Headlines

China is set to approve slightly more than 1 trillion yuan ($137 billion) in additional sovereign debt issuance on Tuesday as Beijing steps up its efforts to spur infrastructure spending and encourage economic growth, three sources told Reuters. China's top legislators, the standing committee of the National People's Congress (NPC), are set to approve the extra debt issuance on the last day of a meeting which has run from Oct. 20 to Oct. 24, said the sources, who declined to be named due to confidentiality constraints.

Shanghai police detained one current and two former employees of GroupM, a unit of London-based advertising giant WPP, citing suspicions that they accepted bribes, the Wall Street Journal reported. Late Saturday, the Shanghai police’s economic crimes investigation division said that three suspects at an unnamed advertising company had been detained on criminal charges of accepting bribes as non-public officials. That statement referred to GroupM, according to a person familiar with the matter.

The Bank of Israel kept short-term borrowing rates unchanged for a third straight decision as expected on Monday, citing the need to prevent an uptick in inflation as a result of a weaker shekel during Israel's war against Palestinian Islamist group Hamas, Reuters reported. The central bank held its benchmark rate at 4.75% - its highest level since late 2006. It had raised rates 10 straight times in an aggressive tightening cycle that has taken the rate from 0.1% last April before pausing in July and again in August.

A senior U.S. Treasury official on Monday said there were signs of "potential improvement" in sovereign debt restructuring cases and more vulnerable countries were expected to seek help, but further work was needed to accelerate the process, Reuters reported. Treasury Assistant Secretary for International Finance Brent Neiman noted advances in the cases of Zambia, Ghana and Sri Lanka over the past year, along with development of new technical approaches, adding his hope that Ghana would reach agreement on its external restructuring in the coming weeks.

Adler Group SA’s €6 billion ($6.4 billion) debt restructuring faced fresh legal scrutiny in a London court as some creditors appealed the deal that saved the embattled German real estate firm from slipping into insolvency, Bloomberg News reported. The plan, approved by a judge, was discriminatory according to dissenting creditors with debt maturing later that include DWS Group and Strategic Value Partners. “Our notes are at greatly material risk of not being paid,” Tom Smith, a lawyer for the bondholders, said at the Court of Appeal on Monday.

Egypt was downgraded for the second time this month, as the North African nation struggles with a severe shortage of hard currency, Bloomberg News reported. S&P Global Ratings, cut the country’s debt deeper into junk territory, to B- from B, albeit with a stable outlook. The decision puts the country on par with nations such as Bolivia, Angola and Iraq. The move follows that of Moody’s Investors Service, which lowered Egypt one level to Caa1 in early October, triggered a further sell-off of Egyptian bonds. S&P’s rating for Egypt is now one notch above that of Moody’s.

Mexico's economic activity exceeded expectations in August driven by a strong performance of primary activities, including agriculture, and a rebound in the services sector, data from statistics agency INEGI showed on Monday, Reuters reported. In Latin America's second-largest economy, activity grew 0.4% in August from July and expanded 3.7% on an annual basis, INEGI said, despite the country's restrictive monetary policy with benchmark interest rates at 11.25% to tame high inflation.

Mexico’s new state-owned airline has no planes or scheduled flights registered under its name a little more than a month before it’s supposed to start operations, Bloomberg News reported. Creating the carrier has been a pet project of President Andres Manuel Lopez Obrador, who has promised prices 20% below commercial airlines on 20 routes serving big cities and beach destinations. The plan, announced in dribs and drabs over the past few months, was to initially lease 10 Boeing 737-800 jets, with three deliveries scheduled for late September and the rest for late October.

Throughout the Covid-19 pandemic and then Russia’s invasion of Ukraine, both the U.S. and Europe borrowed heavily. Now with those emergencies in the rearview mirror, a divergence has emerged: Even as the U.S. continues to let deficits rip, Europe’s are on track to narrow significantly, the Wall Street Journal reported. This is in contrast to a decade ago, when deficits in the wake of the global financial crisis pushed some members of the euro area to the brink of default.

China's troubled property market is showing little signs of a recovery in the short term despite a series of government stimulus measures to help revive activity in the sector which makes up a quarter of the nation's economic output, Reuters reported. Homebuyers, wary of the uncertain economic outlook, have remained on the sidelines, while property developers and agents said sales were still soft following a short-lived burst of activity in major cities like Beijing and Shenzhen.