Global Markets Face Uncertainty as China’s Stimulus Plans Fall Short
Investors eagerly awaited China’s post-holiday market revival, but Beijing’s policymakers failed to deliver concrete details on stimulus measures, leaving markets disappointed. Despite an initial surge, mainland stock indexes retreated, while Hong Kong’s Hang Seng Index plummeted over 10%. The lack of clarity on China’s stimulus plans has set a negative tone for European markets, with stock futures declining in Asia.
The economic calendar is light today, shifting focus to China’s stimulus uncertainty, as well as concerns over escalating Middle East tensions and revised Federal Reserve expectations. Oil prices dipped, partly due to China’s market reaction, and partly due to the ongoing conflict in the Middle East, where Israel is poised to expand its offensive into Lebanon.
The Federal Reserve’s dovish stance is also under scrutiny, following Friday’s strong payrolls report. Market expectations now point to a more moderate 50 basis points rate cut by December. As a result, the 10-year Treasury yield remains elevated above 4%, while the two-year yield hovers near its highest level in over a month.
Today’s key market influencers include speeches from European Central Bank and Federal Reserve policymakers, as well as Germany’s industrial output data for August.
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