Asian shares track Wall Street higher, yen weak
The S&P 500 and the Nasdaq again closed at record highs as US data including retail sales and jobless claims beat forecasts, indicating a modest improvement in the economy that should give the Federal Reserve time to gauge the inflation impact from higher US tariffs.
Streaming giant Netflix beat Wall Street's lofty expectations for second-quarter earnings in part due to a weaker US dollar. Its share price, however, fell 1.8 per cent in after-hours trading, with analysts saying much of the growth had already been priced in.
On Friday, MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8 per cent to its highest since late 2021, bringing the weekly gain to 1.7 per cent.
Japan's Nikkei, however, slipped 0.2 per cent, and the yen was at 148.54 per dollar, down about 0.7 per cent this week after polls showed Prime Minister Shigeru Ishiba's coalition was in danger of losing its majority in the election on Sunday.
Data on Friday showed Japan's core inflation slowed in June due to temporary cuts in utility bills but stayed beyond the central bank's two per cent target. The rising cost of living, including the soaring price of rice, is among the reasons for Ishiba's declining popularity.
"If PM Ishiba decides to resign on an election loss, USDJPY could easily break above 149.7 as it would usher in an initial period of political turbulence," said Jayati Bharadwaj, head of FX strategy at TD Securities.
"JPY could reverse the recent dramatic weakness if the ruling coalition wins and is able to make swift progress on a trade deal with Trump."
Chinese blue-chips rose 0.3 per cent while Hong Kong's Hang Seng index gained 1.2 per cent.
The Tapei-listed shares of TSMC, the world's main producer of advanced AI chips, rallied 2.2 per cent after posting record quarterly profit on Thursday, though it said future income might be affected by US tariffs.
In the foreign exchange market, the US dollar was on the back foot again on Friday, having bounced 0.3 per cent overnight against major peers on the strong economic data. For the week, it is headed for a second successive gain of 0.6 per cent, bouncing further from a three-and-a-half-year low hit over two weeks ago.
Fed governor Christopher Waller said on Thursday he continues to believe the central bank should cut interest rates at the end of July, though most officials who have spoken publicly have signalled no desire to move.
Fed funds futures imply next to no chance of a move on July 30, while a September rate cut is just about 62 per cent priced in.
Treasury yields were slightly lower in Asia. Benchmark 10-year US Treasury yields slipped 2 basis points to 4.445 per cent, having moved little overnight. Two-year yields also edged two bps lower to 3.8981.
Oil prices were mostly steady on Friday, after gaining $1 overnight following a fourth day of drone strikes on Iraqi Kurdistan oil fields, pointing to continued risk in the region.
US crude inched up 0.2 per cent to $67.66 per barrel and Brent also rose 0.2 per cent to $69.68 a barrel. They, however, lost about one per cent for the week.
Spot gold prices were steady at $3,337 an ounce but were set for a 0.5 per cent weekly loss.
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Sydney Morning Herald
14 minutes ago
- Sydney Morning Herald
The US economy keeps chugging along. Does everyone owe Trump an apology?
It is true that recession fears have subsided, though not entirely. In April, JPMorgan gave the United States a 60 per cent chance of falling into recession this year. By May, after Trump paused most tariffs, the bank had revised that to 40 per cent, where it stands today. But the headline GDP figures are not the full story. And Trump's tariffs – and threats of tariffs – have a lot to do with it. In the first few months of the year, as Trump began announcing border duties and the world awaited his so-called 'Liberation Day' on April 2, America's imports surged, with businesses and consumers rushing to beat the tariffs. Imports negatively affect GDP calculations. As such, GDP contracted by 0.5 per cent. In the most recent quarter, imports fell, and GDP returned to 3 per cent – the same strong growth figures the US posted in the middle of last year, under former president Joe Biden. Contrary to Trump's claims, he did not inherit an economic mess from his predecessor, but one of the fastest-growing developed economies in the world post-COVID-19 pandemic. Federal Reserve chairman Jerome Powell said it was better to focus on the combined growth figures for the first half of the year, to smooth out the volatility, which showed GDP rose at 1.2 per cent – down from an average 2.5 per cent last year. 'The moderation in growth largely reflects a slowdown in consumer spending,' he said on Wednesday. Business investment in equipment and intangibles was broadly up, he said, while activity in the housing sector remained weak. But generally speaking, the economy was solid, though inflation was still 'somewhat elevated'. 'It seems to me, and to almost the whole committee, that the economy is not performing as though restrictive policy is holding it back inappropriately,' Powell said, explaining the bank's decision to leave interest rates on hold at 4.25 to 4.5 per cent – despite Trump's intense pressure to cut. Consumer spending rose 1.4 per cent for the quarter, up from 0.5 per cent, even as Trump's new tariffs are raking in tens of billions of dollars in new tax revenue, and amid significant uncertainty about who is footing the bill and how much more there is to come. 'We're going to look back and either say, 'Wow, the economy was super resilient' … or we're going to say, 'Yeah, you could kind of feel it was weakening'.' Louise Sheiner, Brookings Institution And consumer sentiment, measured by the long-running University of Michigan survey, has bounced back into the 60s from just above 50 points. An update is due this Friday, US time. While tariffs have been in place for months and raised tens of billions of additional dollars for US government coffers, the new tariffs, which go into effect in a week, represent the first time since Trump came to power that there has been the semblance of certainty over what the rates will be – at least for now. Still, the US economy seems to be more robust than the doomsday predictions considered. So, do the world's economists owe Trump an apology? Maurice Obstfeld, of the Peterson Institute for International Economics, says it is too soon to decide. 'These behavioural shifts have made GDP data more volatile than usual,' he says. 'Let's wait for the tariffs to settle down at new, predictable levels and see what happens before we shoot the economists.' Louise Sheiner, an economist at the Brookings Institution, espoused a similar view to The New York Times: 'We're going to look back and either say, 'Wow, the economy was super resilient and these things didn't matter as much as we thought they would', or we're going to say, 'Yeah, you could kind of feel it was weakening'.' Justin Wolfers, an Australian economics professor at the University of Michigan, and a regular critic of Trump's economic agenda, says there is still a decent chance of the US economy heading south later this year. 'When I was asked in the first half of the year for a forecast of the chances of a recession, I was careful to give a conditional forecast: if they go for the 'Full Trump', then 75 per cent, and if they drop their nonsense, then 25 per cent,' he says. Loading 'As it happened, he started with the Full Trump, then TACO'd. So perhaps the correct probability is somewhere between 25 and 75 per cent, and probably something like 40 per cent. That still seems right to me.' The term TACO stands for Trump Always Chickens Out – a popular critique of the president's tendency to make scary announcements, before backtracking or reverting to the norm. 'The idea that a single quarterly reading on a single measure says anything about [the economy being a] miracle or mirage is silly on its face,' Wolfers says. 'The economy isn't as bad as folks forecast, but neither was the actual policy that the White House was telling us we should expect.' In moments of candour, the Trump administration acknowledges American consumers might pay higher prices for some goods, but it is convinced economic growth will compensate. Hassett said as much this week, noting real wages had grown, which 'means people have more money in their pockets than the price increases that they've seen'. Board appointees break ranks Trump is also desperate to stimulate economic growth with lower interest rates, hence his constant badgering of Jerome 'Too Late' Powell to cut the rate. Despite Trump insisting 'there is no inflation' (it is 2.7 per cent), the majority of the bank's board wants to see more data before it makes a move – although the market expects cuts later this year. Loading But for the first time in three decades, two governors dissented from Wednesday's decision. Christopher Waller and Michelle Bowman – both Trump appointees to the board from his first term – voted to cut rates by 0.25 points. Both are considered candidates to replace Powell when his term expires next year. [In his dissenting reasons, published Friday in the US, Waller said tariffs only caused a one-off increase in prices, which the bank should 'look through', while soft growth meant monetary policy should be 'close to neutral'. The 'wait and see' approach was overly cautious, he said. Bowman said inflation had fallen - excluding tariff-related increases - and noted the slower growth in private domestic final purchases, a leading indicator of consumer spending.] Arthur Sinodinos, a former Australian ambassador to the US who now works at the Asia Group, says now that Australia's tariff rate has been confirmed at 10 per cent, its main worries will be what impact the tariff regime has on global economic conditions, as well as the US economy.
The Age
14 minutes ago
- The Age
The US economy keeps chugging along. Does everyone owe Trump an apology?
It is true that recession fears have subsided, though not entirely. In April, JPMorgan gave the United States a 60 per cent chance of falling into recession this year. By May, after Trump paused most tariffs, the bank had revised that to 40 per cent, where it stands today. But the headline GDP figures are not the full story. And Trump's tariffs – and threats of tariffs – have a lot to do with it. In the first few months of the year, as Trump began announcing border duties and the world awaited his so-called 'Liberation Day' on April 2, America's imports surged, with businesses and consumers rushing to beat the tariffs. Imports negatively affect GDP calculations. As such, GDP contracted by 0.5 per cent. In the most recent quarter, imports fell, and GDP returned to 3 per cent – the same strong growth figures the US posted in the middle of last year, under former president Joe Biden. Contrary to Trump's claims, he did not inherit an economic mess from his predecessor, but one of the fastest-growing developed economies in the world post-COVID-19 pandemic. Federal Reserve chairman Jerome Powell said it was better to focus on the combined growth figures for the first half of the year, to smooth out the volatility, which showed GDP rose at 1.2 per cent – down from an average 2.5 per cent last year. 'The moderation in growth largely reflects a slowdown in consumer spending,' he said on Wednesday. Business investment in equipment and intangibles was broadly up, he said, while activity in the housing sector remained weak. But generally speaking, the economy was solid, though inflation was still 'somewhat elevated'. 'It seems to me, and to almost the whole committee, that the economy is not performing as though restrictive policy is holding it back inappropriately,' Powell said, explaining the bank's decision to leave interest rates on hold at 4.25 to 4.5 per cent – despite Trump's intense pressure to cut. Consumer spending rose 1.4 per cent for the quarter, up from 0.5 per cent, even as Trump's new tariffs are raking in tens of billions of dollars in new tax revenue, and amid significant uncertainty about who is footing the bill and how much more there is to come. 'We're going to look back and either say, 'Wow, the economy was super resilient' … or we're going to say, 'Yeah, you could kind of feel it was weakening'.' Louise Sheiner, Brookings Institution And consumer sentiment, measured by the long-running University of Michigan survey, has bounced back into the 60s from just above 50 points. An update is due this Friday, US time. While tariffs have been in place for months and raised tens of billions of additional dollars for US government coffers, the new tariffs, which go into effect in a week, represent the first time since Trump came to power that there has been the semblance of certainty over what the rates will be – at least for now. Still, the US economy seems to be more robust than the doomsday predictions considered. So, do the world's economists owe Trump an apology? Maurice Obstfeld, of the Peterson Institute for International Economics, says it is too soon to decide. 'These behavioural shifts have made GDP data more volatile than usual,' he says. 'Let's wait for the tariffs to settle down at new, predictable levels and see what happens before we shoot the economists.' Louise Sheiner, an economist at the Brookings Institution, espoused a similar view to The New York Times: 'We're going to look back and either say, 'Wow, the economy was super resilient and these things didn't matter as much as we thought they would', or we're going to say, 'Yeah, you could kind of feel it was weakening'.' Justin Wolfers, an Australian economics professor at the University of Michigan, and a regular critic of Trump's economic agenda, says there is still a decent chance of the US economy heading south later this year. 'When I was asked in the first half of the year for a forecast of the chances of a recession, I was careful to give a conditional forecast: if they go for the 'Full Trump', then 75 per cent, and if they drop their nonsense, then 25 per cent,' he says. Loading 'As it happened, he started with the Full Trump, then TACO'd. So perhaps the correct probability is somewhere between 25 and 75 per cent, and probably something like 40 per cent. That still seems right to me.' The term TACO stands for Trump Always Chickens Out – a popular critique of the president's tendency to make scary announcements, before backtracking or reverting to the norm. 'The idea that a single quarterly reading on a single measure says anything about [the economy being a] miracle or mirage is silly on its face,' Wolfers says. 'The economy isn't as bad as folks forecast, but neither was the actual policy that the White House was telling us we should expect.' In moments of candour, the Trump administration acknowledges American consumers might pay higher prices for some goods, but it is convinced economic growth will compensate. Hassett said as much this week, noting real wages had grown, which 'means people have more money in their pockets than the price increases that they've seen'. Board appointees break ranks Trump is also desperate to stimulate economic growth with lower interest rates, hence his constant badgering of Jerome 'Too Late' Powell to cut the rate. Despite Trump insisting 'there is no inflation' (it is 2.7 per cent), the majority of the bank's board wants to see more data before it makes a move – although the market expects cuts later this year. Loading But for the first time in three decades, two governors dissented from Wednesday's decision. Christopher Waller and Michelle Bowman – both Trump appointees to the board from his first term – voted to cut rates by 0.25 points. Both are considered candidates to replace Powell when his term expires next year. [In his dissenting reasons, published Friday in the US, Waller said tariffs only caused a one-off increase in prices, which the bank should 'look through', while soft growth meant monetary policy should be 'close to neutral'. The 'wait and see' approach was overly cautious, he said. Bowman said inflation had fallen - excluding tariff-related increases - and noted the slower growth in private domestic final purchases, a leading indicator of consumer spending.] Arthur Sinodinos, a former Australian ambassador to the US who now works at the Asia Group, says now that Australia's tariff rate has been confirmed at 10 per cent, its main worries will be what impact the tariff regime has on global economic conditions, as well as the US economy.
News.com.au
44 minutes ago
- News.com.au
Hyundai Inster review finds top contender in compact EV realm
Cheap electric vehicles. For some time that's been an oxymoron. The influx of new Chinese manufacturers and slowing demand has seen the get-in price decline, but now there is a more recognised brand targeting the basement. Hyundai introduced the compact Inster in April that has a range of 327km with a $39,000 retail starting point. That equates to about $43,500 on the road. It's still a steep ask above the BYD Dolphin Essential which is $31,290 drive-away and has a 410km range. There is also the GWM Ora Standard Range which was recently available for $33,990 (310km range), while the MG4 Excite 51 has been down to $37,990 (350km). Hyundai differentiates itself with a strong dealership network and greater brand reputation. Is that enough to sway buyers from the cheaper alternatives? Our family sampled the base model, although there are extended-range derivatives that push the driving capacity to 360km for an extra $3500 along with the 'outdoorsy' Cross version which tops out the Inster range at $45k plus on-roads. What do you get? Plaudits don't much higher than being named 2025 World Electric Vehicle. That included a panel of more than 90 judges from 30 countries who recognised the Inster for its design inside and out. The bare-bones Inster is reflective of its model positioning, with cloth seat trim and liberal use of plastics across the cabin. Raising the quality bar are twin 10.25-inch screens, one a central touchscreen and the other for the driver instruments. Among the other features are a six-speaker stereo with Apple CarPlay and Android Auto, satnav, along with vehicle-to-load functionality which has a three-pin power point in the front for charging items like laptops, camping equipment, e-scooters and e-bikes. Over-the-air updates can also be undertaken, which means the Inster can get the latest software upgrades without returning to the dealer. That's handy, as servicing is only required every 30,000km or two years. Hyundai offers a prepaid pack of two services for $1310. White, ivory and khaki are all complimentary external colours. Black, yellow and orange add $595. Matt paint options are an extra $1000. Under the floor sits the 42kWh battery, which can be replenished from 10 to 80 per cent using an at-home charger in about four hours. Quicker public chargers would take just under an hour, while a super-fast 120kW one will do it in 30 minutes. We used a standard household power point combined with the provided 10amp charger on our test which proved reasonably quick, taking us from 10-100 per cent in less than 18 hours. How was the drive? Surprisingly adept in varying conditions, a long wheelbase for its size translates to impressive competency on the highway and twisty terrain. On paper the 0-100km/h time of 11.7 seconds looks slow and underwhelming. But the real-world experience is far from pedestrian, with the Inster feeling responsive to acceleration requests and nimble in traffic. Small cars with combustion engines typically feel asthmatic when it comes to hilly terrain, yet the Inster's electric power provided dependable surges up some challenging inclines. Despite its compact dimensions, the Inster has a turning circle of 10.6m. That's better than many vehicles, but given the size it initially felt like it could be tighter (some of our U-turn attempts quickly became three-point turns). Our test saw a thrifty return of 13.2kWh/100km, which was well under the official figure from Hyundai. Most fully electric vehicles we've driven recently are usually well beyond 15kWh/100km. Interior space is also impressive given the dimensions. Four adults can find comfort, with impressive head and knee space for those in the second row. However boot space is limited and we only managed four grocery bags in the boot before requiring the back seat – there is a false floor for additional cargo area. Would you buy one? Kel: Sprightly and distinctive, the Inster regularly induced smiles from onlookers. I enjoyed the drive and loved the exterior styling, especially the circular LED headlights and pixel graphic indicators. The size doesn't suit my demographic, but I could see the appeal for younger EV buyers with $40k to spend or for those who want their second car to be an electric runabout. Grant: When it comes to the bargain basement EVs, you have to look beyond the bottom line. Where the Inster separates itself from the slightly less expensive rivals is performance – it feels more confident and robust on the road than most of the others we have sampled. Sales have been slow and we've seen some Inster demonstrators available with low km for about $37k. For that kind of money it becomes the standout buy in the compact EV realm.
