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Trade of Asia

Asia’s stocks feel better when Chinese homes go up in value.

China’s property stocks go up because of government support.

Asian stocks went up a little bit on Tuesday because of Beijing’s latest move to help developers boost the property market. However, it was still not clear what new damage public unrest over China’s COVID-zero policy might do to the economy.

Shares of Chinese property companies went up after the country’s securities regulator lifted a ban on equity refinancing for listed property firms.

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This made Chinese blue chips (.CSI300) go up 1.1%, and MSCI’s broadest index of Asia-Pacific shares outside of Japan (.MIAPJ0000PUS) went up 0.7%.

Japan’s Nikkei (.N225) fell 0.4%, while South Korea’s index went up 0.3%.

Related: China lags, but Asian stocks are supported by reduced Fed rate hike wagers.

Futures for the S&P 500 and the Nasdaq both went up 0.1%. Euro Stoxx 50 futures lost 0.2%, and FTSE futures lost 0.1%.

The markets were still worried that China’s growing web of restrictions would cause more public unrest and slow growth even more.

Analysts at Nomura said that their index of lockdowns now shows that the equivalent of 25% of China’s GDP is affected, which is more than the previous peak of 21% in April.

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“Full lockdowns like the ones in Shanghai might be avoided, but partial lockdowns in more and more cities might be more expensive than full lockdowns in just a few cities,” said Nomura.

Apple Inc. (AAPL.O) shares dropped 2.6% after it was said that COVID-19 restrictions would cause a big drop in the number of iPhone Pro units made. This shows how far-reaching Beijing’s policies are.
A Wedbush Securities analyst named Daniel Ives said, “The zero-China COVID policy has been a real gut punch to Apple’s supply chain.”

“We think that Apple now has major iPhone shortages that could cut at least 5% of units in the quarter and possibly as much as 10%, depending on what happens in China over the next few weeks with Foxconn production and protests.”

HIGHER FOR A LONGER TIME

The mood also got worse when Thomas Barkin, president of the Richmond Federal Reserve Bank, was the latest official to shoot down the idea that the central bank would quickly change its mind about interest rates next year.

This made things tenser before Fed Chair Jerome Powell’s speech on Wednesday, which is shaping up to be a big event in terms of sending a message to the market, which wants a change in policy.

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Analysts think they might be let down.

Jan Nevruzi, an analyst at NatWest Markets, said, “We think he will pretty much confirm a slower rate of rate hikes at the December meeting, which is almost entirely priced in.” But we also think he will say again that the Fed plans to keep rates low until next year.

“The drop in October’s CPI was good news, but it’s not a total win yet because growth and job market data are still strong,” he said. “It doesn’t seem like Powell would be better off if he toned down his hawkishness.”

The Fed is not alone in its hawkishness. Christine Lagarde, the head of the European Central Bank, says that inflation in the eurozone has not reached its peak and could go even higher.

Figures for Germany’s and Spain’s inflation will be released later on Tuesday before the main eurozone report comes out on Wednesday.

Related: Asian stocks didn’t move much because China COVID went up and tech stocks went down.

Overnight, Lagarde’s comments caused the euro to jump to a five-month high of $1.0497, but a rebound in the U.S. dollar brought it back down to $1.0350.

The dollar also went up to 138.87 yen after briefly falling to its lowest point in three months, 137.50 yen, the night before. The dollar index went from as low as 105.31 to as high as 106.57.

After rising 0.7% on Monday, the dollar fell against the offshore yuan to 7.2161.

Bitcoin went down after a big cryptocurrency lender called BlockFi and eight of its affiliates filed for Chapter 11 bankruptcy.

Due to the changes in the value of the dollar, gold went back down to $1,744 an ounce after briefly reaching $1,763.

Overnight, oil prices in the U.S. fell to their lowest level of the year because of worries about Chinese demand and talk of possible OPEC+ output cuts.

In early trading, U.S. crude futures fell 34 cents to $76.90 a barrel, but that was up from a low of $73.60. Brent futures fell 28 cents to $82.91.

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