Prior to the Fed, Asia Joins Record Global Stock Rally – Asia Market Wrap
Asian markets joined a worldwide share surge, with investors anticipating a rate cut by the Fed later this week. In China, economic activity slowed more than expected for a second straight month with a sharp slump in investment.
The MSCI Asia Pacific Index gained up to 0.2% to close above its all-time high in February 2021. A worldwide equity index remained stable after reaching a record high on Friday. There was no Treasury cash transactions in Asia, as Japan was closed for the vacation. Chinese shares surged 0.9% despite dismal industrial and consumer statistics.
The Hong Kong Dollar extended its gains to hit a four-month high as supply of the currency continued to tighten toward the end of the quarter. French bond futures opened mostly steady in Asian trading after Fitch Ratings downgraded France to A+ from AA-. Contracts for US stocks edged up 0.1% and those for Europe gained 0.3%.
The key question for investors this week is whether Fed officials will push back against market bets on a series of rate cuts extending into next year. The Fed’s decision on Wednesday will set the tone for global markets, but it won’t be the only major event on the calendar. The BoC, the BoE and the BoJ are also scheduled to announce policy decisions, making this a pivotal week for central banks worldwide.
France’s 10-year benchmark bonds offer one of the highest yields in the euro area, akin to Lithuania, Slovakia and Italy. The premium paid over German peers has nearly doubled since President Macron called elections last year, a sign of weaker investor demand.
