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October
World shares steadied near lows on Tuesday as worries that rising oil prices will feed inflationary pressures appeared to ease, while the dollar regained strength ahead of U.S. payrolls data on Friday seen as key to the Federal Reserve's next move.
MSCI's gauge of global stocks (.MIWD00000PUS) slipped 0.04% by 1150 GMT but was off a more than three-month low hit during Asian trading.
European stocks (.STOXX) gained 0.8% as rising bank stocks and an encouraging earnings update from chipmaker Infineon calmed nerves following a tech-fuelled selloff on Monday.
Wall Street was also set for a rebound with futures on the tech-heavy Nasdaq and the S&P 500 both up 0.5%.
Asian shares fell for a third straight day, catching up with heavy losses in the United States, where investors dumped Big Tech as Facebook (FB.O) was hit by a nearly six-hour outage.
Facebook's stock rose more than 1% in U.S. pre-market trade after its services came back online.
But investors remained cautious, worrying that the rally in energy prices and supply chain disruptions could derail the economic recovery just as the U.S. Federal Reserve gets closer to reducing its massive stimulus.
"More than anything else, we are concerned about the impact of stagflation on the general indices, which are very high," said Giuseppe Sersale, fund manager at Anthilia.
"We prefer energy and materials, of course, and we're worried about stocks with high multiples that price who-knows-what increase in earnings (see Nasdaq)," he added.
Banks (.SX7P), which tend to benefit from tighter monetary policy, were the strongest gainers in Europe, up more than 2%.
JPMorgan analysts confirmed their overweight view on European lenders, citing the pick-up in inflation and expectations of higher bond yields.
Oil prices in London hit fresh three-year highs, extending gains from the previous session that came after the world's major oil producers announced they had decided to keep a cap on crude supplies. read more
OPEC+ confirmed on Monday it would stick to its current output policy as demand for petroleum products rebounds, despite pressure from some countries for a bigger boost to production.
Brent crude rose 1.3% to $82.31 a barrel, while U.S. oil added 1.2% to $78.51.
"OPEC+ may inadvertently cause oil prices to surge even higher, adding to an energy crisis that primarily reflects very tight gas and coal markets," said Commonwealth Bank of Australia's commodities analyst Vivek Dhar.
"That potentially threatens the global economic recovery, just as global oil demand growth is picking up as economies reopen on the back of rising vaccination rates," Dhar said.
Market focus in Asia was on whether embattled property developer China Evergrande(3333.HK) would offer any respite to investors looking for signs of asset disposals.
Trading in shares in the world's largest indebted developer was halted on Monday but other Chinese property developers grappled with ratings downgrades on worries about their ability to repay debt. read more
The U.S. dollar edged back towards a one-year high versus major peers ahead of a key payrolls report at the end of the week that could boost the case for the Fed to start tapering stimulus as soon as next month.
"A positive number, which in this case would be somewhere in the region of 480,000 or above, will give the Fed the final reason it requires to initiate the tapering of its asset purchase program," said ActivTrades analyst Ricardo Evangelista.
The dollar index , which tracks the greenback versus a basket of six currencies, was last up 0.1% at 93.9, while the euro fell 0.16% to $1.1602.
Bitcoin rose above the $50,000 mark for the first time in four weeks, adding to a series of gains since the start of October. It was last up 1.6% on the day. read more
Gains in the dollar depressed gold prices , which eased 0.7% to $1,757 per ounce, after rising on Monday to the highest since Sept. 23.
U.S. bond yields nudged up towards recent highs amid caution about the need to raise the government's debt ceiling as the country faces the risk of a historic default in two weeks. (Reuters)
October
Delayed recovery greatest risk to pandemic-hit Indian economy: Reuters poll
Written by Nur Yasmin
India's economic recovery from pandemic-related shutdowns is at risk of a further delay in the six months that are left of this fiscal year, according to economists in a Reuters poll, who expect elevated inflation to hold or accelerate, not fall.
Price pressures in the world's second most populous country have soared thanks to rising fuel prices, but the Reserve Bank of India is not expected to raise interest rates until at least the beginning of next financial year, in April-June 2022.
With lingering concerns about risks to growth, that leaves the RBI slightly behind many of its emerging market peers that are already raising rates.
"While extremely accommodative monetary policy has prevented the economy from falling off a cliff, a continuation of this policy in the absence of appropriate fiscal support will barely move the needle in terms of the pace of recovery of lost growth potential," said Kunal Kundu at Societe Generale.
In the Sept. 27-Oct. 4 poll, year-on-year economic growth in Asia's third largest economy was forecast at 7.8%, 6.0% and 5.8% for Q3, Q4 and Q1 2022 respectively. A July poll offered higher forecasts for Q3 and Q1 2022.
That follows a 20.1% expansion in the April-June quarter, the highest since the mid-1990s, which was helped by a very low base - the start of the pandemic in the prior year.
Gross domestic product (GDP) growth (INGDPQ=ECI) is forecast to average 9.2% this fiscal year. Next financial year, growth is seen at 9.7% and 7.1% for the first two quarters and at 6.5% and 6.4% for the final two quarters, averaging 7.0% during 2022/23.
Those forecasts are largely unmoved from a July poll.
Asked about the greater risk to those numbers for the remainder of the fiscal year, 23 of 34, or over two-thirds of respondents, said a delayed recovery with limited downside. Eight said a strong recovery followed by an upgrade, and the remaining three said weak and prone to further downgrades.
"But with inflation expected to remain elevated ... persisting with ultra-accommodative monetary policy when the economy is in a recovery phase could lead to stagflation, impacting the recovery itself," said Kundu.
Inflation was forecast to be well above RBI's medium-term target of 4% but was projected to remain below the 6% upper threshold until at least end-2024, according to the poll.
The RBI has been vocal about its intention in helping the government bolster growth and said policy support from all sides is required to nurture a nascent and hesitant recovery.
"It will be a long while yet before financial conditions start to tighten in earnest, and even longer before policy rates are raised. Rate hikes will come onto the agenda when the economy should be closer to health," said Shilan Shah at Capital Economics.
"The big picture is that policy will remain very accommodative for several months yet."
Even as those uncertainties about the pace of the recovery prevail, the Indian stock market appears to be unfazed as share prices repeatedly reach record highs.
Investors have flocked to Indian shares as businesses and mobility recuperated from the devastating second wave of COVID-19 during April-May more quickly than expected.
The jobless situation has also improved with major restrictions lifted. A further 17 of 27 respondents said there was a low or very low risk unemployment will rise over the coming year. The rest said there was a high risk. (Reuters)
October
Duterte government's approval slides as Philippines election season starts
Written by Nur Yasmin
Philippine President Rodrigo Duterte's government suffered a slump in ratings in the third quarter, with lower approval of its handling of issues like COVID-19, inflation, crime and corruption, an opinion poll showed on Wednesday.
Pulse Asia's Sept. 6 to 11 survey was released as election season gets underway in the Philippines for the presidency and hundreds of key political posts being contested in May 2022, including by Duterte's allies.
Duterte is allowed only one term in office and cannot seek re-election for the presidency.
The drop mirrors a similar outcome of another poll published last month on public satisfaction with Duterte, whose score fell 21% in June from a record high in November. read more
In Pulse Asia's latest survey of 2,400 Filipinos, the Duterte administration saw double-digit declines in approval ratings for all 14 "selected national issues" compared to the same poll conducted a year ago.
Those included fighting crime, corruption, managing inflation, and controlling the spread of COVID-19, compared with a poll done in the same month last year.
Duterte's closest aide, Senator Christopher "Bong" Go and some of his cabinet ministers are expected to file candidacies this week for the Senate and other positions up for election, which include seats in the lower house, governors and mayors. (Reuters)
October
Son of late Philippines dictator Marcos to run for president
Written by Nur Yasmin
The son and namesake of late Philippines dictator Ferdinand Marcos announced on Tuesday he will run for president in next year's elections, ending months of speculation over his political ambitions.
Ferdinand Marcos Jr, who is popularly known as "Bongbong", had been touted as a potential candidate for either the presidency or the vice presidency, having been involved in politics since his return in 1991 from exile following his father's 1986 overthrow.
"Join me in this noblest of causes and we will succeed. Together, we will rise again," the 64-year-old said in a speech streamed on social media.
Marcos has served as provincial governor, congressman and senator and ran unsuccessfully for the vice presidency in 2016, a defeat he challenged in the courts. His sister Imee is a senator and mother Imelda a former congresswoman.
He is the fourth candidate to announce a run for the presidency.
Manila City mayor Francisco Domagoso registered on Monday, following newly retired boxing icon Manny Pacquiao. read more
Senator Panfilo Lacson, a former police chief, also intends to run in the contest to replace President Rodrigo Duterte, who is not permitted to run for a second term under the constitution, and has decided to retire.
Marcos on Tuesday took an oath as chairman of a political party that had earlier nominated him as its presidential candidate.
His run for the top post would be a big step in a country where many are still healing from the 1970s martial rule era of the elder Marcos.
His family, one of the most famous in the Philippines, has long sought to rebuild its image and has repeatedly denied allegations it plundered billions of dollars of state wealth when in power, which ended in a People's Power uprising. (Reuters)
October
Support for new Japan PM's government less than 50% - survey
Written by Nur Yasmin
Support for the government of Japan's new prime minister is less than 50%, much lower than that of the previous government when it took power, a survey showed on Tuesday, a day after he took office and surprised many by calling an election on Oct. 31.
Prime Minister Fumio Kishida, a former foreign minister, unveiled his cabinet on Monday, mixing allies of a former prime minister, Shinzo Abe, and finance minister, Taro Aso, in key posts with relative political novices, in line with a promise to give younger lawmakers a chance.
Just 49% of respondents said they supported his government, well under the 64% who supported the government of his predecessor, Yoshihide Suga, just after he took office, according to a poll conducted by the Mainichi newspaper, while 40% said they did not support the government.
Suga stepped down after his government came under fire for its handling of the coronavirus pandemic and as the ruling Liberal Democratic Party (LDP) sought a fresh face ahead of the general election.
Of those who didn't support the government, 58% said "because nothing in politics will change", while 20% said they expected nothing from its policies.
Asked what they thought of the cabinet, just over half said they had no expectations of the ministers, while only 21% said they did. (Reuters)
October
Japan's new ministers vow bold action for pandemic-hit economy
Written by Nur Yasmin
J
apan's new finance and economy ministers vowed on Tuesday to take bold policy action to revitalise the pandemic-hit economy, a sign that fiscal and monetary stimulus will remain intact under a government led by Prime Minister Fumio Kishida.
Finance Minister Shunichi Suzuki said he was told by Kishida to stick to bold monetary easing, flexible fiscal spending and a growth strategy to put a decisive end to deflation.
"I hope the Bank of Japan strives to achieve its price target while ensuring markets and corporate funding remain stable," Suzuki told reporters at his first news conference since Kishida formed his cabinet on Monday.
The new economy minister, Daishiro Yamagiwa, told a separate news conference the government would take all necessary measures to support the economy "in a flexible manner without hesitation".
Kishida has pledged to compile a stimulus package worth tens of trillions of yen, which may help firm up growth in the world's third-largest economy. read more
Suzuki said he could not say now how big the stimulus package could be, as that would depend on deliberations among policymakers and the ruling coalition.
"Japan's fiscal state has become more severe due to the cost of dealing with the pandemic," he said, stressing the need to ensure Japan maintain market trust over it finances by laying a long-term path toward fiscal reform.
Japan's COVID-19 case numbers plummeted to the lowest in nearly a year on Monday and steady vaccinations have raised hopes of a rebound in consumption from pent-up demand, as the economy gradually re-opens. read more
But smaller retailers continue to suffer from slow sales and many part-time jobs were lost, weighing on a fragile recovery that is also taking a hit from slowing exports and output blamed on supply constraints.
The government was watching oil prices carefully as rising fuel bills would hit corporate profits and increase the burden on households, new chief cabinet secretary Hirokazu Matsuno said. (Reuters)
October
Macron: G20 must send Taliban clear message on price of recognition
Written by Nur Yasmin
France's President Emmanuel Macron said the forthcoming G20 summit must send a clear message to Afghanistan's Taliban on the conditions for international recognition.
In an interview with France Inter radio station broadcast on Tuesday, Macron said those conditions must include equality for women, access for foreign humanitarian operations and non-cooperation with Islamist terror groups.
"I believe international recognition should have a price, and the dignity of Afghan women, equality between men and women, should be one of the points on which we insist, and should be a condition for us," Macron said.
Referring to the G20 summit due to take place in Rome later this month, Macron said: "We will talk about Afghanistan. We absolutely must, that's to say us, the Europeans, the Americans, China, Russia, the big powers of Africa, Asia, the Pacific, and Latin America all together, we must have a very clear message that we will set conditions for recognition of the Taliban." (Reuters)
October
Singapore parliament approves law to tackle foreign interference
Written by Nur Yasmin
Singapore's parliament has approved a law that gives broad powers to the government to deal with foreign interference that has sparked concern from the opposition and experts about its wide scope and limits on judicial review.
The small and open city-state, which says it is vulnerable to foreign meddling, targeted fake news with a far-reaching law in 2019, and joins nations such as Australia and Russia that have passed laws in recent years to deter foreign interference.
The bill, formally known as the Foreign Interference Countermeasures Act (FICA), was passed late on Monday with 75 members voting in favour, 11 opposition members objecting and two abstaining, local media reported.
Among the measures, FICA allows authorities to compel internet, social media service providers and website operators to provide user information, block content and remove applications. read more
Those deemed or designated as "politically significant persons" under the law will have to comply with strict rules relating to donations and declare their links to foreign entities.
Instead of court, an independent tribunal, chaired by a judge, will hear appeals against the minister's decisions, a move the government says is necessary to protect national security.
The tribunal's decisions will be final.
The government said FICA does not cover the building of overseas partnerships, soliciting overseas businesses, networking with foreigners, sourcing for donations or those discussing policies or political matters that affect their businesses with foreign colleagues or business partners, or supporting charities.
"As long as they are done in an open and transparent manner, and not part of an attempt to manipulate our political discourse or undermine public interest such as security," K Shanmugam, minister for home affairs, said in parliament.
It will also not affect Singaporeans expressing their own views or engaging in advocacy. The home affairs ministry has also previously said it would not apply to foreign individuals or publications "reporting or commenting on Singapore politics, in an open, transparent and attributable way."
But some critics say its broad language risks capturing even legitimate activities, while rights group Reporters Without Borders said the law could ensnare independent media outlets.
Experts and Singapore's opposition parties have called for narrowing the scope of executive powers and more oversight through the judiciary.
The bill was passed without strengthening "the circumscribed checks and balances, particularly judicial review," said Eugene Tan, a law professor at Singapore Management University. "While assurances were given, they could have been given unequivocal expression through legislative codification."
However, Shanmugam said the bill represented the "best balance...between dealing with the risks and providing checks against abuse." (Reuters)
October
Social conservative and economic reformer elected to lead Australia's most populous state
Written by Nur Yasmin
Dominic Perrottet, a social conservative and economic reformer, was on Tuesday elected as the new state premier of New South Wales, which will within days exit a months-long COVID-19 lockdown that has battered its economy.
Gladys Berejiklian last week resigned as premier of Australia's most populous state after a corruption watchdog said it was investigating whether she was involved in conduct that "constituted or involved a breach of public trust". read more
In a vote of the ruling Liberal Party, Perrottet - the state's Treasurer - was elected as Berejiklian's replacement, beating Planning Minister Rob Stokes by 39 votes to five.
"Today, begins a new chapter for New South Wales, and one that we will all write together," Perrottet told reporters in Sydney.
Perrottet, 39, will now oversee the reopening of the state, which has been in a COVID-19 lockdown since June following an outbreak of the highly contagious Delta variant that left many businesses reliant of government aid for survival.
Perrottet said his priority was reform and the safe reopening of the state, as he seeks to revive an economy that is larger than Singapore, Thailand or Malaysia.
While Treasurer, Perrottet proposed changing a one-off tax on the purchase of residential properties to an annual fee to improve housing affordability for first-home buyers.
NSW has also adopted a policy of asset recycling, which has seen the state sell infrastructure such as toll roads to fund new building projects.
Perrottet, a devout Catholic and father of six, will also face the challenge of how to manage the issue of voluntary euthanasia, with a bill set to come before the state's parliament later this year.
Perrottet said he opposes the bill but will not direct his party lawmakers on how to vote. (Reuters)
October
Philippine President Duterte's tumultuous term
Written by Nur Yasmin
Philippine President Rodrigo Duterte has announced he will retire from politics, opening the way for his daughter to run for president in next year's election.
Here is a timeline of some of the key events in Duterte's term:
May 2016: Duterte, the former mayor of Davao City and nicknamed "The Punisher" for his anti-drug crusade in the city, is elected the Philippines' 16th president by focusing almost entirely on crime, drug abuse and corruption.
Once in power, Duterte backs a war on drugs by police that officials say kills more than 6,100 suspected drug dealers. The United Nations say tens of thousands of people in the Philippines may have been killed since mid-2016 amid "near impunity" for police and incitement to violence by top officials. Duterte's spokesperson says the "rehashed claims" of impunity are unfounded.
October 2016: On his first trip to China, Duterte turns his back on the Philippines' decades-long ties with the United States to court Beijing, announcing the separation from the United States by saying "America has lost".
Duterte says Manila and Beijing would resolve their South China Sea dispute through dialogue, a softening of the previous Philippine position. He describes the 2016 arbitration ruling on the South China Sea that went in the Philippines' favour as just a "piece of paper" he could throw in the trash.
May 2017: Duterte cuts short a visit to Moscow when clashes erupt in Marawi between Filipino troops and Islamist fighters. The seige of Marawi lasts five months. By September, the conflict has displaced around 350,000 people and resulted in the deaths of more than 1,000. Duterte declares a state of martial law covering the entire island of Mindanao, which lasts until the end of 2019, the longest period of martial law in the Philippines since the 1965-86 Marcos era.
July 2017: Under the government's "Build, Build, Build" initiative, Duterte pledges to usher in a golden age of infrastructure through a six-year, $180 billion spending spree to modernise and build airports, roads, railways and ports.
February 2018: The International Criminal Court (ICC) opens a preliminary investigation into the thousands of deaths that occurred during Duterte's war on drugs. The following month, Duterte announces his intention to withdraw the Philippines from the ICC. The withdrawal becomes official in March 2019.
May 2019: Elections result in Duterte maintaining his hold on the House of Representatives and see him take control of the Senate, the only effective check remaining on his administration.
January 2020: Duterte says he will end a 1998 pact that allows U.S troops to operate in the Philippines, however the withdrawal period is extended. In February 2021, he says the U.S. must "pay" to keep the deal and in July he restores it.
Sept. 8, 2021: Duterte accepts his party's nomination to run for vice president in next year's election. He is barred by the constitution from seeking a second term and his interest in the largely ceremonial post is dismissed by opponents as a bid to stay in office and avoid potential legal action against him. A prosecutor at the International Criminal Court is still investigating Duterte over his war on drugs.
Oct. 2, 2021: Duterte announces he will not run for vice president but will retire from politics. (Reuters)