As we look ahead to the day in European and global markets, the response to Beijing’s latest stimulus pledges in Chinese stocks has been mixed and volatile. Despite promises over the weekend that show intent, the lack of details has left investors uncertain.
Hong Kong shares started the day with ups and downs before turning lower, while mainland Chinese stocks mostly traded higher. Analysts suggest that the lack of a specific dollar figure for the stimulus package may be the reason for this divergence, as it may be more important to foreign investors than to Chinese investors.
The measures announced by policymakers to support the Chinese economy, such as helping local governments with debt problems and supporting the property market, have been noted. However, concerns remain over the limited efforts to boost domestic consumption, especially after recent data showed slowing consumer inflation and deepening producer price deflation.
The mixed performance in Chinese markets has set a negative tone for Europe, where futures for the EUROSTOXX 50 and FTSE have both fallen around 0.1%. Investors will be watching European luxury goods companies closely, as the sector has seen a nearly 9% increase since Beijing’s recent stimulus announcement.
In the coming days, investors will have plenty to digest with a raft of data from China, including third-quarter growth figures on Friday. Additionally, the European Central Bank is set to make a rate decision on Thursday, with expectations for a 25-basis-point rate cut. UK inflation data is also due on Wednesday.
Remarks from Federal Reserve officials Neel Kashkari and Christopher Waller are expected to provide insight into the central bank’s rate outlook. Despite signs of a resilient U.S. economy, an outsized 50-basis-point rate cut next month is no longer on the table, keeping the dollar supported and near a seven-week high against major peers.
Key developments that could impact markets today include the speeches from the Fed officials, as well as government debt auctions in France and Germany. Stay tuned to Extreme Investor Network for the latest updates on market trends and insights into global finance.