Chinese stimulus and data help push Hang Seng higher

European markets are making tentative strides towards the upside and early trade today following a welcome rebound in global equity markets on Friday. Despite the threat of 200% tariffs on European alcohol, there is still a case of realignment as the overwhelming risk around the US economy sees flows into Asian and European equities. The FTSE 100 has enjoyed a boost from the oil & gas sector, with both crude and NatGas pushing higher in the wake of Chinese stimulus pledges and a surprise US offensive in Yemen. Trump’s attack on the Houthi rebels in Yemen highlights his desire to get global supply chains back onto a more efficient footing, with ships having sailed the longer route around South Africa since the attacks started in November 2023.

The Hang Seng enjoyed a renewed push higher overnight, following an announcement that saw Beijing issue a raft of pledges aimed at sparking a resurgence in household spending and bolster stock and real estate markets. Meanwhile, Monday kicked off with a deluge of Chinese data, with better-than-expected retail sales and industrial production offset by a surprise bump in unemployment (5.4%). Coming at a time when global investors have been reallocating away from the US, this latest push provides a fresh bout of optimism despite the ongoing trade war between China and the US.

Today kicks off a week that is focused on central banks with the federal reserve heading up a raft of announcements that also include the Bank of England, Bank of Japan, and the Swiss national bank. With traders increasingly speculating that Trump could be engineering a recession in a bit to drive down boring costs, all eyes will be on Jeremy Powell as he lays out the Fed’s stance in the face of potential economic weakness.