Asian stocks surged as optimism about the strength of the US economy and expectations for potential stimulus in China fueled investor confidence.
Equity benchmarks gained across the region and US 10-year yields rose to hover just shy of the key 4% threshold, as investors trimmed bets on big Federal Reserve interest-rate cuts , News.Az reports, citing foreign media.
Asian currencies weakened against the dollar, with Indonesia’s rupiah falling for a sixth day. Bank Indonesia said it stood ready to intervene to support the exchange rate. The yen gained against the dollar.
Trading is being shaped by signs of resilience in the world’s largest economy after employers added the most US jobs in six months in September. Wagers on a “no landing” scenario — where US growth momentum remains intact and inflation reignites — stand to boost the greenback while triggering a drop in haven assets. A gauge of Chinese stocks in Hong Kong jumped to the highest level in more than two years before mainland markets reopen Tuesday after a week-long holiday.
Chinese authorities have announced a number of stimulus measures over the past two weeks. Officials from the National Development and Reform Commission said on the weekend will hold a briefing on Tuesday on implementing incremental economic policies.
Goldman Sachs Group Inc. upgraded Chinese stocks to overweight, with strategists including Tim Moe citing a further 15%-to-20% upside potential even after the rally that started in late September. Still, there have been a number of false dawns already and firms such as Invesco Ltd., JPMorgan Asset Management, HSBC Global Private Banking and Wealth, and Nomura Holdings Inc. are among those viewing the rebound with skepticism.
On the US agenda this week are minutes from the Fed’s September policy meeting, as well as consumer price data. US inflation probably moderated at the end of the third quarter, which suggests policymakers will opt for a smaller interest-rate cut when they next meet on Nov. 6-7.
