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(Photo by Kazuhiro NOGI / AFP)
HONG KONG, China – Optimism that U.S. lawmakers will eventually pass a new stimulus package lifted Asian markets on Monday, with the White House increasing its offer and Donald Trump insisting that Republicans want a deal.
The gains followed another strong lead from Wall Street, with hopes of a fresh injection of cash into the world’s leading economy overshadowing a surge in virus infections that have forced some governments to reimpose containment measures and targeted closures. .
Investors were on a roller coaster ride last week when the president suspended talks before taking a 180-degree turn to say they were back and making good progress.
On Friday, he increased his offer, proposing a $ 1.8 billion package and even said he was in favor of an even larger package.
The move has instilled optimism that a deal can be reached, even though the White House plan is $ 400 billion less than the one proposed by Democrats.
With Joe Biden far ahead in opinion polls, analysts say merchants are increasingly betting that he will comfortably win next month’s election, avoiding the uncertainty of a Trump challenge to the outcome, and Democrats will take both houses of the election. Congress.
That expectation continues to support the actions, even as talks remain stalled with Senate Majority Leader Mitch McConnell, saying there wasn’t enough time to complete the talks before the vote, while the Democratic House Leader Nancy Pelosi said they were at a standstill.
“Markets that once feared a Democratic sweep now appear to be waiting for Democrats to take control of the Senate, with Biden’s voting tracks fueling optimism for further stimulus,” said Ben Emons, a strategist at Medley Global Advisors.
– Fresh wave of infections –
Hong Kong and Shanghai led the Asian markets higher, both accumulating more than one percent, while Sydney, Seoul, Singapore, Jakarta and Wellington also enjoyed healthy gains.
But Axi strategist Stephen Innes said that now that traders are pricing in a Biden victory, a Trump rebound in the polls could “raise his prospects for re-election and another divided Congress, undermining expectations for stimulus.”
However, he added that “the backward approach to foreign policy was fine in the middle of the US-China trade war. Still, the stimulus changes at this point in the election race point to a White House in disarray and may not be good at attracting undecided voters. “
Hopes for a new deal overshadow concerns about a new wave of infections, particularly in Europe, with British Prime Minister Boris Johnson set to unveil a new alert system that could cause some cities to crash again.
Meanwhile, Berlin’s bars and restaurants were ordered to close early under a partial curfew announced until October 31, while the escalation of cases in France has sparked fears that the government may impose local closures on major cities. cities, after similar movements in the Spanish capital.
The yuan fell slowly after Chinese officials revealed measures that make it easier for investors to bet against the unit, which has recovered in recent days to highs not seen since April last year. The gains were driven by an economic recovery in China and more attractive interest rates compared to the United States.
Key figures around 0300 GMT
Tokyo – Nikkei 225: DOWN 0.3 percent to 23,543.95 (rest)
Hong Kong – Hang Seng: up 1.5 percent to 24,467.77
Shanghai – Composite: up 1.9 percent to 3,334.44
Euro / Dollar: DOWN to $ 1.1815 from $ 1.1828 at 2100 GMT Friday
Pound / Dollar: DOWN to $ 1.3025 from $ 1.3045
Dollar / yen: DOWN to 105.57 yen from 105.61
Euro / pound: up to 90.71 pence from 90.67
West Texas Intermediate: DOWN 0.9 percent at $ 40.25 per barrel
North Sea Brent Crude: DOWN 0.9 percent at $ 42.46 a barrel
New York – Dow Jones: + 0.6 percent to 28,586.90 (close)
London – FTSE 100: up 0.7 percent to 6,016.65 (close)
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