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Investors stay upbeat ahead of Fed as oil rallies

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HONG KONG: Investor sentiment stayed upbeat as markets tracked gains ahead of the US Federal Reserve meeting which will provide guidance as to how long rates will remain at these low levels. Better than expected earnings from Alphabet Inc, Google’s parent, is also lifting sentiment.

The earnings revealed some hopeful signs in advertising, which represents the lion’s share of Alphabet’s revenue and is closely tied to economic conditions.

S&P Futures were up 0.7% and the Stoxx Europe 600 added 0.1% after Asia’s gains.

The oil price rebound has brought a sense of relief even to oil importers like China.

“The Chinese economy loses more than it gains when oil prices are in a freefall. A strong dollar, tightened global financial conditions, and depressed global trade more than offset any price discounts China might have benefited from cheaper oil,” Jing Sima, China strategist at BCA Research, said in a note.

Credit markets are positive with the Asia IG index narrowing by 2 basis points to 117/119 bps, with the issuance pipeline likely to get busy in coming days.

Shuifa Group’s 3-year dollar bond’s final price guidance was 10 basis points tighter and Nan Hai’s 2NC1 bond was launched 50 bps tighter than the initial guidance, which showed the strong demand for yield.

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