Chinese stocks climb; Dollar steady ahead of US inflation test By Reuters

By Ankur Banerjee

SINGAPORE (Reuters) – Asian stocks got a lift against Chinese shares on Thursday as China’s central bank launched its 500 billion yuan facility to boost capital markets, while the dollar held near a record high of two months ahead of US inflation data later in the day. .

The People’s Bank of China (PBOC) has announced that it will start accepting applications from financial institutions to join a newly created financing scheme, a plan it announced on September 24 as part of a series of stimulus measures that have led Chinese stock markets to rise.

China’s blue-chip CSI300 rose 1.7 percent in early trade, a day after falling 7 percent, as investors remained focused on details of stimulus measures from Chinese authorities to help revive the stuttering economy .

Hong Kong rose 2.5 percent after falling 1.3 percent on Wednesday and is up 24 percent this year.

That left MSCI’s broadest index of Asia-Pacific shares outside Japan 0.76 percent higher in early Asian hours. increased by 0.5%.

Market attention is now on a Finance Ministry press conference on Saturday, which will provide details on the fiscal stimulus plan.

“It is likely that if and when we get more details on the scale of spending, other policymakers will be better able to start rolling out supportive policies relevant to their functions,” ING economists said in a note on Thursday .

“While it may take longer compared to monetary policy, we continue to expect a boost in fiscal stimulus in the coming weeks and months.”

Chinese shares hit a two-year high on Tuesday after the long National Day holiday, but quickly lost momentum as a lack of details on China’s stimulus measures dealt a blow to market enthusiasm.

China’s benchmark indices posted their biggest daily losses on Wednesday since the start of the COVID-19 pandemic.

“The ultimate goal for the Chinese market is not to create sudden rallies. It is about wanting to inject confidence into the economy domestically, to reduce pressure on the housing market. Their ultimate goal is domestic stability,” said Henry Wu, Head of XTrackers Products USA.

The US CPI is on the rampage

Overnight, the index and the Dow closed at record highs after the release of the Federal Reserve’s meeting minutes and ahead of September inflation data. (.N)

The minutes showed that a “substantial majority” of Fed officials at the September meeting supported ushering in an era of easier monetary policy with a half-point rate cut.

However, an even broader agreement emerged that the initial move would not commit the Fed to any particular pace of rate cuts going forward, the minutes said.

Markets have an 82 percent chance of a 25-basis-point cut next month, CME’s FedWatch tool showed, as investors cut expectations for aggressive rate cuts after last week’s strong U.S. jobs report.

Investors’ focus on Thursday will be on inflation data in the form of the consumer price index (CPI) for insight into the path of Fed rates, while the corporate earnings season kicks off on Friday with bank earnings.

September’s CPI is likely to show core inflation holding steady at 3.2 percent from a year ago, according to economists polled by Reuters.

“A higher-than-expected core inflation number would lead yields to extend recent gains and traders to reduce further expectations for a Fed rate cut in November,” said Tony Sycamore, market analyst at IG.

“A scenario that is likely to raise questions around the current Goldilocks narrative and unsettle equity markets.”

Shifting US interest rate expectations boosted the dollar, which measures the currency against six key rivals, steady after climbing to its highest level since August 16 overnight. (FRX/)

The yen was last at 149.13 per dollar, while the euro was at $1.09445.

In commodities, oil prices were higher as investors grappled with rising tensions in the Middle East and its impact on oil supply, as well as an increase in demand amid a major storm moving into Florida .

futures rose 0.4 percent to $76.86 a barrel, while U.S. West Texas Intermediate (WTI) futures rose 0.37 percent to $73.5 a barrel. (OR)