
China A50 resistance test looms as bonds flash expansion
Bond yields hint at recovery while economic data still lags. The A50 is testing a line in the sand that could set the tone for Chinese equities.
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Bond yields hint at recovery while economic data still lags. The A50 is testing a line in the sand that could set the tone for Chinese equities.

PMI strength adds weight to the bullish case for China A50, though official data keeps the rebound debate alive.
China’s services sector strengthened in May, boosting Chinese equity markets and providing some respite for commodities such as copper and WTI crude oil.
Chinese stock futures have surged on the resumption of trade on Monday, finding buying support after hitting multi-week lows on Friday. If the gains stick, it points to a potential trend change in both the Hang Seng and China A50. The gains track similar moves across the Asian region and follow a late surge on Wall Street to end May.
It’s said the stock market isn’t the economy and based on the performance of Hang Seng futures on Wednesday, it’s hard to argue against. Because on the same day the International Monetary Fund upgraded its China economic growth forecast, stocks in Hong Kong are getting hammered.
Chinese economic data is beating expectations at rates not seen since reopening to the world in 2023. And with the government and People’s Bank of China playing an active role in supporting mainland markets, it’s not surprising to see Chinese assets performing comparatively better than others across Asia right now.
Bull markets are born on pessimism, grown on scepticism, mature on optimism, and die on euphoria. The stealth rally in China's A50 and Hong Kong's Hang Seng is keeping to the script.
Investors will be looking forward to a busier session on Tuesday.
The markets seem to be willing to look past the bout of Covid raging through China at the moment. As a result, traders see an opportunity to buy stocks.
Cases have surged in the manufacturing hub of Guangzhou
China is struggling to restore confidence among investors
China is struggling to restore confidence among investors
China’s political event is under the spotlight this week.
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