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South Korean stocks rose on Wednesday, marking their third consecutive day of gains, primarily driven by optimism surrounding AI, with chip stocks surging. The KOSPI index jumped over 4% to 6635 points, its highest level since August 5th. Kiwoom Securities analyst Han Ji-young stated, "With the strong demand for AI infrastructure demonstrated by CoreWeave and Supermicro being validated, capital inflows into the semiconductor sector and domestic AI-related stocks in South Korea are expected to improve." Among heavyweight stocks, Samsung Electronics and SK Hynix rose over 7%, while LG Energy Solution gained approximately 3%. Hyundai Motor and Kia Motors rose approximately 2% and 1.5%, respectively.Hong Kong-listed tech stocks weakened amid volatility, with Tencent Holdings (00700.HK) falling more than 3%, Kuaishou (01024.HK) and Baidu (09888.HK) falling more than 2%, and Alibaba (09988.HK) and JD.com (09618.HK) following suit.On August 12th, Fan Gang, Vice President of the China Society for Economic System Reform and Director of the National Economic Research Institute, delivered an economic speech at the 2026 Boao Real Estate Forum. Fan Gang stated that the Chinese economy is undergoing a structural adjustment more in line with market economy principles, and the real estate market has seen relatively rapid price clearing, with the bottoming process potentially faster than Japans in the past. From the demand side, Chinas long-standing structural problem of "emphasizing supply over demand" is being addressed. Fan Gang pointed out that the current "15th Five-Year Plan" has regarded market demand as the scarcest resource, and macroeconomics is essentially demand-driven. Consumption concepts are also undergoing positive changes, with the younger generation of tech elites beginning to focus on housing quality, and luxury homes in major cities becoming the main sales driver, marking the beginning of a new economic growth logic. "The Chinese economy is in a new stage of development that is more market-oriented and more in line with market principles," Fan Gang noted.August 12 - According to the website of the China Maritime Safety Administration, the Shanwei Maritime Safety Administration issued a navigation warning that live-fire exercises will be conducted in parts of the South China Sea from 5:00 to 18:00 on August 12, and entry is prohibited.Futures Commentary by Everbright Futures: 1. Overnight gold market: London spot gold -0.50%, SHFE gold -0.28%. Gold prices declined slightly as the market focused on tonights US CPI data. Combined with the decline in gasoline prices in July and cooling housing inflation, July inflation data is likely to show a month-on-month decrease. The current market expectation is a 3.5% year-on-year increase in July CPI and a 2.5% year-on-year increase in core CPI. If the inflation data is lower than expected, concerns about interest rate hikes may cool again, potentially increasing gold price volatility. The data itself is full of uncertainty and speculative trading, and gold prices are treated cautiously before the data release. Investors are paying attention to the performance of gold prices in the upper range. 2. Geopolitical news: According to Wall Street News, an advisor to Irans Supreme Leader stated that the Strait of Hormuz will not be opened until Irans conditions are met; US officials stated that the US military fired on a ship attempting to break through the US blockade of Iranian ports; although Pakistan released optimistic signals on Tuesday that the US and Iran were close to reaching some kind of agreement, the actual reopening of the Strait of Hormuz still faces significant obstacles.

NZD/USD finds support near 0.6220; a decline appears more probable due to China's Covid concerns

Alina Haynes

Nov 28, 2022 15:04

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China's anti-Covid shutdown protests have weakened commodity-linked currencies, resulting in a gap-down start of roughly 0.6220 for the NZD/USD pair. During the previous week, the New Zealand dollar dropped after failing to surpass the round-level barrier of 0.6300.

 

Individuals have taken to the streets in China to demonstrate their opposition against the zero-tolerance policy, leading to a rise in civil unrest. Due to Chinese leader Xi Jinping's conservative posture and authoritarian framework, global markets have become more risk-averse. This has created an economic expansion risk and may worsen the already shaky housing market. Increasing apprehensions about societal risks may also result in political instability, which may have long-lasting detrimental effects on economic structure.

 

Notably, New Zealand is one of China's most important trading partners, and instability in China could damage the New Zealand Dollar.

 

In the meantime, the US Dollar Index (DXY) is profiting from investors' liquidity as the demand for safe-haven assets surges. The USD Index is hovering around 106.20 and attempting to reduce volatility as China's anti-locking protests restrict the upside and predictions of a slowdown in the Federal Reserve's larger rate hike cycle limit the downside (Fed).

 

S&P500 futures are under heavy pressure from market players due to a risk-averse market mentality. In anticipation of Fed chief Jerome Powell's address on Wednesday, yields on 10-year US Treasuries have decreased to approximately 3.68 percent. The Fed Chair's speech could dispel suspicions about a pause to the Fed's current rate-hiking program.