Daily Mirror (Sri Lanka)

Asian traders cau­tious on stim­u­lus un­cer­tainty af­ter Trump U-turn

- U.S. News · US Politics · Politics · Donald Trump · Hong Kong · Democratic Party (United States) · Nancy Pelosi · Steven Mnuchin · White House · Republican Party (United States) · Tokyo · Singapore · Manila · Jakarta · Bangkok · Wellington, New Zealand · Mumbai · Shanghai · Beijing · London · Paris · Frankfurt · Joe Biden · National Australia Bank · Australia · Madrid · France · United Kingdom · Germany · Robert Koch Institute · Trump University · Oanda Corporation · Pacific Investment Management Co. · Golden

HONG KONG (AFP) - Asian mar­kets drifted yes­ter­day on un­cer­tainty about the chances of a fresh US stim­u­lus pack­age as talks for a broader agree­ment ap­peared to be back on.

The flip comes just days af­ter Don­ald Trump shut ne­go­ti­a­tions down and as ris­ing virus in­fec­tions con­tinue to sap con­fi­dence.

Global mar­kets were jolted af­ter the pres­i­dent on Tues­day t old his team to stop dis­cus­sions with Democrats so that law­mak­ers could con­cen­trate on pass­ing his Supreme Court nom­i­na­tion.

How­ever, he then tweeted that he wanted the two sides to pass leg­is­la­tion giv­ing US$ 1,200 hand­outs to strug­gling Amer­i­cans and sup­port­ing small busi­nesses and air­lines, pro­vid­ing a bounce for eq­ui­ties.

House Speaker Nancy Pelosi re­jected the call for piece­meal mea­sures and in­sisted a broad deal was needed, though ac­knowl­edged Thurs­day that dis­cus­sions were on­go­ing with Trea­sury Sec­re­tary Steven Mnuchin.

“We’ve told the White House we’re at the ta­ble, we want to con­tinue the con­ver­sa­tion,” she said, adding that “we’ve made some progress”.

Mean­while, on the same day, Trump told Fox Business Net­work: “Well, I shut down talks two days ago be­cause they weren’t work­ing out. Now they are start­ing to work out, we’re start­ing to have some very pro­duc­tive talks.”

Axios re­ported that the about-turn came af­ter the pres­i­dent be­came con­cerned about the neg­a­tive mar­ket re­ac­tion to the talks be­ing called off. “The Democrats ap­pear to have called Pres­i­dent Trump’s bluff on his stan­dard ne­go­ti­at­ing tac­tic of abruptly end­ing talks to gain con­ces­sions from the other side,” said OANDA’S Jeffrey Hal­ley.

“The House Democrats, while open to some di­rect bailouts of the air­lines, have held their ground and tied more stim­u­lus di­rectly to a larger pack­age, rather than a cher­ryp­ick­ing vote-win­ning ap­proach favoured by the pres­i­dent.”

But ob­servers said with Democrats and Repub­li­cans about US$ 600 bil­lion apart in the pro­pos­als, there was lit­tle ex­pec­ta­tion a deal will be reached be­fore the Novem­ber 3 polls.

“We are pretty scep­ti­cal that you’ll see any­thing be­fore the elec­tion,” Libby Cantrill, at Pa­cific In­vest­ment Man­age­ment, told Bloomberg TV. “We prob­a­bly won’t see any ad­di­tional sup­port for the econ­omy un­til Jan­uary 2021 maybe at the ear­li­est.”

Wall Street pro­vided an­other pos­i­tive lead but Asian mar­kets strug­gled to main­tain any mo­men­tum.

Tokyo, Hong Kong, Sin­ga­pore, Manila, Jakarta and Bangkok were slightly lower, while Syd­ney was barely moved. Welling­ton and Mum­bai were slightly higher.

Shang­hai jumped more than one per­cent, though, as traders in main­land China re­turned from their Golden Week hol­i­day.

London, Paris and Frank­furt all rose in early trade. Still, in­vestors are grow­ing in­creas­ingly con­fi­dent that Joe Bi­den will win the White House, with polls giv­ing him big enough leads in bat­tle­ground states that could pre­vent Trump from chal­leng­ing the re­sult - a sit­u­a­tion that would fan un­cer­tainty.

And with Democrats pos­si­bly win­ning both houses of Congress, bets are be­ing put on a much big­ger stim­u­lus than the one be­ing dis­cussed presently.

“In­vestors are rev­el­ling on the blue wave rally bus where the first or­der of the day... will be to open up the stim­u­lus taps, and stocks are ral­ly­ing in kind,” said Axi’s Stephen Innes, re­fer­ring to the Demo­cratic party’s colours.

Na­tional Aus­tralia Bank’s Ro­drigo Ca­tril added that the grow­ing prob­a­bil­ity of a Bi­den win is set­tling mar­kets, who “don’t like un­cer­tainty”.

“It seems in­vestors are em­brac­ing the prospect of a huge Bi­den fis­cal spend­ing plan with con­cerns over higher taxes and reg­u­la­tion likely to be a 2021 story,” he said. While US stim­u­lus and the elec­tion are ma­jor driv­ers of mar­kets, a surge in new virus in­fec­tions in Europe is caus­ing much angst, with sev­eral coun­tries reim­pos­ing fresh con­tain­ment mea­sures and con­sid­er­ing lo­calised lock­downs.

Madrid’s top court struck down plans for new re­stric­tions on mil­lions in the Span­ish cap­i­tal, France put four more cities on its high­est alert and Bri­tain is look­ing at clos­ing pubs and restau­rants in parts of the coun­try.

And in Ger­many, which had been praised for lim­it­ing in­fec­tions, Lothar Wieler, the head of the coun­try’s Robert Koch In­sti­tute for dis­ease con­trol warned: “It’s pos­si­ble that the virus will spread un­con­trol­lably.”

 ??  ??

Newspapers in English

Newspapers from Sri Lanka