Asian shares set to end strong week on soft note, bonds enjoy relief rally
SYDNEY, May 16 (Reuters) - Asian stocks were ending a strong week on a softer note on Friday as the euphoria over U.S.-China trade talks faded, while revived bets for policy easing in the United States sparked a rally in beaten-down bond markets.
Oil prices steadied after plunging over 2% overnight on news of a potential U.S.-Iran nuclear deal, but they are still up 1% for the week as the global economic outlook brightened.
In Asia, shares of Alibaba (9988.HK), opens new tab slumped 6.8% after the tech giant's quarterly revenue failed to impress investors. Their U.S.-listed shares slumped 7.6% overnight.
It has been a strong week for global sharemarkets as investors cheered the trade war truce between the U.S. and China, which has greatly lessened the chance of a global recession. However, there are signs for caution heading into the weekend.
Investors went back to selling the U.S. dollar against the safe-haven currencies on Friday, with the dollar down 0.4% on the Japanese yen and slipping 0.3% on the Swiss franc .
"The markets confront a weekend with less risk of carrying open positions than last, with no major trade talks or significant risks on the calendar," said Kyle Rodda, senior analyst at Capital.com
"However, there is always a slight risk-off bias going into the weekend during a Trump presidency, with a nasty downside surprise at the Monday open only ever one social media post away."
The MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab slipped 0.1% to 613.4 on Friday but it is still set for a weekly rise of over 3%. Goldman Sachsraised its 12-month target for the Asian index to 660, from 620 before.
Chinese blue chips (.CSI300), opens new tab eased 0.2% and Hong Kong's Hang Seng (.HSI), opens new tab fell 0.6%.
Japan's Nikkei (.N225), opens new tab fell 0.4% after data showed its economy shrank for the first time in a year in the March quarter, underscoring the fragile nature of its recovery now under threat from U.S. trade policies.
Nasdaq futures and S&P 500 futures were both down 0.1% after Wall Street ended the day mixed. U.S. retail sales were soft and the producer prices fell unexpectedly in April, as markets added to the bets for a total easing of 56 basis points from the Federal Reserve this year.
That helped Treasuries rally after a brutal week. The benchmark ten-year yields fell 3 basis points to 4.424% on Friday, having already dropped 7 bps overnight to move away from its one-month top.
For the week, they are still up 8 bps.
The two-year yields were also down 2 bps to 3.947%, having fallen 8 bps overnight.
Fed Chair Jerome Powell said on Thursday that policymakers felt they need to reconsider the key elements around both jobs and inflation in their current approach to monetary policy.
In commodities markets, oil prices steadied. U.S. crude futures bounced 0.1% to $61.71 a barrel while Brent was at $64.61 per barrel, also 0.1% higher on the day.
In precious metals, gold prices fell 0.5% to $3,223 an ounce, after rallying 2% overnight. For the week, they are down 3%.
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The Guardian
an hour ago
- The Guardian
Is the cost-of-living crisis over? Victoria's new treasurer is optimistic, but housing remains a battleground
Victoria's new treasurer, Jaclyn Symes, is confident cost-of-living pressures will ease by the next election – and that voters will be less concerned about the state's soaring debt once they see the completed projects it has helped fund. In an exclusive interview with Guardian Australia after handing down her first budget in May, Symes also signalled openness to reforming stamp duty. But she hit back at industry groups like the Property Council, calling on them to move beyond criticising current policies and offer solutions: 'Saying, 'Don't do this,' that doesn't particularly help me. I have a policy brain, I like to find problems and fix them.' The upper house leader made history in becoming Victoria's first female treasurer after she was handpicked by the premier, Jacinta Allan, to take over from retiring Tim Pallas in December. Symes inherited a mountain of debt, and the recent budget forecasts it to climb even higher, to $194bn in 2028-29. That's up from just $21.8bn before Labor took office in 2014, after years of rapid public sector growth, major infrastructure spending, the pandemic and subsequent credit rating downgrades. Symes's first budget was sold as a turning point, delivering a $600m operating surplus and a slight drop in net debt relative to the state's economy. It also included unexpected federal windfalls, which Symes defended using to ease cost-of-living pressures – pointing to $18m for food relief as one of her proudest budget items. 'People have asked, 'Couldn't you have had a higher surplus?' Sure. But it wouldn't have felt very good knowing we're not supporting some of those services that people doing it really tough are relying on,' Symes says. Looking ahead to 2026 – the year of the next state election – Symes is optimistic that the cost-of-living crisis that has engulfed Australia will have eased. She says interest rates are coming down, housing supply is growing and, for the first time in years, wages are forecast to outpace inflation. Sign up for Guardian Australia's breaking news email 'All the signs are there. But if we go too early and abandon the people that are still struggling, then I wouldn't feel very proud about that,' she says. She hopes that people will soon be 'feeling more confident and not worrying about the cost of every meal that's going on the table'. 'That's what you want for all Victorians, but that's not the case right now'. Symes also believes that state debt won't dominate the election debate, and that voters will instead be grateful for the infrastructure it's funded, including the Metro Tunnel and West Gate Tunnel, both set to open this year after huge cost overruns. Symes points to Sydney's $21.6bn Metro, which also ran billions over budget but is now popular with voters: 'The day it opened, people were like, 'Oh, actually, this is a worthwhile investment.'' The budget also brought pain for some, with 1,200 public sector jobs set to go, with the treasurer warning more job losses are likely once the government receives the recommendations of a review, a move Symes defends as tough but necessary. 'Do I want people to lose their jobs? No. But I also have a responsibility as treasurer to make sure that we are being cost-effective,' she says. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion At parliament last week, it became clear housing will be a key battleground at the next election. While the premier pledged to get 'millennials into homes' through planning reform and an extension of stamp duty concessions for new apartments, units and townhouses, the opposition announced a revived 2022 policy to abolish stamp duty for first home buyers on properties worth up to $1m. The shadow treasurer, James Newbury, says it would give 'young Victorians the final leg up they need', but Symes is sceptical, questioning both the opposition's costings and the policy's failure to increase housing supply. Stamp duty remains a huge revenue source for the state – forecast to bring in $11bn in 2028-29. But it's loathed by homebuyers and economists. The Grattan Institute's Brendan Coates calls it 'the worst tax in Australia', as it locks people into their homes, discourages downsizing and acts as a 'tax on divorce' – as separating couples will both have to go on to pay it. Many economists have long called for it to be replaced with a broad-based land tax. Asked if she would consider such a move, Symes leaves the door open: 'I'm always open to having discussions about tax reform. I've got the finances to manage so I can't make reckless announcements.' Last week, Symes addressed a post-budget Property Council breakfast, where she faced a tough crowd. Before she took the stage, Lendlease's Adam Williams warned that property taxes would soon make up 47% of the state's total tax revenue. In the Q&A segment, a member of the crowd said tax on foreign investment was 'killing' developers. Symes tried a joke: 'Let's have a show of hands – what's the worst tax? What's your favourite tax?' It fell flat. Newbury called her 'tone deaf' and 'out of touch' and criticised her for previously describing the role of treasurer as 'fun'. But Symes says she's not fazed by criticism, and that she's been underestimated before: told she couldn't be agriculture minister because she wore wedges to a farm and dismissed as attorney general for 'giggling like a schoolgirl'. 'The commentary that actually affects me more than anything else is the young women, particularly high school girls, who say, 'We have a female treasurer. That's so cool.''
The Guardian
an hour ago
- The Guardian
Australian high-speed rail has barely left the station – some experts say a new US project shows a better way
Progress has been slow on the proposed high-speed rail line between Sydney and Newcastle since the establishment of the High Speed Rail Authority (HSRA) in 2023, and the federal government is yet to commit to building the megaproject. But some experts say there may be a cheaper and easier way to do it, pointing to a US example of what can be achieved. The Newcastle-Sydney high-speed rail line is estimated to cost at least $30bn and take well over a decade to build. The HSRA has spent its infancy developing yet another business case, starting with Sydney-Newcastle, to ultimately form part of a Melbourne-Brisbane line in the second half of this century. Sign up for Guardian Australia's breaking news email Geotechnical drilling has begun to determine how to tackle the mammoth task of traversing the Hawkesbury River with services that can reach a top speed of 320km/h. Meanwhile, Infrastructure Australia is evaluating its business case and will shortly make a recommendation. By contrast, a longer line linking the eastern outskirts of Los Angeles with Las Vegas at similar speeds is being built for a fraction of the cost and time. The private-led Brightline West represents an approach that is in many ways the polar opposite of how Labor is pursuing the technology in Australia, experts say. With construction estimates soaring, experts are now questioning if Australia is letting perfect be the enemy of good and risking a cost blowout that would crush the chance of the line ever being built. The HSRA plans to establish a service between central Sydney and Newcastle's Broadmeadow, running end-to-end in an hour, with a stop at Gosford. The journey on the existing Newcastle-Sydney line takes about 2.5 hours, almost half an hour longer than an express service achieved in the mid-20th century. The HSRA chief executive, Tim Parker, wants to build dedicated dual tracks so that high-speed trains won't have to interact with slower trains, a contrasting approach to how high-speed rail expanded in most countries. Spain's high-speed train, for example, shares sections of track with slower services. While it must slow down in certain sections, this philosophy presents an opportunity to roll out fast train technology in stages and more cheaply. Not only is building a dedicated line more expensive, the Sydney-Newcastle corridor will require an engineering feat to construct what would be the world's longest rail tunnel to allow trains to cross the Hawkesbury River without compromising speed. 'They've picked a starting stretch that is the hardest and most expensive part of the entire east coast,' says Garry Glazebrook, an associate professor at the University of Technology Sydney. The business case has not yet been made public, but the price tag is expected to be eye-watering. Modelling for the New South Wales government's 2019 plan to build a line without federal help reportedly predicted it would cost about $30bn and take 12 years to build just the first stage from Gosford through the Hawkesbury to a station at Sydney Olympic Park – a cheaper option than Central. The costs proved too great. The then Perrottet government abandoned the plan at the end of 2022. Brightline West broke ground in April 2024. Despite covering a 315km point-to-point distance – nearly three times as long as Newcastle-Sydney – construction is expected to be completed swiftly, with services for the 2hr 10min trip to be operating in time for the 2028 Los Angeles Olympics. The project's most up-to-date budget is US$12.5bn (about A$19.5bn), already overrun from a 2020 estimate of US$8bn, but still a fraction of the cost of the Australian proposal. Brightline West – owned by Fortress Investment Group – is funded by a mix of equity, private finance, federal government grants and California and Nevada state-issued tax-exempt bonds for private ventures in the public interest. It is entirely unrelated to the California state government's plan for an LA-San Francisco line, which has been held up as an example of disastrous infrastructure projects in the US. Approved in 2008, no track has yet been laid and cost estimates have more than tripled to US$128bn. Donald Trump has vowed to block federal funds previously promised to the LA-San Francisco project, but administration officials appear satisfied with Biden-era commitments to the Brightline model. Those costs and timeframe may appear ambitious, but Brightline has already established a Miami-Orlando line that reaches 200km/h – just shy of the high-speed definition. The first section, between Miami and West Palm Beach, broke ground in 2014 and was in service by 2018. Brightline West's impressive price tag and timeframe are only achievable through several compromises. Most of the line will initially run along a single track with passing loops , reducing speed accordingly. It will also share its corridor with the Interstate 15 Highway. The track will be built down the I-15's median strip, with trains travelling alongside road traffic, similar to a number of existing rail lines in Perth. This delivers serious savings. Building just one track is cheaper, and land acquisition and permissions are streamlined. Perhaps the greatest compromise is that Brightline West will terminate in Rancho Cucamonga, on the eastern outskirts of LA. While avoiding costly construction in built-up urban areas, passengers will need to connect to existing, slower rail to make the 67km journey to Union station in the heart of the city's downtown. Building anything in Australia is expensive, and rail even more so. Alon Levy is the co-lead of the transportation and land use program at New York University's Marron Institute, and researches why construction costs differ between countries. He believes Newcastle-Sydney already has unnecessary costs baked in thanks to overly prescriptive demands from government. 'It's a foolish requirement this early on to not share any tracks with commuter lines,' Levy says. 'You leave less space for the experts to find cheaper workarounds and drive innovation.' Australia's rail industry is another problem, Levy believes. Australian governments rely heavily on consultants for infrastructure planning, a symptom of the hollowing out of departments of expertise. 'This problem is common in Anglosphere governments,' Levy says. They bring in outside consultants who work on one thing then disband and the expertise vanishes.' Levy believes an Australian government – either the commonwealth or NSW – should establish a 'public sector consultant unit' for rail expertise, which it can then provide to other states to work on their projects at cost, a model successfully proven in France and Italy. The profit motive of companies such as Brightline can also bring down costs by pushing the limits of what is possible. 'They go out to the market and challenge their suppliers … to push the technical limits, so trains can move through difficult stretches and save the company from spending billions moving dirt around,' one rail source who requested anonymity says. 'But in Australia, governments want already proven technology, they want a safer bet that is future-proofed, and that often means being overengineered and double the cost necessary. It's always got to be the gold standard.' Rail unions also increase construction and operating costs. 'Unions have enormous say, it's just the way we work in Australia,' Glazebrook says. Union pressure is broadly seen as having pushed NSW to build new metro tracks for driverless trains with a private operator. A separate rail source, unable to be named due to their work, said the new metro extension under Sydney harbour could not have been built had it been subject to existing Sydney Trains union agreements, due to the line's gradient. Herein lies a catch-22, Glazebrook says. By adopting the proven European approach – staged building using existing tracks already subject to union agreements – construction and operation are beholden to stringent standards that increase the cost and timeframes of projects. Building dedicated tracks is a way to bypass such pressures and can allow for the automation of driving and fewer staffing requirements, saving money on operations once the line is running. But construction costs will soar. 'You throw everything together and you get a real bloody mess,' Glazebrook says. Experts are now questioning if Newcastle-Sydney is the smartest place to start. Glazebrook still backs the proposal put by his group, Fastrack Australia, for the HSRA to begin by upgrading the Sydney-Canberra line in stages to high-speed capability. Its easier terrain makes it lower-hanging fruit, even if trains don't run along the Federal Highway's median strip. Others say Canberra-Sydney more closely resembles the value proposition of Brightline West – the potential to capture market share where air or car trips have dominated. Taxpayers currently foot the huge travel bill of bureaucrats and politicians flying between Canberra and Sydney. The existing train service takes about four and a half hours – a 90-minute high-speed alternative could attract that business to rail instead. The existing Newcastle-Sydney service – ticketed at $11 – takes only an hour and a half longer than the proposed high-speed trip. While local rail experts are not proposing to copy Brightline's model exactly, most agree there are attitudes worth adopting to avoid Australia's high-speed rail ambition being shelved. 'We don't want to let perfect be the enemy of the good,' Glazebrook says.
Daily Mail
an hour ago
- Daily Mail
Fabio Wardley is an odds-on favourite to win at Portman Road next Saturday - while Australia's Justis Huni is a 3/1 underdog according to Sky Bet
We are less than a week out from a blockbuster heavyweight clash at Portman Road, as British, Commonwealth, and WBA Continental champion Fabio Wardley goes head-to-head with Australia's Justis Huni. Wardley proved he was the real deal in his highly-anticipated rematch with Frazer Clarke in October of last year, with the Ipswich native dominating his domestic rival en route to a first round knockout. As a result of his win, it was announced that Wardley would face a big-name heavyweight in Jarrell 'Big Baby' Miller, however the latter was forced to withdraw from the fight following a shoulder injury. Huni was then announced as Miller's replacement, and the undefeated Aussie will be looking to cause a major upset in enemy territory next Saturday and put himself firmly in the mix for a future world title shot. Huni isn't tipped to do so however, with the talented Brisbane prospect a 3/1 outsider according to Sky Bet. Conversely, Wardley is an odds-on favourite at 1/4, while a draw is the widest in the market at 16/1. Wardley is an odds-on favourite to win next Saturday - while Huni is an underdog at 3/1 odds With regard to the method of victory Huni is 8/1 to win by KO/TKO and 5/1 to be victorious by decision. Meanwhile, Wardley is a short 8/13 to stop his opponent and a wider 3/1 to get the nod on the judges' scorecards. Sky Bet odds for Fabio Wardley vs Justis Huni: Fabio Wardley 1/4 Justis Huni 3/1 Draw 16/1 Fabio Wardley to win by KO/TKO 8/13 Justis Huni to win by KO/TKO 8/1 Fabio Wardley to win by Decision 3/1 Justis Huni to win by Decision 5/1
