World Asian markets mixed as traders weigh rates outlook, China data
The drama over Nancy Pelosi’s Taiwan travel plans, briefly explained
US policy toward Taiwan is all about “strategic ambiguity.” That means every trip and remark has to be just right.For House Speaker Nancy Pelosi, potential travel plans have already caused a domestic political debate and a minor foreign policy fracas.
Asian markets were mixed Monday and oil fell as investors assessed data showing further weakness in China's economy and comments from Federal Reserve officials showing it was wedded to its campaign of interest rate hikes to fight inflation.
A strong set of earnings from Wall Street titans Amazon and Apple helped US markets end last week with healthy gains and eased concerns about the impact on consumers of surging inflation and rising borrowing costs.
Biden’s latest global infrastructure plan is all about competing with China. That’s a problem.
China and the US should collaborate on global infrastructure, not compete.The BRI now covers over 139 countries, which together make up 63 percent of the world’s population and 40 percent of global GDP. Completed major projects supported by the BRI range from a railway in Kenya to a port in Pakistan to dams in Laos. A Harvard Business Review analysis found that by 2020, China had “lent about $1.5 trillion in direct loans and trade credits to more than 150 countries,” making Beijing into the world’s largest creditor, surpassing even institutions like the World Bank and International Monetary Fund (IMF).
That came after investors took Fed chief Jerome Powell's post-policy-meeting comments Wednesday as indicating the bank could start to slow down its pace of monetary tightening, providing a much-needed boost to stocks.
However, analysts warned that inflation would take time to come down from its four-decade highs and there were undoubtedly more rate hikes to come.
And officials backed that up at the weekend, with Minneapolis Fed chief Neel Kashkari telling the New York Times that he was "surprised by markets' interpretation" of the latest Fed meeting statement.
"The committee is united in our determination to get inflation back down to two percent, and I think we’re going to continue to do what we need to do until we are convinced that inflation is well on its way back down to two percent -- and we are a long way away from that."
Reserve Bank of Australia hints when interest rates will start coming down
The Reserve Bank has given a hint about when it may start cutting interest rates again. Borrowers this year have endured the most severe increases in the cash rate since 1994.Borrowers in August have copped yet another 0.5 percentage point increase, taking the cash rate to a six-year high of 1.85 per cent.
That came as Atlanta Fed president Raphael Bostic said he did not think the economy was in recession owing to ongoing jobs growth but that inflation remained too high and he was "convinced" more must be done.
Still, Treasuries continued to fall, with the 10-year yield at 2.67 percent, well down from June's peak near 3.50 percent, suggesting expectations for future rates are easing.
Figures showing a second successive economic contraction in April-June put the United States in a technical recession but it is not officially considered so until identified as such by the National Bureau of Economic Research.
In early Asian trade, investors struggled to extend Wall Street's lead, with Hong Kong and Shanghai suffering most after another disappointing reading on the Chinese economy.
The closely watched Purchasing Managers' Index of manufacturing activity shrank in July on the back of weak demand and the strict zero-Covid measures imposed in parts of the country.
Asian markets drift lower as traders eye big week
Asian markets slipped Monday at the start of a key week for equities as the Federal Reserve prepares to lift interest rates again and some of the world's biggest companies report earnings. While the US central bank is widely expected to hike borrowing costs by 75 basis points, traders will be poring over policymakers' views on the outlook for the world's biggest economy as they try to rein in inflation while nurturing growth. The decision comesWhile the US central bank is widely expected to hike borrowing costs by 75 basis points, traders will be poring over policymakers' views on the outlook for the world's biggest economy as they try to rein in inflation while nurturing growth.
While sweeping Covid curbs have eased in major cities such as Shanghai and Beijing, sporadic lockdowns in various cities and towns have kept businesses and consumers worried.
And there are few signs of an easing of the policy, with officials appearing to emphasise zero-Covid over growth in a Politburo meeting last week.
Adding to weakness in Hong Kong was news that US authorities had put market heavyweight Alibaba on a list of firms threatened with New York delisting if they did not comply with disclosure rules.
There were also losses in Taipei and Manila.
Video: IMF lowers China's 2022 growth forecast on two key factors (CNBC)
However, Tokyo, Sydney, Seoul, Singapore, Jakarta and Wellington edged up.
The data out of China revived demand concerns on oil markets, sending both main contracts down Monday, following a bounce last week.
Brent and WTI both lost more than one percent, and investors are now eyeing a meeting of OPEC and other major producers this week, where they will discuss their deal to raise output slowly.
Congress Warns China to Chill on Pelosi’s Potential Trip to Taiwan
As rumors swirl that House Speaker Nancy Pelosi and other members of Congress may be jetting off to Taiwan in the coming days, China is threatening a forceful retaliation. But U.S. lawmakers have their own message for China and President Xi Jinping: Don’t mess with us. Rep. Eric Swalwell (D-CA), a member of the House Intelligence Committee, warned that if China has learned any lessons from Russia’s war in Ukraine, Beijing ought to stand down. “China is playing with fire there if they learn the wrong lesson from Ukraine, if they think that they can violently violate Taiwan's territorial integrity that they wouldn’t suffer reputational and economic damage,” Swalwell told The Dai
Joe Biden called on Saudi Arabia to open the taps further when he visited last month as he tries to address a crucial driver of inflation around the world.
But the kingdom does not appear to have made any such moves so far with the commodity having lost almost all the gains made since Russia's Ukraine invasion.
"The US has expressed optimism about the potential for an OPEC+ supply response, said SPI Asset Management's Stephen Innes.
"However, it seems highly unlikely there will be much appetite for a significant increase in production, with Brent still (around) 15 percent down from year-to-date highs and (down) 12 percent in the last month," he added.
"OPEC+ seems more likely to signal a willingness to continue cooperating long-term, but it would be a surprise if the upcoming meeting resulted in a significant policy shift."
- Key figures at around 0230 GMT -
Tokyo - Nikkei 225: UP 0.5 percent at 27,933.27 (break)
Hong Kong - Hang Seng Index: DOWN 1.0 percent at 19,948.11
Shanghai - Composite: DOWN 0.3 percent at 3,243.32
Euro/dollar: UP at $1.0238 from $1.0228 Friday
Pound/dollar: UP at $1.2191 from $1.2189
Euro/pound: UP at 83.98 pence from 83.89 pence
Dollar/yen: DOWN at 132.47 yen from 133.25 yen
West Texas Intermediate: DOWN 1.3 percent at $97.34 per barrel
Brent North Sea crude: DOWN 1.1 percent at $102.85 per barrel
New York - Dow: UP 1.0 percent at 32,845.13 (close)
London - FTSE 100: UP 1.1 percent at 7,423.43 (close)
Farmers optimistic but wary of relying on China amid talk trade restrictions lift .
Rumours are swirling that China may backflip on its Australian trade restrictions with a change in federal government, but some producers have put the country firmly in their rear-vision mirror.Harvest season means earlier-than-usual mornings and painfully long days, but the Emerald farmer is not complaining.