Headlines

The European Central Bank said on Monday it had fined Goldman Sachs' European unit 6.63 million euros ($7.3 million) for underreporting the risk associated with some corporate credit, thereby flattering its balance sheet, Reuters reported. Goldman Sachs said in a statement it had "closely cooperated with the ECB" and "taken all necessary steps" to resolve the issue. The ECB, the euro zone's top banking supervisor, said Goldman Sachs Bank Europe misclassified some corporate exposures for eight straight quarters in 2019-21, assigning a lower risk to them than the rules prescribe.

Global investors seeking to trade China’s reopening will have a new strategic tool from Monday: onshore interest-rate swaps that had an annual turnover of $3 trillion last year, Bloomberg News reported. The so-called Swap Connect program between mainland China and Hong Kong provides overseas funds with easier access to the derivatives that will help hedge their exposure to the world’s second-biggest bond market. The channel also enables them to bet on key money-market rates that are sensitive to China’s monetary policy.

China’s two leading cross-border online brokerages said they will remove their trading platforms from app stores in mainland China this week as Beijing takes a harder stance on capital flows out of the country, Bloomberg News reported. Futu Holdings Ltd. and Up Fintech Holding Ltd., also known as Tiger Brokers, said Tuesday that the move was to comply with the Chinese securities regulator’s requirements on cross-border brokerage businesses. Futu’s app Futubull will be removed Friday, and Tiger Brokers’ app will be taken off on Thursday.

China's April industrial output and retail sales growth undershot forecasts, suggesting the economy lost momentum at the beginning of the second quarter and intensifying pressure on policymakers to shore up a wobbly post-COVID recovery, Reuters reported. Tuesday's batch of data, which also showed a further decline in property investment, adds to concerns about the outlook for the world's second-biggest economy as both its domestic and export engines of growth remain underpowered.

Argentina's government is bolstering its economic defenses as it battles runaway inflation that hit 109% in April, fast draining central bank foreign currency reserves, a weakening peso and simmering market fears of a sharp-shock devaluation, Reuters reported. The economy ministry announced a package of measures on Sunday including new interest rate hikes, more central bank intervention in currency markets and fast-tracked deals with creditors after inflation overshot all forecasts last week. An official source told Reuters the rate hike would be 600 basis points, bringing the rate up to 97%.

Turkey’s markets slid as the nation heads for a runoff election, with stronger-than-expected support for President Recep Tayyip Erdogan wrong footing investors who were betting on a quick end to his unconventional economic policies, Bloomberg News reported. The benchmark stock index, the BIST-100, closed 6.1% lower after earlier falling as much as 6.7%, triggering a circuit breaker. Turkey’s dollar bonds were the biggest losers in emerging markets and the cost of protecting the debt against default jumped.

Lebanon’s embattled central bank governor failed to appear before French prosecutors on Tuesday to be questioned on corruption charges, officials said, the Associated Press reported. A European judicial team from France, Germany and Luxembourg is conducting a corruption probe into an array of financial crimes, including illicit enrichment and alleged laundering of $330 million, implicating the Lebanese governor, Riad Salameh. Salameh, who has held his post for almost 30 years, has repeatedly denied all allegations against him.

British chemicals producer Venator Materials Plc filed for chapter 11 protection in the U.S., the company said in a court filing late on Sunday, Reuters reported. Venator has estimated both assets and liabilities in the range of $1 billion to $10 billion, according to a filing in the U.S. Bankruptcy Court for the Southern District of Texas.

China's central bank rolled over maturing medium-term policy loans while keeping the interest rate unchanged on Monday, as expected, but markets expect monetary easing may be inevitable in the coming months to support the economic recovery, Reuters reported. The People's Bank of China (PBOC) said it was keeping the rate on 125 billion yuan ($18.08 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions unchanged at 2.75% from the previous operation.

Japan's government and the central bank on Monday held a fresh round of discussions on the role each should play in achieving sustained wage hikes aimed at eliminating the risk of the country returning to deflation, Reuters reported. The meeting of the government's top economic council focused on whether recent rises in inflation and wage growth suggest Japan is approaching a sustained exit from deflation. "While there have been some positive signs in recent data, we must ensure they are stable and sustainable so that Japan won't revert to deflation," the Cabinet Office told the meeting.