Stocks set for steady Asian open. Crude Oil Jumps: Wrap Up Markets

(Bloomberg) — Equities look poised for a solid start in Asia on Tuesday as investors assess China’s commitment to accelerated stimulus and move to support the yuan. The first OPEC+ supply cut in more than a year boosted crude oil.

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Futures were little changed for Japan and rose for Australia and Hong Kong. U.S. futures rose ahead of the resumption of trading on Wall Street after a break. European stocks fell due to the worsening energy crisis.

China announced on Monday a cut in the amount of foreign currency deposits banks must hold as reserves, a move to help the country’s currency after it fell to a two-year low. The offshore yuan was little changed in early trading.

Officials also said they would accelerate the rollout of the incentive in the third quarter. Beijing is ramping up support for an economy that has been weighed down by a Covid lockdown, a slump in the property sector and power shortages.

Crude oil traded around $89 a barrel after OPEC+ agreed to cut output by 100,000 barrels a day in October. The decision comes amid risks to demand from a wave of monetary tightening in the US, Europe and Asia-Pacific to combat high inflation.

The next rate hike is expected in Australia, where economists expect the central bank to raise the policy rate by an additional 50 basis points. Tighter financial conditions globally are weighing on stocks and bonds — the Asia-Pacific share index is at a more than two-year low — and fueling demand for the dollar as a haven.

The dollar may find more support if “further negative headlines emerge on Europe’s energy crisis and/or the Covid situation in China,” Commonwealth Bank of Australia strategist Carol Kong wrote in a note.

The dollar index fell but remains at a record level. The pound rose as markets digested Liz Truss’ victory in the race to succeed Boris Johnson as UK prime minister. The euro also found some relief after slipping to a two-decade low, weighed down by Europe’s energy woes.

Bitcoin traded below the $20,000 level and gold made modest gains.

What to watch this week:

  • Australia interest rate decision, Tuesday

  • Apple’s event is expected to showcase new iPhones, watches, on Wednesday

  • Bank of England Governor Andrew Bailey at the Finance Committee on Wednesday

  • Beige Fed Regional Economic Activity Book, Wednesday

  • Cleveland Fed President Loretta Mester is scheduled to speak on Wednesday

  • European Central Bank interest rate decision, Thursday

  • Fed Chairman Jerome Powell speaks at a Cato Institute conference in Washington on Thursday

  • Reserve Bank of Australia Governor Philip Lowe speaks at the event on Thursday

  • China PPI, overall financing, money supply, new yuan loans, Friday

  • Emergency meeting of EU energy ministers on emergency intervention in electricity markets on Friday

Some of the main movements in the markets:

inventories

  • S&P 500 futures were up 0.4% compared to Friday at 7:28 a.m. in Tokyo. The S&P 500 fell 1.1% on Friday

  • Nasdaq 100 futures rose 0.4% on Friday Nasdaq 100 fell 1.4% on Friday

  • Nikkei 225 futures were little changed

  • S&P/ASX 200 futures rose 0.1%

  • Hang Seng futures added 0.3%

currency

  • The Bloomberg Dollar Spot index fell 0.1%

  • The euro was at $0.9946, up 0.2%

  • The Japanese yen was at 140.51 per dollar, up 0.1%

  • The offshore yuan was at 6.9425 per dollar

Bindings

Goods

  • West Texas Intermediate crude was at $89.09 a barrel, up 2.6%.

  • Gold was at $1,711.84 an ounce, up 0.1%

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