Aussie Falls to Six-Week Low on China Caution, Sagging Sentiment

Australia’s dollar fell to a six-week low as traders weighed prospects for growth in China, the South Pacific nation’s biggest trading partner, before a four-day Communist Party summit ends today.

The currency extended an intraday decline after a report from National Australia Bank Ltd. showed business confidence fell. The Aussie weakened for a third day yesterday after Chinese loan growth slowed more than forecast last month. Australia’s 10-year government bond yields climbed to the highest in more than 1 1/2 years.

Australia’s dollar lost 0.1 percent to 93.50 U.S. cents as of 12:10 p.m. in Sydney after touching 93.37, the weakest since Oct. 2. It had weakened 1.8 percent in the three days through yesterday. New Zealand’s currency was little changed at 82.54 U.S. cents.

Benchmark 10-year bond yields in Australia rose three basis points, or 0.03 percentage point, to 4.26 percent. It earlier touched 4.29 percent, the highest since March 2012.

A sentiment gauge among Australian businesses fell to 5 in October from 12 the prior month, NAB said today. It separately pushed back its forecast for a Reserve Bank of Australia rate cut to May from February, citing a slower increase in unemployment.

Chinese President Xi Jinping and hundreds of top Communist leaders are gathered in Beijing to map out an economic blueprint to sustain growth and drive the urbanization of hundreds of millions of rural residents. A communique will be released after the meeting ends outlining the road map.

New yuan loans grew by 506.1 billion yuan ($83.1 billion) in October, down from a 787 billion yuan increase in the previous month. Analysts forecast a 580 billion yuan gain.

(Source: Bloomberg)

China’s Economic Recovery Gives Boost to Xi Amid Reform Summit

China’s economy entered the final quarter of 2013 with an acceleration in manufacturing and exports, momentum that offered confidence to Communist leaders gathering to determine policy shifts for the coming decade.

Industrial output rose a more-than-estimated 10.3 percent from a year earlier in October and manufacturing investment strengthened, according to data released Nov 9. by the National Bureau of Statistics. Customs data the previous day showed overseas sales rebounded by more forecast.

Failure to implement reforms on issues ranging from interest rates to local government debt and land ownership risks impeding the party’s goals of boosting incomes and spurring hundreds of millions of rural residents to move to the cities. President Xi Jinping and top Communist leaders tomorrow conclude a four-day gathering to map out an economic blueprint for changes that the State Council’s research institute says should include curbing the government’s role in the economy, adjusting the fiscal system and spurring foreign investment.

Standard Chartered last month raised its estimate for China’s 2013 economic growth to 7.6 percent from 7.5 percent and revised next year’s forecast to 7.4 percent from 7.2 percent. The new projections match the median estimates in Bloomberg News surveys in October.

(Source: Bloomberg)

Most Asian Stocks Fall on U.S. Stimulus Bets After GDP

Most Asian stocks fell, with the regional benchmark index heading for the longest streak of weekly losses in five months, after faster U.S. economic growth fueled concern the Federal Reserve may reduce stimulus sooner than expected.

Fortescue Metals Group Ltd. (FMG) sank 4.7 percent after Teck Resources Ltd. sold a stake worth about A$500 million ($473 million) in Australia’s third-biggest iron-ore exporter. Honda Motor Co. declined 0.8 percent after the yen yesterday surged against the dollar, curbing the outlook for Japanese exporters. Samsung Electronics Co. preferred shares declined 4.2 percent in Seoul after Citigroup Inc. managed the sale of a $350 million stake in the electronics firm.

The MSCI Asia Pacific Index dropped 0.2 percent to 139.95 as of 9:41 a.m. in Hong Kong, extending this week’s retreat to 0.9 percent, its third straight weekly loss. More than three shares declined for every one that rose. The gauge gained 8.4 percent this year through yesterday amid unprecedented stimulus from the Bank of Japan and optimism the Fed will continue its bond buying into 2014.

(Source: Bloomberg)