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Asian stocks under pressure, dollar in demand amid resurgent virus fears By Reuters

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© Reuters. FILE PHOTO: A TV reporter stands in front of a large screen showing stock prices at the Tokyo Stock Exchange after market opens in Tokyo

By Suzanne Barlyn

(Reuters) – Asian stocks came under pressure on Friday as investors sought safe havens, such as the U.S. dollar, fearing that a resurgence in coronavirus cases and a lack of additional U.S. fiscal stimulus would hobble the world economy.

U.S. President Donald Trump’s offer on Thursday to raise the size of a fiscal stimulus package to win the support of Republicans and Democrats helped narrow Wall Street losses, though many investors still believe a deal is unlikely before the Nov. 3 election.

“There’s a bit of worry there and also at what we’re seeing in America and in Europe regarding the virus and how it seems to be taking hold pretty significantly again,” said Grant Williamson, investment adviser at Hamilton Hindin Greene in Christchurch, New Zealand.

Stocks struggled to make gains in early Asian trade with Australia’s S&P/ASX 200 () down 0.02% and {{178|Japan’s Ni () adding just 0.06%. Hong Kong’s Hang Seng index futures () () rose 0.36%. E-mini futures for the S&P 500 rose 0.04%.

Australia and New Zealand investors were likely to “take a breather” on Friday, especially after New Zealand equities climbed 6% during October, Williamson said.

On Wall Street, the Dow Jones Industrial Average () fell 0.07%, the S&P 500 () 0.15% and the Nasdaq Composite () dropped 0.47%.

An unexpected rise in U.S. weekly jobless claims figures added to worries about a sputtering world economy, especially in the face of a spike in COVID-19 cases in Europe.

Safe-haven demand due to signs of a stalling U.S. economy drove the () 0.398% higher after touching a two-week high of 93.91, while the Japanese yen strengthened 0.08% versus the greenback at 105.38 per dollar.

MSCI’s broadest index of Asia-Pacific shares outside Japan () closed 0.04% lower.

The euro () was down 0.01% to $1.1705, while a firmer U.S. dollar dragged on sterling , which was last trading at $1.2902, down 0.09% on the day.

was little changed at $1,908.07 an ounce.

Focus in Asia swings to Canada-China relations after Canada ordered a national security review of Shandong Gold Mining Co Ltd’s (SS:) (HK:) bid to acquire a gold mine in the Canadian Arctic. It is the latest sign of pushback faced by China’s state miners.

In Europe, London will enter a tighter COVID-19 lockdown from midnight on Friday as Prime Minister Boris Johnson seeks to tackle a swiftly accelerating second coronavirus wave.

“The market’s on again off again love affair with an impending stimulus torrent masks the fact that investor uncertainty is bristling ahead of an expected choppy period in terms of headline risk, including Brexit, the U.S. election, and perhaps the most horrifying troubles of all, the second wave of the coronavirus that could trigger more intense lockdown worries,” said Stephen Innes, global chief market strategist at AxiCorp.

Brexit talks continued as The European Union put the onus on Britain on Thursday to compromise on their new economic partnership or stand ready for trade disruptions in less than 80 days.

Britain’s Brexit negotiator, David Frost, said on Twitter he was “disappointed.”

The Australian dollar fell 0.06% versus the greenback at $0.709.

Oil prices were weighed by concerns about the coronavirus and its impact on the world economy. Brent crude futures () dropped 16 cents to settle at $43.16 a barrel, while U.S. West Texas Intermediate crude futures () slipped 8 cents to settle at $40.96 a barrel.

Traders’ preference for safety helped government bonds. The yield on U.S. Treasuries Benchmark 10-year notes () was last 0.7306% from 0.734%.





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German factories hum, services shrink in two-speed economy: PMI By Reuters

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© Reuters. FILE PHOTO: General view shows restaurant of hotel castle Elmau in Kruen

BERLIN (Reuters) – German private sector activity grew for the fourth month running in October, a survey showed on Friday, but while the manufacturing sector expanded at a faster rate, services activity shrank, suggesting Europe’s largest economy is operating at two speeds.

Markit’s flash composite Purchasing Managers’ Index (PMI), which tracks the manufacturing and services sectors that together account for more than two-thirds of the economy, slipped to 54.5 in October from 54.7 the previous month.

The reading surpassed the consensus forecast of analysts polled by Reuters, who expected a decline to 53.2, and was well above the 50 mark that separates growth from contraction.

Manufacturing proved robust, with the flash PMI rising to 58.0, its highest level since April 2018. The service sector contracted, however, with the flash PMI dipping to 48.9.

Markit economist Phil Smith said the survey data pointed to resilience in the economy in the face of a second wave of coronavirus cases, with the decline in service sector activity quite limited so far while manufacturing remained solid.

“It’s increasingly looking like a two-speed economy,” he said. “Manufacturing businesses have been able to continue operating with less disruption from any new restrictions than many of their service sector counterparts, whilst at the same time reaping the benefits of a resurgence in global goods trade.”

“As more manufacturers get back or close to pre-COVID-19 levels of activity, however, sustaining growth is going to become more challenging,” Smith added.

The German government expects gross domestic product to shrink in 2020 by 5.8% before rebounding by 4.4% next year.

Berlin has since March implemented an array of rescue and stimulus measures, financed with record new borrowing of some 218 billion euros, which it hopes will help consumers and companies get out of the crisis more quickly.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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China to set five-year plan for steering economy through choppy waters By Reuters

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2/2
© Reuters. FILE PHOTO: Containers are seen at the Yangshan Deep-Water Port in Shanghai

2/2

By Kevin Yao

BEIJING (Reuters) – China’s top leaders will chart the country’s economic course for 2021-2025 at a key meeting starting on Monday, seeking to balance growth and reforms to avoid stagnation amid an uncertain global outlook and deepening tensions with the United States.

President Xi Jinping and members of the Central Committee, the largest of the ruling Communist Party’s elite decision-making bodies, will meet on Oct. 26-29 behind closed doors to lay out the 14th five-year plan, a blueprint for economic and social development.

The plan and its execution will be crucial for China to avoid the so-called “middle income” trap, policy insiders say, referring to the struggle of many economies to boost productivity and shift towards higher value-added industries.

“Although the Chinese government has been calling for a transition in the development model for a number of years, we think the next five years will be particularly important, both politically and economically,” Goldman Sachs (NYSE:) economists wrote in a note ahead of the plenum, the fifth meeting of the Central Committee since the 2017 party congress.

Sustaining steady growth will be the priority, even as expectations grow that top leaders could announce fresh reforms to spur domestic demand, innovation and self-reliance under Xi’s new “dual circulation” strategy, policy insiders said.

Investors also will be closely watching to see if China moves to a more flexible economic growth target, after dropping it this year for the first time since 2002 due to the uncertainty caused by the coronavirus crisis. Some analysts say dropping growth targets would reduce the country’s reliance on debt-fueled stimulus and encourage more productive investment.

China, where the COVID-19 outbreak first emerged, has mounted a robust economic rebound after quashing the domestic spread of the virus, but global prospects remain gloomy and the pandemic has added to tensions with the United States.

“China’s potential growth rate will slow further due to the aging population, weakening effects from investment in driving growth and diminishing dividends from globalisation,” said Tang Jianwei, senior economist at Bank of Communications.

“To reverse the slowdown, we need deep-rooted reforms.”

Policy sources have told Reuters that China’s leaders are set to endorse a lower growth target compared with 2016-2020.

Government think tanks and economists have made recommendations for average annual gross domestic product (GDP) growth targets including “around 5%”, 5-5.5% to 5-6%, the sources said.

The plan to be discussed and approved by leaders next week is expected to be unveiled at the annual parliament meeting in early 2021.

“We need to maintain a balance between development, stability, and risk prevention,” said a policy insider. “Macro adjustments will be more difficult and this will present a test for policymakers.”

INWARD SHIFT

Xi’s strategy to guide the next phase of development, which points to an inward economic shift, has fanned calls by government advisers for reforms to unleash domestic growth drivers, including loosening curbs on residency and land rights and boosting household incomes.

Speeding up reform of the household registration “hukou” system would enable migrant workers to enjoy more social welfare benefits, while land reform would enable farmers get a bigger share of the gains from land deals. Both measures would spur urbanisation and consumption.

Expected moves to further free up interest rates and expand the role of capital markets would address distortions in credit allocation that see huge state banks lend to state companies while the private sector is often deprived of credit.

Chinese leaders are also expected to discuss further plans to curb greenhouse gas emissions and ease reliance on imported technology, especially semiconductors, as Washington squeezes Chinese tech giants including Huawei Technologies Co and Semiconductor Manufacturing International Corp (HK:).





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China imposes anti-dumping measures on U.S., South Korea, EU rubber imports By Reuters

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BEIJING (Reuters) – China’s Ministry of Commerce said on Friday that it will impose temporary anti-dumping measures on some rubber imports from the United States, South Korea, and the European Union from Oct. 28.

Beijing will impose anti-dumping deposits on ethylene propylene diene monomer rubber imports from the countries and region, the ministry said in a statement on its website.

The measures follow an investigation launched in June 2019.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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