China’s additional stimulus to homebuilders unlikely to drive a strong recovery – Fitch Ratings

Dhwani Mehta FXStreet

Commenting on China’s latest support measures to stabilize the country’s property markets, Fitch Ratings said that these policy reforms are unlikely to drive a strong recovery in the sector.

Key takeaways

“We believe this is a sign of the government providing greater support to private developers that are not in distress to avoid further defaults in the sector that could increase the number of stalled residential projects.”

“More private developers that are not in distress may benefit from similar funding support in the near term, supporting their liquidity.”

“However, the programme’s capacity to improve their debt maturity coverages significantly will depend on its scale.”

“Such policies may provide liquidity relief for some developers, but we still expect the recovery in housing sales to be the key to a sustainable improvement in developers’ liquidity more broadly.”

Market reaction

At the time of writing, USD/CNY is cutting losses to trade near 6.8510 while the AUD/USD pair clings to sizeable gains around 0.6970.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

EUR/USD looks to stabilize near 1.1600 as focus shifts to US data

EUR/USD is looking to stabilize near 1.1600 in the European session on Wednesday as traders breathe a sigh of relief before the top-tier US ADP jobs and ISM Services PMI data. A pause in the US Dollar uptrend helps the pair's recovery, but surging energy prices due to the Iran war will likely remain a drag.

GBP/USD stays weak near 1.3350 as USD preserves gains

GBP/USD stays in the red below 1.3350 in the European session on Wednesday. Escalating conflict in the Middle East keeps the "flight to safety" theme intact, supporting the US Dollar against the Pound Sterling. Traders will take more cues from the US ADP Employment and ISM Services Purchasing Managers Index reports, which are due later on Wednesday.

Gold retains positive bias amid sustained safe-haven flows and modest USD pullback

Gold maintains its offered tone through the first half of the European session, though it lacks follow-through and remains below the $5,200 mark. Investors remain concerned about a prolonged conflict in the Middle East and its impact on the global economy amid an already uncertain environment.

ADP Employment Report set to signal stronger February jobs growth, little effect on Fed outlook

The Automatic Data Processing (ADP) Research Institute will release its monthly report on private-sector job creation for February on Wednesday. The so-called ADP Employment Change report is expected to show that the United States private sector added 50K new positions in the month, following the 22K gained in January.

Asian stocks fall as South Korea’s KOSPI slumps over 10%

Asian equities drop on Middle East tensions; the MSCI Asia Pacific Index falls up to 4%. South Korea’s KOSPI fell 10.71% near 5,170, with the Korean Won weakened past 1,500 per dollar.

Solana Price Forecast: SOL consolidation near resistance as ETF inflows offer mild support

Solana price is facing slight rejection as it approaches the upper boundary of the consolidation range at around $88 on Wednesday. Institutional demand is strengthening as spot Exchange Traded Funds recorded two consecutive inflows so far this week.