[ad_1]
Asian stocks rose cautiously on Monday as U.S. stock futures made early gains, even after investors were cautious with unexpected surprises in a chunk of China’s economic data.
The annual growth in retail sales, industrial production and urban investment is expected to slow further in October due in part to pandemic cuts and tensions in the housing market.
Economists at the Commonwealth Bank of Australia argued this week that the People’s Bank of China had the option to reduce bank reserve requirements (RRR) to support activity.
“We believe that a basic 50-point reduction in RRR could release CNY 1 billion in liquidity,” they said in a statement. “We believe that lightening mitigation measures can help meet the financing requirements of real estate developers and offset the risks to the economy.”
Elsewhere, the UN climate conference in Scotland managed to reach an agreement on emissions, but watered down its commitment to phase out coal.
U.S. financial firm MSCI’s broadest Asia-Pacific equity index rose 0.1 percent outside Japan after rising at the end of last week.
Japan’s Nikkei gained 0.7 percent as data show that economic activity fell more than expected in the third quarter, reinforcing the case for an aggressive fiscal stimulus.
Wall Street calmed down last week to break a profit chain, even though the main index was just a shadow of the all-time highs. S&P 500 futures consolidated 0.2 percent on Monday at the start of trading, while Nasdaq futures added 0.3 percent.
A release to be seen this week will see U.S. retail sales on Tuesday, up from a 10-year low reported by consumer sentiment in November, as people were worried about high prices, especially gasoline.
In addition, there are doubts about the prices that companies have the ability to maintain margins in the face of rising costs.
Analysts at Bank of America (BofA) noted that 75 percent of U.S. firms exceeded earnings estimates in the last reporting season, but forecasts for the fourth quarter were only flat, breaking expectations for more than a year.
A rough survey helped the Treasury stabilize slightly, but profits were still up 11 basis points a week as the market was at greater risk of hardening the Federal Reserve.
BofA economist Ethan Harris suspects that the market has not yet had enough prices, with high levels of initial inflation meaning that rates need to rise further to reach neutral.
“If inflation remains high and falls above the projected exceedance, the Fed will have to become much more hawkisha and accept the market amendment or deliberately effect that correction,” Harris warned.
It has combined higher U.S. yields with overall risk aversion for the benefit of the dollar, which has had its best week in nearly three months. Against a basket of currencies, the dollar was firm at 95,120 and the highest since July 2020.
It was 113.99 yen, 114.69 preparing for another October challenge.
COVID factor
The euro looked vulnerable at $ 1.1442, breaking significantly last week.
“Covid’s infection curves are part of the reason they are moving in the wrong direction, while renewed restrictions are being implemented in Austria and the Netherlands,” said Ray Attrill, head of FX strategy at National Australia Bank.
“The consequences or growth and ECB policy are not being lost in the currency markets.”
Christine Lagarde, President of the European Central Bank, will address the European Parliament on Monday.
Inflation concerns kept demand for gold at $ 1,865 an ounce since May saw its biggest weekly gain.
Oil prices had a tougher week, fueled by the strengthening of the dollar and speculation that President Joe Biden’s administration could release oil from the U.S. Strategic Oil Reserve.
Earlier Monday, Brent bounced 21 cents a barrel to $ 82.38, and the U.S. crude added 28 cents to $ 81.07.
[ad_2]
Source link
