Investors cheered the approval of a trillion-yuan sovereign issue as a harbinger of stimulus, while the Chinese government unveiled new support plans that include issuing additional sovereign debt and lifting the budget deficit ratio to finance fresh measures. Hong Kong reversed a pandemic-increase in stock trade levies and Chief Executive John Lee also announced a plan to halve taxes on home purchases for residents as well as non-residents. That helped to boost property stocks, even as troubled Chinese developer Country Garden Holdings Co. was deemed to be in default on a dollar bond for the first time
Stock markets got a boost from fresh stimulus measures for China. The Hang Seng has pared some of its early gains, but is still up 1.0%, while the CSI300 has lifted 0.6% and the JPN225 0.7%.
European stocks: In the red today weighed by a flurry of bank results and a mixed batch of US Big Tech earnings ahead of the ECB decision tomorrow.
Microsoft, Alphabet, and Visa reported their earnings, which indicated strong performance with revenue and net income growth in their respective quarters.
Alphabet (-6% in after-hours) sales beat damped by cloud computing miss.
Microsoft’s (+4% in after-hours) unexpected rebound in Azure cloud growth lifted shares.
Snap Inc. also reported revenue growth but experienced operating and net losses in the same period.
Santander net profit rose 20% on record-high interest rates.
FED: PMIs kept a Fed rate hike through the January 31 FOMC decision on the table with a 40% probability.
USDIndex: returned above 106, but held sideways.
AUDUSD: Aussie Dollar jumped after hotter-than-expected inflation lifted rate hike forecasts for the RBA next month, which would come after four rate pauses.
USOIL steadied today at key 4-month support trendline after a 3-day sharp decline, amid signs that the Israel-Hamas war will remain contained for the time being at least. $83 is a key hurdle, which could indicate a move to $80.
Gold holds gains above $1970.
Bitcoin is up 15% this week amid speculation that ETF applications from BlackRock and others will succeed and drive capital into the asset class.
Today: Germany IFO business climate, BOC rate decision, US new home sales and IBM, Meta earnings.
Interesting Mover: USDCAD broken the descending trendline from the draw tops of 1.3977 and 1.3861.
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Andria Pichidi
Market Analyst
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