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Asia Pacific markets set to rebound as investors welcome Trump plans – live Asian stocks see 'astonishing turnaround' as investors welcome Trump plans – live
(35 minutes later)
1.14am GMT
01:14
Trading has been underway for an hour now in Japan and Korea. Here’s where the main indexes stand:
The yen, which gained so much during yesterday’s turmoil, fell sharply overnight as the US dollar recovered. It’s now at 105.6740, close to a four-month high. The pound and the euro are both down slightly against the greenback however, as the pattern from yesterday is reversed.
Imre Speizer, an economist at Westpac in Australia, said:
An astonishing turnaround in risk appetite pushed equities and Treasury yields higher. Markets appeared to reassess the economic outlook under Trump, towards one of higher growth and higher inflation.
1.02am GMT
01:02
New Zealand cuts rates to record low
The Reserve Bank of New Zealand hasn’t waited around to see what a Trump presidency might mean for US monetary policy – it cut its base rate 25 basis points to a record low of 1.75% this morning.
The move was expected and is the third cut this year. It’s driven partly by a need to get the NZ dollar down to help the country’s huge dairy industry.
Governor Graeme Wheeler said the rate-setters had met on Thursday to discuss whether the cut was still needed in the wake of Trump’s win. They decided it was but pushed back on expectations of yet another reduction soon. He said:
We think at this stage that we won’t need another cut. The economy is doing well and you certainly wouldn’t want to create excessive volatility in respect of interest rates and output in the exchange rate by surprising the market with interest rate adjustments.
12.46am GMT
00:46
Volatility 'fear index' falls 36% in three days
This is an interesting chart. Wednesday saw one of the biggest drops in volatility ever recorded as the markets quickly put their concerns behind them and went into risk-on mode.
Volatility Index has fallen 36% thus far this week, the 3rd largest 3-day decline in history (more than post-Brexit, now 5th on list) $VIX pic.twitter.com/tmbm2YyIek
12.40am GMT12.40am GMT
00:4000:40
But as with Australia, it’s not clear where this is going. A Trump presidency promises a more aggressive US trading position which the markets have implicitly welcomed. But not everyone can be winners here, can they?But as with Australia, it’s not clear where this is going. A Trump presidency promises a more aggressive US trading position which the markets have implicitly welcomed. But not everyone can be winners here, can they?
China is the obvious loser in Asia if, let’s say, Trump tries to force Apple to make its iPhones in the US instead of Shenzhen and Shangahi.China is the obvious loser in Asia if, let’s say, Trump tries to force Apple to make its iPhones in the US instead of Shenzhen and Shangahi.
Here’s a snippet from Larry Elliott’s piece:Here’s a snippet from Larry Elliott’s piece:
Beijing would have two choices. It might take an emollient line, promising to increase direct investment into the US as a way of supporting Trump’s attempt to rebuild the American economy.Beijing would have two choices. It might take an emollient line, promising to increase direct investment into the US as a way of supporting Trump’s attempt to rebuild the American economy.
More likely, though, China would adopt an aggressive, nationalistic stance. Beijing is not without economic weapons, since it has amassed a vast stock of US Treasury bonds in recent years, the proceeds of its trade surplus with America. Beijing could meet Trump’s threat with one of its own: to dump US assets. A tit-for-tat trade war, in which China puts tariffs on US exports, could not be ruled out either.More likely, though, China would adopt an aggressive, nationalistic stance. Beijing is not without economic weapons, since it has amassed a vast stock of US Treasury bonds in recent years, the proceeds of its trade surplus with America. Beijing could meet Trump’s threat with one of its own: to dump US assets. A tit-for-tat trade war, in which China puts tariffs on US exports, could not be ruled out either.
But as Chris Weston from IG says in his morning note, these concerns appear for another day as markets focus on the upside:But as Chris Weston from IG says in his morning note, these concerns appear for another day as markets focus on the upside:
Like many I had been concerned market participants would be worried about Trump’s relationship with the Federal Reserve and a number of their key trade partners (such as China and Japan), but again this concern is for another time it seems.Like many I had been concerned market participants would be worried about Trump’s relationship with the Federal Reserve and a number of their key trade partners (such as China and Japan), but again this concern is for another time it seems.
12.23am GMT12.23am GMT
00:2300:23
Japanese stocks up 6%Japanese stocks up 6%
The market in Japan has opened very strongly with the Nikkei rising more than 6%, reversing the huge losses of Wednesday.The market in Japan has opened very strongly with the Nikkei rising more than 6%, reversing the huge losses of Wednesday.
The Kospi in Seoul is also up.The Kospi in Seoul is also up.
TOKYO'S NIKKEI SHARE AVERAGE EXTENDS GAINS, UP 6.00 PCTTOKYO'S NIKKEI SHARE AVERAGE EXTENDS GAINS, UP 6.00 PCT
#JAPAN: Nikkei 225 cruises past 17,000, closing in on 6 percent gains early session $NKY $USDJPY#JAPAN: Nikkei 225 cruises past 17,000, closing in on 6 percent gains early session $NKY $USDJPY
12.13am GMT12.13am GMT
00:1300:13
The Aussie dollar has risen this morning from overnight lows of below US76c as the markets yo-yoed around during US election night.The Aussie dollar has risen this morning from overnight lows of below US76c as the markets yo-yoed around during US election night.
The Aussie is trading at US76.50c this morning.The Aussie is trading at US76.50c this morning.
But experts say it’s hard to say where it will go from here given the mixed bag of signals out of a Trump win.But experts say it’s hard to say where it will go from here given the mixed bag of signals out of a Trump win.
Here’s Greg McKenna writing at axitrader.com:Here’s Greg McKenna writing at axitrader.com:
I think if Trump delivers on his campaign promises then we face a more volatile global economic and geopolitical environment in the years ahead ... For the Aussie that means it benefits from the reflationary aspects of Trumponomics, but could suffer from the rise in US bonds, and likely Fed hike in December if Australian interest rate markets don’t go with those moves higher.I think if Trump delivers on his campaign promises then we face a more volatile global economic and geopolitical environment in the years ahead ... For the Aussie that means it benefits from the reflationary aspects of Trumponomics, but could suffer from the rise in US bonds, and likely Fed hike in December if Australian interest rate markets don’t go with those moves higher.
12.01am GMT12.01am GMT
00:0100:01
Australian shares up nearly 3%Australian shares up nearly 3%
Huge lead from Australia this morning. The ASX/S&P200 is up nearly 3% and resource and financial stocks have led the way. The iron ore producer Fortescue is the top riser at well over 10.6% but Macquarie and BHP have also shown big gains.Huge lead from Australia this morning. The ASX/S&P200 is up nearly 3% and resource and financial stocks have led the way. The iron ore producer Fortescue is the top riser at well over 10.6% but Macquarie and BHP have also shown big gains.
My colleague Melissa Davey has just filed this report on the morning’s surge.My colleague Melissa Davey has just filed this report on the morning’s surge.
Meanwhile, Chris Weston at IG in Melbourne has this:Meanwhile, Chris Weston at IG in Melbourne has this:
The combination of huge gains in materials, fiscals and energy should push the ASX 200 3.4%, which if it closes at that level would be the strongest gain since 6 October 2011The combination of huge gains in materials, fiscals and energy should push the ASX 200 3.4%, which if it closes at that level would be the strongest gain since 6 October 2011
Incredible gains this morning. Many were predicting further losses after Trump was elected. Will this last? #ASX200Incredible gains this morning. Many were predicting further losses after Trump was elected. Will this last? #ASX200
There's a 'Trump turnaround' in 1st hour of trade on the Australian share market #ASX200 +3.0% to 5,311. $BHP +8.6% $BLS +12.0% @ABCNews24There's a 'Trump turnaround' in 1st hour of trade on the Australian share market #ASX200 +3.0% to 5,311. $BHP +8.6% $BLS +12.0% @ABCNews24
11.37pm GMT11.37pm GMT
23:3723:37
Hello and welcome to the markets live blog from Sydney.Hello and welcome to the markets live blog from Sydney.
Well, that didn’t turn out quite how it was expected to – on a number of levels. The surprise of Trump’s win looked like leading to market meltdown across the world. But it didn’t, thanks in part it seems to Trump’s conciliatory speech, proving that investors hate uncertainty more than anything. The promise of a smooth handover of power, a united Congress, tax cuts and a huge infrastructure spending boost was enough to turn red screens green.Well, that didn’t turn out quite how it was expected to – on a number of levels. The surprise of Trump’s win looked like leading to market meltdown across the world. But it didn’t, thanks in part it seems to Trump’s conciliatory speech, proving that investors hate uncertainty more than anything. The promise of a smooth handover of power, a united Congress, tax cuts and a huge infrastructure spending boost was enough to turn red screens green.
Here’s how they finished in the US and EuropeHere’s how they finished in the US and Europe
In Australia the market has already taken that lead and opened up by nearly 3%. Can it be sustained?In Australia the market has already taken that lead and opened up by nearly 3%. Can it be sustained?
Here’s one informed verdict. Michael McCarthy at CMC Markets in Sydney, said:Here’s one informed verdict. Michael McCarthy at CMC Markets in Sydney, said:
The stunning turn in sentiment suggests there is now a consensus building that much of the policy announced during the campaign was a sales pitch rather than a commitment to act. Investors ignored the potential for damage to international trade and growth prospects and focussed on Republican control of both houses of Congress as well as the White House. This offers the prospect of reform that could stimulate the US economy. However, last night’s action may be as good as it gets for markets for some time. Policy uncertainty and populist agendas rarely lead to sustainable economic growth.The stunning turn in sentiment suggests there is now a consensus building that much of the policy announced during the campaign was a sales pitch rather than a commitment to act. Investors ignored the potential for damage to international trade and growth prospects and focussed on Republican control of both houses of Congress as well as the White House. This offers the prospect of reform that could stimulate the US economy. However, last night’s action may be as good as it gets for markets for some time. Policy uncertainty and populist agendas rarely lead to sustainable economic growth.
There’s much to look at and talk about. But in the meantime start with our economics editor Larry Elliott’s examination of what a Trump win might mean for the global economy.There’s much to look at and talk about. But in the meantime start with our economics editor Larry Elliott’s examination of what a Trump win might mean for the global economy.
UpdatedUpdated
at 11.49pm GMTat 11.49pm GMT