- MSCI’s Asia-Pacific gauge surges to 2.5-year high as PBOC eases FX restrictions.
- Australia opens international borders for New Zealand and other low-risk countries across the Asia-Pacific region.
- Pelosi’s rejection of Trump’s stimulus proposal probe Friday’s heavy risk-on.
- US holiday, light calendar offer little hopes for the bulls.
Asian shares remain bid, led by China, while heading into the European open on Monday. Although weekend headlines challenged Friday’s optimism, mainly due to the chatters surrounding the US coronavirus (COVID-19) stimulus, the People’s Bank of China (PBOC) managed to keep the market bulls happy.
In doing so, the PBOC eased regulations for financial institutions catering to FX traders. The last time the Chinese central bank did such thing, the yuan dropped over 2.0 in the next three weeks. As a result, equity traders in Beijing and Hong Kong cheer the news while printing over 2.0% gains as we write. It should, however, noted that the PBOC Governor Yi Gang has ruled out following the West when it comes to excessive monetary easing.
It’s worth mentioning that Japan flashed mixed data concerning Machinery Orders and Producer Price Index, for August and September months respectively. Though, fears that the BOJ’s future exit from easy money will be too challenging for the markets seem to weigh on Japan’s Nikkei 225, down 0.30% intraday to 23,547 now.
Elsewhere, Australia eases travel restrictions for visitors from New Zealand while also considering lowering the bars for countries like South Korea and Indonesia soon. The news helps stock indices from Australia, New Zealand, South Korea and Indonesia to print mild gains whereas MSCI’s index of Asia-Pacific shares outside Japan rises over 1.0% to probe the early 2018 highs. Additionally, India’s BSE Sensex and the US stock futures are mildly positive by the time of writing.
Moving on, updates concerning the US COVID-19 stimulus and the presidential election will be the key to watch while the virus news from Europe and the UK can also offer near-term trade directions. Even so, a lack of US treasury traders will restrict the market moves.