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☆ Instant View: China's Q2 GDP growth slows to 0.8% q/q, raises stimulus expectations
▼ + stars: | 2023-07-17 | by ( ) www.reuters.com time to read: +11 min

"Consumers are not spending, mainly driven by the bleak outlook for the property market. Disappointing retail numbers and property market sales show it doesn't seem that the boost from rate cuts is sufficient. ..the property market is beginning another slowdown - the government will have to come up with more stimulus for property." "Nonetheless, we think more stimulus is required to stabilise and restore confidence in the property market." ZHIWEI ZHANG, CHIEF ECONOMIST, PINPOINT ASSET MANAGEMENT, HONG KONG"Nominal GDP growth turns out to be lower than real GDP growth in Q2, the first time since comparable data are available in Q4 2016.

Persons: CHRISTOPHER WONG, LOUIS KUIJS, CAROL KONG, XING ZHAOPENG, KEN CHEUNG, ALVIN TAN, VISHNU VARATHAN, MARCO SUN, CHEN, TONY SYCAMORE, ZHIWEI ZHANG, JING LIU Organizations: Gross, National Bureau, Statistics, Shanghai, NBS, BANK OF, ANZ, MIZUHO BANK, OF, OF ASIA FX, RBC, MUFG BANK, IG, SYDNEY, Friday's, BANK OF SINGAPORE, HSBC, stoke, Authorities, Reuters, U.S, Thomson Locations: U.S, SINGAPORE, ASIA, HONG KONG, SYDNEY, CHINA, SHANGHAI, OF ASIA, China

☆ China's quarterly report card is in, and it's bad — but Beijing is unlikely to step in and prop up the economy just yet
▼ + stars: | 2023-07-17 | by ( Huileng Tan | ) www.businessinsider.com time to read: +4 min

China posted GDP growth of 6.3% in the second quarter of 2023, badly missing expectations. Even so, China is unlikely to unleash major stimulus measures to boost the economy because it's already in so much debt. And while the GDP did grow year-on-year, it bears noting that the comparison is with a low base from last year when China's economy was battered by on-off COVID-19 restrictions. "There are growing hopes for 'big bang' stimulus to fire up China's growth," Vishnu Varathan, the head of economics and strategy at Mizuho Bank, wrote in a Monday note before China's second-quarter GDP release. The inherent risk with such high debt levels is that a default threatens a domino impact on the Chinese economy — and even the world.

Persons: Vishnu Varathan, China's, Liu Guoqiang, Zhu Min, Robert Carnell, ING's, Carnell, Nomura Organizations: Service, Reuters, Mizuho Bank, Bloomberg, International Monetary Fund, Asia Pacific Locations: China, Wall, Silicon, Beijing, Tianjin

☆ China's youth unemployment rate just hit a new high and its GDP growth missed analysts' expectations
▼ + stars: | 2023-07-17 | by ( Huileng Tan | ) www.businessinsider.com time to read: +2 min

China's youth unemployment rate hit a new high, and its GDP grew by 6.3% in the second quarter. Analysts polled by Reuters expected China's economy to have grown by 7.3%. After an initial spurt, China's economy is struggling to recover from three years of COVID-19 restrictions. Economists polled by Reuters expected China's GDP to grow by 7.3% during the second quarter of the year. China's economy grew 3% in 2022 and Beijing has set a 5% GDP growth target this year.

Persons: Vishnu Varathan, Varathan Organizations: Reuters, Service, Privacy, Mizuho Bank Locations: Wall, Silicon, China, Beijing

☆ Monetary stimulus would weigh on the Chinese yuan, analyst says
▼ + stars: | 2023-07-13 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailMonetary stimulus would weigh on the Chinese yuan, analyst saysVishnu Varathan, Mizuho Bank's head of economics and strategy, says markets are leaning toward optimism when it comes to China tech and growth stocks, but the Chinese yuan remains "a lot more vulnerable to downside risks."

Persons: Vishnu Varathan, Mizuho Bank's Locations: China

☆ Despite significant disagreements between China and the US, the world is 'big enough for both countries to thrive': Janet Yellen
▼ + stars: | 2023-07-10 | by ( Kai Xiang Teo | ) www.businessinsider.com time to read: +3 min

Treasury Secretary Janet Yellen concluded her trip to China on Sunday with an appeal for both nations to find 'a way to live together.' 'We believe that the world is big enough for both of our countries to thrive,' she said. We believe that the world is big enough for both of our countries to thrive," she said, according to a transcript of her speech on Sunday. John Kerry, the U.S. special envoy for climate change, is slated for a visit to China later this month, per Bloomberg. Despite Yellen's optimism, at least one analyst feels that relations between the US and China remain tenuous.

Persons: Janet Yellen, Yellen, Biden, Yellen's, Antony Blinken's, Xi Jinping, John Kerry, Vishnu Varathan Organizations: Service, US, of Commerce, Eurasia Group, Biden, U.S, Bloomberg, Mizuho Bank's Locations: China, Wall, Silicon, Mizuho Bank's Asia, Oceania

☆ Generative AI is bringing back cloud demand after IT budgets were slashed, and this boom could be a big win for Amazon, analysts say
▼ + stars: | 2023-07-10 | by ( Ellen Thomas | ) www.businessinsider.com time to read: +2 min

Deal cycles are back to closing at about 30 to 60 days in Q2, a Mizuho Bank report said. The demand for generative AI, which operates in the cloud, has driven the stabilization. The big cloud-computing budget cut could be subsiding thanks to generative AI, and Amazon Web Services could benefit massively, according to a new survey of CIOs from Mizuho Bank. CIOs who were focused on trimming cloud budgets in the first quarter are now looking to spend those savings on generative AI. Customers are especially excited about Bedrock, Amazon's foundational model for developers to build generative AI on, because of its privacy features, the survey said.

Persons: CIOs, Mizuho, Bernstein, Bard Organizations: Mizuho Bank, Amazon Web, Mizuho Bank's, AWS, Microsoft, Google, Analysts Locations: Mizuho, OpenAI

The People's Bank of China, which typically issues guidance on dollar deposit rates to state banks, did not immediately comment on the matter. The lenders - Industrial and Commercial Bank of China (601398.SS), , Bank of China (601988.SS), , Agricultural Bank of China (601288.SS), , China Construction Bank (601939.SS), and Bank of Communications (601328.SS), - did not immediately respond to requests for comment. The lower rates could both discourage households from putting savings into higher-yielding dollar deposits and nudge Chinese firms, especially exporters, to settle foreign exchange receipts in yuan. The latest cut in dollar deposit rates was the second in barely a month. Some currency traders also said the cuts in dollar deposit rates would ease pressure on commercial lenders' net interest margin, as banks' dollar deposit rates had risen above lending rates before the recent adjustments.

Persons: Ken Cheung, Banks, PBOC, Winni Zhou, Samuel Shen, Jindong Zhang, Rong Ma, Ryan Woo, John Geddie, Edmund Klamann Organizations: People's Bank of China, Industrial, Commercial Bank of China, Bank of China, Agricultural Bank of China, China Construction Bank, Bank of Communications, Traders, U.S, Mizuho Bank, Reuters, Thomson Locations: SHANGHAI, BEIJING, China, United States, China's, Shanghai, Beijing, Tokyo

HONG KONG, June 27 (Reuters Breakingviews) - A government-led buyout signals more uncertainty ahead for a chip industry grappling with oversupply and geopolitics. The state-backed Japan Investment Corp will take over JSR (4185.T), which makes light-sensitive chemicals vital to manufacturing semiconductors, among other things. In recent years, the conglomerate has pivoted from a low-margin business of selling synthetic rubber used to make tyres to focus on semiconductor materials - primarily photoresists - and biopharmaceuticals. Yet JIC's mandate to boost the country’s global competitiveness and its focus on consolidating industries helps to justify the hefty premium. Either way, the government's focus on elevating national chipmaking champions creates fresh uncertainty for JSR's foreign customers like South Korea's Samsung Electronics (005930.KS) and Taiwan Semiconductor Manufacturing (2330.TW).

Persons: Sharp, Eric Johnson, Una Galani, Thomas Shum Organizations: Reuters, Japan Investment Corp, Renesas Electronics, chipmakers, Samsung Electronics, Taiwan Semiconductor Manufacturing, Japan Investment Corporation, Mizuho Bank, Development Bank of Japan, Thomson Locations: HONG KONG, Tokyo, Taiwan, Japan, United States, South Korea, South

☆ Shares in Japan's JSR untraded on surprise possible buyout
▼ + stars: | 2023-06-26 | by ( Sam Nussey | ) www.reuters.com time to read: +2 min

JSR's market capitalisation was 677 billion yen ($4.71 billion) at Friday's market close. JIC would spend about 1 trillion yen on the acquisition, the Nikkei newspaper reported, injecting 500 billion yen into a new company to make the purchase and borrowing 400 billion yen from Mizuho Bank. JSR is a top supplier of photoresists, which are light-sensitive chemicals used to print patterns on wafers, to global chipmakers. JSR, which was set up in 1957 as a government-backed producer of synthetic rubber, reported a 20% jump in sales to 408.9 billion yen in the year ended March, while operating profit declined 33% to 29.4 billion yen. Shares in JSR, which unusually for a Japanese company has a foreign-born CEO, have gained 25% year-to-date.

Persons: JIC, Travis Lundy, Sam Nussey, Jamie Freed Organizations: JSR, Japan Investment Corp, Nikkei, Mizuho Bank, JIC, Quiddity Advisors, Thomson Locations: TOKYO, China, United States, Japan, Tokyo

☆ Asian markets slide as investors fear more rate hikes by major central banks
▼ + stars: | 2023-06-23 | by ( Laura He | ) edition.cnn.com time to read: +1 min

Hong Kong CNN —Asian stock markets tumbled Friday as investors fretted that more interest rate hikes by major central banks would drag on global economic growth. Mainland Chinese stock markets were closed for a public holiday. Federal Reserve Chair Jerome Powell said Wednesday that more interest rate increases might be needed this year to bring down US inflation to the central bank’s 2% target. “The re-acceleration of global monetary policy tightening dampened markets’ sentiment across regions,” said Ken Cheung, chief foreign exchange strategist for Asia at Mizuho Bank. “The increasing inflation momentum will pave the way for the Bank of Japan’s inflation upgrade and the possible monetary policy tweak in the medium term.”

Persons: Australia’s, Kospi, Jerome Powell, ”, “, Ken Cheung Organizations: Hong Kong CNN, Nikkei, US, Bank of England, Bank of Japan, Mizuho Bank, Bank of Locations: Hong Kong, South, Japan, Asia

☆ Japan Investment Corp in $7 billion deal talks with chipmaker JSR, Nikkei reports
▼ + stars: | 2023-06-23 | by ( ) www.reuters.com time to read: +1 min

June 24 (Reuters) - State-backed Japan Investment Corp is in talks to buy the country's top chipmaker, JSR Corp (4185.T), for about 1 trillion yen ($6.96 billion), the Nikkei reported on Saturday. If the deal goes through, JSR would delist from the Tokyo Stock Exchange as soon as 2024, according to Nikkei. To purchase JSR, JIC intends to establish a new company with 500 billion yen in capital, while Mizuho Bank will provide another 400 billion yen in finance. The fund plans to raise 100 billion yen via preferred shares and subordinated loans underwritten by various banks, according to Nikkei. The deal would grant JSR, with its significant 30% share of the global photoresist market, greater freedom for expansion, without being constrained by worries about stock market performance, Nikkei said.

Persons: JIC, Riya Sharma, Arun Koyyur Organizations: Japan Investment Corp, JSR, Nikkei, Tokyo Stock Exchange, Mizuho Bank, Thomson Locations: Bengaluru

☆ China cuts loan prime rate as economic recovery fizzles out
▼ + stars: | 2023-06-20 | by ( Laura He | ) edition.cnn.com time to read: +3 min

The rate cuts come as Wall Street banks, including Goldman Sachs, slash their forecasts for China’s economy. The People’s Bank of China on Tuesday trimmed its one-year loan prime rate (LPR) by 10 basis points from 3.65% to 3.55%, and reduced the five-year rate by the same margin to 4.2%. This is the first time the PBOC has cut both LPR rates since August 2022, when renewed Covid lockdowns and a deepening property downturn were pummeling the economy. “The 10 bps rate cut[s] are unlikely to stimulate business confidence and housing demand,” said Ken Cheung, chief Asian foreign exchange strategist at Mizuho Bank. Hong Kong and mainland Chinese stocks slid after Tuesday’s rate cuts.

Persons: Goldman Sachs, Goldman, Covid, ”, Ken Cheung, “, ” Goldman Sachs, Fu Linghui Organizations: Hong Kong CNN, People’s Bank of China, Mizuho Bank, Shanghai, National Bureau, Statistics, NBS Locations: Hong Kong, Beijing

☆ China opens a new era of 'proactive easing' as the economic recovery turns sour
▼ + stars: | 2023-06-14 | by ( Jihye Lee | ) www.cnbc.com time to read: +3 min

SHANGHAI, CHINA - NOVEMBER 04, 2022: Buildings at Lujiazui Financial District are illuminated to celebrate the opening ceremony of the 5th China International Import Expo (CIIE) on November 4, 2022 in Shanghai, China. Vcg | Visual China Group | Getty ImagesStock Chart Icon Stock chart iconPointing to soft economic figures from China, including credit data, Citi economists said "stimulus seems to be underway with the weak readings." Barclays economists, writing in a Tuesday note titled "Entering a rate cut cycle," predict China will deliver a cut for every quarter until early 2024. China's central bank controls the benchmark one-year lending and deposit rates, which affect the borrowing costs for banks, businesses and individuals across the country. Mizuho Bank's Head of Economics and Strategy for Asia Vishnu Varathan argued that the latest actions from China's central bank "does not cut it."

Persons: 50bp, Jian Chang, Goldman Sachs, Hui Shan, Asia Vishnu Varathan Organizations: Lujiazui Financial, 5th China, Visual China, Getty, Citi, Barclays, Bank's, Economics Locations: SHANGHAI, CHINA, Shanghai, China, Asia

"The central bank's rate cut decision was not a complete surprise to the market," said Ken Cheung, chief Asian FX strategist at Mizuho Bank. Further interest rate cuts in China would only widen the yield gap with the United States, even if the Fed pauses this week, sending the yuan lower and accelerating capital outflows. Tuesday's rate cut suggests policymakers are increasingly worried about the health of China's recovery, traders and analysts said. Bloomberg reported on Tuesday, citing unnamed sources, that China was considering at least a dozen stimulus measures including cuts to interest rates to support areas such as real estate and domestic demand. "There could be another RRR or policy interest rate cut in Q4, depending on the economic outcome over the next several months."

Persons: Ken Cheung, Yi Gang, Cheung, Marco Sun, Frances Cheung, Goldman Sachs, Winni Zhou, Tom Westbrook, Sam Holmes, Jacqueline Wong Organizations: People's Bank of China, Mizuho Bank, MUFG Bank, Bloomberg, OCBC Bank, Thomson Locations: SHANGHAI, SINGAPORE, China, United States, outflows

☆ China cuts short-term borrowing costs as economy slows
▼ + stars: | 2023-06-13 | by ( ) www.reuters.com time to read: +4 min

SummarySummary Companies PBOC lowers 7-day reverse repo to 1.9% vs. 2.0% prev. The People's Bank of China (PBOC) cut its seven-day reverse repo rate by 10 basis points to 1.90% from 2.00% on Tuesday, when it injected 2 billion yuan ($279.97 million) through the short-term bond instrument. "The central bank's rate cut decision was not a complete surprise to the market," said Ken Cheung, chief Asian FX strategist at Mizuho Bank. Tuesday's rate cut suggests policymakers are increasingly worried about the health of China's recovery, traders and analysts said. "However, the market is expecting the PBOC to cut the policy rate further.

Persons: 10bp, Ken Cheung, Yi Gang, Cheung, Marco Sun, Frances Cheung, Julian Evans, Pritchard, Winni Zhou, Tom Westbrook, Kim Coghill, Sam Holmes Organizations: People's Bank of China, Mizuho Bank, MUFG Bank, OCBC Bank, Capital Economics, Thomson Locations: SHANGHAI, SINGAPORE, China, United States, outflows

☆ China’s small and medium-sized factories post surprise growth, easing market anxiety
▼ + stars: | 2023-06-01 | by ( Laura He | ) edition.cnn.com time to read: +2 min

Hong Kong CNN —A key gauge of China’s small- and medium-sized factories showed their surprise return to expansion last month, which eased market anxiety about growth stalling in the world’s second largest economy. The Caixin manufacturing Purchasing Managers’ Index (PMI) rose to 50.9 in May from April’s 49.5, according to a private survey. The Caixin survey is focused on small and medium-sized enterprises. Asian markets received a boost from the Caixin data. It settled 2% lower on Wednesday, weighed down by the weak China data and a stronger greenback.

Persons: Ken Cheung, Joe Biden, WTI Organizations: Hong Kong CNN, PMI, National Bureau of Statistics, Mizuho Bank, Nikkei, China’s, US, Senate, greenback . Locations: Hong Kong, April’s, China, China’s Shanghai

☆ Stocks rise on US debt ceiling deal but China drags
▼ + stars: | 2023-05-29 | by ( Stella Qiu | ) www.reuters.com time to read: +5 min

S&P 500 futures rose 0.3% while Nasdaq futures firmed 0.5%. After weeks of negotiations, congressional Republican McCarthy and Biden agreed on Saturday to avert an economically destabilising default by suspending the $31.4 trillion debt ceiling until 2025. In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.2%, with falls in Chinese and Hong Kong shares offsetting gains seen elsewhere. U.S. shares rallied at the end of last week on hopes of a debt ceiling deal and bets on artificial intelligence firms. Elsewhere in the currency markets, the dollar index - a measure of the greenback against its major peers - was a touch lower at 104.17 as risk-sensitive currencies staged a rebound.

☆ Asian shares, US futures rise on debt ceiling deal
▼ + stars: | 2023-05-29 | by ( Stella Qiu | ) www.reuters.com time to read: +5 min

The positive news lifted S&P 500 futures 0.2% in Asia while Nasdaq futures firmed 0.4%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) gained 0.3%, after a 1.1% drop the previous week. Two-year yields hit a 2-1/2 month high of 4.6390% on Friday on markets bets of higher Federal Reserve rates for longer. U.S. shares rallied at the end of last week on hopes of a debt ceiling deal and on optimism about artificial intelligence. However, it is still not too far from a two month high hit on Friday.

SINGAPORE, May 15 (Reuters) - The U.S. dollar fell slightly from a five-week high on Monday after a period of strength that has confused analysts. The euro was up 0.27% against the dollar on Monday at $1.088, rebounding after falling 1.54% the previous week. That helped send the dollar index , which measures the greenback against six major peers, down 0.19% to 102.49. Alvin Tan, head of Asia FX strategy at RBC Capital Markets, said a pick-up in U.S. bond yields over the last two days had supported the currency. "If you remove the uncertainty around the debt ceiling situation, the sentiment has been turning bearish against the dollar," said Khoon Goh, head of Asia research at ANZ.

☆ Dollar rises to 5-week high on inflation worries; lira falls
▼ + stars: | 2023-05-15 | by ( Kevin Buckland | ) www.reuters.com time to read: +4 min

Worries over a debt-ceiling standoff on raising the U.S. government's $31.4 trillion borrowing limit also lent some support to the safe-haven dollar. "Now that the Fed is sort of out of the way, inflation in the U.S. has come in softer than expected. The Japanese currency dipped as low as 136.27 per dollar, and was last about 0.3% lower at 136.17 per dollar. The dollar was last up 0.28% at 19.635 Turkish lira after earlier jumping to 19.70 for the first time since March 10. The U.S. currency sank 0.72% to 33.735 baht in onshore Thai trading, and earlier dipped as much as 0.92%.

☆ Dollar awaits inflation data, rattled by debt ceiling impasse
▼ + stars: | 2023-05-10 | by ( Amanda Cooper | ) www.reuters.com time to read: +3 min

SINGAPORE, May 10 (Reuters) - The dollar seesawed on Wednesday after U.S. President Joe Biden and top lawmakers made no headway in the debt ceiling crisis, although volatility was minimal ahead of inflation data that could be instrumental in determining where interest rates head. The dollar held onto most of Tuesday's gains, thanks to another sharp rise in short-dated Treasury yields and to the nervousness that prevailed over Wednesday's U.S. inflation data. The euro was last down 0.1% at $1.0947, as was sterling , which eased 0.1% to $1.2605. Against a basket of currencies, the dollar index edged up 0.14% to 101.76, having earlier fallen by as much as 0.11%. The Japanese yen was steady against the dollar at 135.25 and fell 0.1% against the euro to 148.075, while the Australian dollar fell 0.2% to $0.675.

☆ Dollar braces for inflation, rattled by debt ceiling impasse
▼ + stars: | 2023-05-10 | by ( Amanda Cooper | ) www.reuters.com time to read: +3 min

SINGAPORE, May 10 (Reuters) - The dollar seesawed on Wednesday after U.S. President Joe Biden and top lawmakers made no headway in the debt ceiling crisis, although volatility was minimal ahead of inflation data that could be instrumental in determining where interest rates head. Biden, McCarthy and the three other top congressional leaders are set to meet again on Friday. The dollar held onto most of Tuesday's gains, thanks to another sharp rise in short-dated Treasury yields and to the nervousness that prevailed over Wednesday's U.S. inflation data. Against a basket of currencies, the U.S. dollar index steadied at 101.64. Elsewhere, the Japanese yen was steady against the dollar at 135.25 and against the euro at 148.155, while the Australian dollar eased 0.1% to $0.6755.

☆ Dollar softer as US debt ceiling crisis unresolved, inflation data eyed
▼ + stars: | 2023-05-10 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

SINGAPORE, May 10 (Reuters) - The dollar weakened broadly on Wednesday after U.S. President Joe Biden and top lawmakers failed to break a deadlock on the debt ceiling crisis, though currency moves were marginal amid caution ahead of U.S. inflation data later in the day. The two, however, agreed to further talks and committed their aides to daily discussions about areas of possible agreement. "There has been a lot of attention lately on the debt ceiling issues," said Carol Kong, a currency strategist at Commonwealth Bank of Australia (CBA). Also preoccupying investors was U.S. inflation data, with economists polled by Reuters expecting a 5.5% year-on-year increase in core consumer prices for April. "I think markets are already expecting the Bank of Japan to make some moves."

☆ Dollar softer as U.S. debt ceiling crisis unresolved, inflation data eyed
▼ + stars: | 2023-05-10 | by ( ) www.cnbc.com time to read: +3 min

An employee deals with U.S. one-hundred dollar banknotes at a bank on June 16, 2022 in Hai an, Nantong City, Jiangsu Province of China. The dollar weakened broadly on Wednesday after U.S. President Joe Biden and top lawmakers failed to break a deadlock on the debt ceiling crisis, though currency moves were marginal amid caution ahead of U.S. inflation data later in the day. "There has been a lot of attention lately on the debt ceiling issues," said Carol Kong, a currency strategist at Commonwealth Bank of Australia. Also preoccupying investors was U.S. inflation data, with economists polled by Reuters expecting a 5.5% year-on-year increase in core consumer prices for April. "I think markets are already expecting the Bank of Japan to make some moves."

☆ Stocks slide into Fed mode, shorts stalk banks
▼ + stars: | 2023-05-03 | by ( Tom Westbrook | ) www.reuters.com time to read: +4 min

Overnight, tumbling regional bank stocks (.KRX) dragged the S&P 500 (.SPX) down 1.2% and oil dived more than 5% on fears that shaky bank confidence and signs of weakness in the U.S. job market were harbingers of a looming broader slowdown. Bonds rallied as investors reckoned the Federal Reserve, which sets policy later on Wednesday, will soon be switching from rate hikes to cuts. Among banks, PacWest Bancorp (PACW.O), down 27.8%, Western Alliance Bancorp (WAL.N), down 15.1%, and Comerica Inc (CMA.N) down 12.4%, were the biggest losers. If that happens, focus will be on whether or how hard Fed Chair Jerome Powell pushes back on investors' expectations for rate cuts by year's end. The Australian dollar has given back some of the ground gained on Tuesday, following a surprise rate hike from the central bank, and sat at $0.6670.

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