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Global equity/currency market update: Asian stocks scale two-year high as China announces property boost

20 May 2024 9:00 am
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Mumbai, 20 May (Commoditiescontrol): Asian shares surged to two-year highs on Monday, driven by China's robust measures to tackle its property crisis and anticipation of global rate cuts in the coming weeks. The dollar remained stable after a weekly decline.

Brent crude futures hit a one-week high of $84.14 a barrel, with market attention drawn to the Middle East following the crash of a helicopter carrying Iran's president in heavy fog. Gold hovered close to a record high at $2,423 an ounce.

Japan's Nikkei rose 0.9% in early trade, while Hang Seng futures pointed to gains. The MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.25% to a two-year high, with early gains in Australia and South Korea.

Global stocks reached record highs last week after softening U.S. inflation data. This week's focus shifts to policy speeches, meeting minutes, a central bank decision in New Zealand, and Nvidia's results, amidst a break in the data calendar.

Last week, global bonds retraced a rally following encouraging U.S. CPI data. U.S. Federal Reserve Governor Michelle Bowman reaffirmed her willingness to hike rates if inflation progress stalls. European Central Bank board member Isabel Schnabel suggested a June rate cut might be appropriate but downplayed expectations for a series of cuts.

Two-year U.S. Treasury yields ended last week down four basis points at 4.825%, steady in Asia trade. Ten-year U.S. yields fell 8.4 basis points last week to 4.42%. Two-year bund yields increased by two basis points to 2.988%.

China's "historic" steps to stabilize its property sector, including 1 trillion yuan ($138 billion) in extra funding and eased mortgage rules, boosted the Hang Seng to a nine-month high and copper prices to a 26-month peak. Nickel prices also surged to a nine-month high due to unrest in New Caledonia.

In currency markets, the dollar logged its largest weekly drop against the euro in two-and-a-half months but remained steady in Monday's Asian trade. The euro held at $1.0873, the yen was slightly softer at 155.82 per dollar, and the Australian dollar held at $0.6698 after rising 1.4% last week. The New Zealand dollar hovered at $0.6135 ahead of the Reserve Bank of New Zealand's interest rate decision on Wednesday.

S&P 500 futures rose 0.2% in early trade, while Bitcoin dipped about 1% to $65,863.

(By Commoditiescontrol Bureau: 09820130172)

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