Stocks rise, US dollar struggles on Fed bets

30/5/2022 12:07:00 PM

Global Markets: Stocks rise, US dollar struggles on Fed bets - Reuters

Global Markets: Stocks rise, US dollar struggles on Fed bets - Reuters

SYDNEY/MILAN (May 30): World shares rose on Monday and the US dollar was pinned near five-week lows on hopes of an eventual slowdown in US monetary tightening following sharp interest rate hikes in June and July.Helping to mellow the mood was news that Shanghai authorities would cancel many restrictions on businesses resuming work from Wednesday, easing a city-wide lockdown that began two months ago.The MSCI's benchmark for global stocks rose 0.6% to its highest in more than four weeks

A SYDNEY/MILAN (May 30): World shares rose on Monday and the US dollar was pinned near five-week lows on hopes of an eventual slowdown in US monetary tightening following sharp interest rate hikes in June and July.A SHANGHAI (May 30): China stocks rose for a fourth straight session to close up on Monday (May 30), with Shanghai stocks at five-week highs, as the capital Beijing and financial hub of Shanghai eased stringent Covid-19 control measures.A SYDNEY (May 30): Asian stocks tracked Wall Street higher on Monday while the dollar was pinned near five-week lows as investors wagered on an eventual slowdown in U.A (May 30): The yuan and Chinese consumer stocks rallied as key cities eased Covid-19 restrictions, spurring bets that the worst of the economic impact of strict lockdowns is over.

Helping to mellow the mood was news that Shanghai authorities would cancel many restrictions on businesses resuming work from Wednesday, easing a city-wide lockdown that began two months ago.The MSCI's benchmark for global stocks rose 0.7% higher at 4,029.6% to its highest in more than four weeks by 0745 GMT, driven by a positive open in Europe and strong gains in Asia overnight.Helping to mellow the mood was news that Shanghai authorities will cancel many conditions for businesses to resume work from Wednesday, easing a city-wide lockdown that began two months ago.The index is up 0.6% to close at 3,149.4% so far this month.A small but growing group of investors and analysts are now calling a bottom for Chinese markets after strict lockdowns prompted banks including JPMorgan Chase & Co and Goldman Sachs Group Inc to slash their growth forecasts for the economy.

The pan-European STOXX 600 equity benchmark gained 0.The Hang Seng Index rose 2.Japan's Nikkei added 2.7%, while Japan's Nikkei added 2.2% and Chinese blue chips firmed 0.93, while the China Enterprises Index gained 2.7%.Chinese blue chips firmed 0.Although Wall Street will be shut for the Memorial Day, US futures were trading.13 points.6552 a dollar in offshore markets, while also gaining as much as 0.

S&P 500 e-minis rose 0.9%, having rallied 6.On Sunday, Shanghai authorities said they will remove"unreasonable" conditions for businesses to resume work from Wednesday and announced 50 policy measures to support the economy.8%, after gaining 6.6% last week in their best run so far this year, while Nasdaq e-minis added another 1.3%.Also,"given the recent increase in macro policy support and the relatively loose macro liquidity conditions, we believe market valuation has bottomed for the year", said Meng Lei, a China equity strategist at UBS Securities.Investors have seized on hints that the Federal Reserve, once it has hiked aggressively over the next two months, might then slow its tightening.6% last week in their best week so far this year.” A Bloomberg real-time replica of the CFETS yuan index, a gauge of yuan strength against 24 trading peers, had risen 0.

"Talk of a pause in the Fed rate hike cycle is doing wonders for everything ranging from equities to bonds and — unfortunately — commodities too," said AFS Group analyst Arne Petimezas in Amsterdam.."Over the past few weeks about 50bps has been lopped off from Fed terminal rate pricing.Predictably, Fed pricing suggests the Fed will shift a gear lower after the annual Jackson Hole retreat in August," he added in a note.opportunities will emerge once the current round of earnings downgrades is largely done.1%.The chance of a less hawkish Fed was enough to see Treasuries rebound, with 10-year note yields just above a six-week low at 2.743%.Consumer staples and tourism led the gains, up 1.China is moving towards a “whatever it takes” mentality, trying to rebalance between Covid-19 control and economic growth, said Tommy Xie, the head of Greater China research at Overseas Chinese Banking Corp (OCBC).

That is down from a peak of 3."Money markets have reduced their pricing for additional Fed rate rises by end-2022 from 193bps to 180bps.203% on May 9.Semiconductors and automobiles rose more than 1% each, while real estate developers lost 2%.The steadier market mood has seen the safe-haven US dollar and yen decline, while the euro was boosted by hawkish comments from European Central Bank (ECB) officials who have been flagging a rate hike as early as July."US economic data appear to be slowing, ECB officials are debating even faster initial rate hikes, and front-end rate differentials have started to move in the euro's favour," noted Goldman Sachs analyst Zach Pandl.Asian stocks also rose as investors wagered on an eventual slowdown in US monetary tightening.74%."A sharp slowing in the US economy — if not matched by similar weakness in Europe — could result in a meaningful euro rebound, though the reverse is also true if US data hold up better than expected," Pandl added.Jinling Hotel Corp gained by the 10% limit on the mainland as Guangzhou Baiyun International Airport Co rose more than 6%.

"We see downside risks to US growth, and have recommended USD/JPY put options to express this view.8% and 4." That underscores the importance of this week's major US data, which includes the ISM survey of manufacturing on Wednesday and the May payrolls report on Friday.The steadier market mood has seen the safe-haven dollar and yen decline, while the euro was boosted by hawkish comments from European Central Bank (ECB) officials who have been flagging a rate hike as early as July.Payrolls are forecast to rise a solid 320,000, though that would be down from April, with unemployment at 3.Sentiment on the sector was improved as Alibaba and Baidu posted better-than-expected earnings last week, sending tech firms up 3.5%.The euro rose to a five-week high and was last up 0.Read also: Subscribe to Mid-day email alert We deliver news to your inbox daily.economic data appear to be slowing, ECB officials are debating even faster initial rate hikes, and front-end rate differentials have started to move in the euro's favour," noted Goldman Sachs analyst Zach Pandl.6 billion or about RM24.

2% at US$1.0750, having risen 1.6% last week.economy - if not matched by similar weakness in Europe - could result in a meaningful euro rebound, though the reverse is also true if U.The dollar index fell to a fresh five-week low of 101.38 and was last down 0.Subscribe to Mid-day email alert We deliver news to your inbox daily.

2% at 101."We see downside risks to U.50, after shedding 1.3% last week.China's offshore yuan rose 0." That underscores the importance of this week's major U.85% after hitting a one-week high of 6.

6548 per US dollar.The pullback in the US dollar helped gold off its recent lows, sending the metal up 0.Payrolls are forecast to rise a solid 320,000, though that would be down from April, with unemployment at 3.5% at US$1,862 an ounce.Oil prices have been supported by expectations for stronger demand as the US driving season gets under way, and as European Union nations negotiate over whether to impose an outright ban on Russian crude oil.The EU failed on Sunday to agree on an embargo of Russian oil, but diplomats will still try to make progress ahead of a Monday-Tuesday summit.0746 on Monday, having risen 1.

Brent rose 0.4% to US$119.90 per barrel, while US crude gained 0.The dollar index stood at 101.6% to US$115.72 per barrel.

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