Global Markets Hold Steady Amid Holiday Lull
As the holiday season approaches, Asian stocks experienced a modest uptick on Tuesday, with China’s CSI300 blue-chip index and Shanghai Composite Index rising 0.9% each. Hong Kong’s Hang Seng Index also advanced 1.08%. This growth is attributed to Beijing’s announcement of increased support for the country’s struggling economy, including the issuance of 3 trillion yuan ($411 billion) worth of special treasury bonds next year.
China’s Economic Recovery Faces Challenges
Despite the positive news, investors remain cautious about China’s economic outlook, particularly in light of potential tariffs from U.S. President-elect Donald Trump. According to Ronald Temple, chief market strategist at Lazard, “China faces significant challenges entering 2025, including a real estate crisis that has shattered consumer confidence and a potential trade war with the United States that could trigger the worst growth slowdown in decades.”
Global Market Trends
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.44%, tracking Wall Street’s overnight gain. EUROSTOXX 50 futures ticked up 0.04%, while FTSE futures rose 0.46%. However, S&P 500 futures and Nasdaq futures each lost 0.05%. Japan’s Nikkei fell 0.24%.
Federal Reserve Rate Cuts in Focus
This week, the focus shifts to the Federal Reserve, with markets pricing in just about 35 basis points of easing for 2025. This has sent U.S. Treasury yields surging and the dollar to new highs. The two-year Treasury yield last stood at 4.3427%, while the benchmark 10-year yield steadied near a seven-month high at 4.5907%.
Dollar Strength Impacts Commodities and Gold
The dollar’s continued strength is weighing on commodities and gold, with the dollar index holding near a two-year high at 108.14. The euro eased 0.09% to $1.03955, while the yen languished near a five-month low at 156.99 per dollar. Gold stood at $2,618.10 an ounce after slipping 1% last week.
Oil Prices Edge Higher
Oil prices experienced a slight increase, with Brent crude futures rising 0.5% to $72.99 a barrel, while U.S. crude gained 0.46% to $69.56 per barrel.
Leave a Reply