Headlines

Fitch Ratings said on Thursday it has decided to withdraw its rating on embattled property developer China Evergrande Group and two of its subsidiaries as the firms have stopped participating in the process, Reuters reported. The rating agency in December downgraded Evergrande and its subsidiaries, Hengda Real Estate Group Co Ltd and Tianji Holding Ltd, to so-called "restricted default" status, saying the firms had defaulted on their offshore bond obligations.

Chinese officials have vowed to carry out a slew of government policies to stimulate growth following Premier Li Keqiang’s recent call to avoid a Covid-fueled economic contraction this quarter, Bloomberg News reported. Ministry of Finance authorities said Thursday they would accelerate refunds of value-added taxes, make it easier for small companies to bid on government purchasing projects, and ensure that local special bonds -- which are mainly used to fund infrastructure projects -- are issued in a smooth manner, according to a ministry briefing.

China's proposed cybersecurity rules for financial firms could pose risks to operations of western companies by making their data vulnerable to hacking, among other things, a leading lobby group has said in a letter seen by Reuters. The latest regulatory proposal comes at a time when a string of western investment banks and asset managers are expanding their presence in China, either by setting up wholly-owned units or by taking a bigger share in existing joint ventures.

Spain's jobless number dropped below 3 million in May for the first time since early in the 2008/09 global financial crisis, as the economy's recovery from the impact of COVID-19 boosted hirings and pushed many workers out of the shadow economy, Reuters reported. The number of people registering as jobless fell 3.29% from April, leaving 2.92 million people out of work, the lowest number since November 2008, Labour Ministry data showed on Thursday. Spain added 33,366 net jobs during the month, separate data from Social Security Ministry showed.

The Bank of Canada indicated that persistent price pressures are making it more likely policymakers will need to raise borrowing costs to contractionary levels in order to keep inflation expectations anchored, Bloomberg News reported. In a speech a day after the central bank raised its benchmark overnight rate by a half percentage point to 1.5%, Deputy Governor Paul Beaudry gave new guidance Thursday on how high borrowing costs could rise. The policy rate may now go to the top, or even above, what the Bank of Canada considers its “neutral range,” estimated at between 2% to 3%.

The group of oil-producing nations known as OPEC Plus agreed on Thursday to a larger increase in supply than planned for July and August, the New York Times reported. After a videoconference, the group said it would raise production by 648,000 barrels a day, an increase of about 50 percent over the 430,000 barrels a day agreed under a program last year. Essentially, producers are compressing three months of planned increases into two months. The group suggested in a news release that it was responding to a reopening from lockdowns in countries like China.

Inflation in the euro area in May hit its highest annual level since the creation of the euro currency in 1999, Europe’s statistics agency reported on Tuesday, as a record run-up in energy and food prices stoked by Russia’s war in Ukraine continued to ricochet through the continent’s economy, raising the specter of a lapse into recession, the New York Times reported. Annual inflation in the 19 countries that use the euro currency jumped to a record 8.1 percent in May, from 7.4 percent in April.

German Chancellor Olaf Scholz said Wednesday he wants to join employers and labor unions in a “concerted action” to find ways of cushioning the effects of rising prices while preventing a spiral of inflation in Europe’s biggest economy, the Associated Press reported. Germany, like other countries in Europe and beyond, already has seen inflation accelerate sharply since Russia’s invasion of Ukraine pushed up fuel and food prices. An official estimate this week showed the country’s annual inflation rate jumping to 7.9% in May, the highest rate since the winter of 1973-1974.

Russia cut off gas supplies to more European buyers, stepping up its use of energy as a weapon and sowing further division in the continent, Bloomberg News reported. Gazprom PJSC halted pipeline shipments to the Netherlands and Denmark this week, and then surprised markets by also cutting off a small contract supplying Germany. Shell Plc and wind giant Orsted A/S refused to comply with President Vladimir Putin’s demand for payments to be made in rubles, and Gazprom responded by halting flows.

The European Union’s top trade official said China will exploit Russia’s need to diversify where it sells its energy, with the bloc set to ban as much as 90% of Moscow’s crude oil imports by year’s end, Bloomberg News reported. “What we are seeing, especially in this situation of Russia´s weakness, is that China is going to take good advantage of it,” European Commissioner Valdis Dombrovskis told Bloomberg on Wednesday. “It’s not going to be very advantageous for Russia.” Dombrovskis said that Russia is currently selling its oil to China at a 35% discount.