Asian stock markets closed the trading session this Thursday (1st) on a high, after the president of the Federal Reserve (Fed), Jerome Powell, signaled that the entity will reduce the pace of its monetary tightening starting this month, at the meeting of the next 14th.
In addition, there is continued optimism about China, which has been gradually relaxing restrictions against Covid-19 in the country, in response to the protests that have occurred in recent days against the strict Covid-zero policy.
The Shanghai Composite index closed up 0.45%, at 3,165.47 points, while the less comprehensive Shenzhen Composite rose 1.26%, at 2,044.10 points.
The Hang Seng, from Hong Kong, was up 0.75%, to 18,736.44 points. The Nikkei, of the Tokyo stock exchange, had gains of 0.92%, to 28,226.08 points, and the South Korean Kospi rose 0.30%, to 2,479.84 points.
The Fed comes from four hikes in a row of interest rates of 75 basis points, and Powell’s speeches increase the chances that a smaller increase, of 50 basis points (bp), will occur in December — at least that’s what the survey showed CME Group after the central banker’s speech.
This morning, the tool indicated a probability of 81.8% for a 50 bp increase, at a range of 4.25% to 4.5%, with the remaining 18.2% for another 75 bp increase, at a level of 4, 5% to 4.75%.
The director’s comments, therefore, moved market expectations towards a milder monetary tightening in the world’s main economy and, consequently, boosted risk appetite in stock exchanges. Citi, however, disagrees with the positioning of the market.
“Rather than relying on forecasts of falling inflation, Powell is increasingly concerned that inflation has spread to non-household services, with little prospect of a slowdown in the category given still very tight labor markets. . The implication is a greater focus on wage growth and labor market data and less focus on the slowdown in the prices of the main goods”, warns the entity, which sees risk taking since yesterday as another risk. hawkish ahead, “including Friday’s jobs report.”
On the local scene, investors look optimistically at the relaxation of restrictions against Covid-19 in some metropolises in China that have reported demonstrations in recent days, such as Guangzhong and Chongqing.
According to sources heard by the ReutersBeijing may start to allow some infected people to quarantine at home, a considerable change from the previous guidance of isolating communities in case of positive tests for the virus.
The positive drivers caused investors to leave in the background weak readings of industrial purchasing managers indexes (PMIs) in China and Japan.
Among other markets, the Taiwanese Taiex index rose 0.90% to 15,012.80 points and the Australian S&P/ASX 200 rose 0.96% to 7,354.40 points.
Source: CNN Brasil
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