Headlines

The euro has suffered a swift and brutal slump this year, and now it’s crossed a major threshold for the first time in more than two decades: parity with the dollar, Bloomberg News reported. The 12% decline is the result of multiple pressures, from the war in Ukraine to an energy crisis and the growing risk that Russia cuts off gas exports and pushes the euro area into recession. Add in central banks moving at vastly different speeds and an in-demand dollar, and some analysts say parity may not be the end point, but merely a stepping stone to further weakness.

Europe’s economies showed resilience in May but remain vulnerable and could suffer a steep downturn should Russia stop supplying natural gas to the region, the Wall Street Journal reported. Economic data released Wednesday showed output at factories across the eurozone jumped in May, while the U.K. economy rebounded from a contraction in April. However, the rise in eurozone factory output was almost entirely down to U.S. businesses that operate in Ireland, while U.K. growth was partly driven by the lifting of two years of restricted access to local health services. Both the U.K.

Financial regulators in central China’s Henan and Anhui provinces have promised to give some bank customers some of their deposits back after a protest over their frozen accounts Sunday turned violent, the Associated Press reported. In statements issued late Monday, officials said customers with deposits of 50,000 yuan (about $7,400) or less would be reimbursed. They said others with larger bank balances would get their money back at a later, unspecified date.

Euro zone industrial production increased by more than expected in May as output of capital and non-durable consumer goods picked up sharply during the month, data showed on Wednesday, Reuters reported. The European Union statistics agency Eurostat said industrial production in the 19 countries sharing the euro single currency rose by 0.8% month-on-month and by 1.6% from a year earlier. That compared with market expectations of rises of 0.3% from a month earlier and compared with May 2021.

The European Union's body for dismantling failed banks said on Wednesday it would ratchet up pressure on lenders over the coming months to bolster their defences so that none remain "too big to fail" by January 2024, Reuters reported. The Single Resolution Board (SRB), in its first "heat map" on progress in preventing failing banks from needing a taxpayer bailout, said that the shortfall in special debt issuance by banks to replenish burnt-out capital was down to 32.6 billion euros, or 0.45% of the total risk exposure.

Retail sales in Brazil grew more slowly than expected in May, with momentum decreasing amid persistent inflation, Reuters reported. The seasonally adjusted monthly increase of 0.1% in May from April was much less than the median forecast of 1.0% growth in a Reuters poll of economists. Government statistics agency IBGE said month-on-month sales were up in six of the eight categories surveyed in May, with the biggest impact coming from the 3.5% rise seen in pharmaceutical and medical goods. Sales fell 0.2% compared with May last year, IBGE said, versus a 2.6% increase forecast by economists.

Embattled Scandinavian airline SAS and unions representing pilots will resume negotiations on Wednesday to try and agree a new labor deal to end a one-week strike, Reuters reported. SAS has canceled more than 1,200 flights since July 4 when talks with many of its pilots over a new collective bargaining agreement collapsed and they launched the crippling strike. "What has now happened is that we have asked the parties to gather in Stockholm from Wednesday," Swedish mediator Jan Sjolin said.

An investment vehicle has taken full ownership of Tsinghua Unigroup Co. Ltd., concluding a bankruptcy reorganization plan the Chinese semiconductor conglomerate unveiled last year to deal with its debt crisis, CaixingGlobal.com reported. Tsinghua Unigroup has updated its business registration materials to show that Beijing Zhiguangxin Holding Co. Ltd. now owns 100% of the company, according to an exchange filing published on Monday. Zhiguangxin was created in November 2021 by a consortium led by Wise Road Capital Ltd. and Beijing Jianguang Asset Management Co. Ltd.

Commodity investors looking to China to reverse the rout in global metals markets may be disappointed, with Beijing unable to deliver the kind of investment splurge that powered past bull markets, Bloomberg News reported. Base metals had their worst quarter since 2008 in the three months to June, and the retreat deepened in July. Copper plunged briefly below $7,500 a ton in intraday trading last week, its lowest since late 2020, and is down about 29% from a March record. Iron ore is down about a third from its highest this year, and aluminum is about 40% lower.

Distressed Hong Kong property tycoon Pan Sutong was told by the city’s high court to go bankrupt, marking another blow to the former billionaire, Bloomberg News reported. The court ordered Pan to unwind his holding company, Silver Starlight Ltd, after he and the firm failed to pay creditors including China Citic Bank Corp HK$8 billion (US$1 billion) that was due in 2019, according to a court filing Friday. A representative for Pan said on Monday he is appealing the order.