- Asia's stocks rose as investors assessed China's economic outlook and the central bank's moves to lower interest rates and drain liquidity.
- An Asian equity gauge rose on the back of gains in Japan, where the nikkei 225 is on track to erase its year-to-date loss, and China, while Hong Kong was more subdued. The S&P500 and Nasdaq100 futures fell after the S&P500 index reached its highest level in over three months last week.
- For the first time since January, China's central bank unexpectedly cut a key policy interest rate. It also drained the banking system's liquidity. The offshore yuan fell. However, the world's second-largest economy is still dealing with property-sector woes, covid curbs, and a global slowdown.
- Overall, equity markets have benefited from signs of slowing inflation, which raised hopes of a federal reserve shift to less aggressive monetary tightening that can contain price pressures without triggering a recession.
- In the bond market, however, a still-sharp inversion of the treasury yield curve points to concerns that the Fed will tip the US into an economic contraction. Treasury yields rose slightly, while the dollar remained stable.