China hopes increase, stocks and oil prices rise

By Hemaja Burud

On Friday, the stock market and oil prices rose in anticipation of China relaxing some of its costly Covid-related rules.

The most recent US jobs statistics, which demonstrated that hiring remained strong and salaries continued to increase though more slowly

 gave stocks a boost as well. This raised optimism for a soft landing for the economy despite rising interest rates intended to fight inflation.

According to CMC Markets analyst Michael Hewson, "Asia markets recovered well today on fresh unfounded allegations

that the Chinese government is considering a reopening approach as it seeks to find a way out of the confines of its present zero-Covid policy."

Despite worries that any reopening is unlikely to happen soon and the very real chance that it is just a sucker's bounce,

he continued, "these reports, which still haven't been validated in any official capacity, have sparked a big relief surge in equity markets."

Europe saw the rise continue, with gains of at least 2% in London, Paris, and Frankfurt.

After a tumultuous trading day, major indices all finished more than 1% higher, reflecting an increase in Wall Street stocks.

Oil prices rose as a result of the optimism, with Brent crude climbing 4.1 percent and West Texas Intermediate

rising 5% as traders anticipated rising demand for crude as a result of the news out of China.

The pound recovered some of its lost territory versus the dollar as well, increasing by about two percent after falling after

the Bank of England warned that the UK economy may experience a two-year recession that has already started.

In an effort to rein in spiralling inflation, the BoE increased its benchmark interest rate by 0.75 percentage points on Thursday, the biggest since 1983.

This comes as the US Federal Reserve increased its benchmark rate by the same amount,

marking the sixth increase this year as central banks work to curb inflation that has reached historic highs.