NVDA gained a massive 197% since our AI first added it in November - is it time to sell? 🤔Read more

GLOBAL MARKETS-Asia shares hauled higher as China trims key repo rate

Published 18/11/2019, 05:51
© Reuters.  GLOBAL MARKETS-Asia shares hauled higher as China trims key repo rate
EUR/USD
-
USD/JPY
-
JP225
-
ESU24
-
EU50
-
MIAPJ0000PUS
-
CSI300
-
DXY
-

* Asian stock markets : https://tmsnrt.rs/2zpUAr4

* China trims short-term interest rate, in surprise move

* Helps Asia share markets reverse early losses

* Markets look to Fed minutes, ECB Lagarde speech

* Pound inches up as opinion polls favour Tories

By Wayne Cole

SYDNEY, Nov 18 (Reuters) - Asian shares ticked higher on

Monday after Beijing surprised markets by trimming a key

interest rate for the first time since 2015, stirring

speculation that further stimulus was on the way for the world's

second-largest economy.

China's central bank cut rates on seven-day reverse

repurchase agreements by five basis points to 2.50%, a move that

nudged the yuan higher while lowering bond yields. The news helped Shanghai blue chips recoup early losses to

rise 0.8% .CSI300 , though the initial reaction was cautious

overall. MSCI's broadest index of Asia-Pacific shares outside

Japan .MIAPJ0000PUS moved 0.3% higher.

Japan's Nikkei .N225 firmed 0.3%, and was just short of

its recent 13-month top. E-Mini futures for the S&P 500 ESc1

held steady, as did EUROSTOXX 50 futures STXEc1 .

Beijing's latest policy shift added to hopes it might also

be more serious about making progress in trade talks with the

United States.

On Saturday, Chinese state media said the two sides had

"constructive talks" on trade in a high-level phone call that

included Vice Premier Liu He, U.S. trade representative Robert

Lighthizer and Treasury Secretary Steven Mnuchin. "More than in previous rounds, we see momentum toward

reaching at least a limited trade deal, and certainly a

mini-deal would remove some of the negative sentiment overhang

for the real economy and markets," said Patrik Schowitz, global

multi-asset strategist at J.P. Morgan Asset Management.

"We have upgraded our outlook on equities as an asset

class," he added. "Emerging market equities are now our most

favoured region alongside U.S. large cap equities."

LOOKING TO THE FED

In currency markets, the dollar was little changed against

its main peers on Monday and well within recent tight trading

ranges. Indeed, volatility in the market has been the lowest in

decades recently and shows no sign of shifting.

The dollar edged up on the safe-haven yen to 108.81 JPY= ,

after bouncing on Friday. Chart support lies at 108.23 with

stiff resistance at 109.48.

The euro idled at $1.1063 EUR= having found support at

$1.0987 last week. Investors are awaiting the first major speech

by European Central Bank President Christine Lagarde due on

Friday for clues on future policy.

Sterling nudged up to $1.2926 GBP=D3 as more polls showed

the Tories well ahead in the election race. Against a basket of currencies, the dollar was a shade

softer at 97.905 .DXY .

The dollar and bonds are likely to be sensitive to minutes

of the Federal Reserve's last policy meeting, set to be

released on Wednesday.

"The minutes are likely to reiterate that the U.S. economy

is 'solid' and that current monetary policy settings are

'appropriate', which would support the dollar," said Joseph

Capurso, a currency analyst at Commonwealth Bank of Australia.

However, he noted the soft report on October U.S. retail

sales released on Friday suggested previously strong consumption

was showing some cracks. "Any further weakness in consumption could warrant a

material reassessment of the outlook by the FOMC. Under our

baseline, the FOMC would most likely start cutting interest

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.