Stocks rise as China eases more COVID-19 measures

The prospect of the world’s number-two economy kicking back into gear helped traders overcome data last Friday showing that far more jobs than expected were created in the United States in November.

A big jump in wages added to concerns that the economy remained hot, meaning the Fed still had plenty of work to do to get inflation down to its 2 per cent target.

“If next week’s consumer price index data stays hot … then our forecast for the Fed funds rate to be raised by 50 basis points each in December and February to hit 4.75 to 5.00 per cent may prove too low,” said Mansoor Mohi-uddin, of the Bank of Singapore.

“If the Fed instead needs to keep hiking well into 2023, then the near-term outlook for risk assets will remain challenging for investors.”

Still, the dollar remained under pressure against its main peers as investors lower their expectations for US borrowing costs.

China’s yuan was among the best performers, breaking below the seven per dollar level for the first time in almost three months.

The reopening of China also lifted oil prices as demand expectations improved, while a decision by the Organization of the Petroleum Exporting Countries (OPEC) and top producers to not lift output also boosted the commodity.

Still, Innes added: “One major obstacle to prompt oil prices is that a widespread official reopening is unlikely to occur until spring. So, demand could remain exceptionally soft, including in the initial stages of a broader reopening of the economy.”

Source: CNA

Donate to Breeze of Joy Foundation

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Subscribe To Newsletter
Be the first to get latest updates and exclusive content straight to your email inbox.
Stay Updated
Give it a try, you can unsubscribe anytime.