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More Chinese cities relax strict Covid rules. Investors are hope to see a wild end-of-year stocks rally. House prices tumble Down Under. Here's what you need to know today.

Chinese authorities accelerated a shift toward reopening the economy, with Shanghai and Hangzhou easing some Covid restrictions after protests last weekend. Shanghai will scrap PCR testing requirements to enter outdoor public venues such as parks, while Hangzhou, home to tech giant Alibaba, said it would drop testing requirements for entry into most public venues. They join other top-tier cities such as Beijing, Shenzhen and Guangzhou in relaxing curbs in recent days. Here's how vigils in China quickly turned into historic protests that put pressure on Xi Jinping to change policy direction.

Stock-market investors are hoping to see a wild rally that will mark a strong finish to a chaotic year. A less hawkish Federal Reserve and encouraging inflation data could unleash a mega-rally in December, which has proved to be a strong month for the market over the past 70 years. This year, though, it may get put on hold until the release of the next key US inflation report on Dec. 13. Meanwhile, the optimistic outlook isn't stretching as far as the crypto world, with stocks there teetering on the abyss and the head of BlackRock warning that most digital-asset firms won't survive.

Australia is set to raise interest rates as it closes in on the end of its tightening cycle, while nearby New Zealand just delivered a record hike and is poised to move higher. Some economists expect the Reserve Bank of Australia to pause in 2023, while others see a couple more hikes, reflecting its aim to cool inflation without slowing the economy too much. House prices in both countries are tumbling. New Zealand home values suffered their biggest annual drop in more than 13 years in November, falling 2.9% from a year earlier, while Australia's fell 3.2%.

The dollar inched higher as investors weighed the impact of a hot US jobs report on Federal Reserve rate hikes and an accelerated shift toward reopening of the Chinese economy. Meanwhile, equity futures for Japan fell while Hong Kong's rose. The S&P 500 on Friday slipped 0.1% after trimming a drop of as much as 1%. Chinese shares are likely to be boosted after the fresh relaxation of Covid restrictions.

Falling prices for Rolex, Patek Philippe and Audemars Piguet watches have dragged down an index of the most traded timepieces on the secondary market to pre-boom levels. The Subdial50 Index, which tracks prices for the 50 most traded luxury watch references by value, has fallen to levels not seen since before an unprecedented surge in 2021. The most sought-after watches from the top Swiss brands haven't been able to maintain lofty prices hit during the pandemic when cash-flush consumers stuck at home snapped them up in a frenzied search for the next hot asset class.

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There's no doubt that the strong expectations for a meaningful pivot in Federal Reserve policy are keeping markets supported. Just look at the reactions to Friday's surprisingly sizzling jobs numbers. Yes, bonds, stocks and currencies tanked in the immediate aftermath of a report that showed larger job gains than forecast and the strongest monthly wages growth since January.

However, by the end of the day US yields were lower outside of the short end, and even there the two-year rate rose a modest four basis points, while the S&P 500 index declined a mere 0.1%. Volatility measures fell, extending the slide in the cross-asset gauge I like to use to keep tabs on angst levels across currencies, stocks and bonds. The key remains the Fed and how it ends up reacting, and markets look confident that even this latest jobs report won't shift the central bank away from an expected slowdown to a half-point hike in December. As long as traders feel confident the terminal rate will be under 5% — implying less than a percentage point of increases to come after this month — markets are likely to get calmer still.

Garfield Reynolds is Chief Rates Correspondent for Bloomberg News in Asia, based in Sydney.

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