China's stock market turns upward, but overall remains relatively weak.
Compared to the overnight gains in US stocks, Asian markets show a slightly dull performance. Traders are digesting the impact of political storms in France and South Korea, with the euro stumbling and the won steady. Data shows that foreign capital has flowed out of Asian stock markets for the second consecutive month in November.
A-shares and Hong Kong stocks show a divergence in trends; A-shares struggle to close higher while Hong Kong stocks decline. The latter's decline may be due to position adjustments.
Market expectations for a reserve requirement ratio cut in December are high, providing certain support for the market. In addition, investors are looking forward to the upcoming Central Economic Work Conference, which will set next year's GDP target and may signal more stimulus policies.
As an important meeting approaches, (People's Daily) published an article yesterday on Page 5 titled (How to View Economic Growth—Current Q&A on China's Economy). The article emphasizes that the current Chinese economy pays more attention to achieving effective qualitative improvements and reasonable quantitative growth, rather than simply measuring success by GDP. If 'speed worship' is not broken and there is a habit of expanding and launching projects, even if speed is temporarily raised, future growth will be overdrawn.
Offshore yuan returns to a downward trend.
The stability of the People's Bank of China's midpoint exchange rate for the yuan as an anchor is becoming increasingly important, with today's midpoint stronger than market expectations by 778 points.
As the yuan depreciates, the dollar index also declines during the Asian trading session, indicating additional depreciation pressure on the yuan. Trump's appointment of Navarro as senior advisor for trade and manufacturing brings risks to the yuan—an unwelcome name in the market.
The dollar index has fallen for the third consecutive trading day, seemingly responding with a delay to Federal Reserve Chairman Powell's remarks. The market estimates the probability of a 25 basis point rate cut by the Fed at 74%, up from 67% a week ago.
Gold hovers around $2,650, and traders may shift their attention to Friday's US non-farm payroll report, followed by the November CPI data to be released next week.
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