China's Blue Chips Surge 6% Amid Speculation on Stimulus

Global equity markets experienced an uptick as investors anticipated increased fiscal spending and monetary easing in the U.S., leading Wall Street to set new record highs. This optimism propelled MSCI's global equity index to an all-time high, recording a weekly gain of 3.3%.

Surprisingly, China's blue-chip stocks also saw significant gains, rising by approximately 6% over the week. More than half of these gains occurred on Thursday alone, possibly driven by expectations that the Chinese government may introduce substantial stimulus measures to mitigate potential negative impacts from U.S.-proposed tariffs.

However, there is a warning that markets have been disappointed in the past by unfilled expectations for bold stimulus actions from China. The conclusion of the Standing Committee of the National People's Congress in Beijing, followed by a press conference, is expected to clarify these expectations.

In Europe, stock futures indicate a modest increase of about 0.2% for both the UK's FTSE and Germany's DAX. Nevertheless, Europe faces its own challenges, including the comprehensive tariff threats from the Trump administration. The FTSE experienced a decline this week, worsened by the Bank of England's indication of a potential rise in inflation on Thursday, which may slow the pace of interest rate cuts.

Germany's political landscape is also in flux, as Chancellor Olaf Scholz's proposal to opposition leader Friedrich Merz not only faced rejection but also resulted in calls for an urgent vote of no confidence, raising the possibility of early elections.

This political turmoil follows the removal of Finance Minister Christian Lindner and the collapse of Scholz's three-party coalition due to long-standing budget disputes. Political uncertainty has prompted investors to drive debt risk to unprecedented levels on Thursday.

Investors are also closely monitoring economic reports from Europe, including Italy and Sweden's industrial production figures for September and Greece's consumer price index for October, which could further influence market directions.