Asia stocks, currencies soar, fueling global $2.5-trillion rebound

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The Bloomberg JPMorgan Asia Dollar Index surged this week

Malaysia’s ringgit and Indonesia’s rupiah led an emerging market rally against the US dollar on October 9 while Asian equities pushed higher too after minutes from the Federal Reserve’s latest policy meeting on the previous day suggested it could keep borrowing costs at record lows into next year.

About $2.46 trillion was added to the value of global stocks in the first four days of this week, most of all because emerging-market equities rebounded. Chinese shares gained throughout the regional exchanges, as did Southeast Asian indices in a move that analysts call “sustainable turnaround.”

Energy firms tracked a surge in oil prices as hopes for crude demand picked up and ongoing crises in the Middle East fanned supply worries. Crude prices have seen advances in the past week, surging more than 10 per cent to multi-month highs as worries about a stronger dollar, a supply glut and weak demand ease. The market got a further shot in the arm on October 8 when OPEC said demand will rise more than projected this year.

The gains across assets come after a painful July-September quarter that saw trillions wiped off global markets owing to worries about the state of China’s economy and an expected US interest rate hike.

On October 8, minutes from the Fed’s closely watched policy board meeting showed some members were concerned about China’s struggles, the strong US dollar and persistently low inflation.

“Recent global and financial market developments might restrain economic activity somewhat as a result of the higher level of the dollar and possible effects of slower economic growth in China and in a number of emerging market and commodity producing economies,” the minutes said.

Expectations through most of the year had been for the Fed to hike rates by 2016 as the world’s number two economy picks up pace. However, with China suffering a growth slowdown – to levels not seen in a quarter of a century – and other developed and developing economies under pressure, policymakers have held off firing the gun, which, in turn, inspired investors to return to the stock markets.

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Reading Time: 2 minutes

The Bloomberg JPMorgan Asia Dollar Index surged this week

Malaysia’s ringgit and Indonesia’s rupiah led an emerging market rally against the US dollar on October 9 while Asian equities pushed higher too after minutes from the Federal Reserve’s latest policy meeting on the previous day suggested it could keep borrowing costs at record lows into next year.

Reading Time: 2 minutes

Bloomberg chart
The Bloomberg JPMorgan Asia Dollar Index surged this week

Malaysia’s ringgit and Indonesia’s rupiah led an emerging market rally against the US dollar on October 9 while Asian equities pushed higher too after minutes from the Federal Reserve’s latest policy meeting on the previous day suggested it could keep borrowing costs at record lows into next year.

About $2.46 trillion was added to the value of global stocks in the first four days of this week, most of all because emerging-market equities rebounded. Chinese shares gained throughout the regional exchanges, as did Southeast Asian indices in a move that analysts call “sustainable turnaround.”

Energy firms tracked a surge in oil prices as hopes for crude demand picked up and ongoing crises in the Middle East fanned supply worries. Crude prices have seen advances in the past week, surging more than 10 per cent to multi-month highs as worries about a stronger dollar, a supply glut and weak demand ease. The market got a further shot in the arm on October 8 when OPEC said demand will rise more than projected this year.

The gains across assets come after a painful July-September quarter that saw trillions wiped off global markets owing to worries about the state of China’s economy and an expected US interest rate hike.

On October 8, minutes from the Fed’s closely watched policy board meeting showed some members were concerned about China’s struggles, the strong US dollar and persistently low inflation.

“Recent global and financial market developments might restrain economic activity somewhat as a result of the higher level of the dollar and possible effects of slower economic growth in China and in a number of emerging market and commodity producing economies,” the minutes said.

Expectations through most of the year had been for the Fed to hike rates by 2016 as the world’s number two economy picks up pace. However, with China suffering a growth slowdown – to levels not seen in a quarter of a century – and other developed and developing economies under pressure, policymakers have held off firing the gun, which, in turn, inspired investors to return to the stock markets.

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