Updated throughout the day
September 10
So much for yesterday’s soaring optimism. Concerns over China, fueled by producer prices falling for the 42nd month straight, and a surprise drop in Japanese machinery orders, a gauge for capital spending in the country, helped put Asia’s markets in reverse today.
The Shanghai and Shenzhen Composite indices closed down 1.39% and 1,58%, respectively, while the Hang Seng expand its losses in the morning to close down 2.57%. The Nikkei meanwhile – after gaining nearly 8% yesterday on hope Japan would expand its stimulus program – was down 2.7%. The other Asian markets:
- Straits Times: -1.37%
- Seoul Composite: +1.44%
- Jakarta Comp: -0.09%
- KLSE Comp: +0.66%
- Taiwan Weighted: -0.22%
- AS51:-2.29%
Here is what else you need to know:
Yen falls on stimulus speculation. The Japanese yen fell as much as 0.7% against the dollar today following Kozo Yamamoto’s – one of Shinzo Abe’s closest political allies – calls for more stimulus. The world has been jonesing for more stimulus from the land of the rising sun lately, seeing it as practically needed at this point. Financial Times (paywall)
Aussie unemployment falls to 6.2%. Bumps in full-time male and female employment down under helped the Australian unemployment rate drop to 6.2% from 6.3% in August, in line with the Australian Bureau of Statistics’ expectations and probably the only positive news we’ve had all morning. The majority of the increase came from full-time employment for males, which punched in at 10,100 of the 17,000 jobs added last month. Sydney Morning Herald
Chinese core price inflation hits 13-month high. Chinese CPI came in at 2% for August – its fastest rate since July 2014 – versus a 1.6% climb from the month before. It’s still well below the PBOC’s 3% target though, and pork prices – which surged nearly a fifth from the year before – appeared to be the main driver responsible for the increase. Financial Times (paywall)
Bombardier rejects offer for railway unit. Canada’s Bombardier, the makers of Learjets and Global Express planes, rejected an offer from the state-owned Beijing Infrastructure Investment Co to buy 60% to 100% of its prized Bombardier Transport unit, one of the world’s largest suppliers of monorail and high-speed trains. SCMP (paywall)
The Donald shows up in a Mexican soccer ad. He may be trying to rally the U.S. behind him, but Donald Trump’s controversial remarks on immigration are being used to rally something completely different; the Mexican soccer team. The Mexican team is set to play against the U.S. next month in Cali, and a local TV station has been splicing Trump’s remarks to make it look like the U.S. team is in for a world of hurt. CNN
The new iPad Pro is gigantic. Featuring an enormous 12.9 inch screen and an optional keyboard, the new iPad Pro seems to be quite a pivot from the previous models. Wall Street Journal (paywall)
RBNZ cuts rates. The Reserve Bank of New Zealand slashed its official cash rate by 25 basis points to 2.75% today, plunging the kiwi nearly 1.8% against the greenback in the process. The central bank cited a whole host of reasons behind the move, though they did deem a continued depreciation of the kiwi “appropriate” given “the sharpness of the decline in New Zealand’s export commodity prices.” RBNZ
Beijing clamps down on Forex deals. China has tightened its capital controls, in a sharp reversal of its market liberalising rhetoric, as it struggles to contain the fallout from last month’s devaluation of the renminbi. The State Administration of Foreign Exchange (Safe) hass ordered financial institutions to step up checks and strengthen controls on all foreign exchange transactions. Financial Times (paywall)
Brazil loses investment grade status. With political risk rising and economic growth tanking, U.S.-based ratings agency Standard & Poor’s stripped Brazil of its prized investment grade status earlier today as it downgraded the nation’s credit rating from BBB- to BB+ – junk – and maintained a negative outlook for the region’s growth. Financial Times (paywall)
Indonesia’s Widodo outlines stimulus package. The package will include a revision of regulations and a simplification of the process for obtaining permits for infrastructure projects. In a televised speech, President Joko Widodo said fresh stimulus measures are necessary for “conducive macroeconomic conditions” amid uncertainties in the global economy. Nikkei
European Commission President announces plan for 120,000 migrants. Jean-Claude Juncker is proposing a mandatory quota system that would force member countries to take in asylum seekers. BBC
World Bank chief economist warns Fed to delay rate rise. Chief economist Kaushik Basu has warned the US Federal Reserve that it risks triggering “panic and turmoil” in emerging markets if it opts to raise rates at its September meeting and should hold fire until the global economy is on a surer footing. Financial Times (paywall)
China aims for the dark side of the moon. China is planning the first ever landing of a lunar probe on the far side of the Moon. The Chang’e 4 mission is planned for sometime before 2020, Zou Yongliao from the Chinese Academy of Sciences told state broadcaster CCTV. BBC
And you won’t believe this…
Chinese “princess” jailed. A woman who posed as a Qing dynasty princess in order to run a fraud scheme to got 13 and half years in jail. Wang Fengying called herself “Princess Changping” and claimed to be a descendent of the Aisin Gioro Manchu royal family. She and her accomplice swindled more than 2 million yuan ($313,600) in a year. BBC
Photo: Jim Makos