Currency check: Asa-Pacific currencies are strengthening strongly, led by the Chinese yuan
Both the onshore and offshore Chinese yuan strengthened against the dollar in Asia’s session ahead of a press conference on Covid measures.
The dollar lost 1.09% against the offshore yuan and 0.65% against on land yuan, with both trading around 7.1[ads1]6 levels. The offshore yuan traded near 7.24 per dollar before strengthening sharply.
Other Asia-Pacific currencies also rose against the dollar. The Australian dollars was up at $0.6701 after bouncing from around $0.66 levels, and Korean won was at 1,326.79 per dollar compared with around 1,340 earlier on Tuesday.
— Abigail Of
Chinese indices emerge ahead of Covid briefing
Indices in China jumped more than 2% as investors closely watched developments in the country’s zero-Covid policy after seeing losses in the previous session.
China’s CSI 300 index rose 2.97% in the morning session, while Shanghai Composite rose 2.2%. The Shenzhen component The index rose 2.172 percent.
Local media reported that the Chinese State Council will hold a press conference on Covid measures at 3:00 p.m. local time, or 2:00 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 likely to continue to be ‘very pragmatic’, including on Covid policy, strategist says
Chinese President Xi Jinping has been realistic and practical about Covid, domestic property issues and politics since the end of the Communist Party of China’s National Congress, said Andy Rothman, Matthews Asia investment strategist.
“He has been pragmatic in the Covid policy, announcing a change of direction more towards living with Covid rather than Covid zero,” he said on CNBC’s “Squawk Box Asia” when asked how the government might respond to recent unrest in parts of China.
“He’s been pragmatic in real estate, he’s been very pragmatic in his relationship with Joe Biden, so I expect that to continue,” Rothman said.
He added that he sees the unrest surrounding the long-standing zero-Covid policy as broadly in line with what is expected to come from the Chinese government.
“What the protesters seem to be asking for are things Xi Jinping has already said he wants to deliver,” he said. “He wants to deliver a way out of zero tolerance for Covid, towards living with Covid like the rest of the world.”
Rothman added that recent announcements to ease quarantine measures for international travelers suggest that delivering shifts from the zero-Covid policy will be “relatively easier.”
“He does not retreat, [or] caving in under pressure, he’s just delivering, at a more accelerated pace, what he’s already told these students he wants to give them,” he said.
— Abigail Of
Oil prices jump more than a dollar before China briefing
Oil prices climbed ahead of a press conference to be held by China’s Cabinet as investors continue to monitor developments – with some losses seen on Monday, when it hit the lowest levels in nearly a year.
West Texas Intermediate futures climbed 1.76% to $78.59 a barrel, while Brent crude futures climbed 2.28% to $85.00 a barrel.
However, oil markets may “misjudge news of China’s shutdown,” Rystad Energy wrote in a note.
“[The latest lockdowns’] Likely effect on China’s near-term oil demand, particularly in transportation, is likely to be small,” the note added, citing the company’s own research of real traffic activity in China.
Even with daily Covid cases continuing to rise, cities such as Shanghai have not shown a decline in road traffic activity, 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 that would lead to 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 consequences will be even worse – it would be very chaotic because I think the spread of Covid will be absolutely unprecedented,” Wang said.
He added that he expects Chinese leader Xi Jinping to make adjustments at several local levels to ease public dissent.
Wang said that Xi does not want to officially admit that “the policy has been wrong for a while,” but that he also cannot change it immediately.
– Jihye Lee
Hong Kong-listed property shares rise after China changes fundraising rule
Shares linked to Hong Kong-listed property developers rose after China’s regulator announced it would lift a ban on share-raising for the sector.
The China Securities Regulatory Commission announced five measures to support the property market, including the removal of a multi-year restriction on property developers selling shares to raise financing.
Cifi Holdings Group jumped 13.01% in the first hour of trading, Rural garden also rose 13.36%, Logan Group rose 10.23% and Longfor Group increased 9.88 percent.
– Jihye Lee
Hong Kong on pace for best month since April 1999
Hong Kong’s The Hang Seng Index is about to post its best month since April 1999, when the index rose 21.85%.
The index rose more than 3% as of Tuesday morning, and is up about 22% for the month of November, according to Refinitiv data.
The HSI closed 1.57% lower on Monday, its worst day in a week, as the Hang Seng lost 1.87% on November 21.
–Gina Francolla, Jihye Lee
Japan’s unemployment rate is unchanged, retail sales miss estimates
Japan’s unemployment rate for October was steady from September’s reading of 2.6%, according to official data. The figure is slightly higher than the average expectation of 2.5% from economists polled by Reuters.
The job-to-applicant ratio, which measures active vacancies per job seeker, was 1.35. It indicates that there are 135 jobs available for every 100 applicants, signaling a continued tight labor market in Japan.
The country’s retail sales rose 4.3% in October on a year-over-year basis, missing expectations for a 5% increase predicted in a separate Reuters survey.
The latest reading marks the first decline in retail sales growth it has seen since June this year.
– Ji Hye Lee
The Fed should continue hiking into next year, says Bullard
James Bullard in Jackson Hole, Wyoming.
David A Grogan | CNBC
St. Louis Fed President James Bullard said Monday that the Fed should continue to raise its benchmark interest rate in the coming months and that the market may be underestimating the chance that the Fed will need to become more aggressive.
“We will have to continue to pursue our rate hikes into 2023, and there is some risk that we will have to go even higher than [5%],” Bullard said on a Barron’s Live webinar.
Bullard caused waves in financial markets earlier this month when he said the Fed’s hikes have had “only limited effects” on inflation so far and that benchmark interest rates may need to rise to between 5% and 7%.
Bullard, who is a voting member of the FOMC, said the Fed would have to hold back on any rate cuts next year even if the inflation picture begins to show consistent improvement.
“I think we’re probably going to have to stay there through 2023 and into 2024, given the historical behavior of core PCE inflation or Dallas Fed trimmed average inflation. They will fall, I think. That’s my baseline. But they probably will “not falling as fast as the markets want and probably the Fed wants,” Bullard said.
— Jesse Pound
CNBC Pro: Asset manager names 9 ‘cheap’ stocks to buy as recession fears grow
It’s “critical” for investors to look at valuations right now as a recession looms and inflation looks set to continue, said Steven Glass, CEO of Pella Funds Management.
In this environment, Glass selected a list of nine stocks that, he said, “look particularly cheap given their growth prospects.”
CNBC Pro subscribers can read more here.
— Weizhen Tan
Cryptocurrency prices fall but quickly recover after BlockFi declares bankruptcy
The price of bitcoin took a dive on Monday after BlockFi officially announced that it has filed for Chapter 11 bankruptcy in the wake of FTX’s bankruptcy.
Bitcoin briefly fell to as low as around $16,000, but has already rebounded. It was last down just 1% to over $16,300, according to Coin Metrics. The action in the ether price showed a similar bounce.
BlockFi has been in bad shape since the spring, after the explosion of the Terra project that led to the implosion of Three Arrows Capital. At the time, the company accepted a bailout from FTX that would help it stave off bankruptcy. Of course, FTX is now managing its own bankruptcy.
– Tanaya Machel
CNBC Pro: Goldman Sachs names the global automakers at risk of a slowdown in China
Many global companies are heavily exposed to China, including some of the world’s largest automakers, which generate between 20% and 40% of their worldwide sales in the country, according to Goldman Sachs.
In a note to clients on November 22 – before the latest protests – the investment bank mapped the global auto industry’s exposure to Chinese consumers.
CNBC Pro subscribers can read more here.
– Ganesh Rao
Shares end Monday’s session lower
After a winning Thanksgiving week, the three major indexes ended lower on Monday as investors sold off amid growing concerns about supply chain disruptions amid Covid-related protests in China.
The Dow Jones Industrial Average lost 1.45%, or 497.57 points, to close at 33,849.46. The S&P 500 also decreased 1.54% to end at 3,963.94. The Nasdaq Composite fell 1.58% to end at 11,049.50.
– Alex Harring