Headlines

Hungary raised objections over the implementation of a global minimum tax in the European Union on Tuesday, saying it can only support a proposal that does not disadvantage firms operating in Hungary, and citing additional risks due to the Ukraine war, Reuters reported. Nearly 140 countries reached a two-track deal in October brokered by the Organisation for Economic Cooperation and Development (OECD) on a minimum tax rate of 15% on multinationals.

The British government presented legislation Monday that would allow it to tear up parts of its Brexit agreement with the European Union, stoking fears of a trade war and drawing condemnation from the trade bloc, the Wall Street Journal reported. U.K. Foreign Secretary Liz Truss said that the legislation put before Parliament enables the government to unilaterally alter the terms of a 2019 deal with its European counterparts that placed a customs border within the U.K., between Britain and Northern Ireland.

The Reserve Bank of Australia “will do what’s necessary” to bring inflation back down to its 2-3% target, Governor Philip Lowe said, as he warned interest rates would need to push higher to achieve that goal, Bloomberg News reported. Inflation could accelerate to as much as 7% by year’s end and is unlikely to begin slowing until the first quarter of 2023, Lowe said in an interview with Australian Broadcasting Corp.’s 7:30 Report on Tuesday.

Euro area interbank borrowing rates saw their biggest daily jumps in over 10 years on Tuesday, reflecting huge increases in market expectations for European Central Bank rate hikes, Reuters reported. Euribor is a crucial benchmark as all sorts of financial products, from interest rates swaps, savings accounts to mortgages, are priced off of them. That means increases will reflect a tightening of financial conditions. The six-month Euribor fixing rose 6.7 basis points from Monday in its biggest daily jump since 2011. Fixed at 0.175% on Tuesday, it was at the highest since 2014.

Brazil posted a higher-than-expected $4.9 billion trade surplus in May, official data showed on Monday, boosting exports to the European Union amid Russia's invasion of Ukraine, Reuters reported. The result represented a sharp decline from the $8.5 billion surplus posted in May 2021, on the back of a surge in imports while exports grew at a slower pace. Exports were up 8% from the same month last year to $29.6 billion, a record for any month, the Economy Ministry said.

The Bank of Japan ramped up bond buying on Tuesday as its yield cap came under renewed pressure from rising global interest rates, highlighting its difficulty in remaining a dovish outlier in a global wave of monetary tightening, Reuters reported. The central bank's resolve to keep yields low has helped drive the yen down to 24-year lows against the dollar, as investors have focused on the gap between Japan's ultra-low interest rates and expectations of aggressive hikes by the U.S. Federal Reserve.

Crédito Real built a booming business lending at high interest rates to Mexican teachers and other government workers. The loans were paid back through payroll deduction, reducing the risk of nonpayment, the Wall Street Journal reported. Now it is planning to file for bankruptcy in Mexico after it has faced growing skepticism over how it has been reporting its earnings and measuring the size of its loan portfolio.

The bankruptcy court has allowed a petition filed by an operational creditor of Bombay Rayon Fashions Ltd (BRFL) to admit the company for the corporate insolvency resolution process (CIRP) and appointed Santanu T Ray of AAA Insolvency Professionals as its resolution professional, the Economic Times of India reported. The Mumbai bench of the National Company Law Tribunal (NCLT) admitted the plea filed by Vikash Parasprampuria of Chiranjilal Yarn Traders against the textile maker.

China's cabinet unveiled some steps on Monday to improve the allocation of resources among local governments to help ease their growing fiscal strains and debt risks, amid efforts to support the slowing economy, Reuters reported. In a document on fiscal reform below the provincial level, the State Council laid out steps to divide fiscal revenues and spending obligations among local governments, and transfer payments allocations. China has in recent years taken measures to shore up finances of debt-laden local governments, partly via increased transfer payments from the central government.

Ukraine's central bank said the situation in the war with Russia will determine whether its key interest rate can be cut from the current level of 25% or whether further hikes will be necessary, Reuters reported. On June 2, the central bank sharply raised its main interest rate to 25% from 10%, tightening monetary policy for the first time since the Feb. 24 Russian invasion to tackle double-digit inflation and protect incomes and savings during the war.