Headlines

Chinese regulators have freed up an extra $100 billion for bank lending in a move financial analysts said could help to reassure investors amid trade tensions with Washington, the International New York Times reported on an Associated Press story. The reduction on Sunday in reserves banks are required to hold was part of a series of such cuts economists had forecast before the dispute with President Donald Trump erupted. But they said the announcement could help to defuse fears a threatened U.S. tariff hike might dampen Chinese economic growth.

The International Monetary Fund (IMF) chief Christine Lagarde used her meeting today in Ireland with Taoiseach Leo Varadkar to warn that although “the sun is shining on the Irish economy” it is time for the eurozone to “fix the roof" as the IMF prepares for a climbdown on growth forecasts, Express.co.uk reported. Mrs Lagarde, visiting Dublin to mark 20 years since the adoption of the euro currency, was eager to champion the manner by which Ireland came out of the EU-IMF bailout in December 2013 following the eurozone’s sovereign debt crisis.

A vote by European Union lawmakers to soften capital rules for banks that offload large amounts of bad loans is meeting resistance and could be ditched, officials said, in what would be a blow to Italian lenders profiting from the planned reform. Under a proposal adopted by the economic affairs committee of the European Parliament last Tuesday, EU banks that carry out “massive disposals” of non-performing loans, covering at least 15 percent of all defaulted debt, would be allowed to set aside less capital against losses, Reuters reported.

In a way, the debt relief deal Greece has received as it exits its bailout makes good sense: It keeps the country on a tight leash, all but eliminating the possibility that it will go on a borrowing spree in the financial markets and misspend the money as it’s done before, a Bloomberg View reported. On the other hand, the scheme gets superimposed uncomfortably onto the country’s political cycle: It puts the next government on the spot, making a backlash against it all but inevitable.

Deutsche Bank AG had the outlook for its credit rating lowered to negative from stable by Fitch Ratings, which cited risks tied to the German lender’s turnaround plan, Bloomberg News reported. The move “reflects the substantial execution risk Deutsche Bank faces in implementing its restructuring and Fitch’s view that failure to strengthen its business model would result in the bank’s downgrade,” the rating company said in a statement late Thursday. It confirmed the lender’s BBB+ long-term issuer default rating and all other debt ratings.

Three years after a wave of forced selling by margin traders fueled a collapse in China’s stock market, a new breed of leveraged shareholders is threatening to trigger another downward spiral, Bloomberg News reported. More than 5 trillion yuan ($770 billion) of Chinese shares, or about 12 percent of the country’s market capitalization, have been pledged as collateral for loans, according to data compiled by China Securities Co. and Bloomberg.

House of Fraser’s creditors have approved the recovery plan proposed by the department store chain to close more than half its shops in an effort to avoid financial collapse, putting up to 6,000 jobs at risk, the Financial Times reported. As part of the restructuring, the retailer will close 31 of its 59 UK stores, including flagship properties on London’s Oxford Street and in Cardiff, and will drastically reduce the rents on 10 other outlets, under a company voluntary agreement.

Germany’s dominant factory sector faced stronger headwinds this month, with a key gauge sinking to its lowest level in a year in a half, in the latest sign that the eurozone has failed to escape its rough patch in the second quarter, the Financial Times reported. IHS Markit’s manufacturing PMI slipped to 55.9 in June from 56.9 the previous month. The reading was worse than the 56.2 consensus estimate in a poll conducted by Reuters, albeit well above the 50 level that indicates expansion.

Business confidence in France was higher than expected in June, with a particular uptick in optimism in the services sector, but the manufacturing sector continued to lose steam, according to the latest survey data from IHS Markit, the Financial Times reported. France’s flash composite purchasing managers’ index rose to a two-month high of 55.6 and the services PMI rose to 56.4, both higher readings than the figures expected by economists in a Reuters poll, (54.2 and 54.3 respectively).

European Union finance ministers agreed on Friday to double a war chest for dealing with failing banks and boost powers of the euro zone bailout fund, but were split over whether to have a mechanism to restructure government debt or a euro zone budget, the International New York Times reported on a Reuters story. All the EU's finance ministers except Britain, which will leave the bloc in March, discussed ideas for deeper economic integration of the euro zone.