IS CHINA STRONG ENOUGH?

U.S. and European futures advanced as a surge in Chinese shares led most Asian equities higher Monday. The offshore yuan fell after policy makers acted to restrain its strength by making it easier to bet against.

Chinese stocks gained as investors mulled an expected visit by President Xi Jinping to Shenzhen this week amid optimism he could unveil plans to further open parts of the economy to foreign investment. Shares in Hong Kong also climbed, with a more modest rise seen in South Korea and Australia. MSCI Inc.’s gauge of Asia Pacific stocks hit its highest since June 2018.

Meanwhile, the yuan fell as much as 0.7% against the dollar, which ticked higher against major peers. Japanese equities bucked the trend and retreated. Crude oil declined. Treasuries won’t trade Monday due to a U.S. holiday

FX Overnight News:

  • The Trump administration called on Congress to pass a stripped-down coronavirus relief bill. This comes after it proposed a new comprehensive $1.8 trillion stimulus deal on Friday that immediately ran into opposition on both sides of the political divide
  • France may have reported a drop in new Covid-19 cases to 16,101, the lowest number in five days, but this followed two record-breaking 24-hour periods. Italy is preparing new nationwide restrictions in response to a spike in new cases, while Germany is also considering this possibility.
  • British Prime Minister Boris Johnson is expected to announce new measures to tackle a growing crisis on Monday, outlining three alert levels aimed at helping tailor restrictions for different parts of England.
  • The tech sector will be in focus following a report in the Financial Times that European Union regulators are drawing up a list of up to 20 large internet companies that will be facing new and tougher rules aimed at curbing their market power.
  • Oil prices weakened Monday, as output was restored in Norway, the world's third largest exporter of oil and gas, with the end of a strike. U.S. producers also began pumping again after Hurricane Delta weakened.

FX OVernight Volatility:

Chart of the Day:

Source: Bloomberg, Investing, Reuters

Posted on

October 12, 2020

in

Market Updates

category

Interested in Investing with us?