Hang Seng, China A50: Moderately loose powers fast and furious rally

Uptrend
David Scutt 125
By :  ,  Market Analyst
  • China’s Politburo signals “moderately loose” monetary and “more proactive” fiscal policy, echoing GFC-era language
  • Hang Seng futures rally 1,500+ points, stalling at near November highs
  • China A50 futures break 50-day average but lack volume, bullish breaks eyed for confirmation

Overview

China’s Politburo has reintroduced language regarding the outlook for monetary and fiscal policy last used during the GFC, sparking an immediate market reaction given the shift back then delivered what was the largest fiscal stimulus program on record prior to the pandemic.

On the monetary front, “prudent” policy is out and “moderately loose” is in, while fiscal policy will be “more” proactive, rather than just “proactive”.  It might seem insignificant, but the signal is likely to set off a wave of speculation as to what may be delivered next year, pointing to a potential extension of the bullish moves seen Monday.

With the industrial metals covered in an earlier note, this will focus on the technical lay of the land in two of the most popular index futures linked to China, the Hang Seng and A50.

Hang Seng: watching price action, volumes

Hang Seng Dec 10 2024

Source: TradingView

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