Headlines

Sri Lanka and a group of creditors are in advanced talks over a deal aimed at restructuring the nation’s debt with bilateral lenders, Bloomberg News reported. The government and members of the official creditor committee, which includes India, Hungary and the Paris Club, are exchanging draft versions of the accord, or memorandum of understanding. The documents are needed to finalize an agreement reached in November between the South Asian nation and the official creditor committee and hash out the few remaining issues before a deal is settled.

The Bank of Canada cut interest rates by a quarter of a percentage point, making it the first Group of Seven central bank to kick off an easing cycle, Bloomberg News reported. Policymakers led by Governor Tiff Macklem lowered the benchmark overnight rate to 4.75% on Wednesday, as widely expected by markets and economists in a Bloomberg survey. Officials say they’re more confident that inflation is headed to the 2% target, and said it’s “reasonable to expect further cuts,” if progress continues.

Thai Prime Minister Srettha Thavisin’s administration is discussing ways to exert more control over the country’s central bank after repeatedly clashing with the monetary authority on economic policy, Bloomberg News reported. One of the measures under discussion focuses on the Bank of Thailand’s board chairman role, which will open up in September, the people said. While the chairman doesn’t have powers to dictate monetary policy, the official can evaluate the BOT governor’s performance as well as have a say in which outside experts join the Monetary Policy Committee.

A private gauge of China’s services sector signaled the fastest pace of growth in 10 months in May, echoing official data thanks to strong business activity and market demand, the Wall Street Journal reported. The Caixin services purchasing managers index increased to 54.0 in May from 52.5 in April, Caixin Media Co. and S&P Global said Wednesday. The index, which has now stayed in expansion territory for 17 straight months, reached its highest level since July 2023. A reading above 50 suggests expansion, while one below indicates contraction.

Germany’s jobless rate was stable at a low rate for a sixth-straight month, reflecting a resilient jobs market in Europe’s largest economy, ahead of a European Central Bank interest-rate cut later this week, the Wall Street Journal reported. The adjusted unemployment rate was 5.9% in May, data from the Federal Employment Agency showed Tuesday. The number of jobless claims rose by 25,000 in May, on a seasonally adjusted basis, ahead of estimates of 10,000 and the 8,000 increase recorded in April. Registered job vacancies stood at 702,000, down 65,000 on year, the agency said.

German Finance Minister Christian Lindner announced plans for €23 billion ($25 billion) in income-tax relief for households through 2026 even as he wrestles with his coalition partners over how to plug a hole in next year’s budget, Bloomberg News reported. The proposal includes increasing the tax-free allowance for low earners, as well as lifting earnings brackets to offset the effect of inflation as workers are pushed into higher tranches under the country’s progressive taxation system.

Turkey is considering taxing proceeds from investments in stocks and cryptoassets as part of a fiscal tightening push. Stocks and the lira fell on the news, Bloomberg News reported. Treasury and Finance Minister Mehmet Simsek discussed the plans during a ruling-party meeting over the weekend, AK Party officials told Bloomberg, asking not to be identified as the discussions were private. Simsek emphasized the need for proper taxation of all financial income during the meeting, the people said. Turkey cut the tax rate on profits from stock-market trading to 0% from 10% in 2008.

The Korean owners of one of Frankfurt’s best known skyscrapers failed to agree a restructuring plan for a loan tied to the building, paving the way for insolvency proceedings, Bloomberg News reported. A fund managed by IGIS Asset Management confirmed the event of default for the debt linked to Trianon tower in Germany’s financial capital.

A group of creditors of China South City has filed a lawsuit in Hong Kong against the developer's biggest state-owned shareholder to recover $1.4 billion, according to a court filing and a source familiar with the matter, Reuters reported. The lawsuit is the first such case against a Chinese state shareholder of a developer for recovery of payments owed to creditors under the keepwell provision since the property sector tipped into a debt crisis in 2021.