(Bloomberg) — Stocks and currencies rose in Asia, led by a more than 3% gain in the benchmark Hong Kong index, as China’s manufacturing industry posted its biggest improvement in more than a decade.
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A benchmark index of Asian stocks rose to the most since mid-January, while futures for the S&P 500, Nasdaq 100 and Euro Stoxx 50 pared losses following a report showing the world’s second-biggest economy is recovering strongly after the Covid restrictions were lifted.
Commodity currencies rose, with the Australian dollar recovering from a loss, while the offshore yuan strengthened by more than 0.6%. Oil also rose along with gold.
China’s manufacturing purchasing managers’ index rose last month to its highest reading since April 2012, while another gauge also improved. The data was released ahead of the country’s annual National People’s Congress, and traders were hoping to learn more about Beijing’s economic plans.
“China is in a relatively good place right now relative to other major economies in terms of the easing cycle,” Elizabeth Kwik, head of investment for Asian equities at abrdn, said on Bloomberg Television. Any sign of growth stimulus from the government “will be a good thing to see that could come out of the NPC,” she said, referring to congress.
Wednesday’s rally marks a change from recent weeks, when a repricing of top US rates sent investors selling almost all risky assets. The Hang Seng Index of Chinese companies rose almost 4% helped by technology and real estate stocks, recovering after a loss of more than 11% in February.
The latest data “should keep the yuan on firm footing” ahead of the event, while “commodity currencies such as the Australian dollar may also be buoyed by expectations of a strong recovery in Chinese demand,” Wei said. Liang Chang, a strategist at DBS. bank ltd
An indicator of the strength of the dollar fell and Treasury yields rose. Australian and New Zealand government bond yields fell.
Bond yields rose in Europe on Tuesday after inflation data prompted a reassessment of rate expectations, picking up a theme that has dominated trading in a month in which the Federal Reserve signaled its intention to raise rates. more than the market had anticipated.
Bond traders no longer view the odds of a Federal Reserve rate cut this year as better than even a turnaround from what they expected just a month ago. Market expectations also call for the European Central Bank to raise rates through February 2024, with an ECB terminal rate of 4% at full price.
Key events this week:
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Eurozone S&P Global Eurozone manufacturing PMI, Wednesday
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US Construction Spending, ISM Manufacturing, Light Vehicle Sales, Wednesday
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Eurozone CPI, unemployment, Thursday
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Initial jobless claims in the US, Thursday
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Eurozone S&P Global Eurozone Services PMI, PPI, Friday
Some of the main movements in the markets:
Stocks
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S&P 500 futures were barely changed at 2:08 p.m. Tokyo time. The S&P 500 fell 0.3%
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Nasdaq 100 futures were little changed. The Nasdaq 100 fell 0.1%
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Japan’s Topix Index rose 0.1%
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Hong Kong’s Hang Seng Index rose 3.3%
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China’s Shanghai Composite Index rose 0.9%
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Australia’s S&P/ASX 200 Index was little changed
coins
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The Bloomberg Dollar Spot Index fell 0.1%
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The euro rose 0.1% to $1.0591
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The Japanese yen fell 0.2% to 136.41 per dollar
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The offshore yuan rose 0.5% to 6.9183 per dollar
CRYPTOCURRENCIES
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Bitcoin rose 2.7% to $23,777.69
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Ether rose 3.2% to $1,657.44
Captivity
raw Materials
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West Texas Intermediate crude rose 0.6% to $77.49 a barrel
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Spot gold rose 0.2% to $1,830.38 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With the assistance of Charlie Zhu, Wenjin Lv and Akshay Chinchalkar.
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