World · August 4, 2022

China launched “more” ballistic missiles during the exercises

Chinese forces fired “more” ballistic missiles into the waters around Taiwan during military exercises on Thursday, the Taipei Defense Ministry said, condemning what it described as “irrational actions undermining regional peace.”

“The Ministry of National Defense said that the Communist Party of China has launched multiple Dongfeng series ballistic missiles into surrounding waters of northeastern and southwestern Taiwan since about 1:56 pm this afternoon,” the ministry said. Defense in a short statement.

The Taiwanese military has not confirmed the precise location of where the missiles landed or whether they flew over the island.

The Chinese People’s Liberation Army also confirmed that the missiles had been launched.

Senior Colonel Shi Yi, a spokesman for Eastern Theater Command, said Chinese forces have launched “a multi-regional and multi-model conventional missile firepower assault over predetermined waters off the eastern part of the island of Taiwan.”

“All the missiles hit the target with precision, testing the accuracy of the hit and the denial capabilities of the area,” added Colonel Shi.

Markets follow US rally, eyes on Chinese Taiwan exercises

Asian markets followed a Wall Street rally fueled by healthy economic and earnings data on Thursday as traders kept an eye on Chinese military drills around Taiwan.

Oil managed to register some gains after another selloff that came on the back of new signs of weakening US demand. This followed the major manufacturers announcing a small increase in production.

The three major New York indices rose after a report on the crucial US services sector showed a surprise improvement, calming concerns about a possible recession in the world’s leading economy.

This came as several companies, including Electronic Arts, Starbucks, and Moderna, posted solid earnings, extending a largely positive reporting season in the face of rising inflation and rising interest rates.

All eyes are now on the release of US employment data on Friday, which will provide the latest snapshot of the economy and could help guide the Federal Reserve in its monetary policy debate.

Markets fluctuated this week after a number of Fed officials lined up to suggest there were still some large probable rate hikes and that talk of cuts next year may be over the top.

This came after comments last week from bank chief Jerome Powell indicated that the board may begin to ease its tightening campaign.

“After last week’s Fed meeting which opened up the possibility of a slower pace of rally, markets continue to run ‘risk-on’ despite the recent pushback from Fed officials,” said Stephen Innes of SPI Asset Management. .

READ ALSO: Pelosi’s Asian tour begins under the cloud of Taiwan

“But for equity investors, lower oil prices are a pleasure to watch, as not only have US 10-year yields fallen, but falling oil prices have also pushed inflation expectations down, supporting that thesis. slower growth rate “.

“Preparing for war”

Both major oil contracts rose Thursday, a day after prices plunged to a six-month low when a spike in U.S. inventories showed falling demand, while data showed Americans were driving less than summer 2022 when trips were destroyed by Covid-19.

Crude has now given up on all gains seen in the aftermath of the Russian invasion of Ukraine, even as OPEC + ‘s 100,000-barrel increase in production was blown away by investors as too little to have an impact.

Mood in Asia was also much more stabilized following the upheaval of House Speaker Pelosi’s visit to Taiwan this week, which sparked outrage in China with warnings of harsh military and economic responses.

Beijing suspended a limited amount of imports and exports across the Strait and on Thursday began its largest-ever military drills around Taiwan which are expected to last for days.

Immediately thereafter, the Taiwan Ministry of Defense said it was “preparing for war without seeking war.”

Although Beijing’s show of strength is a cause for concern for traders, with the island effectively cut off, there was a sense of relief that China’s response didn’t go further.

Hong Kong led the gains, adding more than one percent, while there was also progress in Shanghai, Tokyo, Seoul, Singapore, Manila, Jakarta and Wellington.

However, Taipei has again fallen on concern that Chinese maneuvers would affect sea routes and flights to Taiwan.

Mumbai also collapsed, while Sydney remained flat.

London opened lower as investors awaited the Bank of England’s political decision, which many predict will translate into the largest rally since gaining independence in 1997 as inflation is at a four-decade high.

“Whatever they do, the (UK) economy will slow down more than it already has,” said CMC Markets analyst Michael Hewson.

“But inflation is becoming a much bigger long-term threat, and given current trends, it’s unrealistic to expect it to drop to two percent long before 2024.”

Paris and Frankfurt are ahead.

Pelosi’s journey managed to further strain already fraught China-US relations and market strategist Louis Navellier said: “It will be interesting if China takes revenge on any US company or restricts trade in any way.”

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