World Most Asian markets drop as record US inflation fans taper talk
Alan Tudge says the Coalition has increased childcare subsidies by 77 per cent since coming to office. Is he correct?
Minister for Education and Youth Alan Tudge says the Coalition has increased childcare subsidies by 77 per cent since coming to office. Is that correct? RMIT ABC Fact Check investigates.Key Labor figures have been on the attack, saying Coalition changes to childcare policy had "failed" and fell "abysmally short" of supporting Australian families.
Asian markets mostly fell on Monday following another retreat on Wall Street as a surge in US inflation to a record high ramped up concerns the Federal Reserve will be forced to tighten monetary policy sooner than later.
Reports that President Joe Biden was considering a fresh trade probe into China added to the downbeat mood and nullified the optimism sparked by news that he had held talks on Friday with Xi Jinping in a bid to smooth relations between the superpowers.
Stocks make modest gains after days of records
US and European stock markets made modest gains on Friday after days of records as concerns about the pandemic sparked a surprise collapse in US consumer confidence. "This has been a common feature of the markets recently, small and steady gains that have seen European stocks push into record territory," said Craig Erlam, senior market analyst at OANDA. The gains in Europe also have been driven by strong Covid vaccine programs that have enabled countries to loosen restrictions, Erlam said.
After driving a healthy run-up in Asia so far this month, investor sentiment was once again roiled by data on Friday showing US factory gate inflation had soared in August to an all-time high of 8.3 percent owing to a jump in demand as well as supply and labour shortages.
The reading ramped up speculation about the Fed's plans for monetary policy.
Its boss Jerome Powell has already indicated that the central bank will likely start tapering its vast bond-buying programme -- which has been a key driver of the economic and equity markets recovery -- by the end of the year.
But the latest figures could cause officials to bring forward their timeline. The release Tuesday of consumer inflation has now taken on more significance.
Asian markets mostly up as weak US data soothes taper worries
Asian markets mostly rose Monday after a big miss on US jobs creation last month fuelled optimism that the Federal Reserve will hold fire on tapering its massive financial support programme, while Tokyo extended last week's rally on hopes for more economic stimulus. - Tokyo extends rally - Asia built on last week's broadly positive performance. Hong Kong, Shanghai, Singapore, Seoul and Taipei all rose, though Sydney, Wellington and Jakarta dipped.
All three US indexes ended in the red on Friday, with reports of Biden's probe adding to the selling pressure.
The president was said to be looking at Beijing's subsidies and their effect on the US economy, the reports said, with discussions also being held on last year's trade deal agreed by Donald Trump.
"While initially markets traded positively on the hopes that a restart in high-level dialogue might eventually lead to a reduction in Chinese tariffs," news about the investigation "delivered the opposite outcome", said National Australia Bank's Rodrigo Catril.
"That said, it is unclear when the White House will announce the outcome of its review and as we know from the Trump era, any action against China is likely to come with retaliations."
Hong Kong led the losses, with tech firms again taking much of the heat on lingering concerns about China's crackdown on the sector, while Tokyo, Singapore, Seoul, Taipei, Manila and Jakarta were also down.
Bank of England sees inflation surging but keeps stimulus
The Bank of England predicted the UK annual inflation rate to continue surging this year as pandemic-hit economies reopen, but kept its record-low interest rate and emergency stimulus intact. As the pandemic erupted in March 2020, the BoE slashed its key interest rate to the current record-low level. It also began pumping massive sums of new cash into the economy.The bank has created £450 billion under its quantitative easing (QE) programme since March last year, when Covid-19 prompted Britain's first coronavirus lockdown.
However, there were small gains in Sydney, Shanghai and Wellington.
Video: China's factory inflation hits 13-year high (Reuters)
"Risk assets will continue to struggle in the near term with weak hard data due to the Delta (coronavirus) outbreak and supply disruptions over the summer," Barclays strategists including Shinichiro Kadota said.
Traders are also keeping tabs on the Korean peninsula after the North test-fired a new "long-range cruise missile" over the weekend, calling it a "strategic weapon of great significance".
The US military described the move as posting "threats" to the country's neighbours and beyond.
- Key figures around 0230 GMT -
Tokyo - Nikkei 225: DOWN 0.3 percent at 30,292.84 (break)
Hong Kong - Hang Seng Index: DOWN 1.7 percent at 25,756.48
Shanghai - Composite: UP 0.2 percent at 3,708.63
Dollar/yen: UP at 109.97 yen from 109.93 yen at 2100 GMT Friday
Pound/dollar: DOWN at $1.3831 from $1.3839
Euro/dollar: DOWN at $1.1804 from $1.1814
Euro/pound: DOWN at 85.32 pence from 85.34 pence
West Texas Intermediate: UP 0.6 percent at $70.15 per barrel
Brent North Sea crude: UP 0.6 percent at $73.33 per barrel
New York - Dow: DOWN 0.8 percent to 34,607.72 (close)
London - FTSE 100: UP 0.1 percent at 7,029.20 (close)
Ifo expects the highest inflation rate for almost 30 years .
The Ifo Institute expects 3 percent of the highest increase in consumer prices this year for almost 30 years. © Patrick Pleul / DPA Central Image / DPA An inflation rate of more than 3 percent determined the Federal Statistical Office last 1993. for the coming year prophesy the Munich economists an inflation rate between 2 and 2.5 percent, as the institute announced. That too would be a significantly faster price increase than in the middle of the past ten years.