Turkish lira hits another historic low amid pandemic

LONDON (AP) — Turkey’s currency tumbled further Friday, hitting another record low.

The Turkish lira dropped to 7.3677 against the dollar before making a recovery. The lira is down about 19% versus the U.S. currency since the beginning of the year. It was trading around 7.17 on Friday afternoon.

The drop is fueled by high inflation, a wide current account deficit and the Turkish government’s push for cheap credit to drive an economy that was already fragile before the COVID-19 pandemic hit.

Analysts have expressed concerns over the level of Turkey’s reserves and Turkish President Recep Tayyip Erdogan’s aversion to high interest rates.

Turkey had been hoping for an influx of foreign currency through exports and tourism revenues, but the pandemic has sharply undermined the tourism industry and disrupted global commerce.

Speaking after Friday prayers at the recently reconverted Hagia Sophia mosque in Istanbul, Erdogan said “there are serious zigzags in the global economy after the pandemic.”

He added: “I believe the Turkish lira will fall into place ... these are temporary fluctuations.”

AP

Stock market rally fades ahead of US holiday

BEIJING  — The rally in global stock markets, which saw the Dow close above 19,000 for the first time, petered out on Wednesday as investors prepared for a holiday in the U.S.

KEEPING SCORE: Britain’s FTSE 100 rose 0.3 percent to 6,636 while Germany’s DAX shed 0.6 percent to 10,655. France’s CAC 40 dropped 0.4 percent to 4,529. On Wall Street, the futures for the Dow Jones industrial average and the Standard & Poor’s 500 index were both unchanged, a day after the Dow closed above the 19,000 mark for the first time. The U. S. markets will be closed Thursday for Thanksgiving holiday.

WALL STREET: U.S. markets have been the focus since the election of Donald Trump as U.S. president, which many investors bet will be positive for companies. They expect less regulation of financial services and possibly tax cuts as well as spending on infrastructure. He has affirmed plans to withdraw from the Trans-Pacific Partnership but avoided mentioning his campaign pledge to build a wall along the Mexican border. “As Trump has rowed back and not mentioned some of his more extreme policy sound bites, some worries about the nature of his presidency may have begun to abate,” Alex Furber of CMC Markets said in a report. That has helped U.S. indexes hit record highs, with the Dow surpassing 19,000 for the first time and closing at a record high six times in the two weeks.

ANALYST’S TAKE: “The bulls have got control here,” Chris Weston of IG said in a report. “U.S. equity and many other developed markets are going higher, at least in the short-term.” Weston noted investors assume the U.S. Federal Reserve will go ahead with an interest rate hike in December. “Emerging markets have found support and are even attracting buyers,” said Weston. “If the Fed were to assess financial conditions in the wake of a potential rate hike they would be wholly enthused.”

ASIA’S DAY: Sydney’s S&P-ASX 200 rose 1.3 percent to 5,484.40 and Seoul’s Kospi advanced 0.2 percent to 1,987.95. India’s Sensex gained 0.5 percent to 26,081.22 and Hong Kong’s Hang Seng ended unchanged at 22,676.69. The Shanghai Composite Index shed 0.2 percent to 3,241.14. Japanese markets were closed for a holiday. Benchmarks in New Zealand and Taiwan gained while Indonesia retreated.

ENERGY: Benchmark U.S. crude fell 16 cents to $47.87 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 21 cents on Tuesday. Brent crude, used to price international oils, shed 12 cents to $49.00 in London. The contract added 22 cents the previous session.

CURRENCY: The dollar was roughly steady at 111.21 yen while the euro fell to $1.0615 from Tuesday’s $1.0630. TVJ

source: business.inquirer.net

Mexico’s peso plummets to new low on Trump effect

MEXICO CITY—The Mexican peso endured one of its worst week in two decades, falling to a new record low on Friday over concerns about President-elect Donald Trump’s economic policies.

The currency traded at 21.15 pesos per dollar on Friday afternoon, down 8.75 percent compared to last week and 1.65 percent from late Thursday, according to private bank Citibanamex.

The peso had started the day even worse, sinking to 21.45 to the dollar, before regaining some ground.

It was among the worst weeks for the peso since an economic crisis and devaluation of the peso in 1995.

The peso had rallied in the hours preceding Tuesday’s election on optimism that Democratic candidate Hillary Clinton would win.

But Trump’s triumph sent the Mexican currency past the 20 pesos barrier on Wednesday while the stock market plunged.

Shares fell 0.54 percent on Friday compared to Thursday and were down 3.68 percent for the week.

The Republican billionaire has vowed to make Mexico pay for a massive border wall and renegotiate the North America Free Trade Agreement (NAFTA).

While Mexico’s government criticized some of Trump’s remarks during the campaign, President Enrique Peña Nieto said Friday he felt “very optimistic” about relations with the new US administration.

Finance Minister Jose Antonio Meade reiterated on Friday that the government, which has international reserves of $175.1 billion, does not need to intervene in the markets to protect the peso for now.

There is “volatility in all the global markets and therefore an intervention wouldn’t have had the impact that we would have hoped,” he said.

But authorities remain “vigilant” in case action is needed, Meade said.

source: business.inquirer.net

World stocks rise again on stimulus hopes, yuan’s gain

HONG KONG — World stock markets were mostly higher Tuesday as a strengthening yuan and hopes for more central bank stimulus gave investors relief from the mauling that markets have suffered so far this year.

KEEPING SCORE: European stocks were higher in early trading. France’s CAC 40 climbed 0.4 percent to 4,131.18 and Britain’s FTSE 100 added 0.2 percent to 5,831.64. Germany’s DAX dipped 0.3 percent to 9,181.45. U.S. benchmarks were poised to open sharply higher after a long weekend. Dow futures rallied 1.5 percent to 16,148.00 and broader S&P 500 futures jumped 1.5 percent to 1,886.40.

STIMULUS HOPES: Investor sentiment remained positive that central banks would continue to ease monetary policy thanks to comments from the head of the European Central Bank. With the ECB set to discuss policy measures on March 10, Mario Draghi told the European Parliament on Monday that the bank has a range of instruments it can deploy if it decides more stimulus is needed. Earlier, a disappointing report on Japanese economic growth also raised hopes for more policy easing.

RENMINBI RELIEF: China’s strengthening currency also helped boost sentiment. The yuan hovered near its strongest level so far this year a day after the central bank guided the currency, also known as the renminbi, sharply higher. Previous weakness in the yuan triggered worries the Chinese economy was in worse shape than thought. Meanwhile, new yuan loans jumped 71 percent in January, the official Xinhua news agency reported Tuesday, suggesting solid demand in the world’s No. 2 economy.

ANALYST’S TAKE: “Since the start of January everything went south and we really needed some positive news,” said Jackson Wong, associate director at Huarong International Securities. “Factors that were affecting the markets negatively have turned positive now: the yen is weaker, the renminbi is stronger, global markets like the U.S. are stabilizing. All the negative catalysts from January are turning better.”

ASIA’S DAY: Japan’s Nikkei 225 added 0.2 percent to close at 16,054.43 after soaring 7.2 percent the day before, which was its biggest daily gain since September. South Korea’s Kospi rose 1.4 percent to 1,888.30 and Hong Kong’s Hang Seng advanced 1.1 percent to 19,122.08. The Shanghai Composite Index in mainland China surged 3.3 percent to 2,836.57 and Australia’s S&P/ASX 200 was up 1.4 percent to 4,910.00. Benchmarks in Taiwan and most of Southeast Asia also rose.

ENERGY: Benchmark U.S. crude rose $1.28, or 4.4 percent, to $30.72 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $3.23 to settle at $29.44 a barrel on Friday. Brent crude, a benchmark for international oils, added $1.38 to $34.77 a barrel in London.

CURRENCIES: The dollar eased to 114.06 yen from 114.54 yen in Monday’s trading. The euro edged up to $1.1174 from $1.1168. TVJ

source: business.inquirer.net

Q&A: What is a market ‘correction’ and why does it matter?

A dismal start for the stock market this year has pushed the Standard & Poor’s 500 index into what is known as a “correction,” or decline of 10 percent or more from a recent peak. Here are some common questions asked about corrections and what they mean to investors:

WHAT IS A STOCK MARKET CORRECTION?

A “correction” is a Wall Street term for when an index like the S&P 500 or the Nasdaq — or an individual stock — falls 10 percent from its most-recent high. The S&P 500, the index that investors pay most attention to, fell 48 points Wednesday to 1,890, which is 10.4 percent below its recent high of 2,109 set on November 3. A correction is not the same as a bear market, which is defined as when a stock index or individual stock falls 20 percent from its most-recent peak.

IS THE ENTIRE STOCK MARKET IN A CORRECTION?

Almost. The Nasdaq, a technology-dominated index that far outperformed the other two major indexes in 2015, is lagging the other indexes this year and fell into a correction on Monday. On Wednesday it fell 159 points to 4,526, and it is now down 12.2 percent from its recent peak on December 2. The Dow Jones industrial average, comprised of just 30 stocks, is not quite there. It fell 364 points on Wednesday to 16,151, 9.9 percent below its November 3 peak.

___

WHEN WAS THE LAST TIME WE HAD A CORRECTION?

The U.S. stock market entered into its last correction in August. That correction, much like this one, was sparked by financial turmoil in China.

Chinese stock markets have been extremely volatile in recent months, rising to record highs and then plummeting on worries about policy changes, slowing economic growth and a weaker currency. While U.S. investors are not exposed to those stock markets directly, China has been the engine of global economic growth since the financial crisis and weakness there concerns investors everywhere.

Those concerns have had an outsized effect on prices of oil and other commodities because China is such a big consumer, and energy companies have led markets lower in recent weeks.

___

ARE CORRECTIONS A NORMAL THING FOR THE MARKET?

Stock market corrections have historically happened every 18 months. The August correction was the first in nearly 4 years, an unusually long gap. Even the most bullish of market strategists say a correction is ultimately healthy for a market because it removes some of the froth and speculation, and allows investors to buy stocks at more reasonable prices.

source: business.inquirer.net

Asian stocks mixed as shock of Paris attacks fades

BEIJING — Asian stocks were mixed Wednesday as the shock of the Paris terror attacks faded and an uptick in U.S. inflation added support for a possible interest rate hike.

KEEPING SCORE: Tokyo’s Nikkei 225 gained 0.8 percent to 19,785.73 points and the Shanghai Composite Index shed 0.3 percent to 3,593.89. Hong Kong’s Hang Seng was unchanged at 22,264.42. Sydney’s S&P ASX/200 shed 0.2 percent to 5,107.30 and Seoul’s Kospi advanced 0.2 percent to 1,966.63. Jakarta and New Zealand also gained while Taiwan and Singapore retreated. On Tuesday, Wall Street ended little changed, with the Dow Jones industrial average up 0.04 percent and the Standard & Poor’s 500 index down 0.1 percent. The Nasdaq composite gained 0.03 percent.

TERRORISM JITTERS: Investors restored calm in European markets following the attacks in Paris that left 129 people dead and more than 350 injured. Travel and tourism stocks suffered but markets were unexpectedly resilient. Germany’s DAX rose 2.4 percent, helped by a report showing German business optimism rose in November due to strong domestic demand. The data didn’t fully reflect the Paris attacks, though the survey’s authors say it does not appear to have had a significant impact. France’s CAC 40 jumped 2.8 percent. Britain’s FTSE 100 rose 2 percent.

US INFLATION: The consumer price index rose 0.2 percent in October after falling the prior two months. That could increase the likelihood the Federal Reserve will begin raising interest rates from historic lows as early as next month. That would be “a psychological boost that the economy is self-sustaining enough that the Fed could get off the zero interest rate policy,” said David Chalupnik, head of equities at Nuveen Asset Management.

ANALYST’S TAKE: “Markets are fading risk-aversion moves despite still elevated terror-related tensions,” said Mizuho Bank in a report. U.S. inflation data “suggests that price pressures are rising towards the Fed’s 2% inflation goal, supporting calls for the Fed to hike rates next month.”

WALL STREET: Investors weighed mixed results from retailers ahead of the start of the Christmas shopping season amid worries sales will be weak. Urban Outfitters fell 3.8 percent after the retailer’s latest quarterly sales fell short of expectations. Wal-Mart Stores rose 3.5 percent after the company reported improved customer traffic and an increase in a key sales figure for the third quarter, even as a stronger dollar pressured its performance overseas. Energy stocks were among the biggest decliners due to a fall in oil prices.

ENERGY: Benchmark U.S. crude gained 32 cents to $40.98 per barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $1.07 on Tuesday to close at $40.67. Brent crude, used to price international oils, rose 40 cents to $43.97 per barrel in London. It fell 99 cents the previous session to $43.57.

CURRENCY: The dollar gained to 123.4150 yen from Tuesday’s 123.4090. The euro edged down to $1.0636 from $1.0645. TVJ

source: business.inquirer.net

Asian stock markets higher, Japan gains on stimulus hopes

SEOUL, South Korea — Asian stock markets bounced higher Wednesday, led by gains in Japan where investors were buoyed by expectations for more economic stimulus.

KEEPING SCORE: Japan’s Nikkei 225 surged 2.5 percent to 17,346.48 after sliding 4.1 percent on Tuesday amid a global market sell-off. Hong Kong’s Hang Seng index added 1.5 percent to 20,858.26 and China’s Shanghai Composite Index was 0.8 percent higher at 3,061.86. Australia’s S&P/ASX 200 gained 1.9 percent to 5,013.00. South Korea’s stock market finished 1 percent higher at 1,962.81.

JAPAN HOPE: Tokyo stocks gained amid expectations for more monetary and fiscal stimulus following weakness in recent economic data. Domestic demand is tepid in the world’s third-biggest economy and China’s slowdown has also crimped Japanese exports. The quarterly Tankan business confidence survey due Thursday will show how businesses are feeling about the future, possibly providing a trigger for action from policymakers.

ANALYST’S QUOTE: “Japan will be inclined to boost both fiscal and monetary stimulus soon” if the risks of a slowdown in China do not fade in a few months, Mizuho Bank said in a daily note. “The real question is not if more stimulus may be expected, but rather, how much stimulus will be rolled out, and when.”

US WATCH: Investors are waiting for jobs data and the top U.S. central banker’s remarks for clues about when the Federal Reserve will raise interest rates. Policymakers have said they will likely raise interest rates before the end of the year. On Thursday, U.S. payroll processor ADP reports how many jobs private employers added in September and Federal Reserve Chair Janet Yellen gives opening remarks to a community banking conference.

WALL STREET: Wall Street eked out small gains on Tuesday, helped by a rebound in health care stocks. The S&P 500 rose 0.1 percent to 1,884.09. The Dow Jones industrial average climbed 0.6 percent to 16,049.13 The Nasdaq composite dropped 0.6 percent to 4,517.32.

ENERGY: Benchmark crude fell 29 cents at $44.94 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 80 cents to close at $45.23 a barrel on Tuesday on expectations that the Energy Department will report a slowdown in U.S. crude production when it releases its monthly petroleum supply report. Brent Crude, a benchmark for international oils, dropped 14 cents to $48.72 a barrel in London.

CURRENCIES: The euro weakened to $1.1228 from $1.1252 in the previous global trading session. The dollar rose to 119.96 yen from 119.86 yen. TVJ

source: business.inquirer.net

Chinese central bank governor says currency is stable

BEIJING — China’s central bank governor says its currency has stabilized, in an apparent effort to dispel fears of more big declines following a surprise devaluation that rattled global markets.

The yuan’s exchange rate against the dollar “tends to be stable,” Zhou Xiaochuan said at a meeting of finance officials of the Group of 20 major economies in Turkey on Friday, according to a central bank statement.

Beijing said the Aug. 11 devaluation was part of efforts aimed at making the yuan’s state-set exchange rate more market-oriented. But coming without warning amid a collapse in Chinese share prices, it caused anxiety in financial markets.

Zhou’s comments appeared to be aimed at quelling fears Beijing might allow the currency, also known as the renminbi, to fall further to help its struggling exporters by giving them a price advantage. The devaluation had spurred warnings of a possible “currency war” if other governments responded by lowering their own exchange rates.

“At present, the exchange rate of the RMB against the dollar tends to be stable, and most of the correction of the stock market has taken place, so the financial market is expected to be more stable,” the statement read.

Zhou said Beijing was committed to carrying out economic reforms despite recent turbulence in its financial markets.

Also at the G-20 meeting, Finance Minister Lou Jiwei tried to defuse concern about the slowdown in Chinese economic activity, saying Beijing is “not especially concerned” about short-term fluctuations and will stick to its reform plans.

The ruling Communist Party is in the midst of a marathon effort to encourage domestic consumption and reduce reliance on trade and investment to drive growth. It has promised to give market forces a bigger role in the state-dominated economy.

Concerns have mounted, however, that growth is slowing too abruptly after July exports and auto sales contracted and August factory activity weakened.

Lou said the Chinese government expects economic growth of “about 7 percent” this year, according to the central bank statement.

“China is in line with plans and will stick unswervingly to ‘reform and opening up,'” he said.

source: business.inquirer.net

Dollar edges up in Asia after New York sell-off

TOKYO — The dollar edged up against the yen in Asia on Friday after plunging on weak Chinese data which sparked worries over emerging markets.

In Tokyo afternoon trade, the dollar fetched 103.44 yen, up from 103.34 yen in New York Thursday afternoon but still nearly one yen lower than levels in Tokyo on Thursday.

The euro, which climbed Thursday on upbeat eurozone data, bought $1.3684 from $1.3692 in US trade Thursday while it was unchanged at 141.59 yen.

“Risk assets suffered as a much bigger than expected fall in Chinese manufacturing (activity) dented global sentiment,” Credit Agricole said.

Traders moved into the safe-haven yen Thursday as US shares sank on the weak China report and lacklustre corporate earnings, while they look ahead to a Federal Reserve policy meeting next week.

“The poor China data merely exacerbates the worries about emerging markets, and is pushing an acceleration in the investor pullout from these economies, which is not limited to China,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

The data from China — a key driver of global growth — fuelled concerns about emerging markets at a time when the Fed is winding down its stimulus programme, leading foreigners to repatriate their investments to the West.

Argentina’s peso was at 7.9 to the dollar Friday against 8.01 on Thursday, when it had plunged 11.1 percent in the sharpest one-day fall since 2002.

The South American nation is embroiled in a currency crisis that has seen the peso slump about 19 percent so far this year, creating challenges for a government wrestling with falling foreign reserves and mounting inflation.

Boosting the euro, a closely watched report Thursday showed private-sector activity in the eurozone hit a 31-month high in January as a modest recovery gathered pace across the economic bloc.

The dollar was mostly higher against other Asia-Pacific currencies.

It rose to 1,076.70 South Korean won from 1,072.76 won on Thursday, to 12,180 Indonesian rupiah from 12,168 rupiah and to 62.16 Indian rupees from 61.97 Indian rupees.

The dollar also firmed to 45.32 Philippine pesos from 45.30 pesos and to Tw$30.22 from Tw$30.19.

It slipped to 32.86 Thai baht from 32.97 baht and to Sg$1.2785 from Sg$1.2814.

The Australian dollar eased to 87.59 US cents from 87.98 cents, while the Chinese yuan weakened to 17.07 yen from 17.23 yen.

source: business.inquirer.net

Dollar edges down in Asia ahead of Yellen remarks – Lead

TOKYO- The dollar edged down in Asia Wednesday, taking a breather from a rally driven by speculation the Fed will soon start tapering its huge stimulus drive.

The greenback bought 99.48 yen in Tokyo afternoon trade, weakening from 99.62 yen in New York Tuesday.

The euro strengthened to $1.3447 from $1.3433 while it bought 133.76 yen compared with 133.82 yen in US trade.

Dealers are awaiting remarks Thursday from Janet Yellen, President Barack Obama’s nominee to succeed Chairman Ben Bernanke at the Federal Reserve, said a senior dealer at a major bank in Tokyo.

Some investors want to push the dollar above the 100-yen mark but “many of us just don’t want to make aggressive moves before we confirm Ms Yellen makes no negative surprises,” the dealer said.

Yellen will appear before US senators Thursday to defend her nomination as Fed policymakers debate whether the stimulus policy known as quantitative easing is still needed to support the world’s largest economy.

The central bank will hold its regular two-day policy meeting next month after upbeat US data fuelled speculation that it could start tapering its $85-billion-a-month bond-buying program before year’s end.

Traders also are awaiting eurozone industrial production figures for September, due later Wednesday, which will be followed by July-September economic growth data on Thursday.

The dollar was higher against other Asia-Pacific currencies.

It rose to Sg$1.2495 from Sg$1.2486 on Tuesday, to Tw$29.59 from Tw$29.56, to 63.73 Indian rupees from 63.53 rupees, and to 43.77 Philippine pesos from 43.70 pesos.

The greenback inched up to 31.59 Thai baht from 31.57 baht and to 1,072.93 South Korean won from 1,071.20 won.

The Australian dollar fell to 93.04 US cents from 93.29 cents, while the Chinese yuan was at 16.30 yen against 16.31 yen.

source: business.inquirer.net

Asian stock markets subdued after Wall Street slip

MANILA, Philippines — Asian stock markets mostly flitted between gains and losses Wednesday after an improvement in U.S. service industries reinforced expectations the Federal Reserve will reduce monetary stimulus that has propelled stocks higher.

The Institute for Supply Management’s services index rose in October despite forecasts it would soften due to last month’s partial shutdown of the U.S. government. Investors concluded that it makes it more likely that the Fed will start reducing its bond purchases, which have kept interest rates low, within a few months.

Hong Kong’s Hang Seng inched up 0.2 percent to 23,091.45 and China’s Shanghai Composite added 0.3 percent to 2,164.64. India’s Sensex reversed early losses to rise 0.1 percent to 20,989.24. Benchmarks in Singapore and the Philippines were slightly lower.

Japan’s Nikkei 225 defied the narrow range, reversing early losses to rise 0.9 percent to 14,359.57.

“Nobody is buying,” said Francis Lun of GE Oriental Financial Group in Hong Kong. “I think the biggest news globally is the IPO debut of Twitter tomorrow,” he said.

Other analyst say investors remain cautious ahead of possible market moving data and policy meetings this week.

They include the European Central Bank meeting on Thursday where it may foreshadow a further reduction to record low interest rates and the advance estimate of U.S. third quarter economic growth due the same day. U.S. October jobs figures are due on Friday.

China’s leaders are also scheduled to meet in Beijing from November 9-12 to craft a new blueprint for the world’s No. 2 economy as its state-led growth model runs out of oomph.

On Wall Street, stocks took a break from a record-breaking run.

Some weak corporate earnings reports on Tuesday held the market back, pushing the major indexes slightly lower.

The S&P 500 index dropped 4.96 points, or 0.3 percent, to 1,762.97. The index is nine points below its record close of 1,771.95 set Oct. 29.

The Dow Jones industrial average fell 20.90 points, or 0.1 percent, to 15,618.22. The Nasdaq composite added 3.27, or less than 0.1 percent, at 3,939.86.

Benchmark crude for December delivery was up 50 cents at $93.87 in electronic trading at the New York Mercantile Exchange. The contract fell $1.25 to $93.37 a barrel on Monday.

In currencies, the euro rose to $1.3510 from $1.3476 late Tuesday. The dollar rose to 98.74 yen from 98.51 yen.

source: business.inquirer.net

Asian shares edge lower, reversing earlier gains

HONG KONG — Asian markets edged lower in holiday-hit trade on Monday, reversing earlier gains that were fuelled by upbeat US and Chinese manufacturing data as well as strong US auto sales.

The euro made a small gain after suffering selling pressure last week on expectations the European Central Bank (ECB) will cut interest rates at its next meeting Thursday.

Sydney slipped 0.38 percent, or 20.6 points, to close at 5,390.5 and Seoul fell 0.70 percent, or 14.25 points to 2,025.17. Shanghai closed flat, dipping 0.07 points to 2,149.63 and Hong Kong gave up 0.26 percent, or 60.17 points, to 23,189.62.

Tokyo and Mumbai were closed for public holidays.

US shares finished on a high Friday after figures showed manufacturing activity grew faster than expected in October. That came hours after China said its own purchasing managers’ index (PMI) came in at its highest level for 18 months.

News that October auto sales from the three largest US manufacturers — Chrysler, Ford and General Motors — saw double-digit percentage gains supported Wall Street Friday. The Dow added 0.45 percent, the S&P 500 tacked on 0.29 percent and the Nasdaq was flat.

Over the weekend data showed signs of growth in China’s services sector, as the official non-manufacturing PMI recorded its strongest reading in 14 months.

In China, attention is turning to a Communist Party policy meeting due to start Saturday, with traders looking for possible economic reforms.

Also, Washington will release third-quarter gross domestic product advanced estimates on Thursday and official October non-farm payrolls figures Friday.

On currency markets the euro ticked up slightly after tumbling last week on expectations the ECB would cut interest rates, after figures showed inflation in the region at a four-year low.

The euro bought $1.3492, compared with $1.3482 in New York but well down from $1.3750 on Wednesday. It was at 133.09 yen against 133.10 yen in New York.

“The eurozone has seen poor results in recent months, and there are serious concerns that the inflation rate has gone too low,” Desmond Chua, market analyst at CMC Markets in Singapore, told AFP.

“Investors will be watching if the ECB president Mario Draghi will indicate further monetary easing in the eurozone, with a new long-term refinancing option a viable option,” he said.

The dollar was at 98.65 yen from 98.69 yen in New York. The greenback is being buoyed by speculation the Federal Reserve will begin winding down its stimulus programme next month after it gave an upbeat assessment of the US economy last week.

Gold dropped to $1,313.15 at 0810 GMT compared with $1,316.15 on Friday.

In other markets:

– Taipei fell 0.41 percent, or 34.04 points, to 8,354.14.

Taiwan Semiconductor Manufacturing Co. was 0.46 percent lower at Tw$109.0 while chip design house MediaTek was up by its 7.0 percent daily limit at Tw$432.5.

– Wellington was flat, edging down 3.16 points to 4,910.68.

Fletcher Building fell 2.34 percent to NZ$9.60, Air New Zealand was off 0.57 percent at NZ$3.52 and telecoms firm Chorus climbed 0.38 percent at NZ$2.63.

– Manila closed 0.64 percent lower, giving up 41.99 points to 6,543.39.

Philippine Long Distance Telephone Co fell 1.60 percent to 2,824 pesos.

source: business.inquirer.net

Asia stocks muted on prospect Fed to trim stimulus

MUMBAI, India—Asian stocks markets were muted Friday despite an uptick in China’s manufacturing as investors continued to fret that the Fed will begin cutting its stimulus as soon as January.

Two measures of China’s manufacturing improved in October in a possible sign of economic recovery. China’s growth rebounded to 7.8 percent in the three months ended September from the previous quarter’s two-decade low but there are doubts whether the improvement will continue over the remainder of the year.

Worries about less expansive US monetary stimulus continued to preoccupy investors. Stocks fell in Tokyo, Australia, Taiwan and Singapore fell. Greater China benchmarks were mixed.

The Federal Reserve’s announcement this week that it would maintain its monthly bond purchases at $85 billion was widely expected. But the central bank no longer expressed concern, as it did in September, that higher mortgage rates could hold back hiring and economic growth. And its statement made no reference to the 16-day government shutdown, which economists say slowed growth this quarter. Some analysts said that suggests reduction of the stimulus could begin early next year.

The U.S. central bank’s cheap money policy is aimed at supporting economic recovery and has also underpinned stock markets worldwide for several years

Speculation about the timing of the reduction in stimulus — known as tapering — will likely continue to roil markets in coming months, said Chris Weston, chief market strategist at IG in Melbourne, Australia.

“The Asian session has been pretty lifeless today,” Weston said in a market commentary. “Despite it mattering very little whether tapering occurs in January or March, we are still likely to see a negative equity response.”

Japan’s Nikkei 225, the regional heavyweight, fell 0.9 percent to 14,201.57, weighed down by the dollar falling below 98 yen and a 12 percent plunge in Sony Corp. shares after it Thursday reported a 19.3 billion yen ($196 million) quarterly loss.

Hong Kong’s Hang Seng crept up 0.4 percent to 23,290.46 while Australia’s S&P/ASX 200 shed 0.4 percent to 5,411.10. Markets in Taiwan, Singapore and Indonesia fell. Seoul’s Kospi added 0.5 percent to 2,039.42.

The exception to a dull Friday came in India’s stock market, where a modest gain was enough to push the Sensex to a record high — a stunning comeback from a few months ago when the bourse plunged and the Indian rupee fell to a lifetime low as foreign investors withdrew amid a bout of worry about withdrawal of the Fed’s stimulus.

Much of that foreign money has returned now that the rupee has stabilized at a lower level, making Indian stocks a bargain.

“I think clearly the largest driver of the market high is foreign currency inflow,” said Rajiv Mehta, an analyst with IIFL Capital in Mumbai. “Many people seem to think the worst is over.”

On Wall Street, the Dow lost 73.01 points, or 0.5 percent, to close at 15,545.75. The S&P 500 fell 6.77 points, 0.4 percent, to 1,756.54.

The Nasdaq composite dropped 10.91 points, or 0.3 percent, to 3,919.71.

Benchmark U.S. crude for December delivery was up 21 cents at $96.59 a barrel in electronic trading on the New York Mercantile Exchange. The contract had dropped 39 cents to close $96.38 on Thursday.

In currency trading, the euro was down at $1.3550 from $1.3586 late Thursday. The dollar fell to 97.95 yen from 98.31 yen.

source: business.inquirer.net

China, Singapore to allow direct trading between currencies

SINGAPORE—China and Singapore have agreed to allow direct trading between each other’s currency, Singapore’s central bank said Tuesday.

The move, along with other agreements on financial cooperation, is expected to bolster Singapore’s status as a leading offshore trading center for the Chinese yuan, officially called the renminbi(RMB).

“China and Singapore will introduce direct currency trading between the Chinese yuan and Singapore dollar,” the Monetary Authority of Singapore (MAS) said in a statement, adding that details will be announced separately.

The statement was issued after a meeting between senior officials from both countries led by Singapore Deputy Prime Minister Teo Chee Hean and visiting Chinese Vice Premier Zhang Gaoli.

China will also grant Singapore-based investors a 50 billion yuan ($8.2 billion) investment quota under its Renminbi Qualified Foreign Institutional Investor program, MAS said.

This would allow investors based in the city-state to use the yuan to invest in Chinese stocks and bonds.

The program “will help to diversify the base of investors in China’s capital markets and promote adoption of the RMB for investment”, MAS said.

Chinese institutional investors will also be allowed to use the yuan to invest in Singapore’s capital markets.

“The new initiatives will further promote the international use of the renminbi through Singapore,” the MAS said.

Its managing director Ravi Menon added: “Financial ties between the two countries have deepened considerably and Singapore is well placed to promote greater use of the RMB in international trade and investment in the years to come.”

China’s rise as the world’s second-biggest economy has seen the yuan take on a bigger role in international financial markets.

Britain last week said that direct trading between the yuan and the British pound will be allowed.

China also has similar direct trading arrangements for the yuan with the US dollar, the Japanese yen and the Australian dollar.

source: business.inquirer.net

Dollar edges up amid speculation about US economy

TOKYO – The dollar edged up on Monday as trading remained cautious amid speculation about the timing of an end to massive US stimulus plans.

The dollar gained to 98.49 yen in morning Asian trade from 98.16 late Friday in New York.

The euro bought $1.3202, down from $1.3218, while the single currency was trading at 130.09 yen against 129.82 yen.

US financial markets are closed Monday for the Labor Day federal holiday.

“The market is paying more attention to US economic indicators than Syria,” said Daisuke Karakama, market economist at Mizuho Bank’s forex division.

“Especially, the market is focusing on US jobless figures to be released on Friday, ahead of the upcoming FOMC meeting,” Karakama said.

“Nervous trading is expected during the week as we need to pay attention to a lot of things,” he added.

US consumer spending sputtered in July amid weak income growth, according to Commerce Department data released Friday.

The new data cast a cloud over speculation that the Federal Reserve will begin to reduce its $85 billion-a-month bond-buying programme this year.

Concerns about the strength of the major economic indicators in the third quarter could convince the Fed to delay the move, which could come as soon as its September 17-18 monetary policy meeting.

source: business.inquirer.net

Dollar sags in Asia on Syrian tension

TOKYO—The dollar edged down against the safe-haven yen in Asia on Tuesday due to concerns over a possible US military action against Syria.

The dollar was at 98.29 yen in Tokyo afternoon trade, down from 98.51 yen in New York Monday afternoon.

The euro bought $1.3373 and 131.45 yen compared with $1.3369 and 131.68 yen.

The greenback lost ground in the wake of a decline in Tokyo stocks and due to concerns over a possible US military strike against Syria, said a dealer at a Japanese bank.

“The possibility of the US military attacks could make investors risk averse, weighing on the dollar,” he told Dow Jones Newswires.

US Secretary of State John Kerry gave the most explicit warning yet to Damascus that the US would take action over the chemical weapons attack, which he labelled a “moral obscenity”.

Speaking amid reports that Washington and its allies are preparing to launch a punitive cruise missile strike on Syrian targets, Kerry accused Bashar al-Assad’s regime of engaging in a cover-up.

“Let me be clear. The indiscriminate slaughter of civilians, the killing of women and children and innocent bystanders by chemical weapons is a moral obscenity,” he declared in a televised statement.

“By any standard it is inexcusable, and despite the excuses and equivocations that some have manufactured, it is undeniable.”

Emerging Asia currencies were mostly lower, with the Indian rupee trading at 65.32 to the dollar, down from 64.23 Monday afternoon and close to a record low of 65.56 last week.

Expectations of an end to the US stimulus programme have seen investors in recent months repatriate some of the vast sums that have poured into emerging economies, hitting currencies and equities.

“Coming on the heels of Friday’s soft US new home sales report, the market has become even more alert to the (US) economy’s readings into the September 18 FOMC,” National Australia Bank said.

Some speculate the US central bank would announce its start of tapering the bond-buying programme at the next September 17-18 meeting of the policy-setting Federal Open Market Committee.

The dollar rose to 10,925 Indonesian rupiah from 10,770 on Monday.

It went up to 44.43 Philippine pesos from 44.20 pesos, to 1,115.85 South Korean won from 1,113.20 won, and to Sg$1.2824 from Sg$1.2791, and to Tw$29.97 from Tw$29.89.

The Thai baht was flat at 32.16 baht.

The Australian dollar fell to 89.81 US cents from rose to 90.39 cents. The Chinese yuan fetched 16.03 yen against 16.07 yen.

source: business.inquirer.net