China shares hit 21-month high; Turkish lira takes a dive

Chinese shares climbed on Monday after a week-long break as a disappointing survey on the country’s service sector did little to dent optimism on global growth, while political uncertainty caused turbulence for the Turkish and British currencies.

Liquidity was lacking with Japan and South Korea on holiday and a partial holiday in the United States. where stocks will be open but bonds will be closed. 

The Chinese blue-chip CSI300 index rose 1.7 percent to heights not seen since late 2015, partly in a delayed reaction to a targeted easing by the country’s central bank announced a week ago.

That helped offset a fall in the Caixin index of service sector activity to a 21-month trough of 50.6 in September, a contrast to healthier numbers in manufacturing.

Australian stocks still managed to put on 0.5 percent, while Nikkei futures added 0.1 percent even though the cash market was shut.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.02 percent, having rebounded by 1.7 percent last week. E-Mini futures for the S&P 500 were trading 0.11 percent firmer, while futures for the Treasury 10-year note rose 1 tick. 

Bond yields had initially spiked on Friday in reaction to firm U.S. wage numbers, only to retreat as fresh jitters over North Korea bolstered safe havens.

Annual growth in average hourly earnings accelerated to a relatively rapid 2.9 percent in September, outweighing a 33,000 drop in nonfarm payrolls. 

The pick-up in wages boosted already high expectations that the U.S. central bank will raise rates at its December meeting, and that further hikes are likely in 2018. 

Minutes of the Federal Reserve’s last meeting are due on Wednesday and may well show enough support for a move by year-end. A host of Fed speeches are also due this week.