Stocks Set to Rise as China Opens and Employment Data Approach

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Asian stocks were expected to advance Friday, following Wall Street’s gains as concerns about the US debt ceiling and an energy shortage eased. Traders are awaiting critical employment statistics as well as the resumption of business in China following a holiday.

Australian equities gained, as did Japanese and Hong Kong futures. US contracts climbed higher following a third consecutive day of gains for the S&P 500 and Nasdaq 100. Washington lawmakers are scheduled to vote on a temporary settlement to the debt-ceiling deadlock, a move that is expected to bolster mood.

The yield on 10-year US Treasuries has risen to its highest level since mid-June. While some concerns about rising energy costs have subsided, investors remain concerned about inflation. Friday’s employment report in the United States could also reinforce predictions that the Federal Reserve will soon begin cutting its purchases. The dollar remained stable.

Financial markets in China are ready to open for the first time in a week, refocusing attention on the country’s property sector’s debt difficulties and Beijing’s broader regulatory broadsides. Governor of the central bank Yi Gang stated that the country will continue to take actions to rein in monopolistic behaviour by online platforms and to promote consumer and data protection.

Global equities are on track for their best week since early September, aided by the United States’ decision to postpone an immediate default during the debt ceiling debate. However, commodity-driven pricing pressures, the likelihood of stricter Federal Reserve monetary policy, and China’s property-sector downturn all remain dangers to the economic recovery.

“Once you start thinking about tapering, it’s difficult not to consider what that means for the Fed funds rate and when it might begin to rise,” Kim Mundy, currency strategist and international economist at Commonwealth Bank of Australia in Sydney, said on Bloomberg Television. “We believe there is some headroom for markets to begin pricing in a more aggressive Fed funds rate hiking cycle.”

Elsewhere, oil rallied after the US Energy Department stated that it had no intentions “at this time” to tap the nation’s oil reserves in order to assist alleviate rising fuel prices.

Published by Zack Baharum

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