Asia markets rise, China loses some amid dismal trade data. On Wednesday, anticipation that China will stimulate its economy and overnight Wall Street gains lifted most Asia-Pacific stock markets.
Euro Stoxx 50 futures rose 0.23%, indicating cautious European markets. DAX futures rose 0.2%, while FTSE futures remained practically flat. S&P 500 e-minis rose 0.1%.
MSCI’s broadest Asia-Pacific index outside Japan (.MIAPJ0000PUS) rose 0.6% by late morning.
After May’s weak trade figures, China’s share indexes fell. Hong Kong’s Hang Seng (.HSI) rose 0.9% while the benchmark equities index (.SSEC) flattened.
Chinese manufacturers struggled to find foreign demand while domestic consumption remained slow, boosting hopes for economic aid. May exports declined quicker than predicted while imports fell slower.
“Domestic demand is subdued, but external demand was even weaker… so that supports the case for more resolute monetary policy stimulus measures by the PBOC (People’s Bank of China) to prop up domestic demand,” said Carlos Casanova, UBP’s senior Asia economist.
On Tuesday, China requested the biggest banks lower deposit rates to bolster the economy. Speculation of official support for the struggling property sector has lifted those shares during the previous week.
Japan was an outlier, as investors became wary about a surge and sold off before the special quote price fixing after the week. After a 33-year high on Tuesday, the Nikkei (.N225) fell 1.1%.
“Overall, across the board, assets are doing pretty well,” said State Street Global Markets macro strategist Yuting Shao. “The U.S. debt ceiling uncertainty (has been) removed (and) hope on China to introduce more help to the economy is also a good sign for the market.”
The U.S. S&P 500 (.SPX) rose on Tuesday as bets increased that the Federal Reserve will keep interest rates unchanged next week.
Tokyo’s two-year Treasury yield, which usually tracks interest rate predictions, dipped to 4.5% from 4.516% on Tuesday. 10-year note yields fell to 3.67%.
The dollar index was 104.09. After Tuesday’s central bank rate hike, the Australian dollar rose to $0.6690, its highest since mid-May.
Oil extended losses on Wednesday, erasing gains from Saudi Arabia’s weekend commitment to prolong output cutbacks.
At 0456 GMT, Brent crude futures fell 40 cents, or 0.5%, to $75.89. West Texas Intermediate crude futures dropped 35 cents, 0.5%, to $71.39 a barrel.
Gold rose to $1,963.5 per ounce. Bitcoin stabilized at $27,000 after a big overnight comeback from $25,350.
The SEC’s crackdown on cryptocurrency exchanges and designation of Solana, Cardano, and Polygon as securities have paradoxically benefited the token.
“The SEC is making life nearly impossible for several altcoins,” said Oanda senior market analyst Ed Moya. “And that is driving some crypto traders back into Bitcoin.”
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