Key News

China outpaced the rest of Asia overnight as the continent’s markets were mixed as concerns over global growth continue to mount. Yesterday, US Fed Chair Jerome Powell acknowledged the risk of a recession, but the market appears to have shrugged off his statement on the issue.

Internet stocks traded sharply higher overnight on comments from President Xi, more signals of a reprieve for fintech, and a lack of new lockdown news. Alibaba led advances in the sector where most internet companies have reported Q1 earnings except for Trip.com, which reports on Monday.

The electric vehicle ecosystem was strong overnight as a State Council meeting chaired by Premier Li Keqiang reiterated policy support for automobile consumption, including the extension of tax breaks for new energy vehicles. A leading battery maker also officially unveiled a new Cell-to-Pack (CTP) battery design today, which claims to hold 13% more power than the most used battery types. Li Auto was one of the sector leaders overnight, gaining nearly +9% after launching a new SUV model.

President Xi Jinping has approved a plan to standardize and develop regulations for the payments and financial technology sector in a high-level meeting, meaning that the important regulatory period for the sector has likely come to an end.

Xi vowed to meet the government’s growth target of 5.5% in a speech at the BRICS Business Forum overnight, which is a sign that more stimulus is coming. The Chinese president also commented on Russia-Ukraine, again urging constraint from all parties and reiterating China’s “neutral” stance. Last month, I attended a private session with former Secretary of State Dr. Henry Kissinger, who said that Xi likely regrets agreeing to a partnership with Russia before the invasion and would not have done so had he known of Putin’s plans. The former statesman also reminded that China trades more with Europe and the US than with Russia.

The Hang Seng and Hang Seng Tech indexes gained +1.26% and +2.28%, respectively, overnight on volume that decreased by -5% from yesterday.

Shanghai, Shenzhen, and the STAR Board gained +1.62%, +2.08%, and +1.71%, respectively, overnight on volume that increased by +8% from yesterday.

Last Night’s Exchange Rates, Prices, & Yields

• CNY/USD 6.71 versus 6.69 yesterday
• CNY/EUR 7.07 versus 7.06 yesterday
• Yield on 1-Day Government Bond 1.18% versus 1.21% yesterday
• Yield on 10-Year Government Bond 2.78% versus 2.78% yesterday
• Yield on 10-Year China Development Bank Bond 2.99% versus 2.99% yesterday
• Copper Price -2.33% overnight