Markets & Finance News

President Tayyip Erdogan's belief that a shock interest rate cut will stoke up Turkey's economy ahead of elections is instead likely to backfire as hot inflation and a lira selloff stall growth.

Most emerging currencies in Asia lacked direction on Monday as worries grew over property developer China Evergrande's debt crisis, while shares in Singapore and Indonesia outperformed regional peers. News that China Evergrande shares were suspended on Monday after the company missed a key interest payment on an offshore bond for the second time last week kept a lid on Asian currency gains. Chinese media reported that Evergrande, which has $305 billion in liabilities, will sell a half-stake in its property management unit to Hopson Development for more than $5 billion. The Indonesian rupiah and Malaysian ringgit advanced the most in the region, gaining around 0.3% each, while other currencies were little changed on the day. Singapore stocks rose more than 1%, buoyed by Singapore Technologies Engineering after it agreed over the weekend to buy Roper Technologies Inc's TransCore business for $2.68 billion. Indonesia's stock market climbed 1.7% to hit its highest since March. Chinese markets are closed until Thursday for a holiday, while South Korean markets were also shut. Also weighing on markets are expectations that elevated inflation could prompt the U.S. Federal Reserve to bring forward its tapering timeline, which would sap appetite for riskier emerging market assets. U.S. labour data this Friday will have investors glued for signs of a strong improvement in the job market, enough to keep the Fed on course to begin tapering before the year's end or sooner. Data on Friday showed that the personal consumption expenditures (PCE) index, the Fed's preferred inflation measure for its flexible 2% target, increased 3.6% in August from a year earlier, matching July's gain. "The market has priced in the start of taper, but probably not the full impact of it depending on the pace," analysts at OCBC said. Rising commodity prices and supply disruptions have also fuelled expectations global inflation could stay higher for longer. "If skyrocketing commodity prices aren't tamed during this winter season and supply bottlenecks remain unresolved, that might force policymakers into a more hawkish stance in order to get ahead of inflation," said Han Tan, chief market analyst at Exinity. Markets also have a speech by U.S. Trade Representative Katherine Tai later on Monday on the Biden administration's long-awaited China trade strategy to look forward to. HIGHLIGHTS: ** Indonesian 10-year benchmark yields down 2.4 basis points at 6.335%​​ ** Top gainers in Singapore include Genting Singapore Ltd, Capitaland Investment Ltd and CapitaLand Integrated Commercial Trust Asia stock indexes and currencies at 0654 GMT COUNTRY FX FX FX INDEX STOCKS STOCKS RIC DAILY % YTD % DAILY % YTD % Japan +0.02 -7.02 -1.13 3.65 China - +1.25 - 2.74 India -0.13 -1.55 0.95 26.59 Indonesia +0.28 -1.58 1.64 5.89 Malaysia +0.24 -3.55 -0.18 -6.49 Philippines +0.02 -5.34 0.54 -2.50 S.Korea - -8.62 - 5.07 Singapore -0.04 -2.65 1.16 8.53 Taiwan +0.08 +2.23 -0.98 11.37 Thailand -0.30 -11.15 0.90 11.74 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Ana Nicolaci da Costa and Ramakrishnan M.)

The dollar edged higher on Monday after two consecutive sessions of losses as hedge funds ramped up their holdings as widening concerns about the Chinese property sector and resilient U.S. Treasury yields boosted the appeal of the greenback.

Japanese shares shed early gains to end lower on Monday, as worries over the China Evergrande debt crisis outweighed positive cues from a strong finish on Wall Street, while the nation's new premier called for a sooner-than-expected election.

Key U.S. jobs numbers on Friday and an OPEC+ meeting on Monday to review oil output as crude prices top $80 dollars a barrel are top of the agenda for markets as 2021 heads into the homestretch following a bumpy Q3 ride.

The safe-haven dollar found support just below last week's peaks on Monday as renewed concerns about China's property sector and looming U.S. labour data put investors in a cautious mood. The greenback scaled a 14-month high on the euro and a 19-month top on the yen last week as markets reckoned U.S. interest rates could rise ahead of global peers. The euro dipped back below $1.16 and at $1.1598 is not far from last week's trough at $1.1563. The yen was little changed at 111.065 per dollar. The offshore yuan fell about 0.3%. Shares in embattled developer China Evergrande were halted in Hong Kong, rekindling market nerves about the possibility of contagion. Evergrande said it requested a trading halt pending an announcement about a major transaction, while unit Evergrande Property Services Group said the announcement constitutes "a possible general offer for shares of the company." Investors are concerned that a collapse at Evergrande could hurt an already fragile Chinese economy and drag on global growth. The U.S. dollar index edged up 0.08% to 94.029. "(There's) a bit of nervousness," said Moh Siong Sim, currency analyst at the Bank of Singapore, even if most traders still think Evergrande's systemic risk can be contained. "It's part of the wall of worry," he said, which the market could eventually "climb" if the COVID backdrop improves, growth stabilises and inflation concerns subside, but which for now is keeping investor sentiment fairly dour. Besides Evergrande, a Friday CNBC report which said U.S. Trade Representative Katherine Tai will announce on Monday that China is not complying with U.S.-China trade rules also provided support to the dollar, especially against the yuan. Chinese markets were closed for a holiday. In the week ahead, the Reserve Bank of Australia meets on Tuesday and is expected to keep policy steady. Across the Tasman, a 25 basis point hike from the Reserve Bank of New Zealand on Wednesday is priced in. The Australian dollar was about flat at $0.72685 and the New Zealand dollar was little changed at $0.6941. On Friday, U.S. labour data is expected to show continued improvement in the job market, with a forecast for 460,000 jobs to have been added in September - enough to keep the Federal Reserve on course to begin tapering before year's end. "The question is whether there is a number that alters the Fed's view on tapering its bond purchases in November, and what a really weak or hot number means amid the backdrop of rising stagflation fears," said Pepperstone's head of research, Chris Weston. "If U.S. Treasuries find further buyers this week into Friday's U.S. non-farm payrolls, the dollar may go on sale this week." Elsewhere economists polled by Reuters expect the cash rate on hold in Australia until at least 2024, as the RBA has been insisting it will be. Swaps markets show a 97% probability of a rate hike in New Zealand on Wednesday and a 96% chance of another one in November. Sterling, meanwhile, despite Friday gains, is still nursing losses from a sharp drawdown last week when traders shrugged off hawkish central bank rhetoric to focus on a sour outlook and the risk of both higher rates and inflation. The pound was about flat from last week at $1.3540. "Investors are judging the UK by its whole suite of fundamentals factors and movements in sterling suggest that many are not liking what they are seeing," said Rabobank strategist Jane Foley, as the currency erases early 2021 gains. "The UK no longer has an advantage on the vaccine front...and, while PM (Boris) Johnson likes to view Brexit as 'done', many businesses and commentators are only just starting to evaluate its impact." ======================================================== Currency bid prices at 0559 GMT Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar $1.1598 $1.1594 +0.03% -5.07% +1.1614 +1.1588 Dollar/Yen 111.0600 111.0300 +0.00% +7.50% +111.1100 +110.9300 Euro/Yen <EURJPY=EB 128.80 128.75 +0.04% +1.48% +128.8600 +128.6800 S> Dollar/Swiss 0.9305 0.9307 +0.01% +5.21% +0.9311 +0.9293 Sterling/Dollar 1.3539 1.3543 -0.02% -0.89% +1.3577 +1.3534 Dollar/Canadian 1.2627 1.2643 -0.14% -0.86% +1.2654 +1.2614 Aussie/Dollar 0.7269 0.7268 -0.01% -5.53% +0.7283 +0.7250 NZ 0.6941 0.6943 -0.04% -3.36% +0.6952 +0.6927 Dollar/Dollar All spots Tokyo spots Europe spots Volatilities Tokyo Forex market info from BOJ (Reporting by Tom Westbrook. Additional reporting by Kevin Buckland. Editing by Shri Navaratnam)

Asian shares dipped on Monday as concerns about China's property sector and inflation worries offset upbeat U.S. data and positive news on new drugs to fight the coronavirus.

Asia's emerging currencies traded in tight ranges on Monday as investors worried about China's property sector and the timing of Federal Reserve tapering, while shares in Singapore and Indonesia outperformed. Shares in Singapore gained more than 1%, buoyed by gains in Singapore Technologies Engineering after it agreed to buy Roper Technologies Inc's TransCore business for $2.68 billion. Indonesia's stock market climbed 1.6% to hit its highest since March. News that China Evergrande shares were suspended on Monday after the embattled developer missed a key interest payment on an offshore bond for the second time last week kept a lid on Asian currency gains. The Indonesian rupiah and Malaysian ringgit advanced 0.2% each against the dollar, while the region's other currencies were little changed on the day. Chinese markets are closed until Thursday for a holiday, while South Korean markets were also shut. Expectations that elevated inflation could prompt the Federal Reserve to bring forward its tapering timeline also weighed on emerging market currencies. Data on Friday showed core U.S. PCE price index, the Federal Reserve's preferred inflation measure for its flexible 2% target, increased 3.6% in August from a year earlier, its biggest rise in three decades. Rising commodity prices and ongoing supply disruptions have also fuelled expectations global inflation could stay higher for longer. "The market has priced in the start of taper, but probably not the full impact of it depending on the pace," analysts at OCBC said. Investors will next focus on the release of U.S. labour data this Friday. Before then, markets will eye a speech by U.S. Trade Representative Katherine Tai later on the Biden administration's long-awaited China trade strategy. HIGHLIGHTS: ** Indonesian 10-year benchmark yields down 2.4 basis points at 6.335%​​ ** Top gainers in Singapore include Genting Singapore Ltd, Capitaland Investment Ltd and CapitaLand Integrated Commercial Trust ** Hopson Development to buy Evergrande unit -Global Times, citing media reports Asia stock indexes and currencies at 0345 GMT COUNTRY FX FX FX INDEX STOCKS STOCKS RIC DAILY % YTD % DAILY % YTD % Japan -0.02 -7.05 -0.95 3.84 China - +1.25 - 2.74 India +0.00 -1.42 0.00 25.39 Indonesia +0.21 -1.65 1.36 5.60 Malaysia +0.19 -3.60 0.01 -6.30 Philippines -0.04 -5.40 0.31 -2.72 S.Korea - -8.62 - 5.07 Singapore -0.05 -2.66 1.30 8.68 Taiwan +0.08 +2.24 -0.85 11.53 Thailand -0.15 -11.02 0.76 11.60 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Ana Nicolaci da Costa)

Asia's emerging currencies traded in tight ranges on Monday as investors worried about China's property sector and the timing of Federal Reserve tapering, while shares in Singapore and Indonesia outperformed. Shares in Singapore gained more than 1%, buoyed by gains in Singapore Technologies Engineering after it agreed to buy Roper Technologies Inc's TransCore business for $2.68 billion. Indonesia's stock market climbed 1.6% to hit its highest since March. News that China Evergrande shares were suspended on Monday after the embattled developer missed a key interest payment on an offshore bond for the second time last week kept a lid on Asian currency gains. The Indonesian rupiah and Malaysian ringgit advanced 0.2% each against the dollar, while the region's other currencies were little changed on the day. Chinese markets are closed until Thursday for a holiday, while South Korean markets were also shut. Expectations that elevated inflation could prompt the Federal Reserve to bring forward its tapering timeline also weighed on emerging market currencies. Data on Friday showed core U.S. PCE price index, the Federal Reserve's preferred inflation measure for its flexible 2% target, increased 3.6% in August from a year earlier, its biggest rise in three decades. Rising commodity prices and ongoing supply disruptions have also fuelled expectations global inflation could stay higher for longer. "The market has priced in the start of taper, but probably not the full impact of it depending on the pace," analysts at OCBC said. Investors will next focus on the release of U.S. labour data this Friday. Before then, markets will eye a speech by U.S. Trade Representative Katherine Tai later on the Biden administration's long-awaited China trade strategy. HIGHLIGHTS: ** Indonesian 10-year benchmark yields down 2.4 basis points at 6.335%​​ ** Top gainers in Singapore include Genting Singapore Ltd, Capitaland Investment Ltd and CapitaLand Integrated Commercial Trust ** Hopson Development to buy Evergrande unit -Global Times, citing media reports Asia stock indexes and currencies at 0345 GMT COUNTRY FX FX FX INDEX STOCKS STOCKS RIC DAILY % YTD % DAILY % YTD % Japan -0.02 -7.05 -0.95 3.84 China - +1.25 - 2.74 India +0.00 -1.42 0.00 25.39 Indonesia +0.21 -1.65 1.36 5.60 Malaysia +0.19 -3.60 0.01 -6.30 Philippines -0.04 -5.40 0.31 -2.72 S.Korea - -8.62 - 5.07 Singapore -0.05 -2.66 1.30 8.68 Taiwan +0.08 +2.24 -0.85 11.53 Thailand -0.15 -11.02 0.76 11.60 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Ana Nicolaci da Costa)

Japanese shares reversed early gains on Monday as caution ahead of the formation of a new government and lingering worries over the China Evergrande debt crisis outweighed positive sentiment stemming from a strong Wall Street finish last week.