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Asia Pacific stock markets continue recovery after Dow bounces back - live Asia Pacific stock markets continue recovery after Fed hints at delay - live
(35 minutes later)
1.15pm AEST04:15
It's the Fed, stupid
Quite a good one-sentence analysis from Shigemitsu Tsuruta, senior strategist at SMBC Friend Securities in Tokyo, on Reuters referring to speculation that the Fed will not cut rates in September:
The market has started to price in this prospect while the current level provides a good short-term rebound opportunity.
Updated at 1.15pm AEST
1.10pm AEST04:10
LUNCHTIME SUMMARY
OK, trading is looking quite serene today.
Here’s what’s happened so far:
Updated at 1.13pm AEST
12.55pm AEST03:5512.55pm AEST03:55
Tom’s excellent piece also includes some fascinating insights from China expert Fraser Howie, author of Red Capitalism, who talks about what the struggles of working people tell us about the country’s governing class:Tom’s excellent piece also includes some fascinating insights from China expert Fraser Howie, author of Red Capitalism, who talks about what the struggles of working people tell us about the country’s governing class:
Much of the party’s legitimacy comes from the economy and from the Faustian bargain of limited political freedoms and social freedoms against economic prosperity. Any time there is a slowing economy the government is concerned about it for exactly those reasons – the people lose their jobs, there will not be the wage growth, people will not be able to enjoy the benefits of prosperity.Much of the party’s legitimacy comes from the economy and from the Faustian bargain of limited political freedoms and social freedoms against economic prosperity. Any time there is a slowing economy the government is concerned about it for exactly those reasons – the people lose their jobs, there will not be the wage growth, people will not be able to enjoy the benefits of prosperity.
The fear has to be … that party stability is on the line if the economy doesn’t work.”The fear has to be … that party stability is on the line if the economy doesn’t work.”
Intra-party battles are already going on thick and fast. The Chinese Communist party is more worried than almost any outside observer about the stability of the party. Foreigners always say: ‘Oh, yes, it will be fine’. But I think the Chinese communists are far better aware of how they could be toppled or how their party could collapse from the inside relatively quickly.Intra-party battles are already going on thick and fast. The Chinese Communist party is more worried than almost any outside observer about the stability of the party. Foreigners always say: ‘Oh, yes, it will be fine’. But I think the Chinese communists are far better aware of how they could be toppled or how their party could collapse from the inside relatively quickly.
12.41pm AEST03:4112.41pm AEST03:41
Tom Phillips, our correspondent in Beijing, has filed a terrific piece on how poor migrant workers are feeling the effects of the economic slowdown in China.Tom Phillips, our correspondent in Beijing, has filed a terrific piece on how poor migrant workers are feeling the effects of the economic slowdown in China.
He met Liu, a scrap metal dealer whose business on the hardscrabble outskirts of Beijing has dried up, forcing her to return to her home village in south-east China with her two young children.He met Liu, a scrap metal dealer whose business on the hardscrabble outskirts of Beijing has dried up, forcing her to return to her home village in south-east China with her two young children.
Abandoning Beijing was her family’s only option, she said.Abandoning Beijing was her family’s only option, she said.
It’s natural. We came here for work. We lost 200,000 yuan. We can’t afford to live here any more. Maybe one day we’ll return - but I don’t know when.It’s natural. We came here for work. We lost 200,000 yuan. We can’t afford to live here any more. Maybe one day we’ll return - but I don’t know when.
Related: China's migrant workers head home as Beijing faces an economic stormRelated: China's migrant workers head home as Beijing faces an economic storm
12.30pm AEST03:3012.30pm AEST03:30
China slowdown won't harm Japan too badly – KurodaChina slowdown won't harm Japan too badly – Kuroda
Haruhiko Kuroda, the governor of the Bank of Japan, has been speaking in New York about the China situation (still not sure there’s a consensus on crisis).Haruhiko Kuroda, the governor of the Bank of Japan, has been speaking in New York about the China situation (still not sure there’s a consensus on crisis).
He said China’s economy is likely to slow further although he predicted growth in its GDP will remain at 6-7% this year and next, Reuters reports:He said China’s economy is likely to slow further although he predicted growth in its GDP will remain at 6-7% this year and next, Reuters reports:
Already exports to China have been affected, but I do not think that Japan exports in coming years will be (very) negatively affected ... partly because China will maintain growth and Japanese capital goods are... quite competitive.Already exports to China have been affected, but I do not think that Japan exports in coming years will be (very) negatively affected ... partly because China will maintain growth and Japanese capital goods are... quite competitive.
Kuroda said China’s monetary easing was an appropriate step to mitigate any impact on its economy, adding that some market players have become “too pessimistic” on the Chinese economy given its growth is “still quite robust”.Kuroda said China’s monetary easing was an appropriate step to mitigate any impact on its economy, adding that some market players have become “too pessimistic” on the Chinese economy given its growth is “still quite robust”.
On US monetary policy, Kuroda said he expected the Federal Reserve to raise interest rates sometime this year, which would be a strong positive signal for the global economy.On US monetary policy, Kuroda said he expected the Federal Reserve to raise interest rates sometime this year, which would be a strong positive signal for the global economy.
Updated at 12.30pm AESTUpdated at 12.30pm AEST
12.20pm AEST03:2012.20pm AEST03:20
Those poor investment numbers took a bit of bite out of the ASX200 – it fell to around 5240 – but it’s back up again now because the stats are actually more promising than the headline number suggests.Those poor investment numbers took a bit of bite out of the ASX200 – it fell to around 5240 – but it’s back up again now because the stats are actually more promising than the headline number suggests.
While capex fell in the second quarter to the end of June, businesses are planning to invest more than previously thought in the rest of the year to the tune of about 10% more.While capex fell in the second quarter to the end of June, businesses are planning to invest more than previously thought in the rest of the year to the tune of about 10% more.
12.05pm AEST03:0512.05pm AEST03:05
Australian business investment fallsAustralian business investment falls
Business investment fell 4% in the June quarter, the Australian Bureau of Statistics said on Thursday.Business investment fell 4% in the June quarter, the Australian Bureau of Statistics said on Thursday.
The figures, which cover investment in capital goods and include such things as buildings and equipment, was worse than market forecasts, Australian Associated Press reports.The figures, which cover investment in capital goods and include such things as buildings and equipment, was worse than market forecasts, Australian Associated Press reports.
Businesses expect to invest $114.8bn this financial year, which is 23.4% lower than the corresponding estimate made at the same time last year.The final estimate for business investment in 2014/15 is $150.58bn – 4.7% lower than investment in 2013/14.Businesses expect to invest $114.8bn this financial year, which is 23.4% lower than the corresponding estimate made at the same time last year.The final estimate for business investment in 2014/15 is $150.58bn – 4.7% lower than investment in 2013/14.
Poor figures for a government banking on selling a growth story.Poor figures for a government banking on selling a growth story.
11.54am AEST02:5411.54am AEST02:54
Yuan weakensYuan weakens
China’s stock markets may have risen today but the yuan has weakened on hints from the US about the Fed delaying a rate cut.China’s stock markets may have risen today but the yuan has weakened on hints from the US about the Fed delaying a rate cut.
The People’s Bank of China set the reference rate for the yuan at 6.4085 per dollar prior to market open, its lowest level since 2011 and firmer than the previous day’s closing market quote of 6.4105.The People’s Bank of China set the reference rate for the yuan at 6.4085 per dollar prior to market open, its lowest level since 2011 and firmer than the previous day’s closing market quote of 6.4105.
11.49am AEST02:4911.49am AEST02:49
InteractiveInteractive
Great work by the graphics team in London to produce this interactive on how a China meltdown could affect different countries.Great work by the graphics team in London to produce this interactive on how a China meltdown could affect different countries.
Related: How China's economic slowdown could weigh on the rest of the worldRelated: How China's economic slowdown could weigh on the rest of the world
11.45am AEST02:4511.45am AEST02:45
Hang Seng in Hong Kong is also up with a rise of 2.43%.Hang Seng in Hong Kong is also up with a rise of 2.43%.
11.41am AEST02:4111.41am AEST02:41
Chinese markets open upChinese markets open up
Looking good for Shanghai.Looking good for Shanghai.
11.39am AEST02:3911.39am AEST02:39
Just waiting for the first prices to come through from China but the Australian market is purring away nicely, up 1.5%.Just waiting for the first prices to come through from China but the Australian market is purring away nicely, up 1.5%.
IG Market analyst Angus Nicholson reckon whatever happens in China won’t have too much impact today:IG Market analyst Angus Nicholson reckon whatever happens in China won’t have too much impact today:
The Chinese stock market is having less of an influence on the Aussie stocks at the moment.The Chinese stock market is having less of an influence on the Aussie stocks at the moment.
The Chinese economy is still a concern for the world economy at the moment but we’re seeing the Shanghai Composite bottom a bit, so I don’t think we’re going to see as much influence today when the Chinese stock market opens.The Chinese economy is still a concern for the world economy at the moment but we’re seeing the Shanghai Composite bottom a bit, so I don’t think we’re going to see as much influence today when the Chinese stock market opens.
11.34am AEST02:3411.34am AEST02:34
The plunge in commodities prices this year – especially oil – has been astonishing.The plunge in commodities prices this year – especially oil – has been astonishing.
Despite a rise on Thursday because of an unexpected fall in inventory last week, US crude was still under $40 a barrel at $39.19. Brent, the global oil benchmark, gained 64 cents to $43.78 a barrel.Despite a rise on Thursday because of an unexpected fall in inventory last week, US crude was still under $40 a barrel at $39.19. Brent, the global oil benchmark, gained 64 cents to $43.78 a barrel.
Seriously though, does anyone remember peak oil? I guess it could still turn around sharply again with a wider Middle East conflict or some such black swan event, but the idea that economies might be broken by sky-high oil prices has been replaced by the one that says certain countries could be broken by low prices.Seriously though, does anyone remember peak oil? I guess it could still turn around sharply again with a wider Middle East conflict or some such black swan event, but the idea that economies might be broken by sky-high oil prices has been replaced by the one that says certain countries could be broken by low prices.
Check out how Russia and even Saudi Arabia are struggling with the falling price.Check out how Russia and even Saudi Arabia are struggling with the falling price.
Updated at 11.35am AESTUpdated at 11.35am AEST
11.08am AEST02:0811.08am AEST02:08
What he really means is, will China’s chart go more like Thunderbirds 3 or Thunderbirds 4, the one that went underwater?What he really means is, will China’s chart go more like Thunderbirds 3 or Thunderbirds 4, the one that went underwater?
We’ll find out when trading starts at 11.30am Sydney time, ie in about 22 minutes.We’ll find out when trading starts at 11.30am Sydney time, ie in about 22 minutes.
11.03am AEST02:0311.03am AEST02:03
But with Wall Street back on song and the Asia pacific markets up again today, what can possibly can wrong?But with Wall Street back on song and the Asia pacific markets up again today, what can possibly can wrong?
Well, investors are still not convinced about what’s going to happen in China where the weak stock market is seen as being important more because it suggests all is not well with the wider economy, rather than as the root of any systemic problem.Well, investors are still not convinced about what’s going to happen in China where the weak stock market is seen as being important more because it suggests all is not well with the wider economy, rather than as the root of any systemic problem.
Reuters says a “fresh slide in China’s equities [on Thursday] and worries that China may allow a further depreciation of the yuan risked hampering a recovery in other riskier assets in Asia and beyond”.Reuters says a “fresh slide in China’s equities [on Thursday] and worries that China may allow a further depreciation of the yuan risked hampering a recovery in other riskier assets in Asia and beyond”.
It quotes Jasper Lawler, market analyst at CMC Markets:It quotes Jasper Lawler, market analyst at CMC Markets:
Rather than getting ahead of the game with a well thought out plan for stabilising the economy, the PBOC appears to be reluctantly easing policy any time there’s a drop in share prices.Rather than getting ahead of the game with a well thought out plan for stabilising the economy, the PBOC appears to be reluctantly easing policy any time there’s a drop in share prices.
The net effect is that markets clamour for more stimulus while at the same time losing faith it will actually work.The net effect is that markets clamour for more stimulus while at the same time losing faith it will actually work.
10.53am AEST01:5310.53am AEST01:53
It was too late for European bourses though which had struggled on the back of another lacklustre response from the Chinese markets to yet more stimulus – rate cuts and a loosening of reserve requirements – from the People’s Bank of China on Tuesday.It was too late for European bourses though which had struggled on the back of another lacklustre response from the Chinese markets to yet more stimulus – rate cuts and a loosening of reserve requirements – from the People’s Bank of China on Tuesday.
The FTSE was down 102 points to 5,979 on Wednesday. It has now fallen for 11 of the last 12 days (on Tuesday it jumped by 188 points), and is currently 15% off its record high.The FTSE was down 102 points to 5,979 on Wednesday. It has now fallen for 11 of the last 12 days (on Tuesday it jumped by 188 points), and is currently 15% off its record high.
Germany’s DAX and Spain’s IBEX both lost 1.3%, and the French CAC dropped 1.4%.Germany’s DAX and Spain’s IBEX both lost 1.3%, and the French CAC dropped 1.4%.
10.49am AEST01:4910.49am AEST01:49
The key plus-point for the American market seemed to be comments from New York Fed president Bill Dudley who said on Wednesday that a September interest rate rise was now “less compelling” than it had been just a few weeks ago.The key plus-point for the American market seemed to be comments from New York Fed president Bill Dudley who said on Wednesday that a September interest rate rise was now “less compelling” than it had been just a few weeks ago.
The decision to begin the normalisation process at the September FOMC [federal open market committee] meeting seems less compelling to me than it was a few weeks agoThe decision to begin the normalisation process at the September FOMC [federal open market committee] meeting seems less compelling to me than it was a few weeks ago
He was also keen to play down any systemic risk from the China turbulence.He was also keen to play down any systemic risk from the China turbulence.
The stock market has to move a lot – and stay there – to have implications for the US economy. What we’re seeing is not a US problem. This is very different from the financial crisis.”The stock market has to move a lot – and stay there – to have implications for the US economy. What we’re seeing is not a US problem. This is very different from the financial crisis.”
And with the prospect of more cheap money sloshing around the system for a bit longer than everyone had begin to expect, traders went away happy and the market surged.And with the prospect of more cheap money sloshing around the system for a bit longer than everyone had begin to expect, traders went away happy and the market surged.
Updated at 11.01am AESTUpdated at 11.01am AEST
10.42am AEST01:4210.42am AEST01:42
The ASX200 in Australia is up smartly again this morning after a good day on Wednesday saw it recoup a lot of the losses from earlier in the week, rising 35.5 points, or 0.69%, at 5,172.8 points.The ASX200 in Australia is up smartly again this morning after a good day on Wednesday saw it recoup a lot of the losses from earlier in the week, rising 35.5 points, or 0.69%, at 5,172.8 points.
This is this morning’s chart, where it resembles roughly half of Thunderbirds 3.This is this morning’s chart, where it resembles roughly half of Thunderbirds 3.
10.34am AEST01:3410.34am AEST01:34
Good morningGood morning
Welcome to the Asia leg of the markets live blog. We’ve all had time to pause and reflect in the time zone but now things are under way again and the Australian and Japanese markets are up strongly following a huge 619-point surge on Wall Street on Wednesday.Welcome to the Asia leg of the markets live blog. We’ve all had time to pause and reflect in the time zone but now things are under way again and the Australian and Japanese markets are up strongly following a huge 619-point surge on Wall Street on Wednesday.
For full details of how it played out yesterday, here’s the blog.For full details of how it played out yesterday, here’s the blog.
More of that in a moment – especially some interesting comments from a Federal Reserve rates setter – but here are the main scores on the doors this morning.More of that in a moment – especially some interesting comments from a Federal Reserve rates setter – but here are the main scores on the doors this morning.
Nikkei +1.4%Nikkei +1.4%
ASX200 +1.3%ASX200 +1.3%
Kospi +0.56%Kospi +0.56%
The yen is also down on the dollar while the Aussie dollar is currently buying US71.24c.The yen is also down on the dollar while the Aussie dollar is currently buying US71.24c.
Updated at 10.37am AESTUpdated at 10.37am AEST