Stocks and bonds rallied as China tackled a worsening property slump, boosting confidence in global markets.
U.S. and European stock futures rose while bond yields fell. The move comes after China’s banking regulator announced it would set up a special commission to examine risks at China’s corporate group.
The firm, one of the largest privately-placed asset managers in the United States, has defaulted on investments sold to wealthy clients and corporations. This comes amid news that Chinese developer Country Garden Holdings is considering extending its maturity bonds for the first time.
This comes amid news that Chinese developer Country Garden Holdings is considering extending its maturity bonds for the first time.
“This is a financial shock of such magnitude to the system that the authorities will do everything possible to contain it,” said Andrew Bell, CEO of Witan Investment Trust. “I think the risk of infection outside of China is pretty low. But that’s another reason the market is a little more cautious heading into the summer.”
Country Gardens is soliciting input from some bondholders on a proposal to extend payments on yuan bonds due Sept. 2, the people said, asking not to be identified because of the private matter. made it The company, once China’s largest private developer by revenue, risks joining scores of defaulters if it fails to pay coupons on $2 bonds within the 30-day grace period.
Stocks in mainland China fell on Monday as almost all 80 constituents of Hong Kong’s Hang Seng Index fell. The CSI 300 index, the benchmark for mainland stocks, is now trying to wipe out any gains it gained after last month’s Politburo meeting amid signs of economic deterioration.
European government bond yields fell. U.S. Treasury yields stabilized near levels last seen in November on speculation that the U.S. Federal Reserve (Fed) will keep interest rates in captive territory, disappointing investors hoping for easing. was
Traders are looking for clues on the central bank’s next move, and attention will be focused on the minutes of the Fed’s latest policy meeting later this week.
“Equity markets have seen a very strong rally over the last couple of months on expectations that interest rates are nearing their peak,” Bell said. “The market has been a little off, but we have to get over the good news before jumping to another level.”
The yen strengthened after breaking a year-to-date high of 145.07 against the dollar as investors began watching for signs of government intervention, as they did last year.
As Russia’s war with Ukraine drags on and international sanctions hold back the economy, the ruble fell above the 100-yen/dollar level for the first time since March last year.
This week’s main events:
- China medium-term lending, retail sales, industrial production, fixed asset investment, foreign exchange net settlements, Tuesday
- Japanese industrial production, GDP, Tuesday
- UK jobless claims, unemployment rate, Tuesday
- US retail sales, imperial manufacturing, corporate inventories, cross-border investments, Tuesday
- Reserve Bank of Australia Policy Minutes, Tuesday
- Minneapolis Fed President Neil Kashkari Speaks Tuesday
- China Property Prices Wednesday
- Eurozone industrial production, GDP, Wednesday
- UK CPI, Wednesday
- US FOMC minutes, housing starts, industrial production, Wednesday
- U.S. Initial Jobless Claims, U.S. Congress.Depth Leading Index, Thursday
- Eurozone CPI, Friday
The main movements in the market are:
- As of 10:06 am London time, the Stoxx Europe 600 was up 0.2%.
- S&P 500 Futures Gain 0.2%
- Nasdaq 100 Futures Gain 0.4%
- Dow Jones Industrial Average futures gain 0.1%
- MSCI Asia-Pacific Index Falls 1.2%
- MSCI Emerging Markets Index Falls 0.9%
- Bloomberg Dollar Spot Index Little Change
- The euro was little changed at $1.0943.
- The Japanese yen is almost unchanged at 1 dollar = 144.94 yen.
- The offshore yuan fell 0.2 percent to 7.2768 to the dollar.
- The British pound remained unchanged at $1.2696.
- Bitcoin almost unchanged at $29,385.29
- Ether fell 0.3% to $1,847.1.
- The 10-year government bond yield remained almost unchanged at 4.15%.
- German 10-year bond yields fell one basis point to 2.61%.
- UK 10-Year Yield Holds Little Change At 4.52%
- Brent crude fell 0.4% to $86.49 a barrel
- Spot gold barely changed
This article was produced in partnership with Bloomberg Automation.