Markets rose across Asia, with Hong Kong and Shanghai among the best performers, while Sydney, Seoul, Singapore, Taipei, Wellington and Jakarta were also well up
Asian markets rose Monday as investors braced for a too-close-to-call US presidential election, while Chinese leaders meet to decide on a stimulus package.
The advanced came after a positive lead from Wall Street and data showing far fewer US jobs were created last month than expected, boosting hopes for a Fed interest rate cut when it meets this week.
With Democratic Vice President Kamala Harris and her Republican rival Donald Trump neck and neck ahead of Tuesday’s poll, traders are keeping a close eye on any hint of an advantage either way.
The dollar slid Monday as an opinion poll showed Harris leading.
A victory for Trump is seen as being positive for the dollar and pushing up Treasury yields owing to his pledges to cut taxes and impose hefty tariffs on imports.
It is not just about who wins the presidency but also the composition of the House and Senate, according to Peter Esho, founder of Esho Capital.
If the Republicans sweep all three, that will open the door to significant fiscal changes, which is negative for bondholders and could spell higher yields until the dust settles, he said.
The election comes days before the Federal Reserve is due to make its latest policy decision, with investors expecting 25 bp cut after a bumper 50 point cut at its last meeting.
The vote is of particular interest to China, where Beijing is this week meeting to hammer out an economic stimulus.
Both candidates in the race have pledged to get tougher on Beijing, with Trump promising tariffs of 60% on all Chinese goods coming into the country.
We are expecting more details on the proposals to be passed, said Heron Lim of Moody’s Analytics, including “how this extra funding would be allocated to address the near-term economic issues”.
Nomura economists expect lawmakers this week to approve almost a trillion yuan ($140 billion) in extra budget – mostly for indebted local governments.
Observers also expect Beijing to approve a one-off one trillion yuan for banks, aimed at writing off non-performing loans over the last four years.
Markets rose across Asia, with Hong Kong and Shanghai among the best performers, while Sydney, Seoul, Singapore, Taipei, Wellington and Jakarta were also well up.
