Headlines

Property investment in China fell 10.1% in the first five months of 2024 from a year earlier, after dropping 9.8% in January-April, even as policymakers doubled down on efforts to support the ailing sector and shore up consumer confidence, Reuters reported. Property sales by floor area in January-May fell 20.3% from a year earlier, compared with a 20.2% slump in January-April, National Bureau of Statistics (NBS) data showed on Monday. New construction starts measured by floor area fell 24.2% on year, after a 24.6% drop in the first four months.

China’s central bank left a key interest rate steady for the tenth straight month, displaying caution on monetary easing given abundant liquidity and the pressure to prevent the yuan from weakening further, Bloomberg News reported. The People’s Bank of China kept the rate on one-year policy loans, the so-called medium-term lending facility, steady at 2.5% on Monday, in line with the forecast in a Bloomberg survey. It withdrew a net 55 billion yuan ($7.6 billion) from the banking system to avoid excessive liquidity.

China ramped up warning against bond bulls via state-media reports as a debt-buying frenzy re-emerged, Bloomberg News reported. Funds investing in bonds will find it difficult to sustain the returns, which have exceeded 10% in some cases so far this year, the People’s Bank of China-backed Financial News said in a report Saturday. If yields rise, long-duration bonds will “face larger risks of a retreat in capital gains,” the report said, citing unidentified people close to regulators.

The first formal talks on restructuring more than $20 billion of Ukraine’s international bonds ended without a deal as the creditors pushed back against Kyiv’s proposal for debt relief, Bloomberg News reported. With bond payments set to resume this summer, Ukraine is asking debt holders to accept bigger losses that would allow it to finance its defense efforts against Russian aggression and prepare financial resources for economic reconstruction once the war ends.

European Central Bank President Christine Lagarde said officials are being “attentive” to financial market-developments, shortly after her colleague Philip Lane said he’s not worried about French turbulence, Bloomberg News reported. The policymakers responded to questions that followed a week of turmoil that wiped $258 billion from the market capitalization of the country’s stocks and caused the yield on France’s bonds to widen compared with German equivalents.

Brazil’s central bank is facing an emergency of its own making that threatens to sabotage years of deft policy making and credibility gains, Bloomberg News reported. Inflation forecasts are above the 3% target into the foreseeable future and confidence is crumbling as markets question whether the central bank — or the presidency — is commanding monetary policy. It’s a devastating reversal for an institution that was lauded for its fast action against a post-pandemic price surge and subsequent rate cuts that were months ahead of developed economies.

Colombia is on track for its widest fiscal deficit since the Covid-19 pandemic as falling tax revenues leave a hole in the nation’s finances, Bloomberg News reported. The government said Friday it will target a 2024 deficit of 5.6% of gross domestic product this year, from a previous target of 5.3%. The peso and local currency bonds have dropped in recent days as nervous investors ditch the nation’s assets amid concerns over the ballooning fiscal deficit. The government will trim its 2024 budget by 20 trillion pesos ($5 billion), Finance Minister Ricardo Bonilla said.

Germany's biggest industrial union said Monday it will seek a 7% pay increase for millions of workers in negotiations starting later this year, arguing that companies including automakers and machinery manufacturers are in a position to afford it, the Associated Press reported.

Argentina's largest oil union said on Saturday it will strike for 48 hours starting Tuesday to demand higher salaries, a move that will affect production at the giant Vaca Muerta shale formation, Reuters reported. The Vaca Muerta hydrocarbon formation is the world's second-largest shale gas reserve and the fourth largest for shale oil, and plays a central role in Argentina's plan to reverse a significant deficit in its energy trade balance and become a net energy exporter.

Emerging nations are contending with a staggering $29 trillion in public debt. Fifteen countries are spending more on interest payments than they do on education, according to a new report from the United Nations Conference on Trade and Development; 46 spend more on debt payments than they do on health care, the New York Times reported. Unmanageable debts have been a recurring feature of the modern global economy, but the current wave may well be the worst so far. Overall, government debt worldwide is four times what it was in 2000.