[True Zoom Finance] April 22 Market Morning Briefing: U.S. Secretary of State Antony Blinken to visit China; China Securities Regulatory Commission supports Hong Kong in enhancing its status as an international financial center

"The China Securities Regulatory Commission (CSRC) announced multiple cooperation measures last Friday to enhance Hong Kong's status as an international financial hub, including supporting leading domestic companies to list in Hong Kong and expanding the scope of eligible stock ETFs under the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect programs."

Overnight Highlights

• The Nasdaq and S&P 500 closed lower on Friday, dragged down by Netflix, while the Dow Jones rose due to gains in American Express. U.S. Treasury yields retreated from near five-month highs as investors flocked to safe-haven assets after Israel's suspected attack on Iran, pushing gold prices higher. Oil prices edged up slightly but posted a weekly decline after Iran downplayed reports of an Israeli strike on its territory, signaling a potential de-escalation of Middle East tensions. $Hang Seng Index(00HSI.HK)

International News

• The Federal Reserve's semi-annual Financial Stability Report highlighted that the most frequently cited market risk is persistent inflationary pressures potentially leading to a more restrictive monetary policy stance than expected.

• Fed Chair Jerome Powell stated that gaining the confidence needed for rate cuts may take "longer than expected." Chicago Fed President Austan Goolsbee noted that progress on inflation has stalled, necessitating keeping rates steady to assess economic developments.

• ECB President Christine Lagarde emphasized both upside and downside risks to inflation while reiterating the bank's stance on potential rate cuts. ECB Governing Council member Gediminas Simkus suggested that if inflation slows more than expected, the ECB could cut rates consecutively in June and July.

• Bank of Japan Governor Kazuo Ueda indicated that the BOJ will eventually reduce bond purchases but warned that completely ending market intervention would be "dangerous."

• $Tesla(TSLA.US) cut prices for its best-selling Model Y and other models in the U.S. by $2,000, with similar reductions in China, where the refreshed Model 3 now starts at 231,900 yuan.

Greater China News

• U.S. Secretary of State Antony Blinken will visit Shanghai and Beijing from April 24-26 to express concerns over Chinese companies' support for Russia's war efforts.

• U.S. Trade Representative Katherine Tai said the review of tariffs on over $300 billion of Chinese goods will conclude "soon," with the Biden administration seeking to make tariffs more strategic and effective.

• PBOC Governor Pan Gongsheng downplayed deflation and yuan depreciation risks at the IMFC meeting, noting reduced local government debt risks.

• The CSRC announced measures to bolster Hong Kong's financial hub status, including supporting mainland firms' listings in Hong Kong and expanding Stock Connect ETF eligibility.

• The CSRC issued 16 measures to support tech firms via capital markets, facilitating IPOs, refinancing, M&A, and overseas listings.

• China's Commerce Ministry is revising rules to further ease restrictions on foreign strategic investments in listed companies.

• The U.S. House passed a bill giving ByteDance about a year to divest TikTok or face a ban, with Senate voting expected this week.

Commodities & Forex

• The dollar rose for a second week as Middle East tensions spurred caution.

• The IMF expects OPEC+ to gradually increase oil output from July, benefiting Saudi Arabia. Oil prices edged up as Iran downplayed the Israeli strike, reducing geopolitical risk premiums.

Earnings & Data Watch

• China's 1-year Loan Prime Rate (Apr 22: expected 3.45%, prior 3.45%).

Source: Goldhorse Capital Extramile

Author: Terry Chow