# Shares mixed on Fed warning, China acts on property
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-11-14
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Asian Share Markets Mixed as U.S. Central Banker Warns of
Meta Description: Asian share markets were mixed on Monday as a top U.S. central banker warned investors against getting carried away over one inflation number, while Chinese
URL: https://financedigest.com/shares-mixed-on-fed-warning-china-acts-on-propertyhtml

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By Wayne Cole

SYDNEY (Reuters) – Asian share markets were mixed on Monday as a top U.S. central banker warned investors against getting carried away over one inflation number, while [Chinese stocks gained on signs of aid for the country’s hard-hit property](https://www.financedigest.com/brexit-no-obstacle-as-chinese-overseas-property-investment-doubles.html "Brexit no obstacle as Chinese overseas property investment doubles") sector.

A modest miss on U.S. inflation was enough to [see two-year Treasury yields dive 33 basis points for the week and the dollar lose almost 4% – the fourth biggest weekly decline since the era of free-floating exchange rates began over 50 years](https://www.financedigest.com/10-year-david-goliath-crusade-finally-sees-justice-for-off-plan-spanish-property-buyers.html "10 year ‘David & Goliath’ crusade finally sees justice for off-plan Spanish property buyers") ago.

However, the resulting easing in U.S. financial conditions was not entirely welcomed by the Federal Reserve, with [Governor Christopher Waller saying](https://www.financedigest.com/yen-trims-gains-as-possible-next-boj-governor-says-current-policy-appropriate.html "Yen trims gains as possible next BOJ governor says current policy appropriate") it would take a string of soft reports for the bank to take its foot off the brakes.

Waller added the markets were well ahead of themselves on just one inflation print, though he did concede the [Fed could now start thinking about hiking](https://www.financedigest.com/asian-shares-gain-as-fears-about-rapid-fed-hikes-bank-crisis-fade.html "Asian shares gain as fears about rapid Fed hikes, bank crisis fade") at a slower pace.

Futures are wagering heavily on a half-point [rate rise](https://www.financedigest.com/shares-slip-yields-rise-as-u-s-data-sparks-rate-hike-concerns.html "Shares slip, yields rise as U.S. data sparks rate hike concerns") to 4.25-4.5% in December, and then a couple of quarter-point moves to a peak in the 4.75-5.0% range.

Two-year yields edged up to 4.42%, after diving as deep as 4.29% on Friday.

The CPI downside surprise aligns with a broad range of indicators pointing to a downshift in global [inflation that should encourage a moderation in the pace of monetary policy tightening at the Fed](https://www.financedigest.com/wall-st-seen-steady-ahead-of-inflation-data-fed-later-in-week.html "Wall St seen steady ahead of inflation data, Fed later in week") and elsewhere,” said Bruce Kasman, head of economic research at JPMorgan.

This positive message needs be tempered by the recognition that downshift in [inflation will be too little for central banks](https://www.financedigest.com/be-really-really-careful-on-inflation-bank-of-englands-haskel.html "Be ‘really, really careful’ on inflation – Bank of England’s Haskel") to declare mission-accomplished, and more tightening is likely on the way.

MSCI’s broadest index of Asia-Pacific [shares outside](https://www.financedigest.com/outside-door-handle-market-analysis-trends-top-manufacturers-share-growth-statistics-opportunities-and-forecast-to-2027.html "Outside Door Handle Market Analysis, Trends, Top Manufacturers, Share, Growth, Statistics, Opportunities and Forecast to 2027") Japan added 1.1%, after jumping 7.7% last week.

Japan’s Nikkei eased 0.8%, while [South Korea](https://www.financedigest.com/south-korea-has-not-supplied-lethal-weapons-to-ukraine-president-says.html "South Korea has not supplied lethal weapons to Ukraine, president says") went flat. S&P 500 futures dipped 0.3% and Nasdaq futures lost 0.5%.

EUROSTOXX 50 [futures gained](https://www.financedigest.com/geoengineering-marks-scientific-gains-in-u-n-report-on-dire-climate-future.html "Geoengineering marks scientific gains in U.N. report on dire climate future") 0.4%, while FTSE futures tacked on 0.1%.

EYES ON CHINA

Dealers were also [waiting to see if Chinese stocks could extend their big rally](https://www.financedigest.com/jittery-markets-attempt-risk-on-rally-while-waiting-for-powell.html "Jittery markets attempt risk-on rally while waiting for Powell") amid reports regulators have asked financial institutions to extend more support to stressed property developers.

China’s [real estate](https://www.financedigest.com/gold-london-real-estate-and-the-theresa-may-effect.html "GOLD, LONDON REAL ESTATE AND THE THERESA MAY EFFECT") index jumped 5% in response. Blue chips rose 1.1%, helped by a slew of changes to China’s [COVID curbs](https://www.financedigest.com/were-going-to-be-free-chinese-cheer-as-covid-curbs-are-loosened.html "‘We’re going to be free’: Chinese cheer as COVID curbs are loosened"), even as the country reported more cases over the weekend.

It’s hard to see how the case news is anything but negative from an economic standpoint, but it’s the symbolism of the movement, however small, in the zero [COVID strategy that markets](https://www.financedigest.com/predisposition-biomarkers-market-future-trends-segmentation-strategies-to-boost-growth-applications-with-covid-19-impact-till-2028.html "Predisposition Biomarkers Market Future Trends, Segmentation, Strategies to Boost Growth, Applications with Covid-19 Impact till 2028") are happily latching onto,” said Ray Attrill, head of FX strategy at NAB.

U.S. President Joe Biden will meet Chinese leader Xi Jinping in person on Monday for the first [time since](https://www.financedigest.com/soccer-arsenal-reach-womens-champions-league-semis-for-first-time-since-2013.html "Soccer-Arsenal reach Women’s Champions League semis for first time since 2013") taking office, with U.S. concerns over Taiwan, [Russia’s war](https://www.financedigest.com/russia-sharply-scales-back-far-east-war-games-with-china.html "Russia sharply scales back Far East war games with China") in Ukraine and North Korea’s nuclear ambitions on top of his agenda.

The news on [COVID rules](https://www.financedigest.com/sterling-slips-as-boost-from-new-china-covid-rules-fades.html "Sterling slips as boost from new China COVID rules fades") had stoked a short-covering bounce in the yuan, which added to broad pressure on the dollar as yields dived. The yuan was set 1.4% firmer on Monday – the [largest such move since](https://www.financedigest.com/first-quarter-dash-for-cash-largest-since-early-2020-bofa.html "First quarter ‘dash for cash’ largest since early 2020 -BofA") 2005.

The [dollar index](https://www.financedigest.com/dollar-index-jumps-after-u-s-retail-sales-show-surprise-rebound.html "Dollar index jumps after U.S. retail sales show surprise rebound") was up a fraction on Monday at 106.920, but still well short of last week’s 111.280 top.

The euro eased a touch to $1.0308, after climbing 3.9% last week, while the [dollar firmed](https://www.financedigest.com/dollar-firms-after-u-s-labor-data-suggests-more-rate-hikes.html "Dollar firms after U.S. labor data suggests more rate hikes") to 139.49 yen following last week’s 5.4% drubbing.

The dollar lost almost as much to the [Swiss franc](https://www.financedigest.com/swiss-franc-grapples-with-safe-haven-identity-crisis-after-credit-suisse.html "Swiss franc grapples with safe-haven identity crisis after Credit Suisse"), steered in part by warnings from the Swiss National Bank that it would use rates and currency purchases to tame inflation.

[Sterling eased back to $1.1755 ahead](https://www.financedigest.com/sterling-steadies-vs-dollar-ahead-of-boe-ecb-meetings.html "Sterling steadies vs dollar ahead of BoE, ECB meetings") of the British Chancellor’s Autumn Statement on Thursday, where he is expected to set out tax rises and spending cuts.

Crypto currencies remained under pressure as at least $1 billion of customer [funds were reported](https://www.financedigest.com/bank-funding-for-renewables-stagnates-vs-oil-and-gas-report.html "Bank funding for renewables stagnates vs oil and gas – report") to have vanished from collapsed crypto exchange FTX.

[Bitcoin was trading](https://www.financedigest.com/five-ways-to-make-money-trading-bitcoin.html "Five Ways to Make Money Trading Bitcoin") down 1.5% at $16,055, having shed almost 22% last week.

The [dollar’s recent retreat](https://www.financedigest.com/stocks-advance-u-s-dollar-retreats-as-china-drops-quarantine-rule.html "Stocks advance, U.S. dollar retreats as China drops quarantine rule") provided a much-needed fillip to commodities, with gold holding at $1,760 an ounce after jumping more than $100 last week. \[GOL/\]

[Oil futures extended their gains](https://www.financedigest.com/oil-prices-stable-heading-for-weekly-gain.html "Oil prices stable, heading for weekly gain") on hopes for a pick-up in Chinese demand, with Brent up 28 cents at $96.27 while U.S. crude rose 20 cents to $89.16 per barrel. \[O/R\]

(Reporting by Wayne Cole; Editing by Shri Navaratnam and Kenneth Maxwell)


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