The Dow.DJI ended Friday with a gain of 2 percent, while the S&P 500.SPX added 1.95 percent and the Nasdaq.IXIC 1.66 percent.
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A new trend has also emerged in China during this year’s Spring Festival, when more migrant workers from the country’s less developed inland areas preferred to find jobs in adjacent provinces rather than to travel to megacities like Beijing and Shanghai.
The Japanese economy shrank at the seasonally-adjusted annual rate of 1.4% in the final quarter of a year ago – worse than the expected 0.8% contraction – and down from a 1.3% expansion in the previous quarter.
“The poor trade data in January suggests weakening of the underlying momentum in trade growth, which reflects lingering sluggishness in both external demand and fixed asset investment in China”, Bank of America Merrill Lynch strategists said. In an interview carried in the Chinese financial magazine Caixin over the weekend, PBOC Governor Zhou Xiaochuan said yuan exchange reform would help the market be more flexible in dealing with speculative forces betting on yuan depreciation. Total ticket sales over the first three days of this year’s Lunar New Year nearly equaled the total sales for the whole week-long holiday last year, according to Saturday’s statement. January exports fell 11.2pc from a year earlier, while imports dived 18.8pc, suggesting the world’s second-largest economy is still losing steam. France’s CAC 40 advanced 3.1 percent to 4,119.57 and Germany’s DAX added 2.7 percent to 9,210.14.
The government also needed to prevent systemic risks in the economy, and prevent “cross infection” between the stock, debt and currency markets, he said.
Xu Gao, chief economist at Everbright Securities, wrote in a research report published before the data was released: “The central bank has made it very clear that the room for domestic monetary policy easing is restricted by the policy goal of keeping a stable yuan exchange rate”.
China and Hong Kong stocks extended their rebound on Tuesday, led by energy shares, with investors inspired by a jump in oil prices, a rally in European equities and a stabilising yuan.
“A lot of the negativity is already priced in, but it would be a mistake to call it the bottom since markets tend to go further down or further up than anyone expects”, Mobius said.
China Eastern Airlines said last month it had recently repaid US$1 billion worth of dollar debt to reduce its exposure to currency volatility.
Oil was aided in part by weakness in the US dollar as a steep drop in Treasury yields undermined the currency’s interest rate differentials. Likewise, it edged up to 113.90 yen, having touched a 15-month trough just under 111.00 last week.
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The euro also eased to as low as $1.1128 on Monday, retreating from Thursday’s 3 1/2-month high of $1.1377, and last stood at $1.1173.
