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Decision day for A-shares looms, Aussie banks cut, and Zhou speaks. Here are some of the things people in markets are talking about.
China will be hoping the fourth time's the charm as MSCI Inc. releases a decision on whether domestic Chinese stocks will be included in its indexes shortly after markets close in New York Tuesday. Morgan Stanley analysts think there's more than a 50 percent chance so-called Chinese A shares get the nod, which could lift associated bourses by as much as 1 percent the following session. Speculation over whether the shares will be added has buoyed Chinese equities recently, but also attracted bearish bets.
Oz Banks Downgraded
Australia's four biggest banks -- ANZ, Commonwealth, NAB, and Westpac -- had their long-term credit ratings cut by Moody's in light of rising risks associated with the housing market. Last month, S&P downgraded nearly all Australian lenders save for the aforementioned four. The Australian Prudential Regulatory Authority will soon release an update on capital requirements for these institutions, whose mortgage loans constitute an outsized share of assets.
Zhou Remarks Due
People's Bank of China Governor Zhou Xiaochuan is slated to co-host and speak at the Lujiazui Forum in Shanghai following a meeting of BRICS central bank chiefs. Zhou recently chose to forgo raising rates along with Fed Chair Janet Yellen last week, a sign the governor is aiming to use available space to engineer a smooth deleveraging. In April, he asserted that the 6.5 percent growth target for the world's second-largest economy was "within reach" and that financial risks remained under control.
The S&P 500 Index closed at an all-time high Monday, with technology shares leading the way higher. West Texas Intermediate slipped to just above $44 per barrel as investors mulled the potential for a "fracklog" of U.S. wells to exacerbate the supply glut. Meanwhile, New York Fed President Bill Dudley gave the greenback a lift by expressing confidence that labor market improvements would lead to a broad uptick in price pressures.
Risk appetite was on full display Monday, with the Japanese yen underperforming all its G10 peers. As such, Nikkei 225 futures are solidly in positive territory ahead of the open, while S&P/ASX futures are also trading to the upside. Stocks in the region kicked off the week on a strong note with Chinese companies fueling the MSCI Asia Pacific Index's gains.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- You read that right: A 100-year Argentinian bond issuance.
- Jack Ma woos U.S. mom-and-pop shops.
- Democrats test Goldman bankers as anti-Trump candidates.
- How banks avoid having skin in the game.
- Hopes for a "soft Brexit" swell.
- BRICs are back.
- Inside the world of initial coin offerings.