Global Markets:
- Asian Stock Markets : Nikkei up 0.87%, Shanghai Composite up 3.84%, Hang Seng up 3.85% ASX down 0.06
- Commodities : Gold at $2659.35 (0.34%), Silver at $31.30 (0.94%), Brent Oil at $73.98 (0.96%), WTI Oil at $71.16 (1.11%)
- Rates : US 10-year yield at 3.764, UK 10-year yield at 3.924, Germany 10-year yield at 2.175
News & Data:
- (USD) Flash Manufacturing PMI 47.0 vs 48.6 expected
- (USD) Flash Services PMI 55.4 vs 55.3 expected
Markets Update:
Hong Kong’s Hang Seng index surged over 3% on Tuesday, leading Asian markets, driven by consumer non-cyclical stocks. This came after a series of policy easing measures were announced by Beijing in a rare briefing from central bank governor, Pan Gongsheng.
China’s mainland CSI 300 also rose by 2.4%, supported by consumer non-cyclical stocks. The People’s Bank of China (PBOC) will lower the reserve requirement ratio for banks by 50 basis points, although no specific timeline was provided. Additionally, the seven-day reverse repurchase rate will be cut from 1.7% to 1.5%. Pan also mentioned a potential cut in the loan prime rate by 0.2 to 0.25 percentage points, but he did not specify if this applies to the one-year or five-year rate. Other measures include reducing down payments for second homes and releasing 1 trillion yuan in long-term funds.
Winnie Wu, a strategist at Bank of America, called these steps a “big bang” to boost investor confidence. While banking and insurance sectors show short-term promise, Wu believes domestic consumption recovery will take longer and that more fiscal policy and structural reforms are needed for sustainable market growth.
Meanwhile, Australia’s central bank kept its policy rate at 4.35%, and Japan’s Nikkei 225 climbed 0.8%, surpassing 38,000 points for the first time since September 3. The U.S. markets also showed modest gains, with the Nasdaq, S&P 500, and Dow Jones hitting new highs.
Upcoming Events:
- 02:00 PM GMT – USD CB Consumer Confidence
- 02:00 PM GMT – USD Richmond Manufacturing Index
