Morning Bid: Positioning for pivot made in China

Nov 7 (Reuters) – A look at the day ahead in Asian markets from Jamie McGeever.

What the Fed withdraws, China can repay.

Speculation is growing that China may soon make major changes to its zero-covid-19 policy and begin economic recovery. Chinese commodity prices were on fire late last week, and that glow is expected to continue burning through Monday.

The strong close on Wall Street on Friday should also help, but the meeting may be in danger – the Fed will not move at any time, the expected rates are now above 5%, the yield curve will not change, and the decrease in profits next year is. very possible.

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Could China’s pivot on COVID supersede the Fed’s pivot on investor rates, triggering a year-end slump in global markets? Some of the developments in China and Hong Kong last week were interesting.

Shanghai shares rose 6.4%, the biggest weekly gain since July 2020; Hong Kong’s Hang Seng jumped 8.7%, its best week in 11 years, and China’s yuan posted its biggest gain against the dollar on Friday since the currency’s first exchange rate in 2005.

Chinese stocks

A meeting in Hong Kong last week on international banking showed interest in investing in China. “The risk/reward remains attractive for the resumption of trade in China,” said analysts at Morgan Stanley.

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China is also active on the economic front on Monday, with Beijing releasing its trade and FX data for October. Trading activity is expected to slow and FX reserves, the lowest in five and a half years, are expected to approach the $3 trillion mark.

Three major factors that will provide guidance to the markets on Monday:

China trade balance, FX reserves (October)

India trade balance (October)

German current account (September)

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Jamie McGeever reports in Orlando, Fla.; Edited by Lisa Shumaker

Our Standards: Thomson Reuters Trust Principles.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from discrimination.

Jamie McGeever

Thomson Reuters

Jamie McGeever has been a financial journalist since 1998, based in Brazil, Spain, New York, London, and now back in the US. Focus on finance, central banks, policy makers, and global markets – especially FX and fixed income. Follow me on Twitter: @ReutersJamie


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