Shares in Hong Kong and China hit 3-month highs
Dollar, oil stable
US PPI inflation data later on Friday
By Carolyn Cohn and Stella Qiu
LONDON/SYDNEY, Dec 9 (Reuters) – Global stocks rose on Friday on expectations that China’s economy will pick up as the COVID-19 lockdown eases, but shares in jittery markets ahead of the Federal Reserve’s next policy meeting pointed to a 2% weekly loss for the week. .
US S&P futures rose 0.18%, while European shares were flat.
In comments carried by state media on Thursday, Chinese Premier Li Keqiang said the country’s shift in policy on COVID-19 will allow the economy to pick up the pace, a day after a top-level party meeting pledged that they will focus on stabilizing growth while simultaneously optimizing the pandemic. measures.
Fed policymakers will meet next week and are likely to announce a 50 basis point hike in the U.S. central bank’s lending rate, while signaling a slower pace of rate hikes going forward.
“The market is very focused on what the Fed is going to do on Wednesday, nobody wants to take big positions,” said Giles Coghlan, chief currency analyst at HYCM, although he added that Chinese stocks were helped by the fact that China ” made this COVID pivot”.
MSCI’s broadest index of world shares rose 0.22%, while MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.2%, nearing a three-month high hit earlier in the week.
Japan’s Nikkei rose 1.2 percent. Britain’s FTSE lost 0.2% to an 11-day low, hurt by energy shares.
Hong Kong’s Hang Seng jumped 2.3% to a three-month high, with mainland developers up a whopping 9.9% to a four-month high. China’s blue chips rose 1% to their highest in nearly three months.
The world’s biggest investment banks expect global economic growth to slow further in 2023 after a year rocked by the Ukraine conflict and rising inflation that triggered one of the fastest tightening cycles in recent memory.
The US producer price index for final demand was forecast later on Friday to show a 7.2% rise in the 12 months to October, down from 8% last month, ahead of closely watched cost-of-living inflation data next week.
University of Michigan sentiment data will be released later Friday.
Data on Thursday showed some easing in the US labor market, with weekly jobless claims rising modestly.
Futures pegged a near-certain possibility that the Fed will slow its rate hike to 50 basis points next week, but the target U.S. federal funds rate should peak around 4.9% by next May.
“This slowdown is not a sign that the central bank’s job is nearly done … the slower pace of hikes is ushering in a new phase of the Fed’s tightening cycle,” said Brian Martin, G3 head of economics at ANZ.
“With inflation proving volatile and the labor market still buoyant, the risks to our 5.00% final outlook are on the upside.”
In addition to the Fed, the European Central Bank and the Bank of England are expected to announce interest rate decisions next week as policymakers continue to press the brakes on economic growth with firmer interest rates to stave off stubbornly high inflation.
The US dollar was flat against a basket of major currencies on Friday. Against the Japanese yen, it weakened 0.3% to 136.28 yen.
The euro was flat against the US dollar at $1.0557, below a recent five-month peak of $1.0594.
The yield on the benchmark 10-year Treasury note fell 2 basis points to 3.4760%. The two-year yield weakened by 3 basis points to 4.28%.
Treasury yields fell to a three-year low earlier in the week on expectations of slower growth or that a recession would curb interest rate hikes in the United States.
German 10-year government bond yields, the eurozone benchmark, gained 3 basis points to 1.85%.
Commodity prices rallied, with iron ore prices jumping 4.7% to a six-month high on hopes that demand from China would pick up.
Oil was steady as a shutdown of the main crude pipeline from Canada to the United States disrupted supplies, but both benchmarks were headed for weekly losses on worries about slowing growth in global demand.
U.S. West Texas Intermediate (WTI) crude futures fell 0.1% to $71.43 a barrel, while Brent crude was steady at $76.09 a barrel.
Spot gold was up 0.1% at $1,791.59 an ounce.
(Editing by Jacqueline Wong, Kim Coghill and Simon Cameron-Moore)