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

Markets boosted by rate hopes ahead of Fed decision

HONG KONG - Most markets rose Monday ahead of a crucial Federal Reserve policy meeting later in the week, with investors hoping for a less hawkish tilt in their plans for interest rates.

A sense of relief has settled on trading floors over the past week following a report that the US central bank could take its foot off the accelerator in its push to rein in decades-high inflation.

Adding to the positive mood has been an indication that others around the world are looking at slowing down, though the excitement was tempered Friday by record inflation readings in Europe and data showing prices remained elevated.

Asian dealers were given a strong lead from Wall Street, where all three main indexes ended more than two percent higher thanks to a rally in tech firms following a strong earnings report from Apple.

Tokyo, Seoul, Sydney, Singapore, Taipei, Mumbai, Bangkok and Wellington all piled on more than one percent, while Jakarta was also up.

However, Hong Kong and Shanghai fell on concerns about China's growth outlook as the government continues its zero-Covid strategy of lockdowns, with restrictions imposed in towns and cities nationwide.

Data showing activity in the factory and services sectors contracted last month highlighted the impact the measures are having on the world's number two economy.

The drops also come after China announced a tally of over 2,500 new virus cases, the biggest outbreak in more than two months, fanning concerns of further painful shutdowns.

All eyes are on the Fed's policy meeting, which ends Wednesday.

While it is widely expected to announce a fourth successive 75 basis point hike, traders will be poring over the post-meeting statement looking for a hint that officials are open to dialing back the pace of increases.

The gathering comes as other central banks have recently indicated they are willing to ease up, with Canada raising rates less than expected last week, while authorities in Australia and Europe have taken a more dovish view.

Concerns that rapidly rising borrowing costs will send economies into a recession have hammered markets globally this year.

"There has been a succession of central bank downshifts, adding to the 'peak hawkishness' theme running through macro markets," said SPI Asset Management's Stephen Innes. "And investors are entirely focused on these U-turns as peak rates get priced in. 

"So, people don't want to miss the stock market rally wagon, especially if the Fed conveys a similar policy downshift this week, sending the rally into overdrive as pivot procrastinators will be forced to chase."

The policy decision is followed Friday by the release of US jobs figures, which will give a fresh snapshot of the economy in light of rising prices and interest rates.

A better-than-expected earnings season has also provided support to global markets, easing concerns that tighter monetary policies would hammer firms' bottom lines, though big-name tech giants have taken a blow.

National Australia Bank's Rodrigo Catril said more than 70 percent of companies that had reported had beaten forecasts, though he added that while markets had risen over the past month, some traders remained cautious.

"Those with a positive inclination may look at October's equity performance as a sign of a new uptrend while others would suggest we have not yet seen the worst given the lag effects from monetary policy and the prospect of still more tightening to come," he said in a note.

Key figures around 0710 GMT 

Tokyo - Nikkei 225: UP 1.8 percent at 27,587.46 (close)

Hong Kong - Hang Seng Index: DOWN 1.1 percent at 14,700.12

Shanghai - Composite: DOWN 0.8 percent at 2,893.48 (close)

Euro/dollar: DOWN at $0.9945 from $0.9967 on Friday

Pound/dollar: DOWN at $1.1596 from $1.1618 

Dollar/yen: UP at 147.76 yen from 147.46 yen

Euro/pound: UP at 85.79 pence from 85.77 pence

West Texas Intermediate: DOWN 0.9 percent at $87.09 per barrel

Brent North Sea crude: DOWN 1.0 percent at $94.85 per barrel

New York - Dow: UP 2.6 percent at 32,861.80 (close)

London - FTSE 100: DOWN 0.4 percent at 7,047.67 (close) 

Agence France-Presse

Markets sink as US jobs data fan rate hike bets

HONG KONG - Stock markets sank Monday as forecast-beating US jobs data fanned expectations for another big Federal Reserve interest rate hike, while traders are now focusing on an upcoming inflation report.

A brief rally across trading floors last week gave way to gloom as investors grow increasingly worried that central bank efforts to tame runaway prices will plunge the global economy into recession.

Adding to the stress is the upcoming corporate earnings season, which many fear will show that companies are feeling the pain of tightening monetary policies, and fresh China-US tensions.

All three main indexes tumbled Friday -- with the Nasdaq off almost four percent -- following news that a net 263,000 US jobs were created in September.

While that was down from August it was more than expected and showed that the labor market remained robust and highlighted the tough job Fed officials face in their battle against four-decade-high inflation. 

With the spotlight on a consumer price index reading later in the week, policymakers continue to take a hawkish tone, warning they will not ease up on their rate hikes even if that means causing a recession.

Asia tracked the US losses, with Hong Kong down three percent and hefty selling in Sydney, Singapore, Mumbai, Bangkok, Manila, Jakarta and Wellington. 

Shanghai dropped as traders returned from a week-long holiday, with rising Covid numbers in the country leading to worries of more economically painful lockdowns ahead of a key Communist Party gathering.

Chinese tech firms were also hit after Washington on Friday announced new export controls aimed at restricting China's ability to buy and make high-end chips with military applications, adding to tensions between the countries.

London, Paris and Frankfurt all fell in the morning, while Moscow stocks plunged nearly 12 percent following a series of strikes on cities across Ukraine and after the bridge connecting Crimea to Russia was hit by an explosion at the weekend.

Tokyo, Seoul and Taipei were closed.

"The sell-off in equities and the rally in the dollar following Friday's US employment report reflects the concern that the hurdle for a Fed pause is high," said SPI Asset Management's Stephen Innes.

"The rising unemployment rate needed to help bring down CPI inflation will require job losses despite the political fallout that is bound to ensue. Regardless, tightening monetary policy until job losses materialize is on the cards."

He added that there was also nervousness about earnings.

"Unlike June, where earnings were poised to beat expectations, investors are biased towards hitting the sell button as concern around lagged effects of tightening hitting bottom lines now permeate expectations," he said in a note.

The prospect of higher US borrowing costs sent the dollar rallying Friday and it held most of those gains in early Asian trade.

Investors are keeping an eye on the yen, which is edging back to the lows touched last month when the government stepped in with a massive cash injection to support the currency.

The pound weakened even as the Bank of England said it was launching a temporary facility aimed at easing liquidity pressures that arose after the UK government's budget shocked markets last month.

It said it was ready to increase the size of its UK government bond purchases under an emergency measure due to end Friday.

The pound has been hammered -- at one point hitting a record low versus the dollar -- since finance minister Kwasi Kwarteng unveiled a debt-fuelled tax-cutting mini-budget.

Oil prices edged down after seeing their biggest weekly gain since March in reaction to a decision by OPEC and other major producers led by Russia to cut output by two million barrels a day.

The drop Monday came on demand concerns caused by China's Covid flare-ups and more weak data out of Beijing caused by recent lockdowns.

"A slew of weak macroeconomic data that China has released shows that there is very limited room for an economic rebound in the short term, which is hard to provide support for earnings and market confidence," Shen Meng, at investment bank Chanson & Co in Beijing, said.

Key figures around 0810 GMT 

Hong Kong - Hang Seng Index: DOWN 3.0 percent at 17,216.66 (close) 

Shanghai - Composite: DOWN 1.7 percent at 2,974.15 (close)

Tokyo - Nikkei 225: Closed for a holiday

London - FTSE 100: DOWN 0.7 percent at 6,944.90

Pound/dollar: UP at $1.1074 from $1.1082 on Friday

Euro/dollar: DOWN at $0.9703 from $0.9743

Euro/pound: DOWN at 87.62 pence from 87.97 pence

Dollar/yen: DOWN at 145.35 yen from 145.38 yen

West Texas Intermediate: DOWN 0.4 percent at $92.27 per barrel

Brent North Sea crude: DOWN 0.5 percent at $97.44 per barrel

New York - Dow: DOWN 2.1 percent at 29,296.79 (close)

-- Bloomberg News contributed to this story --

Agence France-Presse

Markets drop as Fed hike looms, Putin move lifts dollar and oil

HONG KONG - Stocks fell Wednesday ahead of what many expect to be a third successive jumbo rate hike by the Federal Reserve, while the dollar hit fresh multi-decade highs against the pound and euro after Russia stepped up its war in Ukraine.

Equities around the world have been clattered by fears of a recession in major economies as central banks ramp up borrowing costs to combat the highest inflation in decades, which has been compounded by the Ukraine war and supply chain snarls.

In Washington, the Fed is due to conclude its latest policy meeting, with most analysts predicting it will announce another 75 basis-point lift, though some have tipped a full percentage-point move.

However, while the hike has largely been priced into the markets, the US central bank's forecast and post-meeting comments from boss Jerome Powell are the main attraction for investors.

"Volumes remain light and the mood cautious, with few looking to take on large positions before hearing what the Fed says and where policy makers see rates going by the end of the hiking cycle," Fiona Cincotta, at City Index, said.

"This is what will drive the markets, not the rate hike... but what the Fed plans to do next."

Fed officials have for months stuck to the mantra that they will only ease up on their hawkish drive when inflation comes down and remains subdued.

This has led many to warn that rates are unlikely to come down anytime soon, possibly as late as 2024, with a recession more than likely in the United States as well as other major economies.

DOLLAR EXTENDS RALLY 

Other central banks are also meeting this week. On Tuesday, officials in Sweden surprised markets by unveiling a one percentage-point hike, while the United Kingdom and Switzerland are expected to announce more increases.

Asian markets were back in the red, reversing Tuesday's bounce.

Tokyo, Hong Kong, Sydney and Manila were all down more than one percent, while there were also losses in Shanghai, Seoul, Singapore, Wellington, Taipei, Mumbai and Jakarta.

London rose in early trade, but Paris and Frankfurt were down.

Adding to the dour mood was Vladimir Putin's announcement of a "partial mobilization" as he upped the ante in his battle against Ukraine after his forces were routed from several cities in recent weeks.

He added that he would annex the territories his forces have already occupied and backed weekend referendums in four regions in Russian-held parts of Ukraine.

"We will definitely use all means available" to protect Russian territory, he warned, adding: "That's not a bluff."

The moves mark an escalation of the seven-month war, which has roiled markets and sparked an energy crisis.

Oil prices, which have wilted in recent months owing to worries about demand caused by any recession, surged more than three percent.

And the dollar, a safe haven in times of uncertainty and turmoil and which was already elevated ahead of the rate decision, rallied further.

It hit a fresh 37-year high of $1.1305 against sterling and a new 20-year peak of $0.9885 per euro, with the eurozone already in economic trouble owing to sanctions on Russian oil and Putin's decision to cut off gas supplies to the continent.

The announcement and possible escalation in the war "raises a whole new set of uncertainties", Rabobank's Jane Foley said.

"This is set to weigh on the euro and on the currencies of eastern Europe."

Agence France-Presse

Dollar shines, euro droops as Omicron spreads while Fed hawks circle

TOKYO - The US dollar hovered near the highest since July of last year against major peers on Monday after a Federal Reserve official signaled a first pandemic-era interest rate hike could come as early as March.

The euro sank with the British pound after the Netherlands went into lockdown on Sunday and Britain's health minister declined to rule out the chance of further restrictions before Christmas amid the rapid spread of the Omicron coronavirus variant.

The dollar index, which measures the currency against six major peers, stood at 96.629, not far from the peak at 96.938 reached last month.

The World Health Organization said on Saturday that the number of Omicron cases is doubling in 1.5 to 3 days in areas of the world with community transmission, but noted that much remains unknown about the variant, including the severity of the illness it causes.

On Friday, Fed Governor Chris Waller said an interest rate increase will likely be warranted "shortly after" the bank ends its bond purchases in March.

"Waller gave the (dollar index) a tailwind on Friday," which is now eyeing a new high, but "positioning is skewed long in USDs, so the prospect of position squaring into year-end is elevated," Chris Weston, head of research at brokerage Pepperstone in Melbourne, wrote in a client note.

"While central bank actions are the real issue, headlines on Omicron could be seen as the smoking gun for position squaring."

The greenback, which tends to attract demand as a safe haven, touched its highest since Dec. 15 against the euro, sterling and the risk-sensitive Australian dollar.

The dollar slipped though against fellow haven currency the yen, but still near the middle of the trading range of the past three weeks.

Ten-year US Treasury yields, to which the dollar-yen pair are often closely correlated, languished near a two-week low reached Friday. 

Earlier on Friday, New York Fed president John Williams told CNBC that the Fed will gain "optionality" to raise rates in 2022 by ending bond purchases by March.

Money markets price about 50-50 odds of a quarter point hike by March.

-reuters-

Bulls back in charge in global markets as omicron worries wane

LONDON - Waning Omicron COVID-19 variant worries and a timely booster shot of Chinese stimulus lifted world stock markets and oil on Tuesday and left traders offloading safe-haven currencies and bonds again.

The FTSEurofirst 300 index was on track for its first back-to-back run of plus 1 percent gains since February while Asia saw record bounces from some of China's biggest firms such as Alibaba and Baidu.

The risk-on mood also helped the dollar climb against safe haven currencies such as the Japanese yen,, which had lost 0.6 percent overnight, as the confidence-sensitive Australian dollar also found buyers.

Safe-harbour government bonds went the other way with yields - which move inverse to bond prices - up 2.5 percent on Germany's benchmark 10-year Bund after falling to a three-month low on Monday.

Reports in South Africa said Omicron cases there had only shown mild symptoms and the top US infectious disease official, Anthony Fauci, told CNN "it does not look like there's a great degree of severity" so far.

"Good news relating to the severity of Omicron should be taken with a pinch of salt. Faster transmission could offset the benefits of milder symptoms," researchers at ING said in a note. "More broadly, it is still early days, even if markets are starting to display Omicron fatigue."

The gains also came after China's central bank on Monday injected its second shot of stimulus since July by cutting the amount of cash that banks must hold in reserve.

There was still uncertainty about its property sector as Evergrande teetered on the brink of default again but data showing much stronger import growth was "a positive sign on the strength of domestic demand", RBC analyst Adam Cole said.

Elsewhere, Australia's S&P/ASX200 rose 0.95 percent, while Japan's Nikkei advanced 2.1 percent as risk-on sentiment pushed markets higher.

MSCI's main Asia ex-Japan benchmark has lost about 5 percent so far this year, with Hong Kong markets figuring among the big losers, while Indian and Taiwan stocks outperformed.

Shares in embattled developer Evergrande edged up 1.7 percent after hitting a record low on Monday as markets waited to see if the real estate giant has paid $82.5 million with a 30-day grace period coming to an end.

Elsewhere, markets were supported by gains on Wall Street, where economically sensitive stocks outperformed.

"While epidemiologists have rightly warned against premature conclusions on Omicron, markets arguably surmised that last week's brutal sell-off ought to have been milder," Vishnu Varathan, head of economics and strategy at Mizuho Bank, said in a note.

"After all, early assessments of Omicron cases have been declared mild, spurring half-full relief."

Also supporting the dollar in FX markets was the expectation the Federal Reserve will accelerate the tapering of its bond-buying programme when it meets next week in response to a tightening labour market.

Oil prices jumped another 2 percent to $74.60 a barrel, adding to a near 5 percent rebound the day before as concerns about the impact of Omicron on global fuel demand eased.

Copper prices also ticked higher while gold was steady at $1,778.5 per ounce on expectations US consumer price data due later this week will show inflation quickening.

(Additional reporting by Anshuman Daga in Singapore; Editing by Nick Macfie)

-reuters-

Global stocks, oil plunge as Fed virus move fails to ease fears

LONDON - Stock markets and oil prices went into freefall Monday as interest rate cuts and fresh stimulus measures by central banks failed to lift confidence, with analysts warning that the Federal Reserve may have reached the limits of its power to fend off recession as the coronavirus spreads.

Brent North Sea oil plunged more than ten percent to a four-year low, as a price war between major producers Saudi Arabia and Russia added to sliding crude demand caused by the virus.

The euro surged one percent against the dollar after the Fed on Sunday slashed borrowing costs to almost zero -- its second emergency cut in less than two weeks. 

The US central bank also unveiled a massive asset-buying programme, similar to measures put into place during the global financial crisis more than a decade ago.

The Bank of Japan joined in on Monday, saying it would ramp up its bond-buying programme.

New Zealand's central bank also slashed rates to record lows in an attempt to cushion the economic blow, while the People's Bank of China has injected vast sums into financial markets to ease liquidity worries.

In joint action coordinated with the European Central Bank, Bank of England, Bank of Japan, Bank of Canada and the Swiss National Bank, the Fed moved to counteract global "dollar funding pressures" according to its boss Jerome Powell.

But traders were left unimpressed, with the virus showing no sign of letting up, while the head of the World Health Organization chief Tedros Adhanom Ghebreyesus said it was impossible to tell when it would peak globally.

With G7 leaders set to hold crisis videoconference talks later Monday, IMF chief Kristalina Georgieva called Monday for global governments to work together to provide massive spending as in the 2008 financial crisis to help the economy withstand the damage from the coronavirus pandemic.

Trading was halted on Wall Street just after the opening bell, with the Dow dropping nearly 10 percent. 

In afternoon trading in Europe, Paris 10.7 percent, Milan 10.9 percent, Madrid 11.3 percent, Frankfurt 9.5 percent and London 7.9 percent.

Airlines and tourism groups were the biggest fallers after slashing capacity, with TUI down by nearly a third and British Airways-parent IAG crashing 28 percent.

The car sector also slid as carmakers Fiat Chrysler and Peugeot-Citroen said they were halting production.

"While these (central bank) moves may go some way to easing any potential blockages in the plumbing of the financial markets, they won't adequately compensate for the upcoming economic shocks that are about to come our way," said CMC Markets analyst Michael Hewson.

The scale of the crisis was laid bare by data showing Chinese industrial production for January and February shrank 13.5 percent, the first contraction in around 30 years.

Meanwhile, manufacturing activity in New York state fell to its lowest level since 2009, according to the New York Federal Reserve Bank's monthly industry survey.

Equity markets continue to be whipsawed by the disease, which has now infected almost 170,000 people and killed more than 6,000 with several countries going into lockdown as Europe becomes the new epicentre of the outbreak.

ASIA MELTDOWN

Sydney's stock market led losses in Asia-Pacific, tumbling 9.7 percent in its worst daily drop on record, while Manila shed nearly eight percent and Bangkok and Mumbai dropped more than five percent.

Hong Kong, Singapore, Taipei and Jakarta all lost more than four percent. Wellington and Seoul were more than three percent off.

Shanghai tumbled 3.4 percent after the release of the industrial production data, which came a week after news that Chinese exports had collapsed.

Tokyo ended 2.5 percent lower, after a rally sparked by the Bank of Japan's support measures announcement fizzled.

The broad retreat followed a tumultuous week that saw some stock markets suffer their worst days in decades and in some cases their worst ever.

And experts said there was a concern that the Fed might be running on empty with regards to further action.

Sunday's move "raises the question of whether the Fed has anything left in the tank should the spread of the virus not be contained", said Kerry Craig at JP Morgan Asset Management.

"Our view is that the drag on the services sector from social distancing policies and shock from the fall of the oil price on the energy sector will be enough to tip the US into recession, but not necessarily a long one."

source: news.abs-cbn.com

Global markets up on trade optimism, US stocks end at records

NEW YORK — Global stocks mostly rose Wednesday, with Wall Street again notching new records, as investors stayed upbeat that China and the United States would soon reach an interim trade deal.

Major US indices ended at records for the third straight day following better-than-expected reports on economic growth and durable goods orders.

Briefing.com analyst Patrick O'Hare said the latest reports "feed into the notion that the US economy is not on the cusp of a recession."

But a Federal Reserve survey showed businesses, farmers and bankers nationwide remained concerned about the impact of tariffs and trade conflict.

After more than a year of being lurched up and down by shifting trade headlines, most analysts still expect a deal soon, but concede there is lingering uncertainty.

"Trade optimism has lifted stocks," CMC Markets analyst David Madden. "Equity markets are posting gains, but the upside moves are not massive as dealers are mindful that things still could fall apart."

For Craig Erlam, senior market analyst at Oanda, "the sudden daily obsession with the trade war probably has a lot to do with the fact that there's very little else to talk about at the moment, which doesn't bode well for the rest of the year.

"The trade war has taken the place of the Fed in being what investors are hanging their hat on," Erlam added.

The broad-based S&P 500 gained 0.4 percent, but volumes were low in the final full day of trading before the Thanksgiving holiday on Thursday. 

US markets will reopen Friday with a half-day of trading.

Hong Kong rose 0.2 percent, with e-commerce titan Alibaba piling on more than three percent a day after its market debut that saw it gain more than six percent.

Tokyo ended 0.3 percent higher and Sydney jumped 0.9 percent.

However, Shanghai fell 0.1 percent after data showed that industrial company profits tumbled by 10 percent in October on an annual basis, highlighting continued problems in the world's number two economy.

The pound meanwhile diverged as opinion polls showed the main opposition Labour party closing the gap on Prime Minister Boris Johnson's Conservatives just over two weeks before the general election.

Sterling has been given a lift in recent weeks by expectations Johnson would win a workable parliamentary majority that would allow him to push through his Brexit plan.

Among individual companies, Boeing fell 1.5 percent after its 777X suffered significant problems during testing overseen by US aviation inspectors, raising new questions about a key aircraft under development.

Boeing remains under scrutiny over the 737 MAX, which remains grounded after two fatal crashes.

KEY FIGURES AROUND 5 A.M. THURSDAY 

New York - Dow: UP 0.2 percent at 28,164.00 (close)

New York - S&P 500: UP 0.4 percent at 3,153.63 (close)

New York - Nasdaq: UP 0.7 percent at 8,705.18 (close)

London - FTSE 100: UP 0.4 percent at 7,429.78 (close)

Frankfurt - DAX 30: UP 0.4 percent at 13,287.07 (close)

Paris - CAC 40: DOWN 0.1 percent at 5,926.84 (close)

EURO STOXX 50: UP 0.2 percent at 3,712.85 (close)

Tokyo - Nikkei 225: UP 0.3 percent at 23,437.77 (close)

Hong Kong - Hang Seng: UP 0.2 percent at 26,954.00 (close)

Shanghai - Composite: DOWN 0.1 percent at 2,903.19 (close)

Euro/dollar: DOWN at $1.0999 from $1.1021

Dollar/pound: UP at $1.2899 from $1.2866

Euro/pound: DOWN at 85.26 pence from 85.66 pence

Dollar/yen: UP at 109.55 yen from 109.05 yen

Brent North Sea crude: DOWN 0.3 percent at $64.06 per barrel

West Texas Intermediate: DOWN 0.5 percent at $58.11 per barrel

source: news.abs-cbn.com

US and China seeking to revive trade talks: Trump adviser

WASHINGTON -- Washington and Beijing are working to revive pivotal talks aimed at ending the trade war that has roiled world markets, Donald Trump's chief economic advisor said Sunday.

If calls between both sides' deputies pan out in the next 10 days "and we can have a substantive renewal of negotiations," Larry Kudlow said on "Fox News Sunday," "then we are planning to have China come to the USA and meet with our principals to continue the negotiations."

The US president himself weighed in on Twitter, saying, "We are doing very well with China, and talking!"

In another tweet, he added that the US economy was "poised for big growth after trade deals are completed," and that China is "eating Tariffs."

Yet it was unclear whether a Chinese delegation would be coming to Washington next month, as a White House spokesperson predicted in July after US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin left a round of trade talks in Shanghai.

Kudlow nonetheless emphasized that high-level phone discussions last week were "a lot more positive than has been reported."

The talks involved Lighthizer and Mnuchin on the US side and Vice Premier Liu He and Commerce Secretary Zhong Shan representing China.

World financial markets have been on edge amid signs pointing to a possible global economic slowdown -- notably because of the trade war between the world's two largest economies -- and have been reacting nervously to even the slightest new indicator.

NO FEAR OF 'OPTIMISM'

But Kudlow insisted that the outlook was far from gloomy.

"Let's not be afraid of optimism," he said, adding that "I sure don't see a recession."

The US-China negotiations began in earnest in January and seemed at first to make progress, raising hopes that a trade deal could be rapidly reached. 

But during the spring, the US president abruptly called off the talks, saying the Chinese had reneged on earlier commitments. 

The discussions resumed in June at the highest levels in the margins of the G-20 summit meeting in Osaka, Japan, when Trump met with his Chinese counterpart Xi Jinping.

But markets were hit with a fresh surprise when Trump suddenly announced that as of Sept. 1 he was imposing punitive 10-percent tariffs on $300 billion in Chinese goods that had so far been spared. 

Then came the announcement Tuesday that Trump -- presumably with an eye on the 2020 elections -- would delay imposing the tariffs until Dec. 15 so as not to cast a shadow on Americans' Christmas shopping plans.

The delay was seen as a concession to China and a backhanded admission that the tariffs -- despite Trump's repeated insistence to the contrary -- could in fact affect US consumers.

IMPACT ON AMERICA DENIED

Nonetheless, the president's chief trade adviser, Peter Navarro, firmly rejected that notion in television appearances Sunday.

He said Trump had decided on the postponement only after several company heads told him their contracts with Chinese suppliers were denominated in dollars, meaning they got no benefit from the weakening of the Chinese yuan and their orders ahead of the year-end holidays would be hard-hit. 

Navarro vigorously rejected the notion that the tariff war is hurting American consumers -- despite studies to the contrary by the International Monetary Fund, Harvard University and the Federal Reserve Bank of Boston.

"We're seeing production investment and supply-chain sourcing move -- hemorrhaging from China," Navarro said, with Southeast Asia and the US benefiting.

source: news.abs-cbn.com

World markets stagger towards end of worst year since financial crisis

NEW YORK -- World stock markets staggered Monday towards the end of their worst year since the global financial crisis a decade ago, rocked by rising interest rates, the global trade war and Brexit, dealers said.

London and Paris wobbled in holiday-shortened trade on New Year's Eve -- but nursed dizzying double-digit annual falls after an exceptionally volatile 2018.

Hong Kong rose Monday after US President Donald Trump hailed "big progress" on resolving Washington's trade war with Beijing, but was down almost 14 percent over the year.

Wall Street gained in the final trading session of 2018, but major indices declined for the year, with the Dow shedding 5.6 percent compared to the end of 2017. 

Equities have been hammered in 2018 by tighter monetary policy -- from the US Federal Reserve and also the European Central Bank, which halted its quantitative easing stimulus policy this month.

"Global stocks are set for their worst year since the financial crisis, thanks to the tightening monetary policies," said ThinkMarkets analyst Naeem Aslam

The Bank of England meanwhile hiked British interest rates in August for the second time since the financial crisis to help tame inflation, despite worries that Brexit could wreak havoc on the economy.

'AMERICA FIRST'

Sentiment was also dented by US President Donald Trump's "America First" trade policy which has sparked a damaging trade war with China and others.

Wall Street did however mark the longest-ever "bull market" in August, a run that began amid extraordinary crisis-era monetary policy -- but for which Trump has claimed credit after his tax cuts and regulatory rollbacks.

Yet markets have since spiraled lower on slowing global growth, Italy's fiscal woes, a US government shutdown and Trump's attacks on the Fed.

Investors also ran for cover as the uncertain nature of Britain's looming exit from the European Union in March 2019 casts a long shadow.

"Stock markets have been on a wild ride this year and the United States has been at the center," Oanda analyst Craig Erlam told AFP.

"Tax reforms hugely boosted earnings, bringing an economic boost with it," he said.

However, "the trade war with China and skirmishes elsewhere have weighed heavily on the relevant domestic markets which has dented investor sentiment."

Washington and Beijing imposed tit-for-tat tariffs on more than $300 billion worth of goods in total two-way trade earlier this year, locking them in a conflict that has begun to eat into profits and contributed to stock market plunges.

While investors remain concerned, relations have thawed since Chinese President Xi Jinping and Trump agreed to a 90-day trade truce in early December while the two sides work to ease trade tensions by March 1.

Chinese state news agency Xinhua quoted Xi as telling Trump both leaders want "stable progress".

In Europe on Monday, London's benchmark FTSE 100 index dipped 0.1 percent to finish at 6,728.13 points, marking a sharp annual loss of 12.5 percent.

The Paris CAC 40 climbed 1.1 percent to end at 4,730.69 points -- which was drop of nearly 11 percent for the year.

Many investors were away for Christmas and New Year holidays, while trading hubs including Frankfurt, Rome, Tokyo, Shanghai and Seoul were shut.

'RETURN TO RECESSION'

"2018 has been characterized by a shift from low volatility, high liquidity and expectations of equity out-performance to high volatility, low liquidity and the return of a bear market in equities," said VTB Capital economist Neil MacKinnon.

"For 2019, a global economic slowdown -- perhaps recession -- looks increasingly likely," he warned.

Key Asian markets also limped towards the end of the year in bear market territory -- meaning that they are 20 percent below their most recent peaks.

Tokyo's benchmark Nikkei index had rounded out 2018 on Friday with its first annual loss since 2011, and Shanghai became the worst-performing major global stock market, dropping by nearly a quarter.

KEY FIGURES AROUND 2120 GMT (5:20 a.m. Tuesday in Manila)

New York - Dow: UP 1.2 percent at 23,327.46 (close)

New York - S&P 500: UP 0.9 percent at 2,506.85 (close)

New York - Nasdaq: UP 0.8 percent at 6,635.28 (close)

London - FTSE 100: DOWN 0.1 percent at 6,728.13 (close)

Paris - CAC 40: UP 1.1 percent at 4,730.69 (close)

Frankfurt - Closed for public holiday

EURO STOXX 50: UP 2.2 percent at 3,001.42 (close)

Tokyo - Closed for public holiday

Hong Kong - Hang Seng: UP 1.3 percent at 25,845.70 (close) 

Shanghai - Closed for public holiday

Euro/dollar: UP at $1.1460 from $1.1444 at 2200 GMT

Dollar/yen: DOWN at 109.58 yen from 110.27 yen 

Pound/dollar: UP at $1.2752 from $1.2699 

Oil - Brent Crude: UP 59 cents at $53.80 per barrel

Oil - West Texas Intermediate: UP 8 cents at $45.41 per barrel

source: news.abs-cbn.com

World stocks climb to month peak, dollar hits 3-week high

NEW YORK -- Stocks on major world markets climbed to a one-month high on Wednesday after a raft of strong corporate earnings, while the US dollar hit a three-week high against major currencies.

MSCI's gauge of stocks across the globe gained 0.17 percent and touched its highest point in a month.

Stock markets were also supported by Federal Reserve chairman Jerome Powell reiterating that the US economy was healthy, even though he warned that rising world protectionism would over time pose a risk to the global economic expansion.

"He's been constructive on the economy and downplayed the risk of a recession," said Jonathan Cohn, interest rate strategist with Credit Suisse in New York.

On Wall Street, the Dow Jones Industrial Average rose 79.4 points, or 0.32 percent, to 25,199.29, the S&P 500 gained 6.07 points, or 0.22 percent, to 2,815.62 and the Nasdaq Composite dropped 0.67 points, or 0.01 percent, to 7,854.44.

The S&P 500 hit a more than five-month high.

Shares of Morgan Stanley, airline United Continental and railroad CSX all jumped after the companies reported better-than-expected results.

Amazon.com Inc's stock market value reached $900 billion for the first time, though the shares later reversed course to trade slightly lower.

The pan-European FTSEurofirst 300 index rose 0.60 percent, hitting a one-month high. The region's shares were supported by currency weakness and a rally in technology stocks following well-received earnings updates, including from Sweden's Ericsson.

In the foreign exchange market, the US dollar index , which measures the greenback against a basket of six currencies, rose 0.17 percent, to 95.104 after rising as high 95.407. The euro was down 0.16 percent to $1.164.

Federal Reserve chairman Powell's comments to Congress about the health of the US economy reinforced the view that interest rates would continue to rise supporting demand for the dollar.

Traders saw his comments as signifying that authorities were comfortable with the greenback's near 6 percent rise against its rivals in the last three months.

Benchmark US 10-year notes last fell 4/32 in price to yield 2.8766 percent, from 2.862 percent late on Tuesday. The US yield curve remained near its flattest in nearly 11 years.

Oil prices rose 1 percent after US government data indicated bullish demand for gasoline and distillates, which overshadowed a surprise build in US crude inventories and US crude oil production's hitting 11 million barrels per day for the first time.

US crude settled up 1 percent at $68.76 per barrel, and Brent settled at $72.90, up 1 percent.

Spot gold fell to a one-year low as the US dollar rose before settling at $1,227.81 an ounce.

source: news.abs-cbn.com

Global stocks calm in hopes of US-China trade deal

NEW YORK, United States - World markets were mostly firmer Monday as fears about a China-US trade war were tempered by hopes the two sides will be able to come to an understanding.

The "consensus is back to believing there will be no trade war," said Jasper Lawler, head of research at LCG.

Most Asian and European equities exchanges rebounded somewhat, as trade war fears gave way to moderate investor optimism, or at least a wait-and-see stance.

"European markets are in a more optimistic mood today, with the focus shifting toward a more constructive end to the US-China standoff," said analyst Joshua Mahony at trading group IG.

US stocks also rose, registering strong gains for much of the day as investors smiled on a dearth of new developments in the ongoing US-China trade showdown that has alarmed markets in recent weeks.

But Wall Street's gains were tempered by late-breaking news on an investigation into President Donald Trump's personal lawyer.

Shortly before the closing bell, it emerged that the Federal Bureau of Investigation had raided the offices of Trump's longtime personal lawyer Michael Cohen.

The Dow Jones Industrial Average finished up 0.2 percent at 23,979.10, shedding more than 130 points in the last 20 minutes of trading.

"It appears like it's market-moving," Art Hogan, chief market strategist at Wunderlich Securities, said of the Cohen news.

Cohen has admitted to paying porn actress Stephanie Clifford $130,000. Clifford, who goes by Stormy Daniels, claims she received the money to cover up a sexual encounter with Trump more than a decade ago.

Analysts are looking ahead to earnings season, which begins in earnest with JPMorgan Chase and other large banks and is expected be strong.

Some investors say strong earnings could shift the narrative over trade war fears that has rattled investors over the last month.

"It illustrates the importance of maintaining a long-term perspective and it's not smart to make investment decisions based on the last tweet," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.

"Earnings will remind us that fundamentals matter more."

Among individual stocks, Merck surged 5.3 percent after reporting successful results of a clinical trial for its Keytruda treatment for lung cancer.

Monsanto jumped 6.2 percent following a report the US Justice Department would approve its acquisition by Bayer, the last major hurdle facing the deal.

US shares of Deutsche Bank gained one percent on the announcement that it had replaced chief executive John Cryan with Christian Sewing.

KEY FIGURES

New York - Dow: UP 0.2 percent at 23,979.10 (close)

New York - S&P 500: UP 0.3 percent at 2,613.16 (close)

New York - Nasdaq: UP 0.5 percent at 6,950.34 (close)

London - FTSE 100: UP 0.2 percent at 7,194.75 (close)

Frankfurt - DAX 30: UP 0.2 percent at 12,261.75 (close)

Paris - CAC 40: UP 0.1 percent at 5,263.39 (close)

EURO STOXX 50: UP 0.2 percent at 3,413.05 (close)

Tokyo - Nikkei 225: UP 0.5 percent at 21,678.26 (close)

Hong Kong - Hang Seng: UP 1.3 percent at 30,229.58 (close)

Euro/dollar: UP at $1.2318 from $1.2281 at 2100 GMT Friday

Dollar/yen: DOWN at 106.75 yen from 106.93

Pound/dollar: UP at $1.4127 from $1.4092

Oil - Brent North Sea: UP $1.54 at $68.65 per barrel

Oil - West Texas Intermediate: UP $1.35 at $63.42 per barrel.

source: news.abs-cbn.com

Tokyo and Seoul lead Asia rally after Wall Street gains

HONG KONG - Tokyo and Seoul led a rally in Asian shares Wednesday, on the back of strong earnings reports across the region including from tech giants Sony and Samsung.

The buying, after a muted start to the week in Asia, tracked overnight gains in the Nasdaq on Wall Street that saw it close at a fresh record.

Along with solid US economic data and growing expectations that a centrist continuity candidate will take over at the US Federal Reserve, the outlook for global growth remained broadly positive.

Asia has witnessed an impressive profit reporting season so far, with Sony the latest electronics blue-chip to announce it was expecting record annual profits.

Sony stocks surged 11.4 percent, with strong results attributed to its PlayStation games division and a booming smartphone parts business, as well as a hit with the newest Spider-Man movie.

Honda also revved up its annual profit outlook on motorcycle purchases, while a fall in Nissan passenger car sales after an inspection scandal appeared to have already been priced in by investors.

Tokyo finished at a fresh 21-year high, trading up 1.9 percent, as firms benefited from a weak yen -- making their products more competitive in foreign markets and inflating repatriated profits.

The announcement from Japan's central bank Tuesday that it would keep its ultra-loose monetary policy unchanged, even though overseas counterparts have started turning off the stimulus taps, also contributed.

Seoul shrugged off data showing October exports rising by less than expected, with shares up 1.3 percent, led by Samsung. The flagship tech firm logged a record profit of $10.0 billion for the third quarter.

Hong Kong closed up 1.2 percent, reversing two days of losses, with the latest evidence of the city's equity rally coming from internet giant Tencent's e-book arm. The country's answer to Amazon's Kindle Store, China Literature has reportedly raised US$1.1 billion for a Hong Kong listing next week.

Shanghai edged up 0.1 percent, as new numbers showed Chinese factory activity stabilized in October, going some way to dispel the gloom of Tuesday's official reading which suggested output growth had slowed.

Sydney also finished up, gaining 0.5 percent after a strong showing from miners and healthcare stocks.

At the start of trading in Europe, London and Paris both rose 0.4 percent, while Frankfurt jumped 0.9 percent after a public holiday Tuesday.

- US Federal Reserve meets -

Wall Street rose as data releases showed US consumer confidence hit a 17-year high in October, as congressional Republicans prepared to unveil President Donald Trump's long-anticipated tax cut plan.

The result of the ongoing US Federal Reserve meeting is due after Asian markets close Wednesday.

Investors will scrutinize the announcement for indications of a widely anticipated December rate rise.

Overshadowing the whole process is Trump's imminent decision on whether to replace Fed chief Janet Yellen, with the announcement likely to come Thursday before his departure on an 11-day Asia tour.

Centrist Jerome Powell is tipped as the front-runner, with investors pricing in his potential appointment over the more hawkish John Taylor.

Traders are also keeping a close eye on key payroll data out on Friday.

The New York attack by a truck driver that killed eight people, and Trump's vow to ensure more robust "extreme vetting" of travelers to the US, did not appear to have affected investor sentiment.

Oil prices rose to a two-year high as OPEC members honored pledges to curb supply and exports from northern Iraq fell.

source: news.abs-cbn.com

World markets end volatile year mostly in the black

Most world stocks markets finished 2016 in positive territory despite shock votes in Britain and the United States, but the outlook for 2017 is clouded by looming European elections and Brexit.

The year witnessed a wave of anti-establishment populism, which saw Britain vote to leave the EU and maverick billionaire businessman Donald Trump elected as US president.

Both unexpected outcomes sparked a brief tumble on global equity markets, but many have since staged a stunning recovery to finish 2016 in the black.

London's FTSE 100 gained 14.3 percent over the year, while Frankfurt's DAX 30 added about 6.9 percent and the Paris CAC 40 won 4.9 percent.

In the US, all three major indices enjoyed robust gains, with the Dow Jones Industrial Average jumping 13.4 percent, the S&P 500 9.5 percent and the Nasdaq 7.5 percent.

Japan's Nikkei rose 0.4 percent in 2016, marking the fifth consecutive annual increase and registering its highest year-end close in two decades on optimism over the incoming US government.

Shanghai slumped more than 12 percent on the back of massive capital flight and a languishing yuan currency.

Equities continued to receive support from robust central bank stimulus programs in Europe, Japan and elsewhere, although the US Federal Reserve raised interest rates in December and signaled it plans more tightening in 2017.

A 50 percent jump in oil prices -- fueled in part by the decision of the Organization of the Petroleum Exporting Countries to cut production -- also supported stocks.

That helped boost the Bovespa in Sao Paolo, which jumped nearly 40 percent on strength in commodity prices and the resolution of an impeachment drama involving former president Dilma Rousseff, which ended with the installation of center-right President Michel Temer in August.

-- FTSE sparkles --

Since Brexit, London's FTSE 100 blue-chip index has soared to end the year in record-breaking form, as the British economy shrugged off the impact of the impending divorce from the EU.

"Fears of an imminent UK recession following Brexit proved wide of the mark thanks largely to the resilience of consumer spending," NFS Macro analyst Nick Stamenkovic told AFP.

"Indeed, Brexit was viewed as a local rather than global issue, prompting a sharp turnaround in the fortunes of world stock markets."

Markets also briefly tanked on November 9 after Republican Trump defeated Democrat and market favorite Hillary Clinton to capture the White House.

Yet Wall Street has since enjoyed a blockbuster run with the Dow Jones Industrial Average making a push towards 20,000 points. In the end, the blue-chip index finished at 19,762.60, logging its best year since 2013.

New York has been boosted by expectations that Trump -- who will be inaugurated on January 20 -- will honour election pledges to ramp up infrastructure spending, cut taxes and streamline regulations.

Markets are pricing in "all the good stuff while ignoring for now potential consequences for the dollar, deficits, interest rates, trade, inflation and the uncertainty principle," JPMorgan Asset Management strategist Michael Cembalest said in a research note.

"Whether this benign view is accurate or not will be a major driver of markets next year."

-- Rise of populism --

Looking ahead to 2017, the spotlight is now on upcoming European elections.

The Netherlands heads to the polls in March, followed by France in May, and Germany in the autumn.

Further gains by populist candidates would reverberate through Europe as Brussels moves into the thick of negotiations with Britain over Brexit.

VTB Capital analyst Neil MacKinnon also highlighted the region's banking problem after the European Central Bank called for Italian lender Monte dei Paschi di Siena (BMPS) to receive a bailout of 8.8 billion euros.

Italy's stock market shed 10 percent over the year.

In the US, investors largely have disregarded worries about the unpredictable Trump, including fears his tough posture towards China could lead to a trade war and that his embrace of Russian President Vladimir Putin could roil international alliances.

But reality could trump expectations.

And expectations are high for Trump's first 100 days, which are anticipated to include progress on these key policies, said Sandy Sanders, a senior portfolio manager at Manulife Asset Management.

"Everyone is going to be laser-like focused on what's going through Congress and the Senate and then to the president's desk and they're going to want to see deliverables on that tax reform," Sanders said.

In foreign exchange, many economists predict the euro could slump to parity against the dollar next year, aided by the Federal Reserve's hawkish stance on interest rates.

The Fed's bullish outlook this month pushed the dollar to 10-month yen highs and sent it heading towards parity with the euro for the first time since 2002.

- Key figures around 1630 GMT -

New York - Dow: DOWN 0.3 percent at 19,762.60 (close)

New York - S&P 500: DOWN 0.5 percent at 2,238.83 (close)

New York - Nasdaq: DOWN 0.9 percent at 5,383.12 (close)

London - FTSE 100: UP 0.3 percent at 7,142.83 (close)

Frankfurt - DAX 30: UP 0.3 percent at 11,481.06 (close)

Paris - CAC 40: UP 0.5 percent at 4,862.31 (close)

EURO STOXX 50: UP 0.3 percent at 3,282.94

Tokyo - Nikkei 225: DOWN 0.2 percent at 19,114.37 (close)

Hong Kong - Hang Seng: UP one percent at 22,000.56 (close)

Shanghai - Composite: UP 0.2 percent at 3,103.64 (close)

Euro/dollar: UP at $1.0515 from $1.0484

Dollar/yen: UP at 1.1698 yen from 116.63 yen

Pound/dollar: UP at $1.2322 from $1.2265

source: news.abs-cbn.com

Asia struggles for traction, dollar near 14-year peak on Fed rally

TOKYO - The dollar on Friday stood near a 14-year peak, bond yields were highly elevated and Asian stocks struggled for traction as global markets continued adjusting to the idea of higher US interest rates.

In a move that reverberated across the financial markets, the Fed on Wednesday raised rates for the first time in a year and hinted at three hikes to follow in 2017, up from the two projected in September.

The dollar index topped the 103.00 threshold for the first time since December 2002 overnight and last stood at 103.11.

The euro was steady at $1.0410 after hitting $1.0366 overnight, its lowest since January 2003. The dollar was little changed at 118.065 yen after surging to a 10-month high of 118.660 the previous day.

The greenback was lifted as the notion of the Fed tightening monetary policy next year more quickly than first thought took the benchmark US Treasury 10-year yield to highs not seen in two years.

"World markets continue to adjust to an outlook for higher US interest rates and increased inflation risk boosted by major US tax cuts," wrote Ric Spooner, chief market analyst at CMC Markets.

Tracking the rise in the US 10-year note's yield, Japan's 10-year government bond yield rose to an 11-month peak of 0.10 percent. That gain is expected to test the Bank of Japan's resolve to keep the yield around zero percent.

Asian stocks were mixed, reflecting the differing fortunes for developed and emerging market economies faced with higher US interest rates.

"Emerging market countries have been hit the hardest by capital leaving in search of higher yields and return along with the growing cost of paying back dollar denominated debt," wrote Kathy Lien, managing director of FX strategy at BK Asset Management.

Japan's Nikkei climbed to a one-year high on a weaker yen and gains on Wall Street overnight. US shares rose on Thursday, brushing off the initial shock of a more hawkish Fed, led by shares of banks seen as the benefactors of higher rates.

European stocks also rose, gaining 1 percent on Thursday as bank stocks increased.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped a fraction after falling 1.8 percent on Thursday. The broader emerging market stock index was down 1.6 percent.

Australian stocks shed 0.1 percent, while South Korea's Kospi also lost 0.1 percent.

In commodities, crude oil prices nudged higher. Negative pressures from a bullish dollar were offset after OPEC members told customers they would cut crude supplies.

source: news.abs-cbn.com

Britain votes to leave EU

LONDON - Britain has voted to break out of the European Union, striking a thunderous blow against the bloc and spreading panic through world markets Friday as sterling collapsed to a 31-year low.

Investors scrambled to sell the pound, oil and stocks as Britain took a lurch into the unknown, becoming the first country to quit in the EU's 60-year history, a culmination of decades of suspicion over European aims of creating an ever-closer political union.

Voters decided 52 percent to 48 percent in favour of quitting the bloc with 374 out of 382 regional results declared.

With 16.8 million votes for "Leave" and 15.7 million for "Remain", it is now mathematically impossible for "Remain" to win, the BBC reported.

"Let June 23 go down in our history as our independence day," said top anti-EU campaigner Nigel Farage, leader of the UK Independence Party, who had promised Britons the chance to retake power from Brussels and rein in high immigration.

"If the predictions now are right, this will be a victory for real people, a victory for ordinary people, a victory for decent people," he told supporters.

A joyous crowd chanted back to him: "Out! Out! Out!"

At the rival "Remain" party in London, subdued supporters stood glued to TV screens clutching beers -- some with their hands over their mouths.

'EUROSCEPTIC GENIE'
Sterling plunged more than nine percent to $1.33, a 31-year low. World oil prices skidded by more than six percent and Asian stocks sank.

Britons appeared to have to shrugged off dire warnings that quitting the 28-nation alliance would create a budget hole requiring spending cuts and tax increases once they lose unfettered trade access to the EU.

Their decision will undoubtedly reawaken fears of a domino-effect ripple of exit votes in EU-sceptic members that could imperil the integrity of the bloc, already struggling with twin economic and refugee crises.

"The eurosceptic genie is out of the bottle and it will now not be put back," Farage said.

Dutch far-right MP Geert Wilders and French National Front leader Marine Le Pen immediately called for a referendums on EU membership in their own countries.

Prime Minister David Cameron, who led the ultimately doomed struggle to sway voters in favour of sticking with Brussels, will face immediate pressure to resign.

The bookmakers' favourite to replace him is former London mayor Boris Johnson, a rival from within his ruling Conservative Party who was the "Leave" camp figurehead.

GOING IT ALONE

The result means the world's fifth-largest economy must now go it alone in the global economy, launching lengthy exit negotiations with the bloc and brokering new deals with all the countries it now trades with under the EU's umbrella.

European Commission chief Jean-Claude Juncker has warned the EU will "not be bending over backwards" to help Britain in those negotiations. Analysts say it could take the island nation a decade to secure new trade accords worldwide.

In a worst-case scenario, the International Monetary Fund has warned that the British economy could sink into recession next year and overall economic output would be 5.6 percent lower than otherwise forecast by 2019, with unemployment rising back above six percent.

Thousands of jobs in the City could be transferred to Frankfurt or Paris, top companies have warned. The Brexit camp argued that the business world will adapt quickly, however, with Britain's flexible and dynamic economy buoyed by new economic partners and selective immigration.

Japanese Finance Minister Taro Aso told an emergency press briefing that Tokyo was "extremely worried" about the risks to the global economy and markets but stood ready to respond "firmly".

The campaign has left Britain riven in two, marked by the brutal murder of pro-"Remain" British lawmaker Jo Cox, a mother of two who was stabbed, shot and left bleeding to death on the pavement a week ahead of the vote.

BRITISH UNITY THREATENED

The vote threatens the unity of the United Kingdom, too.

Two years after Scotland voted in a referendum to remain in the United Kingdom, its political leader First Minister Nicola Sturgeon has said a new independence vote is "definitely on the table" after Britain voted against the majority will expressed by Scots.

"Scotland sees its future as part of the EU," Sturgeon told Sky News after the vote.

Northern Ireland, which is part of the United Kingdom, is now faced with the prospect of customs barriers for trade with EU-member the Republic of Ireland. Irish republicans Sinn Fein called for a vote on Irish unity following the referendum.

Leaders of Europe, born out of a determination to forge lasting peace from the carnage of two world wars, will open a two-day summit on Tuesday to grapple with the British decision.

DISINTEGRATION

German Foreign Minister Frank-Walter Steinmeier warned this month that a British departure would be a shock requiring quick action to avert the "disintegration" of the bloc.

"It looks like a sad day for #Europe +the United Kingdom," he wrote on Twitter on Friday.

Small countries that are economically at least as affluent as the UK are the main ones at risk, especially Denmark and potentially also Sweden," said Carsten Nickels of the Teneo analyst group in Brussels.

Immigration and an erosion of economic security have become rallying cries for populist challenges that remain scattered across in Europe, just as they have for Donald Trump's campaign in the US presidential election.

The bloc will have to learn lessons not only from events in Britain but from the rest of Europe, Juncker said ahead of the referendum, warning against a rapid push for more integration.

"This euroscepticism is not only present in Britain," he said.

source: www.abs-cbnnews.com

China jitters send stocks tumbling

LONDON - World stocks and commodity prices tumbled on Tuesday, as poor Chinese data saw fears about its economic health intensify.

After a relatively upbeat few days for world markets, concerns about China were reignited by surveys that showed its giant manufacturing sector shrinking at its fastest pace in three years and its services sector also cooling.

Asian stocks, particularly in Japan and Australia, had swooned overnight, and the gloomy mood remained in Europe as the pan-regional FTSEurofirst 300 opened down 2.5 percent after its worst month in four years.

London, Frankfurt and Paris were down 2.3 to 2.5 percent and oil was also back in the red as it cut almost $1.5 off the $10 it had leapt between Thursday and Monday, which had been its biggest three-day surge in 25 years.

"The problem is that we have these brief spells of optimism like we had last week when U.S. GDP was revised up, but the overall theme is still the weakness in China and that is very hard to dispel from markets," said Philip Marey, a strategist at Rabobank in the Netherlands.

U.S. stock futures were also down 1.5 percent, while the mood was similarly wary in the currency and bond markets.

The safe-haven Japanese yen and the low-yielding euro, which has also been back in favor following its recent Greece-related falls, both rose against the dollar, to 120.16 yen per dollar and $1.1323 to the euro.

Gold another favorite of investors during periods of uncertainty, was up at $1,141 an ounce having risen 3.5 in August, its best month since January

The head of the International Monetary Fund, Christine Lagarde, summed up the situation saying in a speech in Indonesia that global economic growth was now likely to be weaker than had been expected just a few months ago.

She cited both a slower recovery in major advanced economies and a further slowdown in emerging nations and highlighted the need to "be vigilant for spillovers" from China's stutters.

"The transition (in China) to a more market-based economy and the unwinding of risks built up in recent years is complex and could well be somewhat bumpy," she added.

CAUTION! FRAGILE CHINA

The latest bout of volatility had been kicked off by losses on Wall Street overnight after comments from Federal Reserve Vice Chairman Stanley Fischer appeared to keep alive the chances of a U.S. interest rate hike in September.

China's official Purchasing Managers' Index (PMI) then compounded matters, falling to 49.7 in August from the previous month's reading of 50.0, its weakest showing in three years.

"Recent volatilities in global financial markets could weigh on the real economy, and a pessimistic outlook may become self-fulfilling," said He Fan, chief economist at Caixin Insight Group. A separate survey from Fan's organization had also shown the country's services sector slowing.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.6 percent to extend the more than 10 percent it had lost in August.

Chinese shares had remained relatively steady, with the Shanghai Composite Index down a modest 1.2 percent and the CSI300 index almost flat.

Instead the pain was felt elsewhere. Japan's Nikkei slumped 3.8 percent after tanking 8.2 percent in August. Australian, Indonesian and Hong Kong stocks were all down by more than 2 percent.

Metals markets were straining again too. London Metal Exchange copper fell 1 percent to $5,087.50 as markets reopened after a long bank holiday weekend, nickel slid 2 percent while aluminum and tin skidded too.

One of the other recent victims of the China jitters, the Australian dollar, edged up however, adding about 0.2 percent to $0.7125 after the Reserve Bank of Australia held Aussie interest rates steady.

source: www.abs-cbnnews.com