Despite challenges such as Wall Street’s instability and the liquidation of China Evergrande, Asian markets, led by Hong Kong, experienced a surge at the beginning of the week. The optimism stems from the belief that Beijing’s promises of economic stimulus are turning into tangible actions. The Hang Seng rose over 1%, influencing markets in Tokyo and Seoul to follow suit.
Beijing’s latest move to stabilize markets involves fully suspending the lending of restricted shares, accompanied by a bank reserve ratio cut and reports of a planned 2 trillion yuan ($278.45 billion) stocks stabilization fund. While the Hang Seng has room for further growth compared to its position last week, European equities face uncertainty, especially as U.S. stock futures point slightly lower after the S&P 500’s decline on Friday.
Caution is advised in a week filled with significant risk events, including the Federal Reserve’s policy decision, the monthly jobs report, and mega-cap earnings from influential companies like Alphabet, Microsoft, Apple, Amazon, and Meta Platforms. Monday’s events include Sweden’s release of preliminary GDP figures, earnings reports from Ryanair and Koninklijke Philips, and speeches by ECB’s Luis de Guindos, following expectations of a rate cut.
As markets remain dynamic, key developments to watch on Monday include Sweden’s GDP (Q4), financial results from Ryanair and Koninklijke Philips, and a speech by ECB’s Luis de Guindos. The Bank of England is set to announce its policy a day after the Federal Reserve’s decision, adding to the significant events shaping the week ahead.
