Early Asia wrap: Apparently, China still has plenty of kitchen sinks to throw
|Asian stocks shrugged off Wall Street’s stumble and surged ahead on Thursday, riding high on renewed optimism over China’s stimulus push. It seems like China hasn't run out of kitchen sinks just yet, as reports swirl about a hefty $142 billion injection into top banks. This latest move sent Asian markets back into the green, even as U.S. markets had a more cautious, "wait-and-see" kind of day. Futures are catching a bit of a bounce stateside, but traders are still itching for fresh fuel after last week’s Fed rate cut.
China’s domestic "shock and awe" package didn’t quite shake up the global stage the way it used to, signalling that Chinese stimulus isn't packing the same punch in today's more politically fragmented world. Now, all eyes are shifting to Fed Chair Jerome Powell’s upcoming speech, with traders eagerly hoping for dovish signals, while Friday’s U.S. price data looms large.
Adding a little extra spice, Fed Governor Waller, who’s become a bit of a market weathervane, justified the recent 50 bps cut by highlighting that core PCE is running below target. Another downside miss on inflation, and we could see a November 50 bps cut fully baked in. That kind of move would likely push stocks higher, drag bond yields lower, and spark a dollar sell-off—lifting all global markets in the process.
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