Asian stocks rise as Chinese data beats forecast By Reuters – .

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Asian stocks rise as Chinese data beats forecast By Reuters – .


© Reuters. FILE PHOTO: A man wearing a protective mask, amid the COVID-19 outbreak, walks past an electronic board displaying Japan’s Nikkei Index outside a brokerage in Tokyo, Japan September 21, 2021. REUTERS / Kim Kyung-Hoon

By Wayne Cole

SYDNEY (Reuters) – Asian stocks edged up on Monday as Chinese economic data surprised to the upside, defying bets that the economy was stuck in a slowdown despite falling house prices on the mainland was a worry.

Annual growth in retail sales and industrial production both far exceeded expectations, with consumption rebounding positively given the pandemic restrictions.

On a negative note for the stressed housing market, new home prices in China fell 0.2% month-on-month in October, the biggest drop since February 2015.

CBA economists have argued that there is a chance that the People’s Bank of China will cut bank reserve requirements (RRRs) this week to support activity.

“We estimate that a 50 basis point cut in the RRR can free up CNY 1 billion in cash,” they said in a note.

Chinese blue chips were flat on the data, while the largest MSCI index of Asia-Pacific stocks outside of Japan rose 0.4%, after rising late last week.

gained 0.5%, with data showing that economic activity contracted more than expected in the third quarter only strengthened the case for aggressive fiscal stimulus.

Elsewhere, the United Nations climate conference in Scotland managed to strike an emissions deal, but only by watering down a pledge to phase out coal.

Wall Street eased last week to break a string of gains, even though the major indices were just a shade of all-time highs. firmed 0.1% in early trading on Monday, while futures on the Nasdaq rose 0.2%.

A key release this week will be U.S. retail sales on Tuesday for any impact of falling consumer confidence to a decade-long low reported for November as people worried about rising prices, in especially for gasoline.

There are also doubts as to whether companies have the pricing power to maintain their margins in the face of rising costs.

BofA analysts noted that 75% of U.S. companies exceeded earnings estimates in the last reporting season, but the forecast for the fourth quarter was only flat, breaking more than a year of rising expectations. .

The grim inquiry helped Treasuries stabilize a bit, but yields were still up 11 basis points for the week as the market took into account heightened risk of an early Federal Reserve tightening.

BofA economist Ethan Harris suspects that the market still has not sufficiently integrated price as the high starting level of inflation means rates need to rise further to achieve neutrality.

“If inflation remains high and exceeds the expected exceedance, the Fed will have to become much more hawkish and accept a market correction or deliberately induce such a correction,” Harris warns.

The rise in US yields combined with a general risk aversion in favor of the dollar, which had its best week in nearly three months. Against a basket of currencies, the dollar was firm at 95.017 and just at its highest since July 2020.

It held steady at 113.85 yen, bracing for another challenge from the October high at 114.69.

The euro looked vulnerable at $ 1.1455, after breaking decisively lower last week.

“Covid infection curves moving in the wrong direction are part of the reason, as new restrictions are imposed in Austria and the Netherlands,” said Ray Attrill, head of FX strategy at NAB.

“The implications of growth and ECB policy are not lost on the currency markets. “

European Central Bank President Christine Lagarde will appear before the European Parliament later on Monday.

Inflation fears kept demand for gold at $ 1,860 an ounce, after registering its biggest weekly gain since May.[GOL/]

Oil prices have had a tougher week, hit by a stronger dollar and speculation that President Joe Biden’s administration may release oil from the United States Strategic Petroleum Reserve.[O/R]

reversed early gains on Monday to lose another 52 cents to $ 81.65 a barrel, while it fell 48 cents to $ 80.31.

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