China Sets 1.25% Overnight Reverse Repo Rate Below Market Expectations 
China Factory PMI Seen Returning to Growth in June as AI Export Demand Supports Economy 
Oil Prices Rise as US-Iran Tensions Threaten Strait of Hormuz Oil Shipments 
Asian Stocks Slip as US-Iran Ceasefire Hopes Lift Oil, Dollar Strength Persists 
US Dollar Slips After PCE Inflation Data Eases Fed Rate Hike Expectations 
China Expands Export Controls, Adds 20 Japanese Companies to Restricted List 
US Stock Futures Rise as US-Iran Ceasefire Hopes Boost Market Sentiment 
Canada Grants C$7 Million to Greenland Molybdenum Mine to Strengthen Critical Minerals Supply 
Gold Price Ends Lower for Fourth Week Despite Rebound as Fed Rate Hike Bets Strengthen 
Iran Attack in Strait of Hormuz Pushes Oil Prices Higher 
US Dollar Slips After PCE Inflation Data as Fed Rate Hike Expectations Stay Elevated 
South Korea’s KOSPI Plunges as Apple Price Hikes and OpenAI IPO Delay Shake AI Chip Stocks 
Economic pessimism has set in – but there are reasons for Australians to be hopeful 
Trump Threatens 100% Tariffs on Countries Imposing Digital Services Taxes on U.S. Tech Firms 
Japan Targets 1%+ Real Economic Growth With ¥370 Trillion Investment Plan 
Asian Currencies Stay Range-Bound as Investors Eye China Data, RBNZ Outlook and U.S.-Iran Ceasefire 
Chinese Stocks Rally to Two-Year Highs: Optimism Over Beijing Stimulus
Chinese stock markets experienced strong gains over the past three weeks, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes surging between 16% and 20% since late September. This rally pushed the indices to their highest levels in two years, driven by growing optimism over Beijing’s fiscal stimulus measures.
UBS Analysts Maintain Positive Outlook
Despite the recent cool-off in the rally, UBS analysts remain optimistic. They emphasized that while Chinese stocks are no longer as undervalued as a month ago, there is still significant upside. UBS continues to maintain an Overweight rating on local stocks, pointing to long-term growth potential.
Beijing's Fiscal Stimulus: Progress and Concerns
China's Ministry of Finance recently introduced a range of fiscal measures, including increased debt issuance, property market relief, and more support for provincial governments. However, investor sentiment was dampened by the lack of specific details on the timing and scope of these measures. There is also concern over the absence of initiatives aimed at boosting consumer spending, a key driver of economic recovery.
Capital Outflows from India Signal Market Shift
Interestingly, UBS analysts noted that China's recent stock market gains coincided with significant capital outflows from India, another major emerging market. This shift in sentiment aligns with UBS’s Underweight rating on Indian stocks, indicating a broader trend of investor preference for Chinese markets amid Beijing’s ongoing stimulus efforts.
