China reopening hopes fail to inspire equities
|Monday’s session has seen stocks lose ground and the dollar enjoy a respite after its recent lurch lower.
Stocks drop on China disappointment
“Stock markets are distinctly underwhelmed by China’s all-too tentative moves towards reopening its economy, and instead have gone back to worrying about the Fed. Friday’s jobs report continues to loom over markets, causing further losses as some dovish bets are pared back. While the pre-meeting blackout means we might be spared any Fed comments, it seems stocks will continue to trade in a negative fashion, at least until the meeting itself.”
Dollar tries to stem losses
“The dollar might not have been too enthused by payrolls on Friday, but today it is taking a more optimistic view. But this may not be a sustained move, given that the Fed is unlikely to take a more hawkish line from that of Powell’s speech last week. Such a surprise would certainly give the greenback a new lease of life, while equally hitting risk assets hard, potentially nullifying the chance of an extended equity rally in January.”
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