The corporate performance and outlook risk disappointing markets that are increasingly priced for a “soft-landing” slowdown in both growth and inflation.
In the Asia session investors cheered pledges of support in the readout from an earlier-than-expected Politburo meeting in China — though not too loudly.
Property stocks in Hong Kong surged, only they had spent much of the past week or two descending deeper into the discount cellar so gains came from a low base. The Hang Seng rose about 3% and the Shanghai Composite roughly 2%, but neither is roaring out of recent ranges.
The yuan jumped, but it had help from China’s state banks, which sources said were buying onshore and offshore early in the Asian day.
Morgan Stanley analysts made much of the absence in the readout of a familiar line that “property is for living not for speculation” and the addition of a pledge to “optimise” policy.
“Investors should recall that the early stage of COVID easing was labelled as ‘optimised’ policy, which led to a complete change of the policy later,” they wrote. Traders are buying it today, but may not do so tomorrow while a cash crunch looms over giant names like Country Garden and Dalian Wanda.
The Eurozone bank lending survey is also out on Tuesday and can give a view on the health of borrowing ahead of Fed and European Central Bank meetings, which are both expected to deliver rate hikes.
The yen was steady in Asia as investors weigh whether the Bank of Japan will tweak policy on Friday.
/cloudfront-us-east-2.images.arcpublishing.com/reuters/5KX67XOGZJNVNJQUHIXJAWTNZY.jpg "Earnings, China hold spotlight ahead of rates decisions 36")
