of fiscal stimulus,” said Carlos Casanova, senior Asia economist at Union Bancare Privy. “We’ll probably get some numbers by the end of the month. I think so.” ”, but authorities in Beijing are probably not going to stop at nothing to save the economy.
Before the weekend’s press conference, asset managers were waiting for further fiscal policy from authorities to sustain the rally sparked by stimulus measures in late September. Investors and analysts surveyed by Bloomberg expected China to release up to 2 trillion yuan ($283 billion) in new fiscal stimulus on Saturday, including subsidies, consumption vouchers and financial support for families raising children. was.
The domestic stock benchmark CSI300 index on Friday pared its biggest weekly decline since late July, while the Australian and Kiwi currencies, which are the most representative of developed-market currencies for sentiment against China, fell for the second week in a row. .
“The Beijing government has shown increased urgency and determination in recent weeks to meet this year’s annual targets through a number of policy measures, but more concrete fiscal policy is expected to be announced and further efforts are underway. It’s likely still a work in progress,” said economist Erin Shinn. HSBC Holdings’ representative for Greater China wrote in a memo. “Further fiscal support is likely planned, likely to be in the trillions of renminbi range, and the next major meeting is scheduled for later this month.”
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In the commodity sector, Brent crude oil futures fell 1.5% and Singapore iron ore futures reversed early losses. The dollar rose after two consecutive weeks of gains as traders eased expectations on the pace of the Federal Reserve’s interest rate cuts.
The Monetary Authority of Singapore has left the currency unchanged for the sixth consecutive review. This week, China’s economic growth and retail sales figures are expected to be released, as well as inflation figures for New Zealand, Canada and the UK. Central banks in Thailand, the Philippines and Indonesia are expected to make policy decisions later this week ahead of the European Central Bank.
The ECB will likely advance its push for global monetary easing by cutting interest rates, which policymakers all but ruled out just a month ago.
Barclays strategists, including Themistocris Fiotakis, wrote: “Clearly, the softening in activity indicators and accelerating inflation is having an immediate impact on both ECB communications and markets, with the ECB expected to cut interest rates by 25 basis points this week to 95%. % probability,” he wrote in his notebook. To the client. “We see risks to European macro rates and interest rates as skewed to the downside, which creates room for further euro weakness, especially in the cross.”
This week’s main events:
China trade balance, Monday
India CPI, Monday
UK unemployment rate and average weekly earnings, Tuesday
Eurozone industrial production, Tuesday
Canadian Consumer Price Index, Tuesday
Goldman Sachs, Bank of America and Citigroup earnings Tuesday
Republican presidential candidate Donald Trump is scheduled to be interviewed by Bloomberg Editor-in-Chief John Micklethwait on Tuesday at the Economic Club of Chicago.
New Zealand CPI, Wednesday
Interest rate decisions by central banks of Thailand, Philippines and Indonesia Wednesday
UK CPI, PPI, RPI, House Price Index, Wednesday
ASML, Morgan Stanley earnings, Wednesday
Australian unemployment rate Thursday
Eurozone CPI, ECB Interest Rate Decision, Thursday
U.S. retail sales, unemployment claims, industrial production, business inventories, Thursday
TSMC, Netflix earnings, Thursday
Japan CPI, Friday
China’s GDP, retail sales, industrial production, housing prices, Friday
UK retail sales, Friday
The main movements in the market are:
stock
S&P 500 futures were down 0.1% as of 11:16 a.m. Tokyo time.
Nikkei 225 futures (OSE) are almost unchanged
Australia’s S&P/ASX 200 rises 0.5%
Hong Kong’s Hang Seng fell 1.9%.
The Shanghai Composite rose 0.4%.
Euro Stoxx50 futures fell 0.1%
currency
Bloomberg Dollar Spot Index rose 0.1%
The euro fell 0.1% to $1.0923.
The Japanese yen remained almost unchanged at 149.21 yen to the dollar.
The offshore yuan fell 0.2% to 7.0868 yuan to the dollar.
cryptocurrency
Bitcoin fell 0.3% to $62,540.94.
Ether fell 0.6% to $2,446.26.
bond
merchandise
West Texas Intermediate crude oil fell 1.8% to $74.21 a barrel.
Spot gold fell 0.4% to $2,645.99 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Matthew Burgess.
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