Asian markets mixed but little joy as traders eye more Fed hikes

HONG KONG - Markets were mixed Thursday, with little buying enthusiasm after minutes from a Federal Reserve policy meeting indicated interest rates will likely keep rising longer than previously feared.

A blockbuster jobs report and sticky inflation data this month have dealt a hammer blow to earlier expectations the US central bank could soon pause its monetary tightening campaign or even cut borrowing costs before year's end.

Several Fed officials have lined up to warn traders they were too optimistic and that with the labour market still strong, rates would need to keep rising until it had weakened and prices were under control.

Minutes from the Fed's February 1 decision reinforced that broad agreement as policymakers try to get inflation down to their target of two percent.

"Participants observed that a restrictive policy stance would need to be maintained until the incoming data provided confidence that inflation was on a sustained downward path to two percent, which was likely to take some time," the minutes said.

"Almost all participants agreed that it was appropriate to raise the target rate for the federal funds rate 25 basis points at this meeting."

And it noted that "a few participants" were in favour of a 50-point increase.

Analysts pointed out that the minutes came before the latest jobs and inflation figures.

National Australia Bank's Taylor Nugent, meanwhile, noted "the absence of any mention of 'disinflation' in the minutes, which contrasts (bank boss Jerome) Powell's press conference where he noted many times that the disinflationary process was underway".

After a healthy rally through January, global markets have rowed back this month as investors come to terms with the higher-for-longer rates narrative and recession fears return.

After Wednesday's sell-off, Asian markets were mixed.

Hong Kong, Shanghai, Sydney, Singapore, Mumbai Bangkok and Manila all fell, though Seoul, Wellington, Taipei and Jakarta edged up.

London dipped at the open, though Frankfurt and Paris edged higher.

"One of our big concerns coming into this year was the market was anticipating an event that wasn't likely to occur, that being a dovish Fed pivot," Oaktree Capital Management's Danielle Poli told Bloomberg Television.

"The market has woken back up a little bit in these last two weeks."

Investors are now awaiting the release of US jobless claims later in the day, which could provide a fresh idea about the strength of the labour market.

Crude prices edged up slightly Thursday but made only a small dent in the losses of at least three percent suffered the day before as the prospect of higher rates and a possible recession drags on demand expectations.

Agence France-Presse

Asian markets rise again on recovery hope as inflation data looms

HONG KONG - Asian equities pushed higher Wednesday as investors were buoyed by China's reopening and optimism that key data due this week will signal a further slowdown in US inflation.

Traders tracked a Wall Street advance as they brushed off fresh warnings that Federal Reserve rates would continue to rise and a World Bank decision to slash its global growth forecast.

After a stumble Tuesday, regional markets resumed the upward push that has characterized the start of the year thanks to China's emergence from nearly three years of zero-COVID isolation.

The reopening, easing of Beijing's tech crackdown and moves to help the property sector have raised hopes for the world's number-two economy, a crucial driver of world growth.

SPI Asset Management's Stephen Innes said: "Despite a solid start to the year, there should be a lot more upside to China's stocks, with earnings upgrades to drive further outperformance.

"Although we are not pitching a tent in that camp just yet, many investors are starting to believe China's reopening could be faster than expected on pent-up demand, a robust economic rebound and fewer supply constraints."

In early trade, Hong Kong again led the gains by piling on more than one percent, having already added about eight percent in 2023. Shanghai, Tokyo, Sydney, Seoul and Singapore were also in the ascendancy, though there were small losses in Wellington, Taipei and Manila.

Focus this week is on Thursday's US consumer price index, which is expected to show that price gains eased further in December.

But while that could possibly allow the Federal Reserve to take a lighter approach to its monetary tightening campaign, policymakers continue to push back against any pivot away from rate hikes.

Markets were battered last year by fears that almost a year of hikes will tip the economy into recession.

Bank boss Jerome Powell said that "restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy".

Meanwhile, Fed governor Michelle Bowman said that while inflation was coming down, "we have a lot more work to do" and that once rates had peaked they would have to stay there for some time. 

She added that "unemployment has remained low as we have tightened monetary policy and made progress in lowering inflation".

"I take this as a hopeful sign that we can succeed in lowering inflation without a significant economic downturn," she said.

And JP Morgan Chase CEO Jamie Dimon said borrowing costs could actually go higher than the five percent priced in by markets, suggesting they could hit six percent.

There was little reaction to the World Bank slashing its 2023 global growth forecast by about half and a warning that the economy was "perilously close" to recession owing to high inflation, rising interest rates and Russia's invasion of Ukraine.

Economists have warned of a slump in the world economy as countries battle soaring costs and central banks simultaneously hike interest rates to cool demand amid ongoing disruptions from the war in Ukraine.

The World Bank's latest forecast points to a "sharp, long-lasting slowdown", with growth pegged at 1.7 percent this year, roughly half the pace it predicted in June, according to its Global Economic Prospects report.

Key figures around 10:30 a.m. in Manila 

Tokyo - Nikkei 225: UP 1.1 percent at 26,457.56 (break)

Hong Kong - Hang Seng Index: 1.5 percent at 21,642.27

Shanghai - Composite: UP 0.3 percent at 3,177.88

Dollar/yen: UP at 132.44 yen from 132.21 yen on Tuesday

Euro/dollar: DOWN at $1.0733 from $1.0739

Pound/dollar: UP at $1.2156 from $1.2153

Euro/pound: DOWN at 88.31 pence from 88.34 pence

West Texas Intermediate: DOWN 0.8 percent at $74.54 a barrel

Brent North Sea crude: DOWN 0.7 percent at $79.51 a barrel

New York - Dow: UP 0.6 percent at 33,704.10 (close)

London - FTSE 100: DOWN 0.4 percent at 7,694.49 (close)

Agence France-Presse

Markets drop again as traders brace for another big Fed hike

HONG kong - Markets fell Monday as traders extended last week's rout across risk assets, with expectations high that the Federal Reserve will this week announce another outsized interest rate hike.

With recent data showing US inflation rooted at four-decade highs, investors are increasingly pessimistic about the outlook for the global economy.

Some observers have warned of a sharp recession in many countries caused by the huge rate increases, which are hitting families in the pocket.

And with uncertainty rife owing to a range of issues, including Russia's war in Ukraine and China's lockdown-induced slowdown, equities are in danger of revisiting the lows they hit in June.

Several central banks are due to make rate announcements this week, with Japan and Britain among the biggest, although the main event is Wednesday's Fed decision.

There had been a hope that after two 75-basis-point increases in a row, and economic data showing weakness, officials would take their foot off the pedal this month.

But last Tuesday's disappointing consumer price figures shocked traders and ramped up bets for a third successive 75-point rise, while some have predicted a whole percentage point move.

Policymakers, including Fed boss Jerome Powell, have repeatedly said their ultimate aim is to bring inflation under control, even if that means sending the economy into recession.

"It is clear that the Fed will project hawkish messaging, once again reiterating that it will bring down inflation unconditionally," said Vasileios Gkionakis at Citigroup.

Wall Street's worst week since June ended with more losses after FedEx reported Thursday that it shipped fewer packages than expected over the summer owing to weakness in the global economy.

That came as CEO Raj Subramaniam said he expects a global recession.

Asian equity investors continued the selling on Monday.

Hong Kong closed down one percent, even after reports that the city's government was considering ending mandatory hotel quarantine for incoming travelers.

Shanghai was also down despite news that megacity Chengdu was ending a two-week Covid-19 lockdown that saw 21 million people affected.

Sydney, Seoul, Singapore, Taipei, Manila and Wellington were also in the red, though Mumbai and Bangkok inched up and Jakarta was flat. Tokyo was closed for a holiday.

Frankfurt and Paris both opened lower. London was closed for the funeral of Queen Elizabeth II.

The prospect of more big Fed rate hikes is also keeping the dollar at multi-decade highs against its major peers, with the yen feeling most of the pressure as the Bank of Japan refuses to tighten policy.

"Speculative selling of the yen is readily justified by the ongoing widening in US-Japan yield differentials," said Ray Attrill, of National Australia Bank.

"Until or unless something happens to arrest or reverse this spread widening, the yen is susceptible to additional selling pressure."

The Japanese unit last week hit a fresh 24-year low of 144.99 to the dollar, though it has bounced slightly after comments from BoJ officials that signaled they were ready to intervene to provide support.

Oil prices dipped despite the news out of Chengdu as demand fears are fuelled by the growing fear of recession around the world.

Agence France-Presse

Asian markets drop as Fed minutes cause fresh rate hike woe

HONG KONG - Markets dropped in Asia on Thursday following a sell-off in New York spurred by minutes from the Federal Reserve indicating officials intended to keep lifting interest rates to tackle decades-high inflation.

While policymakers said they would eventually have to start tempering their tightening pace, they said they would keep borrowing costs elevated "for some time", though admitted there was a risk of going too far and damaging the economy.

The minutes dampened hopes that after a period of quick, sharp increases this year, the bank could possibly begin lowering them in 2023 once inflation was coming down.

Bets on a more dovish approach in the new year had been boosted by data showing inflation came down quicker in July than expected. That helped drive a rally in equities from their June lows and weighed on the dollar.

But the realization that policy would likely stay restrictive undermined the sense of optimism, pushing all three indexes on Wall Street down Wednesday with the tech-heavy Nasdaq taking the biggest hit, while the dollar rallied and extended gains in Asia. 

And news that UK inflation spiked above 10 percent for the first time since 1982 added to the downbeat mood.

Asian traders appeared increasingly worried that the Fed will slip up as it tries to bring down inflation without causing another recession in the world's biggest economy.

Tokyo, Hong Kong, Sydney, Shanghai, Seoul, Taipei, Mumbai, Wellington and Bangkok were down, though Singapore, Manila and Jakarta edged up. 

London fell in the morning while Frankfurt and Paris rose.

"The key takeaway from these minutes would appear to show that there is little inclination on the part of anyone on the (policy board) to even look at the possibility of rate cuts," said Michael Hewson at CMC Markets.

He added that they "chime with more recent comments from Fed officials which suggest that we could see at least another 1.5% in rate rises by year end".

And JP Morgan Asset Management's Meera Pandit told Bloomberg Television: "We do still anticipate there's going to be a lot of interest-rate volatility in the back half of the year, especially once markets start to perhaps acknowledge the fact that we might not necessarily see cuts in 2023 that are being priced in."

Sentiment was also dragged by continuing worries about China's economy, with Goldman Sachs and Nomura slashing their growth outlooks again following another weak round of data and as the country reels from Covid-19 lockdowns.

The announcements came after Beijing on Monday cut interest rates in a surprise move, before Premier Li Keqiang called on six key provinces -- accounting for about 40 percent of the economy -- to bolster pro-growth policies.

But Nomura economists said that while officials will likely unveil further measures "rolling out a comprehensive stimulus package is of low probability in a year of government reshuffle, while the need for maintaining zero-Covid makes conventional stimulus measures much less effective". 

Agence France-Presse

Asian markets down as investors look to uncertain 2022

HONG KONG - Asian stocks were mostly down in Wednesday trade as a "Santa Claus rally" showed signs of fatigue and continued fears over the Omicron variant -- as well as uncertainty about economic prospects for 2022 -- weighed on markets.

Covid-19 cases have surged across the world, prompting governments to impose new measures to limit contagion while the travel industry faced thousands of flight cancellations.

Warnings from the World Health Organization that the risk from the variant remains "very high" have compounded the sense that the pandemic is far from over, though data showing a reduced risk of hospitalization has lifted spirits.

Reflecting the uncertainty, Tokyo closed down in thin holiday trade on Wednesday, with the market weighed down by US futures losses.

Seoul was also down, while Sydney and Wellington rose. Europe opened mixed, with London's FTSE slightly up while Paris and Frankfurt fell. 

In China, markets fell, in a slide analysts partly attributed to losses in shares of major liquor brands -- including Kweichow Moutai, one of the world's biggest drinks companies.

"The drop is mostly contributed by some blue chips, in particular the baijiu names," Zhang Gang, a strategist at Central China Securities, told Bloomberg.

"It's likely that some funds want to cash out before the year-end after the recent rebound."

Hong Kong's Hang Seng Index was down as investors eyed uncertain prospects for 2022 as well as a continued debt crisis in the mainland's property market.

A continued regulatory clampdown by Beijing on overseas listings by Chinese firms has also weighed down markets -- though expectations that the country's central bank will add further stimulus in 2022 offered some hope.

FITS AND STARTS 

But trading volumes remain thin going into the new year, when prospects for global growth and the long-term impact of the Omicron variant are expected to become clearer.

Moody's economist Mark Zandi said in a note the Omicron wave would dent growth in the first quarter, but "not have a material impact" on 2022 overall because of a rebound later in the year.

"Even after the Omicron wave abates, there will almost surely be others. But we expect each new wave to be less disruptive to the healthcare system and economy than the wave before it," he said.

Katie Nixon, chief investment officer for Northern Trust Wealth Management, was also upbeat, saying her firm was "pretty constructive going into 2022".

"We're having fits and starts related to this Omicron variant of course. This will create maybe demand delayed but not destroyed," she told Bloomberg TV.

There was also optimism on oil markets, with crude holding a roughly one-month high on hopes that the Omicron variant will not dent global travel in the ways many had feared.

Agence France-Presse

Asian stocks on hold for Lunar New Year, bitcoin eyes record highs

TOKYO/NEW YORK - Asian shares hovered just below a record high on Friday as mixed US economic data caused some investors to show restraint after a global stock market rally pushed many bourses to dizzying heights.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.05 percent, trading just shy of an all-time high reached in the previous session. Australian stocks lost 0.63 percent. Shares in Tokyo fell 0.2 percent, pulling back from 30-year highs.

Futures for the S&P 500 declined 0.12 percent. Euro Stoxx 50 futures were up 0.03 percent, German DAX futures slipped 0.14 percent, and FTSE futures eased 0.13 percent, pointing to a subdued start to European trading.

Markets in Greater China and most of Southeast Asia are closed on Friday for the Lunar New Year holiday. China’s stock and bond markets, foreign exchange and commodity futures markets are closed through Feb. 17 for the holiday.

Bitcoin surged to a new record high after BNY Mellon said it would offer custodian services for cryptocurrencies. The dollar headed for a weekly loss, stung by bitcoin’s assent and disappointing U.S. economic data.

Trading in the United States and Europe on Thursday did not move prices enough to provide much direction, said Tom Piotrowski, a market analyst at CommSec in Sydney.

“We didn’t get much of a lead-in from the northern hemisphere,” Piotrowski said. “Markets are in a bit of a holding pattern waiting for the next catalyst and it is just a question of whether that catalyst is going to be a positive one or a negative one.”

World stock markets were holding close to record highs on Thursday as investors weighed some tepid economic data against increasing vaccinations against COVID-19 and the prospect that more government spending and continued cheap money from central banks will drive higher growth and, eventually, inflation.

The MSCI world equity index, which tracks shares in 49 countries, fell 0.03 percent on Friday, also pulling back from a record high.

On Wall Street, the Nasdaq and S&P 500 eked out gains of 0.4 percent and 0.2 percent, respectively, while the Dow Jones Industrial Average slipped 0.02 percent.

Prices held near records as investors bet on more government spending, although enthusiasm was tempered when U.S. President Joe Biden said that China was poised to “eat our lunch,” raising fears of renewed strain on Sino-U.S. ties.

U.S. weekly unemployment claims fell less than expected and core consumer prices rose at a slower pace, which caused some traders to temper the optimism about the economic outlook.

Bitcoin reached a record high of $49,000 before erasing gains.

BNY Mellon’s announcement that it will help clients hold, transfer and issue digital assets came just days after Elon Musk’s Tesla revealed it had bought $1.5 billion worth of the cryptocurrency and would accept it as a form of payment for its cars.

Spot gold fell 0.17 percent to $1,822.21 per ounce. U.S. gold futures fell 0.14 percent to $1,829.50. Gold prices are still on track for their best week in three amid broad dollar selling.

The dollar index edged up by 0.05 percent on Friday but was still on course for a 0.6 percent weekly decline.

Soft demand at an auction of $27 billion of new 30-year Treasuries on Thursday rattled bond investors.

The yield on 10-year U.S. Treasuries rose to 1.1599 percent. The 30-year yield initially rose but then fell back to 1.9398 percent.

Brent crude fell 0.57 percent to $60.79 a barrel, having dropped half a percent the previous session. U.S. oil fell 0.64 percent to $57.88 a barrel, after falling by 0.8 percent on Thursday.

OPEC cut its demand forecast and the International Energy Agency said the market was still oversupplied, which cast a gloom over energy markets.

-reuters-

Asia shares mostly lower amid rising coronavirus cases, Washington turmoil

NEW YORK - Asian stocks were mostly lower on Tuesday, tracking Wall Street declines as political turmoil in Washington and rising coronavirus cases worldwide weighed on sentiment ahead of the start of the quarterly earnings season.

Political uncertainty dominated trading as House Democrats introduced a resolution to impeach U.S. President Donald Trump, accusing him of inciting insurrection following a violent attack on the Capitol last week.

Several big tech giants, including Twitter Inc, Amazon.com Inc , Alphabet Inc, Facebook Inc and Apple Inc, have taken actions against Trump and his network of supporters, as concerns mounted over the risk of continued violence.

Twitter’s stock tumbled 6.4 percent on Monday after the micro-blogging site permanently suspended Trump’s account last Friday.

Investors also kept an eye on the continued spread of the coronavirus globally as cases surpassed 90 million on Monday, according to a Reuters tally.

“The weakness was led by tech and I think the banning of Trump’s account by Twitter and Amazon stepping up against Parler all brought a renewed focus on increased regulation and reining in on tech,” said Thomas Hayes, chairman of Great Hill Capital in New York.

Japan’s Nikkei slipped 0.48 percent, South Korea’s KOSPI fell 0.91 percent and Hong Kong’s Hang Seng index futures lost 0.54 percent.

Defying the broader selloff, Australia’s S&P/ASX 200 rose 0.24 percent.

On Wall Street, the Dow Jones Industrial Average fell 0.29 percent, the S&P 500 lost 0.66 percent and the Nasdaq Composite dropped 1.25 percent.

Investors are expecting guidance on the extent to which executives see a rebound in 2021 earnings and the economy from results and conference calls from JP Morgan, Citi and Wells Fargo Friday.

Meanwhile, longer-term Treasury yields were at their highest since March before new long-dated supply coming this week and on speculation of more U.S. fiscal stimulus as Democrats will have control of Congress and the White House.

“People are optimistic to see the yield curve steepening and it could help spreads and net interest margins for banks,” Hayes said.

Benchmark 10-year notes last fell 11/32 in price to yield 1.1443 percent, from 1.107 percent late on Friday.

The spread between the two-year and 10-year Treasury yields brushed against 100 basis points to hit its steepest since July 2017.

The climb in yields in turn offered some support to the dollar, which rose to its highest in over two weeks against a basket of currencies.

The U.S. dollar index rose 0.256 percent, with the euro down 0.54 percent to $1.2152. The Japanese yen weakened 0.24 percent versus the greenback at 104.20 per dollar, while Sterling was last trading at $1.3516, down 0.35 percent on the day.

Crude oil prices fell, hit by renewed concerns about global fuel demand amid tough coronavirus lockdowns across the globe, as well as the stronger dollar.

U.S. crude recently fell 0.1 percent to $52.19 per barrel and Brent was at $55.61, down 0.68 percent on the day.

Safe-have spot gold dropped 0.2 percent to $1,844.27 an ounce. Silver fell 1.70 percent to $24.94.

-reuters-

Asian stocks rally as investors applaud vaccine development

HONG KONG/BOSTON - Asian share markets mostly shot higher on Tuesday driven by regional airline, tourism and travel stocks as global investors applauded progress in the development of a coronavirus vaccine which lifted confidence in a world economic recovery.

Pfizer Inc said its COVID-19 vaccine, developed with German partner BioNTech SE, was more than 90 percent effective in preventing infection, marking the first successful results from a large-scale clinical trial. 

"Markets will remain on the lookout for more promising vaccine data in addition to news of a fiscal reboot," PineBridge Investments portfolio manager Mary Nicola told Reuters. 

The vaccine news sparked renewed optimism in equities around the world but oil prices slipped in Asian trade after posting the biggest one-day percentage gain in five months. 

However, some analysts sounded caution over the speed in which the vaccine could be implemented.

"Given more tests are needed, then the approval process. Manufacturing and distribution would mean the vaccine, if truly effective, is still months away from mass deployment," said Tai Hui, chief Asia market strategist at JPMorgan Asset Management.

Brazil's health regulator said on Monday it had suspended clinical trials for China's Sinovac coronavirus vaccine after adverse effects had emerged. 

Japan's Nikkei 225 rose 1.1 percent after reaching a 29-year high in early trade and Australia's S&P/ASX 200 rose 1.6 percent.

Hong Kong's Hang Seng index futures was up 1 percent in early trade but there was marginal weakness in China as the CSI300 Index slipped by 0.24 percent. MSCI's broadest index of Asia-Pacific shares outside Japan was 0.12 percent higher.

Airline, travel and tourism stocks across Asia were beneficiaries of the optimism prompted by the vaccine announcement.

Qantas Airways gained 8.6 percent to hit its highest level since March, Japan Airlines shot 17.6 percent higher and ANA Holdings rose 16.4 percent.

In Hong Kong, Cathay Pacific Airways shares jumped 14.9 percent, the best since July.

"Markets will get ahead of themselves in the short term with the vaccine news but longer term it feels like it is going higher," Ord Minnett advisor John Milroy said from Sydney. 

Early Tuesday, Japan's Prime Minister Yoshihide Suga instructed his cabinet to design a fresh stimulus package to help revive the nation's flagging economy to offset the ongoing effects of coronavirus.

The stronger performance on Asian markets followed the positive lead overnight from the United States and Europe.

On Wall Street, the Dow Jones Industrial Average rose 2.95 percent the S&P 500 gained 1.17 percent while the Nasdaq Composite dropped 1.53 percent. E-mini futures for the S&P 500 rose 0.47 percent.

Pfizer's announcement jolted European shares to an eight-month high, building on expectations of more stable trade policies following the U.S. election. 

While stocks have also rallied on the assumption that Democrat Joe Biden would be the next U.S. President, the top Republican in U.S. Congress on Monday did not acknowledge Biden as president-elect, raising concerns about a rough transition of power.

Senator Mitch McConnell said in a speech that President Donald Trump was well within his rights to look into charges of election "irregularities" but did not offer any evidence of fraud. 

The Australian dollar fell 0.18 percent versus the greenback at $0.7272.

The yen strengthened 0.3 percent to 105.03 per dollar, while sterling was last trading at $1.3174, up 0.09 percent on the day.

The vaccine news also sent long-dated U.S. Treasury yields sky-rocketing in their biggest one-day jump since March. The yield curve, an indication of risk appetite, hit its steepest level since March. 

Bonds had their biggest selloff since recoiling from March peaks. The yield on benchmark 10-year U.S. government debt, which rises when prices fall, jumped 10.3 basis points on Monday and held above 0.9 percent on Tuesday at 0.9099 percent.

The CBOE Market Volatility index, a barometer of investor anxiety, hit its lowest closing level since late August.

Oil prices surged, posting their biggest daily percentage gain in more than five months as the vaccine news and an OPEC output deal fueled optimism about rebounding demand.

However, in Asian trade some of the momentum fell away. 

Light crude oil fell by 1.49 percent during the Asian session to $39.69 a barrel while brent crude slipped 1.25 percent.

Spot gold added 0.32 percent to $1,867.6 an ounce.

-reuters-

Asian markets look to follow Wall Street rally as oil surges

NEW YORK -- Asian markets on Friday looked to latch onto Wall Street's overnight gains after crude prices notched their biggest one-day surge on record, helping offset concerns about the depth of a global recession.

Despite the rally in stocks, investors still sought the safety of the US dollar and government bonds as an unprecedented number of Americans - 6.6 million - filed jobless claims due to coronavirus-induced lockdowns, as economic concerns stayed front and center.

US stocks rallied after US President Donald Trump said he expects Russia and Saudi Arabia to announce an oil production cut of up to 10 million to 15 million barrels as the two countries signaled willingness to make a deal.

Saudi Arabia said it would call an emergency meeting of the Organization of the Petroleum Exporting Countries, Saudi state media reported.

Nikkei futures edged slightly higher, above the index's cash close on Thursday, and Australia's benchmark was up 1.5 percent in early trade. Hong Kong futures were negative.

E-Mini futures for the S&P 500 fell 0.04 percent. A gauge of stocks across the globe advanced 1.24 percent overnight, adding to modest gains earlier in Europe.

On Wall Street, the Dow Jones Industrial Average rose 2.2 percent, the S&P 500 gained 2.3 percent and the Nasdaq Composite added 1.7 percent.

Projections released by the US Congressional Budget Office showed US gross domestic product will decline by more than 7 percent in the second quarter as the coronavirus crisis takes hold.

Interest rates on 10-year Treasuries will likely be below 1 percent during the quarter as well, the CBO said.

Investors sought the perceived safety of government bonds. Benchmark US 10-year notes fell in price to last yield 0.6111 percent.

Global coronavirus cases surpassed 1 million on Thursday with more than 52,000 deaths as the pandemic further exploded in the United States and the death toll climbed in Spain and Italy, according to a Reuters tally.

The dollar gained for a second straight day against a basket of currencies as investors continued to take shelter in the US currency.

The dollar index rose 0.672 percent, while the Japanese yen weakened 0.21 percent versus the greenback at 108.15 per dollar.

Gold prices jumped as record high US jobless claims intensified fears of the coming economic slowdown and drove investors toward the safe-haven metal.

US gold futures settled 2.9 percent higher at $1,637.70 an ounce.

Highly rated US corporate bond issuers raised a record $110.502 billion this week, according to Refinitiv IFR data, as firms borrowed cash in fear the coronavirus crisis may soon limit their access to capital markets.

Brent futures rose $5.20, or 21.0 percent, to settle at $29.94 a barrel, while US West Texas Intermediate (WTI) crude rose $5.01, or 24.7 percent, to settle at $25.32.

Despite the record surge on Thursday, oil prices have still lost more than half their value this year.

-Reuters-

Asian markets mostly down as virus fears grow

HONG KONG - Asian markets fell Monday following a steep drop on Wall Street as the jubilation from last week's enormous US stimulus package faded and investors returned their attention to the soaring infection and death rate of the coronavirus.

Donald Trump finally signed off the more than $2 trillion pump-priming measures on Friday, but equities -- which enjoyed a rally for much of the week -- ended on a negative note as dealers took profits.

While the disease ravages populations and the global economy grinds to a halt with 40 percent of the planet in lockdown, experts are struggling to get a grip on the scale of the crisis that is forecast to cause a worldwide recession.

And analysts say there are likely more dark days ahead, with Trump abandoning his timetable for life returning to normal in the United States and extending emergency restrictions for another month.

The president said he expected the country to "be well on our way to recovery" by June 1 -- dropping his previous target of mid-April.

Meanwhile, senior US scientist Anthony Fauci issued a tentative prediction that COVID-19 could claim up to 200,000 lives in the US.

Governments and central banks have acted to shore up the global economy, pledging around $5 trillion in stimulus support, with China on Monday joining the party by lowering bank borrowing costs and pumping billions of dollars into financial markets, while Singapore also eased rates.

AxiCorp's Stephen Innes said markets looked like they were "nearing policy fatigue where it becomes less effective, and as the surprise element diminishes, no one cares".

"So, while policy responses in the US and Europe have been spectacular... the coronavirus keeps spreading globally, deepening fears of the economic and financial impact across countries. More market turmoil likely lies ahead."

He also pointed out that with the corporate reporting season approaching "now we are about to enter a vortex of bad earnings, bad economic data, and bankruptcies."

THE BIG UNKNOWN

The downbeat mood weighed on Asian equities, though most pared their morning losses. Tokyo and Hong Kong ended more than one percent down, while Shanghai was off 0.9 percent. Mumbai and Manila lost more than two percent, while Taipei slipped 0.7 percent.

Seoul was flat, while there were also losses in Bangkok and Jakarta.

Singapore slid more than four percent as investors brushed off the city-state's monetary policy easing measures that came days after data showed it was heading for a deep recession.

However, Sydney soared seven percent in its best one-day performance ever following a more than five percent slide Friday. Traders also were buoyed by data pointing to a slowdown in new infections in Australia as well as an $80 billion economic government support package that was unveiled after markets closed but was widely expected.

In early trade, London and Paris each lost around 2.8 percent while Frankfurt was down 1.6 percent.

"The big question for markets is whether the huge stimulus introduced so far across the globe will be enough to help the global economy withstand the economic shock from the COVID-19 containment measures," said National Australia Bank's Rodrigo Catril.

"To answer this question one needs to know the magnitude of the containment measures and for how long they will be implemented. This is the big unknown and it suggests markets are likely to remain volatile until this uncertainty is resolved."

The return to a risk-averse environment on trading floors also sent the dollar back up against higher-yielding currencies with the Mexican peso, Indonesian rupiah and South Korean won losing more than one percent apiece.

The South African rand plunged more than two percent to a record low after Moody's slashed its credit rating on the country to below investment grade.

Crude plunged with the market remaining in turmoil, with the Saudi-Russian price war adding to the impact of battered demand caused by the virus. And there are warnings the commodity, already at near two-decade lows, could sink even further as production remains heightened and storage tanks around the world approach full capacity.

"When the storage capacity is filled, we should probably expect a response from Saudi Arabia, Russia, and other essential oil producers," Innes added, though he warned "the longer their response takes, the higher the risk of another steep decline in oil prices".

source: news.abs-cbn.com

Chinese support measures buoy world stocks

LONDON -- Global shares were buoyant on Monday as the promise of further policy stimulus from China to counteract the economic hit from a coronavirus outbreak calmed nervous investors.

Trading was light, with US stocks and bond markets shut for a public holiday.

Both the pan-European STOXX 600 index and Germany's DAX reached record highs before paring some gains. The MSCI All-Country World Index, which tracks shares across 47 countries, was flat on the day.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.14 percent to near last week's peak of 558.30, its highest since late January.

The gains were led by China, whose blue-chip index climbed 2.25 percent after the country's central bank lowered a key interest rate and injected more liquidity into the system.

Also whetting risk appetite was an announcement by China's finance minister on Sunday that Beijing would roll out tax and fee cuts.

"Traders are mindful of the fact the Chinese authorities intervened in the financial markets at the beginning of the month, when the domestic stock markets reopened after the Lunar New Year celebrations," said David Madden, market analyst at CMC Markets in London.

"Some dealers hold the view that Beijing will intervene in the markets again should the situation get much worse, which could explain the resilience of equity markets."

Fears about the jolt to the world economy from the coronavirus lingered, though, as the number of reported new cases in China rose to 2,048 as on Sunday from 2,009 the previous day.

"The latest numbers from the Hubei province still suggest that the infection pace is slowing after the sudden jump following the methodology changes last week," Danske Bank said in a research note, highlighting that the number of new cases within China is the lowest since Jan. 23.

Restrictions were tightened further in Hubei over the weekend. Most vehicles were banned from the roads and companies told to stay shut until further notice.

Japan's Nikkei fell 0.7 percent after its economy shrank at the fastest pace in almost 6 years in the December quarter. The slowdown in the world's third-largest economy came amid concern the coronavirus effects will hurt output and tourism, stoking fears Japan may slump into recession.

The coronavirus also led trade-dependent Singapore to downgrade its 2020 economic growth forecast. China's economy is widely expected to slow sharply as well.

BULL RUN

South Korea's KOSPI index ended mostly flat. Australian, Singapore and Malaysian share indexes weakened.

Asia's woes have yet to spread to the United States, though. Wall Street indexes scaled record highs on Friday.

Talk of a middle class tax cut and a proposal to encourage Americans to invest in stocks boosted equity markets late last week, Betashares chief economist David Bassanese said.

Bassanese had misgivings about the plan, saying it reminded him of former US President George Bush encouraging Americans to buy a home during a housing boom.

"It adds to my suspicion that this decade-long bull market could eventually end via a blow-off bubble, driven by central bank persistent low interest rate policy," he said in a note.

Later in the week, flash manufacturing activity data for February are due for the euro zone, the United Kingdom and the United States. They are likely to capture some of the early impact of the viral epidemic.

Action was relatively muted in currency markets, with the dollar up against the yen at 109.90 and the pound at $1.3015. It gained against the euro to $1.0840.

The risk-sensitive Aussie, which is also played as a liquid proxy for Chinese assets, ticked up 0.1 percent to $0.6721.

That left the dollar index flat at 99.135.

In commodities, gold fell 0.22 percent to $1,581.25 an ounce. Brent crude was flat at $57.31 a barrel and US crude added 0.1 percent to $52.09.

source: news.abs-cbn.com

Asian shares rise as weak sentiment caps gains

SHANGHAI -- Asian equities rose on Friday after the S&P 500 index notched a new record closing high, but investor sentiment remained fragile following weak data from China and Germany, which reinforced concerns about the global economy.

Early in the Asian trading day, MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.34 percent. Japan's Nikkei added 0.58 percent and Australian shares gained 0.53 percent.

The safe-haven yen weakened, with the dollar rising 0.11 percent to buy 108.50 yen. The euro was unchanged at $1.1021 and the dollar index, which tracks the greenback against a basket of six major rivals was flat at 98.163.

Providing a fillip to investor confidence in Asia were comments from White House economic adviser Larry Kudlow that Washington was getting close to a trade agreement with China.

Higher US Treasury yields also indicated a slight risk-on tone in the Asian session, with the 10-year yield rising to 1.8307 percent from a US close of 1.815 percent on Thursday.

The policy-sensitive two-year yield rose to 1.6036 percent from 1.593 percent on Thursday after US Federal Reserve Chair Jerome Powell said the risk of the US economy facing a dramatic bust was remote.

A Reuters poll of more than 100 economists showed that while concerns have eased over a US recession, few see an economic rebound, and most believe a trade truce is unlikely in the coming year.

Global sentiment has been buffeted in recent weeks by conflicting assessments of progress in talks between the United States and China aimed at ending their 16-month-long trade war.

On Thursday, China's commerce ministry said that the two countries are holding "in-depth" discussions on a first phase trade agreement, and that cancelling tariffs is an important condition to reaching a deal.

China has also ended a nearly five-year ban on imports of US poultry meat, which the US Trade Representative said would lead to more than $1 billion in annual shipments to China.

Those developments followed comments from officials from both countries last week that they had a deal to roll back tariffs, only to have US President Donald Trump deny that any such deal had been agreed to.

The new record for the S&P, which gained just 0.08 percent to 3,096.63, came despite a grim outlook from network gear maker Cisco Systems that underlined the impact of trade uncertainty.

The company forecast second-quarter revenue and profit below expectations as increasingly global economic uncertainties kept clients away from spending more on its routers and switches, sending its shares down 7.3 percent.

The Dow Jones Industrial Average fell 0.01 percent 27,781.96 and the Nasdaq Composite dropped 0.04 percent to 8,479.02.

European shares also fell after data showed the German economy grew just 0.1 percent in the third quarter, with consumer spending helping the country to avoid a mild contraction.

"In further diminishing the likelihood of significant fiscal stimulus from the Berlin government, it was not good news at all," analysts at National Australia Bank said in a morning note.

The German data followed numbers from China indicating a faster-than-expected slowdown in factory output growth in October due to weak domestic and global demand.

In commodity markets, US crude prices rebounded after sliding Thursday on rising US crude inventories. US West Texas Intermediate crude was 0.37 percent higher at $56.98 a barrel.

Gold retreated from gains prompted by trade uncertainty. Spot gold was last trading at $1,466.98 per ounce, down 0.27 percent.

source: news.abs-cbn.com

World markets buoyed by growing trade optimism

LONDON - European and Asian markets extended gains Tuesday, after a record lead from Wall Street, as trade optimism gave another lift to sentiment.

Global bourses had already soared on Monday on expectations that economic superpowers China and the United States were close to a mini trade deal.

Those gains spilled over into Tuesday following a report that President Donald Trump was considering cutting some tariffs on Chinese goods.

Markets also banked higher on a reported easing in China's one-year lending rate, while London advanced after a survey showed Britain's key services sector had avoided contraction in October.

"European markets are following Asian stocks higher, as optimism over talks between the US and China continues to boost sentiment," said IG analyst Joshua Mahony.

"With the PBoC (People's Bank of China) deciding to cut the one-year medium-term lending rate in China, it is clear that the bank remains committed to supporting the Chinese economy while negotiators work on removing the current US tariffs."

He added: "A cut to the Chinese lending rate has helped improve sentiment as rumors circle that the US could remove ... tariffs."

The Financial Times said Tuesday that the White House is considering dropping existing tariffs on more than $100 billion of imports to seal the deal with China.

It cited unnamed sources as saying officials were looking at rolling back levies on a range of imports including clothing, appliances, and flatscreen monitors, which have been subject to 15 percent rates since September 1.

The US has imposed duties on Chinese goods worth hundreds of billions and the removal of some of these is said to be a key demand of Beijing in any trade agreement.

Meanwhile, a Bloomberg News article said Chinese officials were looking at locations in the United States where Xi Jinping and Donald Trump could hold a signing ceremony as early as this month.

In Asia, Tokyo led gainers as it reopened after a long weekend to play catch-up with Monday's rally.

The Nikkei ended 1.8 percent higher, while Shanghai rose 0.5 percent and Sydney added 0.2 percent.

Hong Kong won 0.5 percent as investors brushed off data showing a key measure of business confidence fell to its lowest level in more than a decade as the city reels from global trade woes and violent protests.

Last Friday's forecast-busting US jobs report has meanwhile lifted investor hopes that the US economy -- the world's biggest -- is stabilizing.

source: news.abs-cbn.com

World stocks slip as growth fears linger; euro slides

NEW YORK -- The dollar rose to almost a two-year high against the euro on Thursday on an upbeat US capital goods report, while world equities slid as weak economic data from South Korea and a profit warning from 3M Co renewed concerns about global growth.

New orders for US-made capital goods increased by the most in eight months in March, which combined with worries about the economic health of the euro zone knocked the single currency to its lowest against the greenback since May 2017.

Other data showed the number of Americans filing claims for unemployment benefits last week was the biggest in 19 months, but the trend remains consistent with a strong labor market.

"The dollar is benefiting from strong domestic data, weak data abroad and a slew of dovish central bank meetings," said John Doyle, vice president of dealing and trading at Tempus Inc in Washington.

The euro fell 0.19 percent to $1.1131, while European shares slid after a mixed bag of earnings from the region.

Finnish telecom network equipment maker Nokia tumbled 9 percent, its biggest decline in 18 months. Nokia reported a surprise quarterly loss after it failed to supply 5G telecoms equipment on time.

The pan-European STOXX 600 index closed down 0.21 percent and MSCI's gauge of stock performance in 47 countries shed 0.25 percent.

On Wall Street, strong results from Facebook and Microsoft Corp lifted the tech-heavy Nasdaq to a new intra-day record but were offset by dismal earnings in industrials, including 3M and United Parcel Service Inc .

UPS fell 8.1 percent and the industrial sector slid 2 percent, while Facebook gained 5.8 percent and Microsoft Corp rose 3.3 percent.

The Dow industrials fell 1 percent at one point, dragged down by a 13 percent plunge in 3M shares after the company reported a lower-than-expected quarterly profit, cut its 2019 earnings forecast and said it would lay off 2,000 workers globally.

The Dow Jones Industrial Average fell 134.97 points, or 0.51 percent, to 26,462.08. The S&P 500 lost 1.08 points, or 0.04 percent, to 2,926.17 and the Nasdaq Composite added 16.67 points, or 0.21 percent, to 8,118.68.

Asian markets slid earlier in the day, losing 0.5 percent as South Korea's economy unexpectedly contracted in the first quarter, a reminder of economic fragility outside the United States.

Shanghai's bourse also fell late in the day, losing more than 2 percent on the latest central bank efforts to temper expectations for further monetary policy easing.

Chinese officials also warned of protracted pressure on economic growth, casting a shadow over hopes for a sustained recovery in the world's second-biggest economy.

The dollar index, which measures the greenback versus a basket of six major peers, held near its highest level since May 2017. The index was up 0.1 percent.

The Japanese yen strengthened 0.48 percent versus the greenback at 111.63 per dollar.

The Turkish lira weakened 0.95 percent against the dollar after Turkey's central bank left interest rates unchanged at 24 percent but in a dovish shift dropped a previous reference to possible further tightening if needed to address inflation.

US Treasury yields rose as investors piled into the safe-haven government bonds following a dovish report from Canada's central bank and solid demand at auction for $41 billion of new five-year notes.

Benchmark U.S. Treasury 10-year notes fell 3/32 in price to push yields up to 2.5343 percent.

Oil prices eased after Brent touched $75 per barrel for the first time in nearly six months on the suspension of some Russian crude exports to Europe.

Brent crude futures settled down 22 cents at $74.35 a barrel. U.S. crude fell 68 cents to settle at $65.21.

US gold futures settled unchanged at $1,279.70 an ounce.

source: news.abs-cbn.com

Asia facing sharp falls after Wall Street wipes out 2018 gains

SYDNEY -- Asian share markets face a rough ride on Thursday after a tumble in technology stocks inflicted the largest daily decline on Wall Street since 2011, wiping out all its gains for the year.

Nikkei futures were down 2.7 percent and pointing to opening losses of around 600 points for the cash index. MSCI's broadest index of Asia-Pacific shares outside Japan seemed certain to start at its lowest since March last year.

The dive in formerly high-flying tech stocks sent investors scampering to the safety of sovereign bonds, with yields in 10-year Treasuries falling the most since May to 3.11 percent.

"Concerns that earnings growth may be peaking against an unsettled global backdrop and that fiscal stimulus will wane continued to weigh on sentiment," said analysts at ANZ in a note.

Global worries included the growing international pressure on Saudi Arabia over the death of Jamal Khashoggi.

Adding to the air of tension police intercepted suspected bombs mailed to former US President Barack Obama, Hillary Clinton and other high-profile Democrats, as well as to CNN, in what New York officials branded an act of terrorism.

Weak readings on manufacturing in Europe added to angst over world growth, as did a surprise slump in US home sales which suggested rising mortgage rates were sapping demand for housing.

On Wall Street, disappointing forecasts from chipmakers hammered the tech sector. They followed disappointing forecasts on Tuesday from industrial giants Caterpillar and 3M .

The Nasdaq closed down 12.4 percent from its Aug. 29 record closing high, falling 4.4 percent for the day in its biggest one-day percentage decline since Aug. 18, 2011.

The Dow fell 2.41 percent and the S&P 500 lost 3.09 percent.

In currency markets, funds flowed to the US dollar and Treasuries and out of the euro and the British pound.

The euro shed 0.7 percent to $1.1397 and breached a major chart bulwark at $1.1430. Against a basket of currencies, the dollar climbed to a nine-week peak and was last trading at 96.370.

Sterling hit a seven-week trough $1.2865, having dropped 0.8 percent overnight.

The yen got the usual safe-haven bid, with the euro skidding to a two-month low at 127.68 yen. Even the dollar eased to 112.08 yen.

Oil prices eased amid all the concerns over global growth. Brent crude fell 76 cents to $75.68 a barrel, while US crude dropped 40 cents to $66.42.

source: news.abs-cbn.com

Asian shares edge lower as investors await China data

SHANGHAI -- Asian shares were lower on Monday, brushing off the firmer Wall Street lead as investor caution dominated ahead of the release of key Chinese economic data, which is expected to show signs of a slowdown.

But while broader concerns about the US-China trade war continue to temper risk appetite, the absence of any escalation of rhetoric out of Beijing or Washington over the past few days is helping support sentiment, as are strong earnings from industrial firms on Wall Street.

China is set to release second-quarter gross domestic product (GDP) figures on Monday at 0200 GMT (10 a.m. Monday in Manila), which, along with June industrial output, are expected to show a modest slowdown in economic growth.

A government effort to rein in financial risk and an escalating trade war with the United States are expected to dent China's economic growth prospects.

In early Asian trade, MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1 percent.

On Friday, the Dow Jones Industrial Average rose 0.38 percent to 25,019.41 and the Nasdaq Composite added 0.03 percent, to 7,825.98. The S&P 500 touched a five month high before ending up 0.11 percent to 2,801.31.

US stock futures touched a fresh five-month high on Monday. S&P500 e-mini futures, the world's most liquid equity index futures, rose 0.2 percent in early Asian trade to hit their highest level since Feb. 2.

US stocks had been lifted by gains in industrial counters and energy companies, offsetting a drop in financials after mixed earnings from big Wall Street banks. Investors have also taken succor from a lack of new escalation of trade war rhetoric.

Australian shares were flat, and Seoul's Kospi was down 0.1 percent. Japan's markets are closed for a holiday Monday.

The dollar rose 0.05 percent against the yen to 112.42 .

The euro was down 0.1 percent on the day at $1.1677, while the dollar index, which tracks the greenback against a basket of 6 major rivals, was flat at 94.768.

The yield on benchmark 10-year Treasury notes rose to 2.8289 percent compared with its US close of 2.831 percent on Friday.

Treasury prices have fallen after the US Federal Reserve reiterated on Friday in its semi-annual Monetary Policy Report to the US Congress that it expected "further gradual increases" in interest rates due to "solid" economic growth.

The two-year yield, which rises with traders' expectations of higher Fed fund rates, was at 2.582 percent, unchanged from the US close.

ANZ analysts said in a note Monday that the Fed's report "yielded few surprises," but noted that trade tensions continue to weigh on commodity markets and US consumer confidence.

US crude dipped 0.5 percent at $70.67 a barrel, weighed by easing concerns about supply disruptions that had pushed prices higher. Brent crude was 0.4 percent lower at $75.04 per barrel.

A rising dollar drove gold prices to seven-month lows on Friday, but spot gold was slightly higher on Monday, trading at $1241.16 per ounce.

source: news.abs-cbn.com

Asian markets largely quiet on back of US retreat

HONG KONG - Asian markets were largely muted on Tuesday, tracking a retreat in New York as anticipation builds ahead of major earnings reports and a Federal Reserve policy meeting.

Hong Kong shed 0.3 percent, Tokyo and Shanghai were flat and Sydney lost 0.2 percent.

But Seoul gained 0.9 percent as South Korean tech giant Samsung announced a record profit for the July to September period, its best for any quarter, and said it would double its dividends next year.


The world's biggest memory chip and smartphone maker has faced multiple challenges since last year, including a humiliating recall of its flagship Galaxy Note 7 handsets and a corruption scandal that engulfed its de facto leader.

But its profits and share price have rocketed this year, thanks to strong demand for its memory chips and revived smartphone sales following the roll-out of the new-generation Galaxy Note 8.

Its quarterly net profits soared to 11.2 trillion won ($10.0 billion) -- a jump of 148 percent on the same period a year earlier -- and Samsung shares rose 1.92 percent on Tuesday.

Samsung Electronics is the key subsidiary of the sprawling Samsung Group, whose heir Lee Jae-Yong was found guilty in August of bribery, perjury and other charges stemming from payments to the secret confidante of ousted president Park Geun-Hye.

Tokyo shares clawed back earlier losses to end flat after Japan's central bank announced it would maintain its 2.0-percent inflation target -- seen as crucial in a long battle against deflation that is blamed for holding back the once-booming economy.

A stronger yen weighed on automakers, with Toyota losing 1.2 percent and Honda falling 0.5 percent, while SoftBank plunged on reports that talks over a planned telecoms mega-merger had been cancelled.

SoftBank fell 4.6 percent, after leading business daily Nikkei reported that merger talks between its US subsidiary Sprint and fellow wireless operator T-Mobile -- controlled by Deutsche Telekom -- had been scrapped.

In other downbeat news, Chinese manufacturing growth slowed in October after two consecutive months of acceleration, according to official data released Tuesday, due to weak demand and a drop in production because of public holidays and restrictions before a key Communist Party meeting.

In early European trade, London gained almost 0.2 percent while Paris was flat. Frankfurt was closed for a German public holiday.

BIG WEEK FOR U.S.

Investors are braced for a busy news week in the US, with President Donald Trump expected to say whether he will replace Federal Reserve chief Janet Yellen. The announcement is likely by Friday before he embarks on an Asian tour.

Traders are also keeping a close eye on the release of the October jobs report on Friday.

News of the first indictments over the FBI investigation into Russia's interference in the 2016 US presidential election have also sparked caution among investors.

"The scope of Special Prosecutor (Robert) Mueller's investigation will likely widen. But at this stage, we have no idea if there's a smoking gun or it's all a tempest in a teapot," said Stephen Innes, head of Asia-Pacific trading at OANDA.

There are fears the probe could potentially derail Trump's tax cut plans, which have boosted investor optimism.

A guilty plea by George Papadopoulos -- a foreign policy adviser on Trump's campaign -- is seen as the strongest evidence yet of possible collusion between the campaign and Russia.

source: news.abs-cbn.com

Most Asia markets up after Wall St record

HONG KONG - Most Asian markets rose Monday following another record close on Wall Street, while Shanghai stocks pared steep early losses thanks to stronger than expected growth figures.

The world's number two economy expanded an annualized 6.9 percent in April-June, beating forecasts in an AFP survey and indicating it is stabilizing after a years-long slowdown.

However, while the reading was the same as the previous three months, officials warned of "uncertain factors abroad and long-term structural contradictions" at home.

China is trying to shift from an economy reliant on state investment to one powered by consumer spending. Its leaders are also attempting to clamp down on bad debt, which analysts fear could spark a financial crisis if not dealt with.

Rob Subbaraman, chief economist for Asia ex-Japan at Nomura Holdings in Singapore, told Bloomberg News that while fiscal stimulus remains an important driver of growth "it's also encouraging to see more signs of rebalancing, with the pickup in retail sales growth."

But Shanghai stocks fell 1.4 percent after a top-level government policy-setting conference at the weekend promised an extended crackdown on risks in the financial system.

The country's second exchange in Shenzhen dived 4.3 percent while the ChiNext gauge, a Nasdaq-style index in Shenzhen, plunged 5.1 percent to a near thirty-month low.

Since April, China has launched an aggressive crackdown on risky lending as warnings mounted over a looming debt crisis due to runaway credit.

The IMF warned in April that potential contagion from debt defaults could "imperil global financial stability".

CITIC Securities analyst Zhang Qun said the signal from the weekend conference "hurt" market sentiment.

DOLLAR STRUGGLES

Most other regional investors built on last week's solid gains, tracking fresh highs for the Dow and S&P 500 prompted by below-par US inflation and retail sales data.

The US readings missed forecasts and fueled speculation that the Federal Reserve's plans to raise interest rates this year could be put on the back burner. This sent equities higher since borrowing costs look likely to remain low.

Hong Kong ended up 0.3 percent and Seoul closed 0.4 percent higher.

Singapore was 0.1 percent higher while Wellington, Taipei and Manila all saw healthy rises. But Sydney ended 0.2 percent down. Tokyo was closed for a public holiday.

Lower expectations of a rise in US interest rates rattled the dollar on Friday. While the unit was stronger it struggled to claw back its big losses against the pound, euro and yen.

The greenback was already under pressure after Fed boss Janet Yellen gave a more dovish outlook for future rises in interest rates, pointing to the bank's struggle to fire up inflation.

"Persistently low inflation and soft retail sales in the US are raising legitimate concerns about whether the likely resting point for the Fed Fund Rate might be well below the three percent" that is forecast for the end of 2019, said Ric Spooner, chief market analyst at CMC Markets.

In early European trade London and Frankfurt each rose 0.2 percent, while Paris was flat.


source: news.abs-cbn.com

Asia stocks set to rise on US cues, dollar bounces

HONG KONG - Asian stocks are set to climb to fresh three-month highs on Wednesday following a stronger Wall Street as investors welcomed US President Donald Trump's eagerness to deliver on his campaign promises.

Trump's shift back to growth initiatives including promising corporate tax breaks to fuel investment at home after focusing on protectionism in the first few days snapped the US dollar's losing streak and pushed Treasury yields higher.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.16 percent. Early Asian markets such as Japan and Australia led the region higher.

"After a bumpy start in the first few days where Trump focused on protectionist measures, the markets reacted positively overnight with US equity benchmarks boosted to fresh all-time highs," said James Woods, global investment strategist at Rivkin Securities in Sydney.

The S&P 500 and Nasdaq set records on Tuesday in a broad rally led by financial and technology stocks.

Trump signed two executive orders on Tuesday to move forward with construction of the controversial Keystone XL and Dakota Access oil pipelines, rolling back key Obama administration environmental actions in favor of expanding energy infrastructure.

He also met chief executives of the Big Three US automakers and pressed them to build more cars in the United States.

The dollar halted a three-day losing streak against a basket of its trade-weighted rivals and pushed higher on Tuesday.

Sterling added to overnight gains and was trading at 1.22 per dollar after Britain's Supreme Court ruled that the government would need approval from Britain's parliament before formally triggering the country's departure from the European Union. It has bounced 4 percent over the last week.

In bond markets, US Treasury yields rose with two-year benchmark yields holding firm at 1.22 percent compared to 1.15 percent on Tuesday, reflecting strong economic conditions. Ten year yields were at 2.46 percent.

Oil prices consolidated overnight gains with Brent futures flat after rising 0.4 percent overnight.

Renewed optimism over Trump's growth policies took the wind out of a recent rally in safe-haven gold which stabilized around the $1,210 per ounce level.

source: news.abs-cbn.com