Asian shares gain as Trump fuels trade deal optimism

SYDNEY/TOKYO -- Asian stocks gained on Friday as investors took heart from US President Donald Trump saying trade talks with China were "moving right along", and US oil prices sat near 2-1/2-month highs after OPEC and other producers agreed to cut output.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.5 percent and Japan's Nikkei added 0.3 percent.

Australian shares rose 0.2 percent and South Korea's Kospi climbed 0.8 percent, while China's Shanghai Composite and Hong Kong's Hang Seng indexes gaining 0.1 percent and 0.9 percent, respectively.

Trump's upbeat tone in comments on Thursday was enough to spark buying, despite a lack of agreement between Washington and Beijing over whether existing tariffs should be dropped as part of a preliminary deal to end their trade war.

"Many players have taken a wait-and-see attitude given a lack of fresh trading cues ahead of US payrolls data and the Federal Reserve's policy meeting. But clearly, the mood is quite positive," said Yasuo Sakuma, chief investment officer at Libra Investments.

Investors were hoping that the two sides will reach a compromise to at least avoid their worst fears - that the United States will go ahead with its final batch of tariffs on about $156 billion of Chinese exports.

Uncertainties over a deal have pushed some investors to the sidelines in recent sessions, while nervousness before the release of US non-farm payrolls data later in the day could also curb market liquidity.

Investors were also looking ahead to a Fed policy meeting on Dec. 1-11. A Reuters poll of economists and analysts showed the Fed would keep rates on hold at 1.50-1.75 percent.

Oil prices retreated but hovered near recent peaks after major oil exporting countries agreed on Thursday to cut output by an extra 500,000 barrels per day in the first quarter of 2020, after a nearly six-hour meeting on Thursday.

Details of the agreement and how the cuts will be distributed among producers still need to be ratified at a meeting in Vienna of OPEC and non-OPEC nations, otherwise known as OPEC+, on Friday.

"The cut of an extra 500,000 barrels a day was not priced into the market, so the cut will be positive for the market if it is carried out," said Tatsufumi Okoshi, senior commodity economist at Nomura.

"But since OPEC countries haven't fully complied with the existing cut, markets will probably have to wait to see how the cut will pan out," he added.

Brent crude futures dipped 0.3 percent to $63.20 a barrel, having struck its highest on Thursday since Nov. 28, while US West Texas Intermediate (WTI) crude eased 0.2 percent to $58.31 per barrel, but was not far off Thursday's 2-1/2-month high of $59.12.

The agreement coincided with the initial public offering (IPO) of state oil firm Saudi Aramco, which was priced at the top of its range, raising $25.6 billion in the world's biggest IPO.

In the currency market, the British pound soared on growing confidence that next week's election will give the Conservative Party the parliamentary majority it needs to deliver Brexit, ending near-term uncertainty.

Sterling spiked to a seven-month high of $1.3166 on Thursday and last stood at $1.316, up 1.6 percent so far this week. It hit 2-1/2-year highs versus the euro.

The euro stood at $1.1108, near a one-month high of $1.11165 set on Wednesday, lifted by firmer euro zone economic data.

That helped push the dollar index to a one-month low of 97.356 on Thursday. The index last stood at 97.369.

Against the yen, the dollar traded at 108.72 yen, having slipped slightly the previous day.

source: news.abs-cbn.com

Asia stocks firm as Fed props up rate cut expectations

TOKYO -- Asian stocks advanced on Friday after a top Federal Reserve official cemented expectations of a US interest rate cut later this month, fueling appetite for riskier assets and keeping a cap on the dollar.

New York Fed President John Williams said on Thursday that policymakers could not wait for economic disaster to hit before adding stimulus, in a speech read as a strong argument in favor of quick monetary action.

In oil markets, crude surged after the United States said its navy destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows, raising concerns about supply disruptions out of the region.

The comments by Williams made it a virtual certainty the Fed would cut interest rates by 25 basis points at its July 30-31 policy meeting and also fueled expectations of an even deeper 50 basis point reduction.

Financial markets quickly reacted, with Fed fund rate futures at one point pricing in almost 70 percent chance of a 50 bp cut at the month-end meeting. The odds eased to around 40 percent after the New York Fed clarified that Williams' speech was not about immediate policy direction.

Wall Street shares shook off a sluggish start and moved higher overnight thanks to Williams' dovish comments.

The Shanghai Composite Index and Hong Kong's Hang Seng were both up 1 percent.

Australian stocks added 0.7 percent, South Korea's KOSPI rose 1 percent and Japan's Nikkei advanced 1.65 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 1 percent, bouncing back from the previous day's losses.

Over the week, the index has climbed a modest 1 percent, as riskier assets were partly capped by US President Donald Trump's reiteration of his threat to impose further duties on Chinese imports. The two sides resumed talks recently to seek an end to a year-long trade war that has rattled financial markets and slowed global growth.

"Dovish Fed policy expectations do provide support for the equity markets, which are set to rebound after suffering losses the previous day," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management. "But factors such as US-China trade issues and tensions over Iran are likely to limit the markets' gains."

The dollar index against a basket of six major currencies stood little changed at 96.787 after losing roughly 0.5 percent overnight to a two-week low of 96.671 in the wake of comments from the Fed's Williams.

The greenback was up 0.2 percent at 107.520 yen, crawling away from a three-week trough of 107.210 on Thursday after the New York Fed's clarification of Williams' comments. The currency had previously lost 0.6 percent against its Japanese peer.

The euro was 0.1 percent lower at $1.1267 after climbing 0.45 percent the previous day.

US Treasury yields were lower across the board in light of Williams' dovish views. The 2-year yield was at 1.7826 percent after touching a two-week low of 1.7520 percent. The 10-year yield declined to a 10-day trough of 2.023 percent and was last at 2.0363 percent.

In commodities, US crude oil futures reversed a large part of the previous day's deep losses, rising 1.8 percent to $56.34 per barrel.

Crude rallied after the reports the US Navy had destroyed the Iranian drone, clawing back earlier losses during the week. Oil prices had fallen on Thursday amid expectations that crude output would rise in the Gulf of Mexico following last week's hurricane in the region.

Spot gold extended the previous day's rally made on the prospects of lower US interest rates and brushed a six-year high of $1,452.60 an ounce, before pulling back a touch to $1,443.36. Middle East tensions also helped boost safe-haven gold.

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Asia stocks steady, euro little moved as EU vote shows limited gains by nationalists

TOKYO -- Asia stocks edged up early on Monday, and the euro was confined to a narrow range after the weekend's European Parliament elections highlighted the deepening political fragmentation of the 28-country bloc.

The euro was a shade higher at $1.1211, holding within a tight $1.2272-$1.2754 range in what was a limited reaction to so far the exit polls.

Estimates after the European Parliament polls closed on Sunday showed that the two largest centrist groups - the European Peoples' Party (EPP) to the right and the Socialists & Democrats (S&D) on the left - will no longer hold a majority in the new 751-seat chamber.

Analysts said the single currency's muted reaction to the preliminary vote outcome came as the results showed populist and far-right parties in some countries were unlikely to have gathered as much support as anticipated.

A centrist, pro-EU coalition would still be possible in the new chamber that will sit for the first time on July 2nd. But it would be more difficult to piece together among more numerous partners, according to the European Parliament's estimates.

The longer-term impact of the election, therefore, remained unclear, analysts say.

"It's difficult to foresee what will happen to Brexit, the political situation in Italy and elections in Greece just by looking at the vote count," said Shin Kadota, senior strategist at Barclays in Tokyo.

"We may not see an immediate market reaction, as the election outcome will have to seep in first before beginning to have a political impact on the various countries."

The pound was 0.1 percent higher at $1.2727. Sterling had bounced back from a near five-month trough of $1.2605 after British Prime Minister Theresa May said she would quit early next month.

The dollar index against a basket of six major currencies inched down 0.05 percent to 97.563.

In equities, MSCI's broadest index of Asia-Pacific shares outside Japan added 0.1 percent.

Gains were limited by persistent concerns that the China-U.S. trade conflict was fast turning into a technology cold war between the world's two largest economies.

Japan's Nikkei climbed 0.2 percent.

Wall Street's major indexes edged higher on Friday in a rebound from the previous session's losses after comments from US President Donald Trump regarding trade relations with China gave the wary markets a bit of a respite.

US crude futures crawled up 0.38 percent to $58.85 per barrel, trimming some of the deep losses suffered last week when trade tensions clouded the global demand outlook for the commodity.

Brent crude rose 0.79 percent to 69.24 per barrel.

source: news.abs-cbn.com

Safe haven support keeps dollar near 19-month high on growth risks

SINGAPORE - The dollar held near a 19-month high on Monday, bolstered by safe-haven buying as heightened concerns of a global economic slowdown reduced appetite for riskier assets such as stocks and Asian currencies.

Weaker-than-expected economic data out of China and Europe and fears of a possible US government shut down spooked investors away from stocks toward safe haven assets such as the greenback and yen.

"The dollar is clearly showing it is attractive during times of market stress," said Ray Attrill, head of currency strategy at NAB.

The dollar index, which gauges its value versus 6 major peers, was little changed at 97.44, below the 19-month high of 97.71 it hit on Friday.

The Australian dollar, whose fortunes are closely tied to China's economy, was marginally lower at $0.7174. It lost 0.3 percent of its value last week as data showed Chinese November retail sales grew at the weakest pace since 2003 and industrial output rose the least in nearly three years, underlining risks to the economy.

The offshore Chinese yuan was flat at 6.9013.

Apart from fears of a global economic slowdown, markets are also focusing on the future trajectory of US monetary policy.

The Federal Reserve is set to raise interest rates by 25 basis points at its Dec. 18-19 meeting. The central bank has lifted rates eight times since December 2015 in a bid to restore policy to more normal settings after having slashed borrowing costs to near zero to combat the financial crisis a decade ago.

With the December hike largely factored in by the market, larger moves in the dollar will be guided by the Fed's forward guidance.

According to their latest projections in September, the median view among the Fed's policymakers was for three rate hikes in 2019. However, interest rate futures used to gauge the probability of further hikes are pricing in only one rate hike in 2019.

Traders believe that higher US borrowing costs will likely hurt US growth momentum and ultimately force the Fed to pause its monetary tightening path.

Recent comments by Fed officials have also been read as dovish by some analysts. Last month, Fed Chairman Jerome Powell said rates were near the range of policymakers' estimates of "neutral" - the level at which they neither stimulate nor impede the economy

"The Fed will most likely move from an auto-pilot mode to being data dependent," added Attrill.

The yen was flat in early Asian trade at 113.36 to the dollar. It strengthened against the euro and sterling last week, reflecting the risk-off mood in the financial markets.

The euro was also little changed at $1.1304, having lost 0.6 percent last week after weaker-than expected data out of France and Germany suggested that economic activity in Europe remains weak.

Sterling remained under pressure in Asian trade, down 0.02 percent at $1.2582. British trade minister Liam Fox said on Sunday talks with the European Union to secure "assurances" for parliament on Prime Minister Theresa May's Brexit deal will take time, with a decision expected in the New Year.

source: news.abs-cbn.com

Asia shares, euro pressured by Turkish crisis

SYDNEY -- Asia's share markets slipped and the euro hit one-year lows on Monday as a fresh fall in the Turkish lira fuelled demand for safe havens, including the US dollar, Swiss franc and yen.

Japan's Nikkei lost 0.95 percent and MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.3 percent as bourses across the region turned red.

EMini futures for the S&P 500 were off 0.15 percent, while Treasury yields dipped further.

Much of the early action was in currencies with the euro gapping lower as the Turkish lira took another slide to all-time lows around 7.2400 at one stage.

It was last at 6.8450, having found just a sliver of support when Turkish Finance Minister Berat Albayrak said the country had drafted an action plan to ease investor concerns and the banking watchdog said it limited swap transactions.

The currency tumbled more than 40 percent this year on worries over Turkish President Tayyip Erdogan's increasing control over the economy and deteriorating relations with the United States.

"The plunge in the lira which began in May now looks certain to push the Turkish economy into recession and it may well trigger a banking crisis," said Andrew Kenningham, chief global economist at Capital Economics.

"This would be another blow for EMs as an asset class, but the wider economic spillovers should be fairly modest, even for the euro zone," he added.

Kenningham noted Turkey's annual gross domestic product of around $900 billion was just 1 percent of the global economy and slightly smaller than the Netherlands.

The Turkish equity market was less than 2 percent of the size of the UK market, and only 20 percent was held by non-residents, he added.

"Nonetheless, Turkey's troubles are a further headwind for the euro and are not good news for EM assets either."

Indeed, the single currency sank to a one-year trough against the Swiss franc in early trade around 1.1300 francs, while hitting a 10-week low on the yen around 125.45 .

Against the US dollar, the euro touched its lowest since July 2017 at $1.13715. It was last at $1.1392 and still a long way from last week's top at $1.1628. The dollar eased against the safe haven yen to 110.65, but was a shade firmer against a basket of currencies at 96.388.

The Argentine peso and South African rand were also caught in the crossfire.

"Contagion risks centre on Spanish, Italian and French banks exposed to Turkish foreign currency debt, as well as Argentina and South Africa," warned analysts at ANZ.

"Turkey's massive pile of corporate debt denominated in foreign currencies, but a rapidly sliding currency – and inflation that's threatening to go exponential – is a toxic combination."

In commodity markets, gold had found little in the way of safety flows and was last stuck at $1,211.80 an ounce.

Oil prices edged higher with Brent up 5 cents at $72.86 a barrel, while US crude added 15 cents to $67.78.

source: news.abs-cbn.com

Dollar sags after soft US wages data, Brexit woes weigh on pound

TOKYO - The dollar struggled near 3-1/2-week lows against its peers on Monday after US jobs data showed slower-than-expected wages growth, while the pound retreated as a key member of Britain's cabinet resigned over Prime Minister Theresa May's Brexit plan.

The dollar index against a basket of six major currencies was 0.1 percent lower at 93.962..

It had lost nearly 0.5 percent on Friday and stooped to 93.921, its lowest since June 14, after closely-watched US wages indicators disappointed the market.

Data on Friday showed average US hourly earnings gained five cents, or 0.2 percent in June after increasing 0.3 percent in May. This pointed to moderate inflation pressures that dented expectations that the Federal Reserve would raise interest rates a total of four times in 2018.

Nonfarm payrolls did rise by a stronger-than-expected 213,000 in June, Friday's data also showed, although this had little impact on currencies.

"The wages component has been the focal point for the market for a while now, rather than the non-farm payrolls, and the dollar slipped accordingly. The flattening of the US yield curve, perhaps reflecting worries about the economic impact of trade conflicts, is also a key factor weighing on the dollar," said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.

The 10-year Treasury yield fell to its lowest level in nearly six weeks on Friday. As a result the spread between the two- and 10-year yields was at its flattest in 11 years.

The dollar was little changed at 110.42 yen after losing 0.2 percent on Friday.

The euro was 0.1 percent higher at $1.1752. The single currency had risen 0.45 percent on Friday, when it brushed $1.1768, its strongest since mid-June.

The pound was effectively flat at $1.3295.

Sterling had climbed to $1.3328 earlier in the session, its highest since June 14, before pulling back after sources told Reuters British Brexit Secretary David Davis had resigned in a blow to Prime Minister Theresa May.

"The latest headlines are negative for the pound, but there are underlying expectations for the Bank of England to raise rates and that could help limit potential losses," Ishikawa at IG Securities said.

source: news.abs-cbn.com

Asian shares fall as China-US trade spat intensifies

TOKYO -- Asian shares retreated on Monday after US President Donald Trump cranked up trade tensions with China by going ahead with tariffs on Chinese imports, prompting Beijing to immediately respond in kind.

Fears of a trade war added to pressure on oil prices, which extended Friday's big fall amid expectations of higher output from OPEC and Russia.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.2 percent in early trade, near its lowest level since May 31. Financial markets in China and Hong Kong will be closed on Monday for Dragon Boat festival holiday.

Japan's Nikkei slid 0.7 percent as fears of growing protectionism overshadowed stronger-than-expected export data.

US e-mini S&P futures fell 0.4 percent in early trade.

Trump on Friday announced hefty tariffs on $50 billion of Chinese imports, laying out a list of more than 800 strategically important imports from China that would be subject to a 25 percent tariff starting on July 6, including cars.

China said it would respond with tariffs "of the same scale and strength" and that any previous trade deals with Trump were "invalid." The official Xinhua news agency said China would impose 25 percent tariffs on 659 US products, ranging from soybeans and autos to seafood.

China's retaliation list was increased more than six-fold from a version released in April, but the value was kept at $50 billion, as some high-value items such as commercial aircraft were deleted.

Analysts say the direct impact of those tariffs may be limited, especially for the US economy, which is in a strong shape with the jobless rate at the lowest level since 2000 with limited inflationary pressure.

Many market watchers believe the move was a negotiating tactic to wring greater and faster concessions from Beijing.

Yet investors worry the tensions could escalate further, possibly causing world trade to slow down and dampening business confidence.

"There are trade frictions not only between the US and China but also between the US and its allies. Trump could put more pressure on other countries like Japan and NATO courtiers," said Yoshinori Shigemi, global market strategist at JPMorgan Asset Management in Tokyo.

"So far investors have been escaping to high-tech shares and small cap shares. After all, money is still abundant. But investors should be cautious," he added.

In the currency market, the dollar was supported for now as the euro has lost steam after the European Central Bank had suggested on Thursday it would hold off raising interest rates through the summer of next year.

The euro traded at $1.1595, having slipped to a two-week low of $1.1543 on Friday.

The dollar stood at 110.63 yen, having hit a three-week high of 110.905 on Friday.

The Japanese currency has not shown a reaction to an earthquake that struck Western Japan, including Osaka, the country's second largest urban area.

The Canadian dollar hit a one-year low of C$1.3210 on Friday on worries about falls in oil prices on top of concerns about US trade policies.

Oil prices were under pressure on fears of increased supply as two big producers - Saudi Arabia and Russia - have indicated they were prepared to increase output.

The Organization of Petroleum Exporting Countries (OPEC), Russia and other producers are due to meet in the Austrian capital on June 22-23.

US crude futures took additional hit also as China's retaliatory tariffs included crude oil.

Over the past six months, the United States has exported an average 363,000 bpd of crude oil to China, which along with Canada is the biggest buyer of U.S. crude.

US crude futures fell 1.1 percent to $64.31 per barrel, briefly touching their lowest levels since April 10.

International benchmark Brent fell 0.5 percent to $73.10.

source: news.abs-cbn.com

Bitcoin 'whales' pulling cryptocurrency strings

LONDON - Bitcoin, the star of the cryptocurrency world, is widely seen as a freewheeling tool as open as the internet itself.

But analysts have cast doubt on the veracity of that perception, highlighting that the bulk of bitcoin is in fact heavily concentrated in the hands of a powerful few.

Some 1,000 bitcoin holders -- out of a total 11 million -- hold some 35.4 percent of currency, according to BitInfoCharts.

These bitcoin "whales" -- a word popularly used for big money players in financial markets -- "literally control the currency", said Bob McDowall, an expert in cryptocurrencies.

They can "dictate monetary policy, which is normally the function of a central bank or a government", he said.

Unlike central bank-issued denominations, virtual currencies are produced, or "mined," by banks of computers solving complex algorithms and freely traded online.

The other key difference with typical currencies is that the number of bitcoin in existence can never exceed 21 million.

There are currently some 17 million bitcoins in circulation.

Bitcoin's surge in value from a few cents to a peak in December 2017 of $19,500 turned some of its first investors into billionaires.

The BitInfoCharts study also found that the top 10 account holders held 5.96 percent of the bitcoins.

Experts cautioned that the statistics should be taken with a pinch of salt, however, as several individuals could be behind a single account and one person could hold several accounts.

'WHALES' WITH POWER

In a 24-hour period between Monday and Tuesday, the 100 biggest bitcoin transactions out of 200,000 accounted for 24 percent of the money volumes -- an unimaginable level of concentration compared to other markets.

"In the currency market for example it's such a huge market with so many transactions in a day that a pure actor can't have any influence on a market," Craig Erlam, an analyst for Oanda, a currency trading platform, told AFP.

Big bitcoin players, by contrast, can hold a lot of sway over the market.

To try and prevent excessive falls in the value of the currency, observers believe that the "whales" may be checking with each other first before putting in major orders, leading to suspicions of fraud in this unregulated market.

US authorities in May opened a criminal investigation into possible market manipulation of bitcoin and other cryptocurrencies, suspecting traders of "spoofing" -- putting in false orders and quickly withdrawing them to move the currency.

But Aaron Brown, former director of AQR Capital Management, who runs a bitcoin fund, said the role of "whales" is being exaggerated.

He admitted that a coordinated sale of bitcoin by the biggest accounts could cause the value of the currency to plunge but said that the risk was theoretical and that major historical investors in the currency have a strong sense of community.

Since the end of 2017, the concentration of bitcoins has decreased, according to a study by Chainalysis, a think tank.

Several long-term investors have sold their bitcoins and a new type of player has entered the scene -- speculators, who tend to hold fewer bitcoins but carry out more transactions.

"The supply of bitcoin available for trading has increased by 57 percent since December 2017," the Chainalysis study found.

source: news.abs-cbn.com

Dollar struggles after Tillerson's dismissal strikes down recovery

TOKYO - The dollar wallowed against the yen and other major currencies on Wednesday after the sudden dismissal of US Secretary of State Rex Tillerson killed off an earlier bounce in the currency.

US President Donald Trump fired Tillerson on Tuesday after a series of public rifts over policy on North Korea, Russia and Iran, replacing his chief diplomat with loyalist CIA Director Mike Pompeo.

It was deja vu for the currency market and the dollar, which had declined a week ago when the exit of White House economic advisor Gary Cohn undermined investor sentiment towards the greenback.

The dollar was down 0.1 percent at 106.490 yen, having slipped overnight from a 2-week high of 107.300 reached after wariness over a political scandal in Japan waned slightly.

The greenback also lost a bit of traction after the February US inflation data released on Tuesday was in line with expectations, suggesting the Federal Reserve remained on track to raise interest rates at a gradual pace.

Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo, said comings and goings in the White House were becoming something of an everyday occurrence and that dollar's reaction was likely to become more limited each time.

"For the dollar to rise above 107 yen again, it may need a clarification of the ongoing political scandal in Japan in addition to a hint by the Fed at this month's meeting that it might accelerate the pace of rate hikes," Yamamoto said.

The yen had risen against the dollar at the start of the week as a political scandal engulfed Japanese Prime Minister Shinzo Abe and his close ally, Finance Minister Taro Aso.

The Japanese currency advanced as the cronyism scandal raised doubts about Abe's ability to continue pursuing his economic policies, dubbed "Abenomics," which included aggressive monetary easing.

The Fed holds a 2-day policy meeting starting on March 20 and the central bank is widely expected to raise interest rates for the first time this year.

The dollar index against a basket of six major currencies was little changed at 89.711 after it tracked a decline in US yields and shed 0.25 percent on Tuesday.

The euro was steady at $1.2394 after rising 0.45 percent overnight.

The pound was up 0.1 percent at $1.3982 and in close reach of a two-week peak of $1.3994 scaled on Tuesday on the back of the dollar's broad decline.

The Australian dollar was steady at $0.7860 after bouncing to a 2-week high of $0.7898 the previous day on robust business indicators.

source: news.abs-cbn.com

Asia extends Wall St selloff as Trump sparks fears of trade war

TOKYO - Stock markets in Asia extended a selloff on Wall Street as investors were rattled after President Donald Trump announced the United States would impose hefty tariffs on steel and aluminium imports, raising the specter of a global trade war.

Early on Friday, MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.2 percent while Japan's Nikkei tumbled 2.4 percent.

On Wall Street, the S&P 500 lost 36.16 points, or 1.33 percent, to 2,677.67 on Thursday, coming a day after the investors sold off heavily on worries the Federal Reserve might increase rates more than expected this year.

Trump said the duties of 25 percent on steel and 10 percent on aluminium would be formally announced next week, although White House officials later said some details still needed to be ironed out.

Investors fear Trump's decision could spark retaliatory moves from major trade partners like China, Europe and neighboring Canada in a blow to the global economy.

The anxiety was underscored by Canada's quick response, with officials in Ottawa saying they will retaliate against any US tariffs on steel and aluminium products.

The concerns of a harmful trade war eclipsed the upbeat US economic data published on Thursday, including a rise in the manufacturing index to 14-year higher and another showing the number of Americans filing for unemployment benefits hitting a 48-year low.

US inflation picked up as the PCE price index, a gauge of underlying inflation, advanced 0.3 percent in January - the largest gain since January 2017. On the year, it posted an increase of 1.5 percent, same as the previous 2 months.

"Even if you manufacture goods, if someone doesn't buy them, you have to scale back your production, leading to slowdown in global economic activities," said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank.

"I would expect markets entered another period of correction," he added.

US Treasuries yields fell as the risk of a trade war appeared to push aside considerations of inflation, a major theme that spooked global financial markets earlier this year.

The 10-year US Treasuries yield fell to 2.811 percent, hitting its lowest level in three weeks and further extending the distance from its four-year peak of 2.957 percent touched on Feb 21.

In contrast, junk bonds came under heavy pressure with high yield iShares high-yield corporate bond ETF posting its biggest fall since November 2016.

In the currency market, the dollar's rebound following the bullish comments on the US economy from new Federal Reserve Chair Jerome Powell on Tuesday lost steam.

The euro jumped back to $1.2271, after having hit a seven-week low of $1.21545.

The dollar slipped to 106.12 yen, edging back towards its 15-month low of 105.545 set on Feb 16.

Oil prices were also under pressure, having fallen more than one percent the previous day as Trump's trade move raised worried about the global economy.

US crude traded at $61.23 per barrel, up 0.4 percent in Asia on Friday after having fallen to two-week low of $60.18 on Thursday. It is down 3.7 percent so far this week.

source: news.abs-cbn.com

Asia stocks dip, dollar recovery continues as yields rise

TOKYO - Stock markets dipped after a long winning run on Wall Street ended overnight, while the dollar gained momentum on Wednesday as yields on US Treasury debt headed for highs not seen in 4 years.

MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.15 percent. Japan's Nikkei shed 0.2 percent.

Australian stocks were down 0.05 percent and South Korea's KOSPI fell 0.4 percent.

The Dow and S&P 500 fell on Tuesday to snap a six-session winning streak as a sharp decline in Walmart weighed heavily.

Gains in Amazon and chip stocks helped the Nasdaq hold near the unchanged mark.

US equities pulled back sharply from record highs earlier this month as a steady rise in Treasury yields raised worries that the Federal Reserve could hike interest rates more frequently this year than initially expected.

Treasury yields rose overnight with the benchmark 10-year yield crawling back to near a four-year peak as investors made room for this week's $258 billion deluge of new government debt.

Treasury yields have risen in the wake of increased government borrowing. The US Treasury Department has issued more debt in anticipation of a higher deficit from last year's major tax overhaul and a budget deal that will increase federal spending over the next 2 years.

The dollar benefited from the higher yields, with its index against a basket of 6 major currencies rising to a one-week high of 89.802.

The index has bounced 0.7 percent so far this week after slumping 1.5 percent the previous week to a three-year low.

The US currency has been weighed down by a variety of factors this year, including concerns that Washington might pursue a weak dollar strategy and the perceived erosion of its yield advantage as other countries start to scale back easy monetary policy.

Confidence in the dollar has also been shaken by mounting worries over the US budget deficit.

But the greenback managed to find bids once the dust began to settle after last week's tumble.

"We are seeing the dollar being bought back after last week's slide. The steady US economy and the possibility of the Fed accelerating its rate increases will likely keep fueling the dollar's rebound, particularly against the euro and yen," said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

The dollar was steady at 107.365 yen after gaining 0.7 percent overnight. The euro was 0.05 percent lower at $1.2331 following losses of 0.55 percent the previous day.

The Australian dollar was flat at $0.7877 and the New Zealand dollar dipped 0.1 percent to $0.7340.

The stronger dollar weighed on commodities, with US crude oil futures slipping 0.25 percent to $61.63 per barrel.

US crude hit a near two-week high the previous day on news of inventory declines at a key storage hub and from expectations that top OPEC producers could extend cooperation beyond 2018.

source: news.abs-cbn.com

Egypt's mufti says bitcoin forbidden in Islam

Egypt's grand mufti has said that bitcoin is forbidden in Islam, warning the digital currency could be used for criminal purposes.

Bitcoin, launched in 2009 and based on a peer-to-peer payment system, poses "high risks to individuals and states," Shawqi Allam said in a published ruling.

It could provide "stable and secure financial resources for terrorists and criminal groups," said Allam, who acts as the country's official interpreter of Islamic law.

Minting and issuing currency is an "absolute right" of monetary institutions and "one of the most specific functions of the state," he said.

Bitcoin is a virtual currency created from computer code. It and other virtual currencies use blockchain, which records transactions that are updated in real time on an online ledger and maintained by a network of computers.

Its value surged as high as $19,500 in December from around $1,000 last January, but has slipped back after a series of warnings from governments and analysts about the risk and volatility associated with cryptocurrencies.

source: news.abs-cbn.com

Bitcoin plunges below $12,000

NEW YORK/LONDON - Bitcoin plunged by a quarter to below $12,000 on Friday as investors dumped the cryptocurrency in manic trading after its blistering ascent to a peak close to $20,000 prompted warnings by experts of a bubble.

It capped a brutal week that had been touted as a new era of mainstream trading for the volatile digital currency when bitcoin futures debuted on CME Group Inc, the world's largest derivatives market on Sunday.

Friday's steep fall bled into the U.S. stock market, where shares of companies that have recently lashed their fortunes to bitcoin or blockchain - its underlying technology - took a hard knock in early trading.

The biggest and best-known cryptocurrency had seen a staggering twentyfold increase since the start of the year, climbing from less than $1,000 to as high as $19,666 on the Luxembourg-based Bitstamp exchange on Sunday and to over $20,000 on other exchanges.

Bitcoin has fallen each day since, with losses accelerating on Friday.

In the futures market, bitcoin one-month futures on Cboe Global Markets were halted due to the steep price drop, while those trading on the CME hit the limit down threshold.

In the spot market, bitcoin fell to as low as $11,159, down more than 25 percent on the Luxembourg-based Bitstamp exchange , its largest one-day drop in nearly three years. For the week, it was down around a third - its worst performance since April 2013.

"After its parabolic-like rally, a crash was imminent and so it has proved," said Fawad Razaqzada, market analyst at Forex.com in London. "Investors may have also been put off buying bitcoin at those elevated levels amid repeated warnings from experts about the way it had climbed near $20,000."

"A manic upward swing led by the herd will be followed by a downturn as the emotional sentiment changes," said Charles Hayter, founder and chief executive of industry website Cryptocompare in London. "A lot of traders have been waiting for this large correction."

"With the end of the year in sight a lot of investors will be taking profits and saying thank you very much and closing their books for the holiday period," he added.

Warnings about the risks of investing in the unregulated market have increased - Denmark's central bank governor called it a "deadly" gamble - and there have been worries about the security of exchanges on which cryptocurrencies are bought and sold.

South Korean cryptocurrency exchange Youbit said on Tuesday it is shutting down and is filing for bankruptcy after it was hacked for the second time this year.

Coinbase, a U.S. company that runs one of the biggest exchanges and provides digital "wallets" for storing bitcoins, said on Wednesday it would investigate accusations of insider trading, following a sharp increase in the price of a bitcoin spin-off hours before it announced support for it.

CRYPTO-RIVALS

As rival cryptocurrencies slid along with bitcoin, the total estimated value of the crypto market fell to as low as $440 billion, according to industry website Coinmarketcap, having neared $650 billion just a day earlier.

But other cryptocurrencies surged this week, with investors moving into cheaper digital coins, rather than cashing out of the sector.

Ethereum, the second-biggest cryptocurrency by market size, soared to almost $900 earlier in the week, from around $500 a week earlier. Ripple, the third-biggest, has more than quadrupled in price since Monday.

Stephen Innes, head of trading in Asia-Pacific for retail FX broker Oanda in Singapore, said that there have also been moves out of bitcoin into Bitcoin Cash, a clone of the original cryptocurrency. Oanda does not handle trading in bitcoin.

"Most of it is unsophisticated retail traders getting burned badly," Innes said on bitcoin's recent retreat.

While some say the launch by CME and its rival Cboe Global Markets of bitcoin futures over the last two weeks has given the digital currency some perceived legitimacy, many policymakers remain sceptical.

Bitcoin is known to go through wild swings. In November, it tumbled almost 30 percent in four days from $7,888 to $5,555. In September, it fell 40 percent from $4,979 to $2,972.

source: news.abs-cbn.com

Singapore urges 'extreme caution' on bitcoin, cryptocurrencies

SINGAPORE/LONDON - Global financial regulators are beginning to warn the public against the risks of investing in a market that many feel is in a speculative bubble, with Singapore's central bank on Tuesday urging "extreme caution" about buying cryptocurrencies.


The staggering growth of bitcoin and other decentralized digital currencies this year - with the market swelling from around $17 billion at the start of January to well over $600 billion now - has led to increasing concerns over what the fallout could be if the bubble were to suddenly burst.

There have also been worries that regulators have not been doing enough to protect consumers. Many, though, say investors must take responsibility and must not expect protection if they lose money because of the difficulties of regulating an opaque, complex market that has no centralized authority.

The Monetary Authority of Singapore (MAS) said in an official statement on Tuesday it is "concerned that members of the public may be attracted to invest in cryptocurrencies, such as bitcoin, due to the recent escalation in their prices".

"MAS considers the recent surge in the prices of cryptocurrencies to be driven by speculation," the central bank said in a statement. "The risk of a sharp reduction in prices is high. Investors in cryptocurrencies should be aware that they run the risk of losing all their capital."

The city-state's central bank added that there is no regulatory safeguard for investments in cryptocurrencies and that it does not regulate them either.

It urged the public to act with "extreme caution" and to understand the "significant risks" they take on if they invest in virtual currencies.

Denmark's central bank on Monday said bitcoin investing was "deadly", warning the public to steer clear of it. It also said potential investors should not complain to financial regulators if things do go wrong.

A survey by the Center for Macroeconomics and the Center for Economic Policy Research released on Tuesday found a majority of leading European economists were in favour of greater regulatory oversight of the market, primarily because of concerns that cryptocurrencies facilitate tax evasion and other criminal activity.

But a large majority of the economists agreed that the market did not represent a threat to the stability of the financial system - now or in the next couple of years - as mainstream financial markets were isolated enough from bitcoin. They also took the view that the cryptocurrency market was still relatively small.

European Union states and legislators agreed last week on stricter rules to prevent money laundering and terrorism financing on exchange platforms for bitcoin and other virtual currencies, but it has not moved to regulate the market beyond that.

Late in 2013, the EU issued a formal warning on the risks of using unregulated online currencies, warning that bitcoin investors would be on their own if they lost money.

Bitcoin set a record high of $19,666 on Sunday on the Luxembourg-based Bitstamp exchange, its prices having surged more than twentyfold this year. On Tuesday at 1447 GMT, it stood at $17,942, down more than 5 percent on the day.

BIG IN ASIA

"As most operators of platforms on which cryptocurrencies are traded do not have a presence in Singapore, it would be difficult to verify their authenticity or credibility. There is greater risk of fraud when investors deal with entities whose backgrounds and operations cannot be easily verified," the MAS said on Tuesday.

Singapore has been positioning itself in recent years as a capital for "fintech" - or financial technology - but it is not a centre for cryptocurrency trading. Instead, Japan and South Korea are home to some of the biggest global exchanges, and investors there have piled into the market over the past year.

South Korea said last week that it will ban minors from opening accounts on exchanges, a statement seen by Reuters showed, and that it may tax capital gains from cryptocurrency trading.

Japanese Finance Minister Taro Aso said on Tuesday that bitcoin had not been proven to be a credible currency and that he would watch its developments.

Australia's central bank chief also last week warned of a "speculative mania" in the market, while his New Zealand counterpart said bitcoin appeared to be a "classic case" of a bubble and cast doubt on its future.

The chairman of the U.S. Securities and Exchange Commission (SEC) warned last week that trading and public offerings of new cryptocurrencies in so called "Initial Coin Offerings" or "ICOs" may be in violation of federal securities law, after stopping one from going ahead.

China has outlawed ICOs, while other regulators such as Britain's Financial Conduct Authority have issued warnings about the risks of investing in them.

On Sunday, France's finance minister said his country would propose that the G20 group of major economies discuss regulation of bitcoin next year.

source: news.abs-cbn.com

Bitcoin surges above $16,000 as concerns mount

Bitcoin flirted with $17,000 on Thursday, triggering a warning the cryptocurrency was like a "train with no brakes" and prompting fresh concern about its looming launch on mainstream markets.

Still under $14,000 in Asian trading hours, it smashed through $15,000 in European trading and got as high as $16,777 before pulling back, according to Bloomberg data. Near 2145 GMT (5:45 a.m. in Manila), bitcoin stood at $16,070.

The rally came just a day after the virtual currency, which has been used to buy everything from an ice cream to a pint of beer, hit the $12,000 mark for the first time. The eye-popping rise has seen the currency's value soar more than 50 percent in just one week, and from just $752 in mid-January.

Bitcoin -- which came into being in 2009 as a bit of encrypted software -- has no central bank backing it and no legal exchange rate.

It has surged dramatically in the past month, driven by growing acceptance among traditional investors of an innovation once considered the preserve of computer nerds and financial experts, and sometimes more shady users.

But some, including the US Federal Reserve, have warned against dabbling in bitcoin as it could threaten financial stability, and fears of a bubble have increased as the price has soared.

"Bitcoin now seems like a charging train with no brakes," said Shane Chanel, from Sydney-based ASR Wealth Advisers. "There is an unfathomable amount of new participants piling into the cryptocurrency market."

But he warned: "Once the hype slows down, we will most certainly see some sort of correction."

FINANCIAL INDUSTRY CONCERNS

There also are mounting concerns about its introduction into the mainstream financial system after a US regulator last week cleared the way for bitcoin futures to trade on major exchanges, a decision which analysts say has helped spur the recent rally.

The Commodity Futures Trading Commission decision allows bitcoin derivatives to be offered on the Cboe Futures Exchange starting this weekend and on the world's biggest futures venue, the Chicago Mercantile Exchange (CME), from December 18.

But the Futures Industry Association, which groups some of the world's biggest derivatives brokerages, criticized the CFTC's move in a letter to the regulator, saying contracts are being rushed through without properly weighing the risks.

"A more thorough and considered process would have allowed for a robust public discussion among clearing member firms, exchanges and clearing houses," the association said.

Bitcoin transactions happen when heavily encrypted codes are passed across a computer network.

Goldman Sachs, an FIA member, plans to clear bitcoin futures contracts for some clients, meaning it will serve as intermediary to enable transactions, a spokeswoman said.

"Given that this is a new product, as expected we are evaluating the specifications and risk attributes for the bitcoin futures contracts as part of our standard due diligence process," she said.

The NiceHash marketplace was meanwhile on Thursday investigating a security breach resulting in the theft of bitcoin.

"Clearly, this is a matter of deep concern and we are working hard to rectify the matter in the coming days," NiceHash said in a statement.

"In addition to undertaking our own investigation, the incident has been reported to the relevant authorities and law enforcement and we are co-operating with them as a matter of urgency."

Bitcoin and other virtual currencies use blockchain, which records transactions that are updated in real time on an online ledger and maintained by a network of computers.

In 2014 major Tokyo-based bitcoin exchange MtGox collapsed after admitting that 850,000 coins -- worth around $480 million at the time -- had disappeared from its vaults.

Bitcoin's use on the underground Silk Road website, where users could use it to buy drugs and guns, also raised suspicions about the virtual money.

source: news.abs-cbn.com

Bitcoin chalks up new record as it charges past $14,000

SINGAPORE - Bitcoin broke past $14,000 to a fresh record on Thursday as investors continued to pile in, triggering a warning the cryptocurrency was "like a charging train with no brakes" that would inevitably slip back.

It touched a new high of $14,485 before slipping back to $14,398 in Asian afternoon trade, according to Bloomberg News.

The rally came just a day after the virtual currency, which has been used to buy everything from an ice cream to a pint of beer, hit the $12,000 mark for the first time.

Bitcoin -- which came into being in 2009 as a bit of encrypted software and has no central bank backing it -- has risen from a 2017 low of $752 in mid-January, and surged dramatically in the past month.

The increased interest has been driven by growing acceptance among traditional investors of an innovation once considered the preserve of computer nerds and financial experts.

US regulators last week cleared the way for Bitcoin futures to trade on major exchanges, including the world's biggest futures centre the Chicago Mercantile Exchange (CME).

But some, including the US Federal Reserve, have warned against dabbling in Bitcoin as it could threaten financial stability, and fears of a bubble have increased as the price has soared.

"Bitcoin now seems like a charging train with no brakes," said Shane Chanel, from Sydney-based ASR Wealth Advisers. "There is an unfathomable amount of new participants piling into the cryptocurrency market."

But he warned: "Once the hype slows down, we will most certainly see some sort of correction."

Chris Weston, chief market strategist at IG, also predicted "downside moves" in future.

"When the price does turn and there is confusion, even panic.... then watch the short sellers come out in droves," he said.

Transactions happen when heavily encrypted codes are passed across a computer network.

Bitcoin and other virtual currencies use blockchain, which records transactions that are updated in real time on an online ledger and maintained by a network of computers.

But it has also suffered controversies. In 2014 major Tokyo-based Bitcoin exchange MtGox collapsed after admitting that 850,000 coins -- worth around $480 million at the time -- had disappeared from its vaults.

source: news.abs-cbn.com

Bitcoin, an 'Uber' currency, not without risk

PARIS - Bitcoin, which this week soared to a new record high of more than $8,000, is the monetary equivalent of Uber, since it bypasses central bank regulation and could be attractive for financially fragile countries, economists say.

Nevertheless, it is precisely the lack of oversight that opens up the users of cryptocurrencies such as bitcoin to risks and dangers, analysts warn.

"Bitcoin? It's about 'Uber-ising' currency, about not having a central bank that decides the price," said Ludovic Subran, chief economist at credit insurer Euler Hermes, referring to Uber, the ride-hailing app that has set the cat among the pigeons in the taxi sector in recent years.

"Yes, it's exactly that: it bypasses a central regulatory authority. That's the genius of this invention," agreed Yves Choueifaty, founder of the Paris-based asset management firm Tobam, which this week launched the first European fund investing in bitcoin.

Bitcoin is not regulated, but is traded on specialist platforms. It has no legal exchange rate and no central bank backing it. Launched in 2009 as a bit of encrypted software written by someone using the Japanese-sounding name Satoshi Nakamoto, bitcoin is controlled and regulated by its community of users.

Investors are already referring to it as "digital gold", as the bitcoin soared to a new record high of more than $8,000 this week, a staggering rise in value from just under $1,000 at the beginning of the year.

"We have no need for central banks," said Yves Choueifaty, suggesting that institutional investors may be behind the recent sharp gains, even if insisted that there was "no bitcoin bubble."

The growing interest in bitcoin is catching mainstream attention: the CME Group of Chicago, one of the world's biggest exchanges, has decided to launch a bitcoin futures marketplace. And prestigious US universities are offering courses in blockchain technology, on which cryptocurrencies are based.

'DOLLARIZATION 2.0'

Virtual currencies could also prove attractive to economic players in countries such as Zimbabwe or Venezuela, whose fiat currencies have been ravaged hyper-inflation. Caracas, for example, has had to issued a new 100,000-bolivar bill, when just a year ago, the biggest-denomination banknote was 100 bolivars.

"Think of countries with weak institutions and unstable national currencies. Instead of adopting the currency of another country -- such as the US dollar -- some of these economies might see a growing use of virtual currencies. Call it dollarization 2.0," said the head of the International Monetary Fund, Christine Lagarde, recently.

Economists also suggest the bitcoin could be of interest to developing countries where individuals often find it easier to access the internet than traditional bank accounts.

Nevertheless, central banks and the big financial institutions are concerned that virtual currencies can be used for illicit purposes and are highly speculative by nature.

"It's the exact definition of a bubble," the head of Swiss banking giant Credit Suisse, Tidjane Thiam, warned recently in comments that immediately sparked an uproar on social media among bitcoin's supporters.

The head of the French central bank or Banque de France, Francois Villeroy de Galhau, warned in the summer: "People are using the bitcoin today are clearly doing it at their own risk and at their own peril."

'NO INTRINSIC VALUE'

Nobel laureate, Jean Tirole, also insisted that the current bitcoin boom was a "bubble".

"It's something that has no intrinsic value," he told AFP on the sidelines of a conference in Paris this week.

"It could collapse from one day to the next. I would be completely against French banks, for example, investing in bitcoin."

Euler Hermes economist Subran called on the financial authorities to make potential investors more aware of the risks.

"There's a lot of money to be made. And a lot of money to be lost," he said.

"We're seeing more and more people wanting to venture there, but they're not fully aware of the risk."

Bitcoin has regularly suffered abrupt falls, for example, in cases of friction between the members of the community who oversee it and the members who produce it, when the regulatory authorities issue any warnings, or if there are data hacks.

But more often than not, bitcoin quickly makes up any losses and some investors are predicting it will soon top the $10,000 level. Back in 2011, it had struggled to pass $1.

source: news.abs-cbn.com

Stocks weighed by doubts on US tax reform, sterling falls

NEW YORK - Stocks notched a small gain in choppy trade on Monday amid uncertainty over the fate of US tax reform efforts, while Britain's pound fell as investors worried if Theresa May can remain Prime Minister and get a good European Union exit deal.

US stock indexes made little ground. Some investors sought bargains after a few days of losses while others were put off by a dividend cut and weak financial forecasts at heavyweight General Electric which plans to radically shrink to focus on aviation, power and healthcare.

Investors were waiting for any signs of compromise on US tax policy after US Senate Republicans on Thursday unveiled a plan that would cut corporate taxes a year later than a rival House of Representatives' bill.

"What the market seems to be focused on is if and when tax reform will be agreed on by Republicans in both the Senate and the House and how it'll fare in Congress," said Ryan Larson, head of US equity trading at RBC Global Asset Management in Chicago.

While senators and representatives are trying to reach a deal, investors can still hope, said Nathan Thooft, senior managing director at Manulife Asset Management in Boston.

"They're still working through the math attached to the two plans. They still have to go through reconciliation but the fact the conversations are happening is a positive."

The Dow Jones Industrial Average rose 17.49 points, or 0.07 percent, to 23,439.7, the S&P 500 gained 2.54 points, or 0.10 percent, to 2,584.84 and the Nasdaq Composite added 6.66 points, or 0.1 percent, to 6,757.60.

The pan-European FTSEurofirst 300 index lost 0.53 percent and MSCI's gauge of stocks across the globe shed 0.25 percent, a third straight day of losses after hitting an intraday record high on Thursday.

Sterling fell 0.6 percent, its biggest daily fall against the dollar since Nov. 2. It was also down 0.6 percent against the euro after the Sunday Times newspaper reported that 40 members of parliament from May's Conservative Party agreed to sign a letter of no-confidence in her, eight short of the requirement to trigger a party leadership contest.

"That just highlights some of the internal weakness that the Conservative party has within its own self and I think that’s going to undermine the Brexit negotiations going forward," said Sireen Harajli, foreign exchange strategist at Mizuho in New York.

The dollar edged higher against a basket of other major currencies, recovering ground after a 0.6 percent drop last week. It rose 0.1 percent, with the euro up 0.03 percent to $1.1666.

US two-year Treasury note yields hit a fresh nine-year high as the yield curve resumed its flattening, with investors pricing in a Federal Reserve interest rate hike in December. The two-year yield hit a nine-year peak of 1.687 percent, up from 1.662 percent Friday.

Oil prices held steady in a tight range Monday after briefly testing lower, with support from Middle East tensions and record long bets by fund managers balanced by rising US production.

A purge of Saudi Arabia's leadership by Crown Prince Mohammed bin Salman has raised concerns about political stability in the region's largest oil producer.

US crude fell 0.04 percent to $56.72 per barrel and Brent was last at $63.13, down 0.61 percent.

source: news.abs-cbn.com

US stocks fall on weak earnings, strong pound hits FTSE

NEW YORK - US stocks retreated Wednesday following a batch of mostly lackluster earnings, while a stronger pound hammered London's FTSE 100.

US stocks have hit numerous records over the last month, boosted in part by good earnings. But disappointing reports Wednesday from AT&T and Boeing, among others, led to declines in both those companies and the broader market.

"Earnings season has been good overall, but we are still seeing some misses," said Gorilla Trades strategist Ken Berman. "Bulls know that a brief pullback might be necessary."

Investors were also rattled by discord among Republicans that could halt progress on President Donald Trump's tax cut plan, a key investor priority.

In a withering address on the Senate floor, Arizona Republican Senator Jeff Flake announced Tuesday he was retiring from the body and lambasted Trump for "reckless, outrageous and undignified behavior."

Earlier, Republican Senator Bob Corker of Tennessee, who is also retiring, called Trump an "utterly untruthful" leader who "debases" the nation.

The strife "creates great anxiety about tax reform," said Tom Hainlin of US Bank's Ascent Private Capital Management.

London's FTSE 100, meanwhile, dropped 1.1 percent after Britain's GDP grew 0.4 percent in the third quarter, slightly outperforming expectations.

The pound, which has been under pressure over suggestions that a hike in interest rates may be delayed, spiked after the positive GDP results, rising against the dollar and the euro.

"Ultimately, a respectable growth rate in the UK economy will assist the equity benchmark in the long run, but for now the pound is putting pressure on it," said David Madden, market analyst at CMC Markets UK.

Eurozone stocks also retreated ahead of the European Central Bank's policy meeting Thursday, at which it is expected to announce a big reduction in its bond-buying stimulus as the eurozone economy picks up.

Frankfurt fell 0.5 percent to drop back below the 13,000 point level, while Paris shed 0.4 percent.

Analysts expect the ECB will slash the volume of corporate and government bonds it buys each month in half -- from 60 billion to 30 billion euros -- but extend the duration of the program while pledging to keep the monetary tap open and interest rates at historic lows for longer, in order to help financial markets adjust.

In Asia, a phenomenal run of 16 straight days of gains finally ended in Tokyo on Wednesday as a late bout of profit-taking saw the Nikkei close in negative territory for the first time this month.

KEY FIGURES AROUND (5 a.m. Thursday in Manila)

New York - DOW: DOWN 0.5 percent at 23,329.46 (close)

New York - S&P 500: DOWN 0.5 percent at 2,557.15 (close)

New York - Nasdaq: DOWN 0.5 percent at 6,563.89 (close)

London - FTSE 100: DOWN 1.1 percent at 7,447.21 points (close)

Frankfurt - DAX 30: DOWN 0.5 percent at 12,953.41 (close)

Paris - CAC 40: DOWN 0.4 percent at 5,374.89 (close)

Madrid - IBEX 35: DOWN 0.5 percent at 10,153 (close)

EURO STOXX 50: DOWN 0.6 at 3,588.49

Tokyo - Nikkei 225: DOWN 0.5 percent at 21,707.62 (close)

Hong Kong - Hang Seng: UP 0.5 percent at 28,302.89 (close)

Shanghai - Composite: UP 0.3 percent at 3,396.90 (close)

Euro/dollar: UP at $1.1813 from $1.1760 at 2100 GMT

Pound/dollar: UP at $1.3257 from $1.3131

Dollar/yen: DOWN at 113.78 yen from 113.93 yen

Oil - West Texas Intermediate: DOWN 29 cents at $52.18 per barrel

Oil - Brent North Sea: UP 11 cents at $58.44 per barrel

source: news.abs-cbn.com

China expands forex basket, dilutes role of dollar

BEIJING - China said Thursday it would almost double the number of foreign currencies it uses to determine the official value of the yuan, thereby diluting the role of the dollar.

The move to expand the foreign exchange basket used to set a daily reference rate for the yuan, or renminbi, will help Beijing shake off the weakness of the currency against the greenback and project an image of stability in the unit.

The dollar will see its prominence in the basket dented by the newcomers, with its share falling from 26.4 percent to 22.4 percent. It is followed by the euro at 16.34 percent.

Among the 11 currencies to join the 13 existing ones are the South Korean won, the South African rand, the Hungarian forint, the Turkish lira and the Polish zloty, according to the Chinese Foreign Exchange Trade System, which is run by the central bank.

The expansion is designed to "strengthen the representativeness" of the basket and will come into force on January 1, it added.

"The move is aim (ed) to reduce the impact of dollar strength on the overall performance of the basket," said Christy Tan, head of markets strategy in Hong Kong at National Australia Bank Ltd.

China's currency has been under pressure from uncertainty over the health of the world's second largest economy, massive capital outflows and the sharp rise in the dollar following Donald Trump's election victory and anticipation of US interest rate hikes.

However, when valued against the "basket of currencies" as a whole, the yuan fares much better, even seeing a rise over the past four months.

China's communist regime likely hopes the move will project an image of stability and strengthen the international stature of the renminbi after it was welcomed by the International Monetary Fund into its elite currency basket in October.

source: news.abs-cbn.com