China fires ‘multiple’ ballistic missiles during exercise

Chinese forces fired “several” ballistic missiles into the waters around Taiwan during a military exercise Thursday, Taipei’s defense ministry said, condemning what it called “irrational actions that undermine regional peace.”

“The Ministry of National Defense said the Chinese Communist Party launched several Dongfeng-series ballistic missiles at nearby waters in northeastern and southwestern Taiwan at approximately 13:56 this afternoon,” the defense ministry said in a brief statement.

The Taiwanese military has not confirmed the exact location where the missiles fell or whether they flew over the island.

The People’s Liberation Army of China also confirmed the missile launch.

Senior Colonel Shi Yi, a spokesman for the Eastern Theater Command, said Chinese forces launched a “multi-regional and multi-target conventional missile fire attack in predetermined waters off the eastern part of the island of Taiwan.”

“All missiles accurately hit the target, testing the accuracy of the strike and the ability to block the area,” Colonel Shi added.

Markets follow US rally, watch China’s Taiwan exercises

Asian markets on Thursday tracked a Wall Street rally fueled by strong economic and earnings data, while traders were wary of Chinese military exercises around Taiwan.

Oil was able to rise slightly after another sell-off caused by new signs of weakening demand in the US. This followed major manufacturers announcing a slight increase in production.

New York’s three major indexes rose after a report on the key US services sector showed an unexpected improvement, calming fears of a possible recession in the world’s leading economy.

This comes after several companies, including Electronic Arts, Starbucks and Moderna, posted strong earnings, extending a generally positive reporting season in the face of rising inflation and rising interest rates.

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

Markets have swung this week after a number of Fed officials lined up to suggest that there is still the possibility of a significant rate hike, and talk of a rate cut next year may be exaggerated.

This comes after bank chief Jerome Powell’s comments last week that the policy board may start to loosen its tightening campaign.

“Following last week’s Fed meeting, which opened up the possibility of a slower pace of growth, markets remain risky, despite the recent withdrawal from Fed officials,” said Steven Innes of SPI Asset Management.

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“But it’s good for equity investors to see lower oil prices as not only did US 10-year bond yields drop, but the decline in oil prices also lowered inflation expectations, supporting the slower growth thesis.”

“Preparing for War”

Both major oil contracts rose on Thursday, a day after prices fell to six-month lows, as a surge in U.S. inventories showed declining demand, while numbers showed Americans traveled less than in the summer of 2022 when Covid-19 19 pitched travel.

Crude oil has now lost all the gains made since Russia’s invasion of Ukraine, although investors have shrugged off a 100,000-bbl OPEC+ production increase as too small to have an impact.

Sentiment in Asia has also been much more stable following the turmoil of House Speaker Pelosi’s visit to Taiwan this week, which sparked outrage in China with warnings of harsh military and economic measures.

Beijing suspended limited cross-strait imports and exports and on Thursday began its largest-ever military exercise around Taiwan, which is expected to last several days.

Shortly thereafter, Taiwan’s Ministry of Defense stated that it was “preparing for war without seeking war.”

While Beijing’s show of force worries merchants as the island is effectively cut off, there was a sense of relief that China’s reaction didn’t go any further.

Hong Kong led the growth, adding more than one percent, while Shanghai, Tokyo, Seoul, Singapore, Manila, Jakarta and Wellington also saw growth.

However, Taipei panicked again over fears that Chinese maneuvers would affect shipping lanes and flights to Taiwan.

Mumbai also declined while Sydney remained flat.

London opened lower as investors awaited a policy decision by the Bank of England that many expect will lead to the biggest gain since London gained independence in 1997 as inflation is at its highest level in four decades.

“Whatever they do, the[UK]economy will slow down more than it is now,” said Michael Hewson, an analyst at CMC Markets.

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

Paris and Frankfurt have grown.

Pelosi’s trip was able to further strain the already tense relationship between China and the US, with market strategist Louis Navelier saying: “It will be interesting if China retaliates against any US companies or restricts trade in any way.”

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