Currency check: Asia-Pacific currencies strengthen strongly, led by the Chinese yuan
Both the Chinese onshore and offshore yuan appreciated against the dollar in the Asian session ahead of a news conference on Covid measures.
The greenback lost 1.09% against the offshore yuan and 0.65% against the onshore yuan, both trading around 7.16. The offshore yuan traded at 7.24 per dollar before rallying sharply.
Other Asia Pacific currencies also appreciated against the dollar. That Australian dollar had risen to $0.6701 after bouncing from around $0.66 and that Korea won was 1,326.79 per dollar, down from around 1,340 earlier on Tuesday.
— Abigail of
Chinese indices emerge ahead of Covid briefing
Indices in China rose more than 2% as investors closely watched developments in the country’s zero-Covid policy after posting losses in the previous session.
China’s CSI 300 Index rose 2.97% in the morning session during the Shanghai composition increased by 2.2%. That Shenzhen component The index rose by 2.172%.
Local media reported that China’s State Council will hold a press conference on the Covid measures at 3 p.m. local time or 2 a.m. ET.
The nation saw a drop in the number of daily infections for the first time in more than a week.
– Evelyn Cheng, Jihye Lee
China’s Xi is likely to continue to be “very pragmatic,” including on Covid policies, strategist says
Chinese President Xi Jinping has been realistic and practical on Covid, domestic real estate issues and politics since the end of the Chinese Communist Party National Congress, said Andy Rothman, investment strategist at Matthews Asia.
“He has been pragmatic on Covid policy and announced a change of direction towards living with Covid rather than Covid Zero,” he said on CNBC’s Squawk Box Asia when asked how the government might respond to the recent unrest in parts of China.
“He’s been pragmatic about real estate, he’s been very pragmatic about dealing with Joe Biden, so I expect that’s going to stay that way,” Rothman said.
He added that he sees the unrest surrounding the ongoing zero-Covid policy as broadly in line with what is expected of the Chinese government.
“What the protesters seem to be asking for are things that Xi Jinping has already said he wants to deliver,” he said. “He wants to show a way out of zero tolerance for Covid and towards living with Covid like the rest of the world.”
Rothman added that recent announcements to ease quarantine measures for international travelers suggest that implementing shifts from the zero-Covid policy will be “relatively easier”.
“He does not retreat [or] If he gives in under pressure, he’s just delivering at an accelerated pace what he’s already said to these students and what he wants to give them,” he said.
— Abigail of
Oil prices rise more than a dollar ahead of China briefing
Oil prices rose ahead of a news conference to be held by China’s State Council as investors continue to monitor developments – paring some losses posted on Monday when they hit their lowest level in almost a year.
West Texas Intermediate futures rose 1.76% to $78.59 a barrel, while Brent crude futures rose 2.28% to $85.00 a barrel.
However, oil markets may “mistake the news of China’s lockdown,” Rystad Energy wrote in a note.
“[The latest lockdowns’] likely impact on China’s near-term oil demand, particularly in transportation, is likely to be small,” the release added, citing the company’s own investigation into real transportation activity in China.
Even as daily Covid cases continue to rise, cities like Shanghai have shown no slowdown in road traffic, according to Rystad Energy’s own research.
— Lee Ying Shan
China unlikely to make sudden changes to its Covid policy: National University of Singapore
The Chinese government is unlikely to make sudden changes to its zero-Covid policy as it will bring chaos, Professor Wang Gungwu of the National University of Singapore said on CNBC’s Squawk Box Asia.
“If you suddenly change the policy, I think the damage and the consequences would be worse – it would be really messy because I think the spread of Covid will be absolutely unprecedented,” Wang said.
He added he expects Chinese leader Xi Jinping to make adjustments at the local level to ease public dissent.
Wang said Xi did not want to officially admit that the “policy has been wrong for quite some time,” but she also cannot change it immediately.
– Jihye Lee
Hong Kong-listed property shares rise after China changes fundraising rule
Stocks related to Hong Kong-listed real estate developers soared after China’s regulator announced it would lift a ban on raising capital for the sector.
China’s securities regulator announced five support measures for the real estate market, including lifting a multi-year restriction on real estate developers selling shares to raise finance.
Cifi Holdings Group up 13.01% in the first hour of trading, country garden also increased by 13.36%, Logan group rose by 10.23% and Longfor group gained 9.88%.
– Jihye Lee
Hong Kong on track for best month since April 1999
Hong Kong Hang Seng Index is on track for its best month since April 1999, when the index rose 21.85%.
According to data from Refinitiv, the index was up more than 3% on Tuesday morning and around 22% in November.
The HSI closed 1.57% lower on Monday, the worst day of the week, as the Hang Seng lost 1.87% on Nov. 21.
-Gina Francolla, Jihye Lee
Japan’s unemployment rate unchanged, retail sales miss estimates
According to official data, Japan’s unemployment rate held steady in October from September’s reading of 2.6%. The number is slightly above the median expectation of 2.5% of economists polled by Reuters.
The job-to-applicant ratio, which measures active job openings per job seeker, was 1.35. This means that there are 135 positions available for every 100 applicants, indicating that the labor market in Japan remains tight.
The country’s retail sales rose 4.3% on an annualized basis in October, missing the 5% increase forecast in a separate Reuters poll.
The latest reading marks the first slowdown in retail sales growth since June this year.
– Jihye Lee
The Fed should continue hiking into next year, Bullard says
James Bullard in Jackson Hole, Wyoming.
David A Grogan | CNBC
St. Louis Fed Chairman James Bullard said Monday that the Fed should raise its benchmark interest rate further in the coming months and that the market may be underestimating the chance the Fed will have to become more aggressive.
“We need to continue our rate hikes into 2023 and there is some risk that we will need to go higher [5%]’ Bullard said at a Barron’s Live webinar.
Bullard caused a stir in financial markets earlier this month when he said the Fed’s rate hikes so far have had “limited impact” on inflation and that the federal funds rate may need to rise to between 5% and 7%.
Bullard, who is a voting member of the FOMC, said the Fed must postpone rate cuts next year even if the inflation picture starts to steadily improve.
“I think we probably need to stay there all of 2023 and into 2024 given the historical behavior of PCE core inflation or Dallas Fed trimmed median inflation. They will sink I think. That’s my baseline. But they will probably win. It’s not going to fall as fast as markets would like and probably the Fed would like,” Bullard said.
— Jesse Pound
CNBC Pro: Money manager names 9 ‘cheap’ stocks to buy amid mounting recession fears
It’s “crucial” for investors to look at valuations now that a recession is looming and inflation is likely to continue,” said Steven Glass, chief executive of Pella Funds Management.
In this environment, Glass selected a list of nine stocks that he thinks “look particularly cheap given their growth prospects.”
CNBC Pro subscribers can read more here.
— Wheat Tan
Cryptocurrency prices fall but quickly recover after BlockFi files for bankruptcy
Bitcoin price declined on Monday after BlockFi officially announced it had filed for Chapter 11 bankruptcy following FTX’s bankruptcy.
Bitcoin briefly fell as low as $16,000 but has already recovered. It was last down just 1% to over $16,300, according to Coin Metrics. Ether price action showed a similar upswing.
BlockFi has been in bad shape since the spring after the Terra project was blown up, leading to the implosion of Three Arrows Capital. Back then, the company accepted a bailout from FTX that would help it avoid bankruptcy. Of course, FTX is now managing its own bankruptcy.
– Tanaya Machel
CNBC Pro: Goldman Sachs names global automakers facing China slowdown
Many global companies have significant exposure to China, including some of the world’s largest automakers, which generate between 20% and 40% of their global sales in the country, according to Goldman Sachs.
In a note to clients on Nov. 22 – ahead of the latest protests – the investment bank outlined the global auto industry’s commitment to Chinese consumers.
CNBC Pro subscribers can read more here.
— Ganesh Rao
Stocks end Monday session lower
After a successful Thanksgiving week, the three major indices ended lower on Monday as investors sold off amid mounting concerns over supply chain disruptions amid Covid-related protests in China.
That Dow Jones industry average lost 1.45% or 497.57 points to close at 33,849.46. That S&P500 also lost 1.54% to end at 3,963.94. That Nasdaq Composite slipped 1.58% to end at 11,049.50.
– Alex Harring
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