Headlines

China is flashing new signs of financial stress almost on a daily basis, with a property giant making fresh efforts to avoid default and a state-run bad debt manager suffering a bond slump on worries about its own health, Bloomberg News reported. In the latest indication of its liquidity struggle, Country Garden Holdings Co. has proposed a grace period of 40 calendar days for a maturing yuan bond as it seeks to win creditor support to stretch payment into 2026.

China’s largest banks are preparing to cut interest rates on existing mortgages and deposits, the latest state-directed measures to shore up growth in the world’s second-largest economy, Bloomberg News reported. An announcement that big state-owned lenders are reducing rates on the majority of the nation’s 38.6 trillion yuan ($5.3 trillion) of outstanding mortgages may come as soon as Tuesday, according to people familiar with the matter. The reductions will only affect loans on first homes, two of the people said. Lenders such as Industrial & Commercial Bank of China Ltd.

China will extend preferential tax policies for foreign nationals working in the country through to the end of 2027, the finance ministry said on Tuesday, in a boon to foreign firms struggling to attract talent post-COVID, Reuters reported. The government proposed scrapping the provision of non-taxable allowances for foreign workers in 2022, but decided to extend the scheme on a review basis until the end of this year.

Japan's financial regulator will closely monitor how central bank policy impacts regional banks, as the world's third-largest economy approaches the normalisation of its monetary settings after years of massive easing, Reuters reported. The Financial Services Agency (FSA) "will monitor how potential changes in the financial markets and client situations will affect regional banks' profits and health," the regulator said in its annual policy outlook released on Tuesday.

China's surprise move to slow the pace of mainland initial public offerings (IPOs) in an attempt to bolster the secondary market will cloud the fundraising plans of hundreds of companies and will weigh on the economy, bankers and lawyers said, Reuters reported. The regulatory decision was part of a package of measures unveiled by Beijing over the weekend to revive a lagging stock market and boost investor confidence in the world's second-largest economy, which is fast losing its growth momentum.

The European Union is unlikely to agree on new fiscal rules by the end of this year as planned, Italian Economy Minister Giancarlo Giorgetti said yesterday, Reuters reported. The EU rules, called the Stability and Growth Pact, have been suspended since 2020 to help governments deal with the COVID-19 pandemic and then the February 2022 Russian invasion of Ukraine and the resulting increase in energy and food prices.

Bank of Montreal set aside more money for potentially sour loans and severance costs as it absorbs Bank of the West during a difficult period for U.S. regional lenders, Bloomberg News reported. The Canadian bank earned C$2.04 billion ($1.89 billion) on an adjusted basis in the fiscal third quarter, weighed down by weaker results in its US personal and commercial division. The profit of C$2.78 per share was short of the C$3.13 expected by analysts in a Bloomberg survey.

The CEO of French retailer Carrefour on Tuesday urged the government to delay a law putting a cap on promotions retailers can offer, warning that consumers have made massive cuts to spending on essential goods owing to high prices, Reuters reported. Carrefour Chairman and Chief Executive Alexandre Bompard, who is among French retail executives due to meet Finance Minister Bruno Le Maire on Wednesday to discuss cost of living issues, said he would ask for "a one-year moratorium on the application of the Descrozaille law" that limits promotions on beauty, hygiene and care products.

Binance, the world’s largest cryptocurrency exchange, is reevaluating its Russian business, including the possibility of a full withdrawal from a once-important market that has turned into a headache, the Wall Street Journal reported. Last week, the Journal reported that Binance was helping Russians move money abroad—despite the company last year saying that it had stopped working in the country, was implementing Western sanctions requirements and had restricted trading on its platform in Russia.

Two decades ago, Germany revived its moribund economy and became a manufacturing powerhouse of an era of globalization. Times changed. Germany didn’t keep up. Now Europe’s biggest economy has to reinvent itself again. But its fractured political class is struggling to find answers to a dizzying conjunction of long-term headaches and short-term crises, leading to a growing sense of malaise, the Wall Street Journal reported. Germany will be the world’s only major economy to contract in 2023, with even sanctioned Russia experiencing growth, according to the International Monetary Fund.