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China stocks rally, Wall Street sours on the dollar and the Federal Reserve signals more rate hikes. Stocks in Hong Kong and the Chinese mai [View in browser]( [Bloomberg]( China stocks rally, Wall Street sours on the dollar and the Federal Reserve signals more rate hikes. China rally Stocks in Hong Kong and the Chinese mainland rallied as investors bet on an economic boost after Beijing struck a [conciliatory tone]( toward residents unhappy with Covid curbs. China said it would [bolster vaccination]( among its senior citizens, though it stopped short of announcing mandates that helped raise inoculation rates in other countries. “We do not expect China policy to publicly shift away from the Zero Covid stance, however, we could see some easing of the policy privately and in localized areas,” Jefferies analyst Mohit Kumar wrote in a note. Dollar shift Former dollar bulls including JPMorgan Asset Management and Morgan Stanley say the[era of dollar strength is ending](. Strategists say that may spell buying opportunities for the currencies of Europe, Japan and emerging markets. “The dollar is no longer the straight, one-way buy we’ve seen this year. There’s room for currencies like the euro and yen to recover,” said Kerry Craig, a strategist at JPMorgan Asset, which oversees [$2.5 trillion](. Fed hikes [Federal Reserve policymakers stressed]( on Monday that they will raise borrowing costs further to curb inflation. Stronger-than-anticipated demand in the economy and the labor market “suggest a modestly higher path for policy relative to September,” New York Fed President John Williams told reporters. Meanwhile, at a separate event, St. Louis Fed President James Bullard — one of the central bank’s most hawkish officials — said he thinks “markets are underpricing a little bit the risk that the FOMC will have to be more aggressive rather than less aggressive in order to contain the very substantial inflation that we have in the US.” Upbeat markets US equity futures climbed, with S&P 500 contracts rising 0.3% as of 5:16 a.m. in New York. Nasdaq 100 futures saw steeper gains of 0.4%. The dollar fell for the first time in three days, boosting most Group-of-10 currencies. Treasuries were little changed, while oil and gold climbed. Bitcoin rallied, following a decline of more than 2% on Monday. Coming up… At 9 a.m., we’ll get data housing data from the Federal Housing Finance Agency. At the same time, we’ll get the latest readings for the S&P CoreLogic Case-Shiller gauge of home prices in 20 cities. At 10 a.m., the Conference Board will publish the latest figures for its gauge of consumer confidence. What we’ve been reading Here’s what caught our eye over the past 24 hours: - China turmoil will cost Apple[6 million iPhone ProsÂ]( - Elon Musk [takes aim at AppleÂ]( - BlockFi becomes latest crypto platform to [file for bankruptcy]( - [Snap tells staff]( to work four days in the office from February - [Balenciaga seeks damages](for controversial ad - Dubai tops list of cities where [luxury home prices are set to rise]( - The most “[politically charged](” football match And finally, here’s what Joe’s interested in this morning Yesterday we got the latest release of the [Dallas Fed's monthly manufacturing survey]( and it was kind of a mixed bag (like everything these days). The headline number was negative. But it was a bit better than expected. Meanwhile, the employment sub-index was still in positive territory, meaning more firms are adding workers than reducing payrolls. As always with the Dallas Fed report, I like to look at the [anecdotal commentary]( from business managers in the area. Again, it was kind of a mixed bag. Some are worried about a looming recession. Others see a modest slowdown. Others can't keep up. There was one comment in particular, from a respondent in the "Printing and Related Support Activities" sector that caught my attention: This is a manufacturing business making packaging. I believe we are a very good indicator of economic trends. Having said that, order volumes are down versus prior quarters. There is less panic buying going on. Inventories are beginning to go down. Lead times we are able to give to our customers are beginning to decrease as input of new orders slows. The slowdown is consistent with normal seasonal factors but way below last year’s very high fourth-quarter order level. We are beginning to see the end of the dislocations caused by the pandemic. That line about "panic buying" was interesting. One of the theories about this economy is that companies are hoarding everything. The scars of the 2020/2021 undulations are so fresh, so firms would rather hold onto labor, logistics capacity, goods etc., just to avoid having been caught short again. Headline inflation is still very elevated. However, there are disinflationary trends out there. Commodities have come in a lot, particularly oil. Shipping costs have tumbled big time Other measures of supply chain stress have eased. And now, to the extent that panic buying was contributing to tight markets, maybe that's on the way out as well. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwartÂ]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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