Super Central Bank Week Puts Rates in Focus
SingTao · 1 SOURCESabout 3 hours ago2 MIN
Summary
Markets are heading into a “super central bank week” as the US Federal Reserve, European Central Bank and Bank of Japan are all due to announce interest-rate decisions, with markets broadly expecting no change. Hong Kong equities remain fragile after the Hang Seng Index fell 1,093 points, or 4.51%, over the previous week despite a 158-point rebound on Friday. At the same time, a jump in Brent crude above US$117 a barrel has revived inflation concerns, while US stocks ended last Friday lower after a volatile session. Major earnings releases and the first estimate of US third-quarter GDP are also expected to keep trading choppy.
Key Points
- US stocks closed lower on Friday after sharp intraday swings, with the Dow down 652 points to 52,215, the S&P 500 off 39 points to 7,623, and the Nasdaq down 53 points to 25,955.
- Brent crude briefly rose above US$117 a barrel, intensifying inflation worries even as the recent sell-off in technology shares showed signs of easing.
- US Treasury yields rebounded on Friday, with the 10-year yield up 5.2 basis points to 5.001% and the two-year yield up 6.57 basis points to 4.7053%.
- EPFR Global data cited by Bank of America showed global equity funds took in US$55.6 billion in the week to October 21, including US$6.7 billion into US equity funds.
- Hong Kong stocks remain technically weak, with the Hang Seng facing support at 23,000 and 22,800, then 22,600 and 22,400, while resistance stands at 23,200, 23,400 and 23,600.
Why It Matters
For Hong Kong investors, the combination of central-bank decisions, US growth data and index-futures settlement on Thursday could keep the local market volatile in the near term. With southbound funds recording consecutive net outflows and the Hang Seng still trading below multiple short- and medium-term moving averages, any rebound may remain vulnerable unless the index can regain and hold above its 20-day line.