A look at the day ahead in European and global markets according to Rae Wee
Asian markets rose on Thursday, defying overnight weakness on Wall Street, as optimism over China’s latest stimulus measures received a fresh boost from news of a possible capital injection into its major banks.
Authorities are considering a $142 billion injection to help big lenders, Bloomberg News reported, just two days after policymakers announced a series of measures aimed at pulling the country out of its deflationary crisis.
While the latest measures point to a sense of urgency among policymakers as Beijing’s 5% economic growth target for the year begins to slip out of sight, investors saw reason to cheer.
After months of seemingly futile waiting by the markets, Chinese authorities finally appear to be waking up to the idea that much more needs to be done to get the world’s second-largest economy back on track.
China’s blue-chip index reversed early losses to trade higher after the latest news report, while Hong Kong’s Hang Seng Index rose around 2%.
MSCI’s broadest index of Asia-Pacific shares outside Japan hit a more than two-year high.
This set the tone for a strong open in Europe, with futures posting solid gains during the Asian session.
China aside, the day was already shaping up to be a busy one for global markets, with a rate decision from the Swiss National Bank (SNB) along with a series of speeches from Federal Reserve and European Central Bank officials.
The SNB is expected to cut rates by 25 basis points, marking its third consecutive rate-cutting session.
Needless to say, the focus will be on policymakers’ guidance on their respective rate outlooks, with those at the ECB likely to maintain a less hawkish stance on rate cuts compared to their US counterparts.
Key events that could influence markets on Thursday:
– Swiss National Bank interest rate decision
– Speeches by Federal Reserve and ECB monetary policymakers
– Weekly applications for unemployment benefits in the United States
(By Rae Wee; edited by Edmund Klamann)