Evergrande Shares Tumble By 25%
Shares of embattled developer China Evergrande Group (3333.HK) plunged by 25% today after police detained some staff at its wealth management unit, suggesting a new investigation that could add to the property company’s woes.
Turkish President Urges Musk To Build Tesla Factory
Turkish President Recep Tayyip Erdogan asked Tesla (TSLA.O) CEO Elon Musk to build a Tesla factory in Turkey, Anadolu Agency posted on social media platform X on Sunday, during during a meeting at Turkish House, a skyscraper near the United Nations in New York.
Oil Inches Higher On Supply Concerns
Oil prices inched higher today, buoyed by forecasts of a widening supply deficit in the fourth quarter after Saudi Arabia and Russia extended cuts and on optimism of a demand recovery in China, the world’s top crude importer.
The Bank of Japan’s (BOJ) policy meeting on Friday is the highlight of the week in Asia, with speculation rising that policymakers may be much closer to moving away from ultra-loose policy and negative interest rates than previously thought.
Rate decisions and guidance from Taiwan, the Philippines and Indonesia on Thursday will also be closely scrutinized, while the latest inflation figures from Japan, Malaysia and Hong Kong are on tap this week too.
Wall Street’s gloomy end to last week has seen the three main indexes fall between 0.83% and 1.56% on Friday. This will cast a shadow over the Asia open today, even though Asian markets ended the week on a far more positive note. Meanwhile, the MSCI Asia ex-Japan Index rose on Friday, lifted by surprisingly strong Chinese retail sales and industrial production figures, ensuring a decent 1.2% rise on the week.
The euro has weakened for the last nine weeks, its longest losing streak ever. The 5% decline over that period is modest relative to other multi-week spells of depreciation, but nine weeks is still record-breaking. A period of consolidation and reversal is surely imminent.
The flip side of that run, which has more far-reaching implications and affects Asia more is the dollar has strengthened nine weeks in a row, its longest, best run since 2014.
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Yen Under A Microscope Prior To Meeting
The U.S. dollar and most major currencies were flatlining in early trades today, barring a blip in sterling, as a Japanese holiday and a bunch of upcoming central bank meetings sucked the air out of markets.
The BOJ’s policy meeting on Friday is the highlight of the week in Asia, after Governor Kazuo Ueda stoked speculation of an imminent move away from ultra-loose policy. In a week packed with central bank meetings, decisions are also due from the U.S. Federal Reserve on Wednesday and Bank of England on Thursday.
An Unlikely Rate Raise In November
The Federal Reserve is unlikely to raise interest rates at its Oct. 31-Nov. 1 meeting, Goldman Sachs strategists wrote on Saturday, while also forecasting the U.S. central bank would lift its economic growth projections when policymakers gather next week.
“We think that further labor market rebalancing, better news on inflation, and the likely upcoming Q4 growth pothole will convince more participants that the FOMC (Federal Open Market Committee) can forgo a final hike this year, as we think it ultimately will,” the investment bank’s strategists wrote in a report.
A Slow Start For The Asian Markets
Asian shares started cautiously today in a week packed with central bank meetings that include the Federal Reserve and the Bank of Japan, which will be closely scrutinized for the global interest rate outlook.
Both S&P 500 futures and Nasdaq futures rose by 0.2% in early Asia. MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) slipped by 0.1% after gaining 1.2% last week. Meanwhile, Japan’s Nikkei (.N225) is closed for a holiday.