The National Health Commission said on Monday that China will stop requiring domestic travelers to be quarantined starting January 8. It will also downplay the severity of COVID-19 because it has become less virulent and will gradually develop into a common respiratory infection.
By Tuesday morning in Hong Kong, MSCI is at its widest Table of contents Asia-Pacific shares outside Japan rose 0.5%. China’s blue chip rose 0.6 percent and Japan’s Nikkei stock index rose 0.43%.
U.S. stock futures, the S&P 500 e-minis, inched up 0.61%, suggesting the market is bullish as traders return to their terminals on Tuesday after the Christmas break.
Markets in some regions including Hong Kong and Australia remained closed on Tuesday.
Chaoping Zhu, global market strategist and JPMorgan Asset Management, said the latest policy move from China shows that economic activity in most major cities can quickly return to normal, This is very positive for investors.
“Most of China’s cities can recover from the latest COVID-19 outbreak in January… the process will be faster than people expect,” he said, adding that there were concerns concerns about the outbreak lasting longer and putting pressure on the economy. but the development is generally better than expected. He also said that the reopening of China, and the resumption of overseas visits by Chinese tourists, will boost service and consumption industries outside the country, especially industries in neighboring Southeast Asia.
Inbound tourist arrivals recovered from 60% to 70% in November for many ASEAN countries, Zhu said, but there is still a gap between now and 2019 before the pandemic.
“This gap will be filled by Chinese tourists. This is the final piece of the puzzle,” he said.
The dollar fell sharply on Tuesday while the currencies of Australia and New Zealand spiked as put in luck Appetite increased after China removed the quarantine rule.
The kiwi rose 0.65% to $0.63115 while the Australian dollar edged up 0.25% to $0.67485 in mostly little year-end trading. These two currencies are often used as liquid representations of the Chinese yuan.
Oil prices rose on weak trading on Tuesday, on concerns that winter storms across the United States are affecting logistics and production of petroleum products and shale oil.
Brent crude was up 73 cents, or 0.9%, at $84.65 a barrel by 0122 GMT, while U.S. West Texas Intermediate crude was at $80.41 a barrel, up 85 cents. , equivalent to 1.1%.
US Treasuries will resume trading on Friday. The benchmark The 10-year yield rose to its highest last week since early April, ending at around 3.75%.
The latest Personal Consumption Expenditure (PCE) price index, released on Friday, shows inflationary pressures are easing, but Federal Reserve policymakers remain concerned about strength. of inflation. labor market and service sector cohesion and wage inflation, could further complicate central bank efforts.
Analysts from Citi highlighted the upside risk in a report on Friday that the Fed’s policy rate could hit 5.25% to 5.50% by the end of 2023, largely based on expectations. The labor market continued to create more jobs in the first few months of 2023, albeit already very tight, adding pressure to rising wages and prices for non-shelter services.
