Markets Wrap: Asian Stocks Surge on News of Chinese Bond Sale

Asian stocks rebounded on Monday as reports of China’s plan to issue ultra-long bonds worth 1 trillion yuan ($138 billion) lifted market sentiment. The issuance of these bonds is expected to provide a much-needed boost to the Chinese economy.

Initially, markets reacted negatively to data showing a contraction in Chinese credit in April and news of potential tariff increases on Chinese electric vehicles by US President Biden. However, the announcement of the bond sale helped reverse losses and drove trading for the day.

Investors are closely monitoring statements from US officials for clues on the Federal Reserve’s interest rate policy. While some Fed officials have indicated a reluctance to lower rates in the near future, the upcoming US inflation data release on Wednesday is expected to be a key factor influencing market movements.

In addition to the bond issuance news, developments in global geopolitics also impacted trading. President Putin’s replacement of his defense minister in Russia and escalating tensions in the Middle East added to market uncertainty.

Looking ahead, key events this week include policy rate decisions in China, inflation and growth figures in the Eurozone, and speeches by Fed officials including Chair Jerome Powell. Australian jobs data and budget announcements are also on the agenda.

Overall, the market remains cautiously optimistic as investors navigate through a mix of economic data, geopolitical developments, and central bank policies.