China rate cuts looming, US booming
By Jamie McGeever
Oct 21 (Reuters) -A look at the day ahead in Asian markets.
The trading week in Asia opens against an increasingly bullish global backdrop fueled by continued strength in U.S. stocks, but with local sentiment more circumspect due to the uncertainty surrounding China's deep-rooted economic problems.
The People's Bank of China is expected to cut its loan prime rates on Monday, Beijing's latest move in a series of monetary, fiscal and liquidity support measures to shore up the imploding property sector, revive growth and fight off deflation.
PBOC Governor Pan Gongsheng told a financial forum in Beijing on Friday that the LPR will be reduced by 20 to 25 basis points on Monday, the official Xinhua news agency quoted Pan as saying.
The PBOC also on Friday unveiled new measures to inject more than $100 billion into the country's stock market, which helped lift Shanghai's blue chip equity index by 3.6%, while the MSCI Asia ex-Japan index rose 1.6% for its best day since Sept. 26.
China's economic "data dump" on Friday wasn't as bad as many feared it could have been, and annual GDP growth in the third quarter was slightly above consensus at 4.6%.
But as economist Phil Suttle notes, the past two quarters have been unusually weak, delivering 2.75% growth on a seasonally-adjusted annualized basis, "the weakest two-quarter growth rate in modern times" outside of COVID-related shutdowns.
Little wonder Beijing has sprung into action.
Stocks have responded positively, but bond yields are sliding again. They initially spiked higher on hopes the support measures, which include substantial bond issuance, will reflate the economy but 10-year yield is once again within sight of 2.00%.
U.S.-Sino trade wars have been pushed to the forefront of investors' minds again after Republican presidential candidate Donald Trump said he would impose additional tariffs "at 150% to 200%" on China if China were to "go into Taiwan," the Wall Street Journal reported on Friday.
The U.S. juggernaut, meanwhile, keeps rolling on - economic data are beating expectations, GDP growth is tracking well over 3%, incoming earnings are strong, and Wall Street is hitting new highs.
But perhaps the optimism is overdone. Analysts at Raymond James note that short-term options and technical indicators are getting skewed, suggesting the market may be "ripe for a period of consolidation or vulnerable to a near-term pullback."
Financial conditions are easing around the world, as central banks cut rates and stocks march higher. On that score, investors in Asia will keep close tabs on the dollar, which has recovered recently and is at a three-month high.
Friday's Morning Bid Asia newsletter incorrectly stated that Malaysia would announce GDP data later in the day. The preliminary GDP will be released on Monday, Oct. 21.
Here are key developments that could provide more direction to markets on Monday:
- China loan prime rate decision
- Malaysia GDP (Q3)
- Reserve Bank of Australia deputy governor Andrew Hauser speaks
Global stocks in 2024 https://tmsnrt.rs/3Nw32tU
China market rollercoaster https://reut.rs/3BWQcSW
China economy snapshot https://reut.rs/48aIbWG
Reporting by Jamie McGeever
Mga Kaugnay na Asset
Pinakabagong Balita
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.
