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Australian shares have best day for five years in Trump bounce – live Australian shares have best day for five years in Trump bounce – live
(35 minutes later)
6.14am GMT
06:14
There have been big moves in the bond markets in the past 24 hours as investors have dumped the safety of government paper in favour of equities and the dollar.
After Trump's win, Pimco and other bond traders are seeing fast-tracked Fed. https://t.co/3iQxd6y3Xr pic.twitter.com/hmdRuZF1AC
Yields on US Treasury 10-year notes reversed an initial plunge to 1.716% and bolted to 2.09% overnight as the price of bonds dropped. The net rise of 21 basis points was the largest daily increase since July 2013, Reuters said.
There’s also an expectation that the Fed will raise rates in December, with a possible US fiscal stimulus seeing the return of inflation and more rate rises.
Imre Speizer, an economist at Westpac, 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.
5.59am GMT5.59am GMT
05:5905:59
European and US markets to open upEuropean and US markets to open up
Futures trading suggests Europe and the US will rejoin the party when the markets open later today.Futures trading suggests Europe and the US will rejoin the party when the markets open later today.
Spread better IG sees the FTSE100 up 0.5% at 6940 points, while the Dax in Germany will be up 0.68% at 10,715 points.Spread better IG sees the FTSE100 up 0.5% at 6940 points, while the Dax in Germany will be up 0.68% at 10,715 points.
The Dow Jones on Wall Street is set to open up around 60 points.The Dow Jones on Wall Street is set to open up around 60 points.
5.53am GMT5.53am GMT
05:5305:53
The Nikkei has gone even better than the ASX today with a rise nearly 7%, helped by a drop in the yen as the US dollar received a Trump bump as we might now have to call it.The Nikkei has gone even better than the ASX today with a rise nearly 7%, helped by a drop in the yen as the US dollar received a Trump bump as we might now have to call it.
But the authorities are still worried that they might have to act to keep the yen down in future.But the authorities are still worried that they might have to act to keep the yen down in future.
Hiroshi Watanabe, former vice finance minister for international affairs, told Reuters that “if the yen spikes by 3 yen or more, Japan should not hesitate to intervene”, regardless of US concerns about such action.Hiroshi Watanabe, former vice finance minister for international affairs, told Reuters that “if the yen spikes by 3 yen or more, Japan should not hesitate to intervene”, regardless of US concerns about such action.
If Japan hesitated to intervene out of deference (to Trump), it would not be able to act for the coming four years.If Japan hesitated to intervene out of deference (to Trump), it would not be able to act for the coming four years.
Japan has not intervened in currency markets since Nov. 2011.Japan has not intervened in currency markets since Nov. 2011.
5.44am GMT5.44am GMT
05:4405:44
Toot toot!AUSTRALIAN STOCKS RIDE THE TRUMP RALLY: What you need to know (via @BIAUS) https://t.co/gf8DoGW10WToot toot!AUSTRALIAN STOCKS RIDE THE TRUMP RALLY: What you need to know (via @BIAUS) https://t.co/gf8DoGW10W
Biggest gains on the ASX200 today: $ACX up 13.7%, $SGM up 13.6%, $BSL up 13.5%, $WSA up 12.1%, $CPU up 12% #ausbizBiggest gains on the ASX200 today: $ACX up 13.7%, $SGM up 13.6%, $BSL up 13.5%, $WSA up 12.1%, $CPU up 12% #ausbiz
5.37am GMT5.37am GMT
05:3705:37
Australian market closes up 3.34%Australian market closes up 3.34%
It’s been a good day for investors down under – the best in fact since 2011, AAP reports.It’s been a good day for investors down under – the best in fact since 2011, AAP reports.
The ASX/S&P200 has closed up 172.2 points, or 3.34%, at 5,328.8 points, adding $50bn to the market’s value, more than making up for yesterday’s losses.The ASX/S&P200 has closed up 172.2 points, or 3.34%, at 5,328.8 points, adding $50bn to the market’s value, more than making up for yesterday’s losses.
Mining and construction stocks led the way on hopes of a boom in the US.Mining and construction stocks led the way on hopes of a boom in the US.
Surging iron ore prices also helped, soaring past the 2016 peak to $71 a tonne. Copper – a key construction material – also jumped 4% to a 16-month high, Reuters reported.Surging iron ore prices also helped, soaring past the 2016 peak to $71 a tonne. Copper – a key construction material – also jumped 4% to a 16-month high, Reuters reported.
UpdatedUpdated
at 5.44am GMTat 5.44am GMT
5.21am GMT5.21am GMT
05:2105:21
There’s a lot of commentary around today about Trump’s trade policies and what they will mean for the global economy.There’s a lot of commentary around today about Trump’s trade policies and what they will mean for the global economy.
We’ve already heard from JP Morgan and Saul Eslake. And here’s Paul Bloxham from HSBC in Australia, speaking to Australian Associated Press.We’ve already heard from JP Morgan and Saul Eslake. And here’s Paul Bloxham from HSBC in Australia, speaking to Australian Associated Press.
For Australia, the main negative impact seems likely to be the effect that reduced global trade could have on Asian growth, given Asia’s high trade reliance. Continued strengthening of Australia’s economic ties to China should be a priority as it would help support local growth even in the face of rising global trade protectionism.For Australia, the main negative impact seems likely to be the effect that reduced global trade could have on Asian growth, given Asia’s high trade reliance. Continued strengthening of Australia’s economic ties to China should be a priority as it would help support local growth even in the face of rising global trade protectionism.
But Standard Life, in a research note quoted by AAP, saw the possibility that Trump could moderate his campaign promises, which included putting tariffs of 45% on Chinese goods and 35% on Mexican goods, in order to avoid disruption.But Standard Life, in a research note quoted by AAP, saw the possibility that Trump could moderate his campaign promises, which included putting tariffs of 45% on Chinese goods and 35% on Mexican goods, in order to avoid disruption.
It is plausible that the new administration will not ramp up tariffs on Mexican and Chinese imports, content instead to bury the prospect of new trade agreements and make more use of enforcement clauses in existing agreements.It is plausible that the new administration will not ramp up tariffs on Mexican and Chinese imports, content instead to bury the prospect of new trade agreements and make more use of enforcement clauses in existing agreements.
4.53am GMT4.53am GMT
04:5304:53
'Trump won't force Yellen to quit' – adviser'Trump won't force Yellen to quit' – adviser
Trump won’t force Janet Yellen to resign as chair of the Federal Reserve, according to an adviser, despite speculation that he might try to end her term prematurely.Trump won’t force Janet Yellen to resign as chair of the Federal Reserve, according to an adviser, despite speculation that he might try to end her term prematurely.
Judy Shelton, an economist and senior fellow at the Atlas Network and adviser to Trump on monetary policy, told the Wall Street Journal that “he’s not urging her to resign at all”.Judy Shelton, an economist and senior fellow at the Atlas Network and adviser to Trump on monetary policy, told the Wall Street Journal that “he’s not urging her to resign at all”.
However, the Journal reports that Shelton did concede that Trump was minded to replace Yellen when she completes her first term in 2018.However, the Journal reports that Shelton did concede that Trump was minded to replace Yellen when she completes her first term in 2018.
He’s saying he’d want someone whose thinking is more in keeping with his own.He’s saying he’d want someone whose thinking is more in keeping with his own.
Trump was openly critical of Yellen in one of the presidential debates in September, saying that interest rates had been kept too low and that asset bubbles created by loose monetary settings would eventually burst.Trump was openly critical of Yellen in one of the presidential debates in September, saying that interest rates had been kept too low and that asset bubbles created by loose monetary settings would eventually burst.
4.29am GMT4.29am GMT
04:2904:29
Risk to global growth has increased – JP MorganRisk to global growth has increased – JP Morgan
JP Morgan’s team in Australia have been looking at what Trump’s win could mean for the global economy – and Australia’s.JP Morgan’s team in Australia have been looking at what Trump’s win could mean for the global economy – and Australia’s.
They say that a US fiscal stimulus would have limited benefits for the rest of the world while trade barriers could mean trouble for trading partners.They say that a US fiscal stimulus would have limited benefits for the rest of the world while trade barriers could mean trouble for trading partners.
A US policy-induced trade shock will be negative for global growth. This leaves risks to global growth more asymmetric than was previously the case. Second, the distribution of risks to Chinese growth have shifted to the downside, given the increased probability of rising tensions in US-China trade relations and weaker Chinese export growth.A US policy-induced trade shock will be negative for global growth. This leaves risks to global growth more asymmetric than was previously the case. Second, the distribution of risks to Chinese growth have shifted to the downside, given the increased probability of rising tensions in US-China trade relations and weaker Chinese export growth.
A trade shock could in turn damage the US.A trade shock could in turn damage the US.
A marked slowing in US growth might not be an issue, except that growth in the rest of the global economy doesn’t look robust enough – particularly given limited scope for additional policy support – to provide much of a buffer. And even in the event that US growth slows on a trade shock, this will likely be more inflationary (via higher import prices) than would have otherwise been the case, meaning that the growth and inflation trade-off in the US becomes less favourable.A marked slowing in US growth might not be an issue, except that growth in the rest of the global economy doesn’t look robust enough – particularly given limited scope for additional policy support – to provide much of a buffer. And even in the event that US growth slows on a trade shock, this will likely be more inflationary (via higher import prices) than would have otherwise been the case, meaning that the growth and inflation trade-off in the US becomes less favourable.
And that means that interest rate cuts are back on the horizon in Australia.And that means that interest rate cuts are back on the horizon in Australia.
For the RBA, we think this underscores the risk that rates are likely to go lower in Australia. All else equal, domestic growth needs to be stronger to provide an offset to external shocks, should they occur.For the RBA, we think this underscores the risk that rates are likely to go lower in Australia. All else equal, domestic growth needs to be stronger to provide an offset to external shocks, should they occur.
4.02am GMT4.02am GMT
04:0204:02
US billionaire Carl Icahn apparently cashed in on the stock market panic over Trump’s election victory.US billionaire Carl Icahn apparently cashed in on the stock market panic over Trump’s election victory.
The longtime Trump supporter told CNN Money that he left the Republican’s victory party in Manhattan in the early hours of Wednesday to go home and buy “a lot of stock” in the plunging overnight market.The longtime Trump supporter told CNN Money that he left the Republican’s victory party in Manhattan in the early hours of Wednesday to go home and buy “a lot of stock” in the plunging overnight market.
I’m glad I did that. I guess that’s what makes me happy today too ... I personally don’t believe that Trump is bad for the market necessarily.I’m glad I did that. I guess that’s what makes me happy today too ... I personally don’t believe that Trump is bad for the market necessarily.
3.21am GMT3.21am GMT
03:2103:21
SUMMARYSUMMARY
OK, the stock markets have proceeded magisterially today despite a background of major tectonic shifts in the financial landscape.OK, the stock markets have proceeded magisterially today despite a background of major tectonic shifts in the financial landscape.
Here are the main points:Here are the main points:
3.08am GMT3.08am GMT
03:0803:08
More on the implications for Asia’s big emerging economies – and Australia.More on the implications for Asia’s big emerging economies – and Australia.
Saul Eslake, the independent economist, has warned about the implications for Asutralia if Trump were to start a trade war with China and undermine the Fed, pushing the US dollar down.Saul Eslake, the independent economist, has warned about the implications for Asutralia if Trump were to start a trade war with China and undermine the Fed, pushing the US dollar down.
[This would create] a great deal of uncertainty in our part of the world, about the geopolitical environment by making a less wholesome commitment to longstanding US alliances with countries like South Korea and Japan ... Those things, particulary a trade war with China, would be highly negative for Australia.[This would create] a great deal of uncertainty in our part of the world, about the geopolitical environment by making a less wholesome commitment to longstanding US alliances with countries like South Korea and Japan ... Those things, particulary a trade war with China, would be highly negative for Australia.
Saul Eslake: the Australian economy will be negatively impacted if @realDonaldTrump starts a trade war with China https://t.co/gvPVUtJ8pMSaul Eslake: the Australian economy will be negatively impacted if @realDonaldTrump starts a trade war with China https://t.co/gvPVUtJ8pM
2.55am GMT2.55am GMT
02:5502:55
Like every measure in the last 24 hours, the US dollar has been topsy-turvy. The chance of a Fed rate cut dropped to 30% on Wednesday but is now more than 80%, according to IG.Like every measure in the last 24 hours, the US dollar has been topsy-turvy. The chance of a Fed rate cut dropped to 30% on Wednesday but is now more than 80%, according to IG.
#Fed to proceed with December U.S. rate rise despite #Trump upset: @ReutersPolls https://t.co/Jt0UCpNHT5#Fed to proceed with December U.S. rate rise despite #Trump upset: @ReutersPolls https://t.co/Jt0UCpNHT5
The dollar index against major currencies recovered from 95.885 on Wednesday to around 98.448 on Thursday.The dollar index against major currencies recovered from 95.885 on Wednesday to around 98.448 on Thursday.
But the longer-term outlook is uncertain as Trump pushes his protectionist agenda (see below). Tim Condon, an Singapore-based economist at ING, told Reuters:But the longer-term outlook is uncertain as Trump pushes his protectionist agenda (see below). Tim Condon, an Singapore-based economist at ING, told Reuters:
We expect a Trump Treasury to elevate the importance of the bilateral trade surplus with the US in identifying currency manipulators and intensify pressure on trade partners to allow currencies to appreciate.We expect a Trump Treasury to elevate the importance of the bilateral trade surplus with the US in identifying currency manipulators and intensify pressure on trade partners to allow currencies to appreciate.
2.39am GMT2.39am GMT
02:3902:39
Yuan fixed at lowest point since 2010Yuan fixed at lowest point since 2010
The yuan has been fixed today at 6.7885 – its lowest point since September 2010.The yuan has been fixed today at 6.7885 – its lowest point since September 2010.
Bearing in mind that Trump labelled China a “currency manipulator” on his way to winning the presidency, the issue could prove to be a flashpoint between the two countries.Bearing in mind that Trump labelled China a “currency manipulator” on his way to winning the presidency, the issue could prove to be a flashpoint between the two countries.
China has pushed the value of its currency steadily downwards in the past year – very clumsily to begin with, sparking last year’s mini-stock market crash – as it tries to export its way out of slowing economic growth.China has pushed the value of its currency steadily downwards in the past year – very clumsily to begin with, sparking last year’s mini-stock market crash – as it tries to export its way out of slowing economic growth.
Chart: Renminbi (USD/CNY) 1-month forward rate - pic.twitter.com/uFsDKHRJmuChart: Renminbi (USD/CNY) 1-month forward rate - pic.twitter.com/uFsDKHRJmu
But everyone else has got the same idea (including Abe of course). The US dollar is holding its gains on Thursday and was sitting at 105.32 yen, up from below 102 on Wednesday. But for Trump’s manufacturing recovery to work you expect that he will want it come down.But everyone else has got the same idea (including Abe of course). The US dollar is holding its gains on Thursday and was sitting at 105.32 yen, up from below 102 on Wednesday. But for Trump’s manufacturing recovery to work you expect that he will want it come down.
2.14am GMT2.14am GMT
02:1402:14
Shinzo Abe 'to meet Trump on 17 November' – official saysShinzo Abe 'to meet Trump on 17 November' – official says
The Japanese prime minister Shinzo Abe is planning to meet the US president-elect in New York on 17 November, a Japanese government official has said.The Japanese prime minister Shinzo Abe is planning to meet the US president-elect in New York on 17 November, a Japanese government official has said.
Reuters reports that the pair had “talked by telephone and confirmed close cooperation between their two nations”.Reuters reports that the pair had “talked by telephone and confirmed close cooperation between their two nations”.
It might be interesting to hear what they have to say to each other about trade and the economy. Like China, Japan has a lot to be worried about. Trump is an avowed opponent of the Trans Pacific Partnership trade deal which would be a huge blow for Abe’s plans to boost his country’s huge manufacturing sector.It might be interesting to hear what they have to say to each other about trade and the economy. Like China, Japan has a lot to be worried about. Trump is an avowed opponent of the Trans Pacific Partnership trade deal which would be a huge blow for Abe’s plans to boost his country’s huge manufacturing sector.