A Bitcoin logo on the doors of the Paralelni Polis venue in Prague, Czech Republic, on Tuesday, May 17th, 2022. (Photo: Milan Jaros/Bloomberg) China’s CSI 300 Index climbed after the nation’s banks cut their benchmark lending rates, adding to optimism over recent stimulus measures. Shares also advanced in South Korea, Taiwan and Australia, but fell in Hong Kong. US equity futures gained after the S&P 500 notched up a sixth straight weekly increase, boosted by corporate earnings and signs of economic resilience.
Financial markets are being shaped by wagers on the health of the US and Chinese economies on the one hand, and the impact of hostilities in the Middle East and geopolitics on the other. The decision by Chinese banks to cut lending rates came after officials have implemented a series of measures to revive economic growth and bolster the housing market.
China’s banks lowered their one-year loan prime rate, on which most new and outstanding loans are based, to 3.10% from 3.35%, and reduced the five-year gauge to 3.60% from 3.85%.
“It is not a big positive surprise, but rather within the expected range — we believe that the market’s sense of relief will spread and provide support for stock prices,” said Chunai Jean, senior strategist at Daiwa Asset Management in Tokyo. “We will continue to monitor the schedule of the Standing Committee of the National People’s Congress and the fiscal spending measures expected to be implemented at the meeting.”
Read more: Traders Bet China to Keep Yuan Calmer Onshore If Trump Wins
Gold climbed to hit an all-time high of about $2,730 an ounce, while silver, palladium and platinum also rose. In the Middle East, Israel is discussing its attack on Iran after a Hezbollah drone exploded near Prime Minister Benjamin Netanyahu’s private home at the weekend. Investors are also boosting gold holdings ahead of what’s expected to be a tight US presidential election.
The yen rose against the dollar as traders positioned for Japan’s parliamentary election scheduled for Sunday. The ruling coalition of the Liberal Democratic Party and Komeito may fall below the threshold of 233 seats needed for a parliamentary majority, according to an Asahi poll.
Read more: World Economy Fault Lines Shift From Prices to Politics and Debt
Finance ministers and central bank chiefs from around the world gather in Washington this week for the annual meeting of the International Monetary Fund and World Bank. Hanging over the meeting is the grinding Russia-Ukraine war and a toss-up US presidential election that offers starkly different economic outcomes for the world.
Bitcoin flirted with $70,000, a level last seen since June, amid a spurt of demand for dedicated US exchange-traded funds.
In US earnings this week, Tesla Inc. faces questions on its production targets and regulatory challenges after the unveiling of its much-hyped Cybercab failed to enthuse investors and quell concerns over its recent vehicle sales.
Boeing Co. will also have to sooth investors increasingly concerned over production delays, depleted financial resources and labour strife. Striking workers will vote on Oct. 23 to ratify a tentative agreement on a new contract the company and their union reached at the weekend, including a wage increase of 35% spread over four years.
Investors are positioning for the US election in about two weeks as odds tilt toward Trump winning the White House and Republicans controlling Congress. Traders have already begun ramping up bets on assets which had thrived in the wake of the former president’s 2016 victory, and are now looking to the impact on proposed policies including a lift in trade tariffs.