A look at the day ahead in European and global markets by Rae Wee
Asian markets rose on Thursday despite overnight weakness on Wall Street, as optimism about China’s latest stimulus measures was given a new boost by news of a potential capital injection into China’s biggest banks.
Authorities are considering a $142 billion cash injection to help major lenders, Bloomberg News reported, just two days after policymakers announced a raft of measures to lift the country out of a deflationary malaise.
While the latest moves signal a sense of urgency among authorities as Beijing’s 5% economic growth target for this year moves further out of sight, investors saw reason to cheer.
After months of waiting in vain for the markets, Chinese authorities finally seem to realize that much more needs to be done to get the world’s second-largest economy back on track.
China’s blue-chip index pared earlier losses to rise after the latest news, while Hong Kong’s Hang Seng index rose about 2%.
MSCI’s broadest index of Asia-Pacific shares outside Japan reached its highest level in more than two years.
That set the tone for a strong open in Europe, with futures posting solid gains during the Asian session.
Apart from China, it looked set to be a busy day for global markets, with an interest rate decision from the Swiss National Bank (SNB) and a series of speeches from officials from the Federal Reserve and European Central Bank.
The Swiss National Bank is expected to cut interest rates by 25 basis points, the third rate cut in a row.
Of course, the focus will be on the guidelines that policymakers use for their interest rate outlooks. The ECB will probably be less aggressive in cutting rates than its US counterparts.
Key developments that could impact markets on Thursday:
– Swiss National Bank Interest Rate Decision
– Speeches by Fed and ECB policymakers
– US Weekly Jobless Claims
(By Rae Wee; Edited by Edmund Klamann)
