Asian Equities Higher on Central Bank Moves

Asian share markets were broadly higher on Monday as the prospect of further policy stimulus in China and Europe whetted risk appetites while sending the euro skidding.  The single currency was near 28-month lows having shed 1.2 percent on Friday when European Central Bank President Mario Draghi surprised by declaring his commitment to fighting deflation.

That came hot on the heels of an unexpected cut in interest rates from the People’s Bank of China, and sources told Reuters Beijing was ready to ease further to head off slowing inflation.  “China’s rate cut adds to the determination of global policy makers to avoid deflation and support growth,” said Shane Oliver, head of investment strategy at fund manager AMP Capital iun Sydney.

“While U.S. quantitative easing may have ended, it’s being replaced by QE in Japan and Europe and rate cuts in China,” he added. “This in turn augurs well for shares and other growth assets.”  Wasting no time, Chinese stock markets rallied, with a key index at its highest level in around one-and-a-half years.

Reuters

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.