Asian stocks pulled higher by China; dollar rises: markets wrap

Asian equities advanced as China’s policy shifts on Covid and the property sector pushed a gauge of the region’s shares toward its highest level in two months.

Contracts for the S&P 500 and Nasdaq 100 declined amid gains in the dollar after Federal Reserve Governor Christopher Waller cautioned that policymakers had “a ways to go” before ending interest-rate hikes.

A 16-point plan to boost China’s real estate market and efforts to reduce the economic cost of the government’s pandemic response saw Hong Kong and mainland stocks rally. Shares of developers led the charge, with Country Garden Holdings Co. surging by a record 55%.

“So much negative news flow has been now factored into price,” Catherine Yeung, an investment director at Fidelity International, said of Chinese stocks on Bloomberg Television. “It just feels that China is likely to have seen its worst.”

The greenback had been on the backfoot before Waller’s comments amid signs of cooling in US inflation and the prospects of a dovish tilt by the Fed. The University of Michigan’s preliminary November survey on Friday showed US consumer inflation expectations increased in the short and long run while sentiment retreated.

Waller also noted that while the hiking cycle would continue for some time, the Fed could start considering a downshift to a 50 basis-point move at the next meeting in December or the one after that.

Treasury yields rose across the curve after cash trading was closed for Veterans Day on Friday.

Cryptocurrencies remained under pressure amid FTX’s deepening woes. A swift plunge in the value of FTX’s key crypto assets and unauthorized withdrawals of funds after it filed for bankruptcy suggest customers have little chance of recovering much of their deposits.

A negative tone also held sway in the Japanese market, with the nation’s benchmark stock indexes weighed down by a slump of as much as 14% in SoftBank Group Corp., which failed to announce a widely-expected stock buyback.

Investors will keep a wary eye on the Group of 20 summit in Indonesia, where US President Joe Biden and Chinese leader Xi are expected to meet. Biden’s hand has been strengthened by the Democrats defying political forecasts and historical trends to keep control of the Senate.

Oil advanced for a third session as investors weighed the outlook for Chinese demand as the market tightens heading into winter.

The positive sentiment from China also filtered through to Australian iron ore miners and steel companies as their shares surged.

Gold declined on the stronger dollar.

Key events this week:

• US President Joe Biden plans to meet Chinese President Xi Jinping on the sidelines of the G-20, Monday
• Fed’s John Williams moderates panel, Monday
• China retail sales, industrial production, surveyed jobless, Tuesday
• Former US President Donald Trump plans to make an announcement, Tuesday
• US empire manufacturing, PPI, Tuesday
• US business inventories, cross-border investment, retail sales, industrial production, Wednesday
• Fed’s John Williams, Lael Brainard and SEC Chair Gary Gensler speak, Wednesday
• ECB President Christine Lagarde speaks, Wednesday
• Eurozone CPI, Thursday
• US housing starts, initial jobless claims, Thursday
• Fed’s Neel Kashkari, Loretta Mester speak, Thursday
• US Conference Board leading index, existing home sales, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.3% as of 2:08 p.m. Tokyo time. The S&P 500 rose 0.9%
• Nasdaq 100 futures fell 0.5%. The Nasdaq 100 rose 1.8%
• Euro Stoxx 50 futures rose 0.4%
• The Topix Index fell 0.7%
• The S&P ASX Index was little changed
• The Hang Seng Index rose 2.6%
• The Shanghai Composite Index rose 0.5%

Currencies

• The Bloomberg Dollar Spot Index rose 0.4%
• The euro fell 0.4% to $1.0308
• The Japanese yen fell 0.4% to 139.40 per dollar
• The offshore yuan rose 0.5% to 7.0539 per dollar
• The Australian dollar fell 0.4% to $0.6677

Cryptocurrencies

• Bitcoin fell 2.6% to $15,944.38
• Ether fell 2.7% to $1,183.3

Bonds

• The yield on 10-year Treasuries advanced eight basis points to 3.89%
• Australia’s 10-year yield advanced 11 basis points to 3.77%

Commodities

• West Texas Intermediate crude rose to $89.08 a barrel
• Spot gold fell to $1 760.91 an ounce

This story was produced with the assistance of Bloomberg Automation.