China Construction Bank cuts deposit rates
BEIJING: China Construction Bank cut deposit rates on Tuesday, part of an expected move by Chinese state-owned banks to alleviate shrinking interest margins at lenders as Beijing rolls out sweeping monetary easing measures to aid the broad economy. The bank reduced deposit rates by 5-25 basis points for some tenors, according to rates shown on its mobile app.
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The Star
37 minutes ago
- The Star
Asian currencies strengthen on signs of easing trade tensions
Emerging Asian currencies strengthened on Thursday as the dollar weakened following a softer U.S. inflation report, while the U.S.-China trade truce and signs that President Donald Trump may adopt a milder stance in tariff talks also supported risk sentiment. The Taiwan dollar advanced 0.8% to its highest level since early-May, and the South Korean won rose 0.9%. The Malaysian ringgit inched up 0.3%, and the Thai baht rose 0.4% to a near three-week high. Investor focus this week remained on trade talks between Washington and Beijing, which concluded with a framework deal that would lift Chinese export curbs on rare earth minerals and restore access for Chinese students to U.S. universities. "Relief from the fact that both the countries have managed to reach an agreement following their talks earlier in the week has been more or less priced in by markets, which has made the U.S. dollar continue to weaken, helping Asian currencies," said Khoon Goh, head of Asia research at ANZ. The dollar index dipped 0.2% as signs emerged that Trump may take a more conciliatory tone in tariff negotiations. Trump said he was open to extending a July 8 deadline to conclude trade talks with countries before imposing higher tariffs. He also said the U.S. would send out letters in one to two weeks outlining the terms of trade deals to dozens of other countries. Meanwhile, data also showed U.S. consumer prices rose less than expected in May, prompting traders to ramp up bets on a Federal Reserve rate cut as early as September, adding pressure on the dollar. Around the world, Iran warned if nuclear negotiations fail and conflict arises with the United States, it will strike American bases in the region. Back in Asia, stocks in South Korea were up 0.9%, while those in Singapore and Malaysia edged up 0.2% and 0.1%, respectively. However, shares in Taiwan fell 0.8%. Insurance company Fubon Financial Holding , which reported a significant loss for May, was among the top drags on the benchmark index. "There are ongoing concerns about the impact of the strong Taiwan dollar on the profitability of Taiwanese life insurance companies," Goh said. Thai stocks slipped 0.4% as political uncertainty deepened with the Supreme Court set to hear a case that could result in jail time for former Prime Minister Thaksin Shinawatra. Markets in Philippines were closed for a holiday. HIGHLIGHTS: ** Pakistan boosts defence budget by 20% but slashes overall spending in 2025-26 ** South Korea, Vietnam leaders agree to expand cooperation in areas such as nuclear power - Reuters
New Straits Times
an hour ago
- New Straits Times
China markets flat, Hong Kong dips as initial trade optimism wanes
HONG KONG: Chinese stocks steadied after an initial fall and Hong Kong shares were trading lower on Thursday, led by declines in the tech sector, as markets struggled to sustain positive momentum from Sino-US trade talks that provided few concrete details. A trade truce between the world's two biggest economies was back on track, according to U.S President Donald Trump, a day after negotiators from Washington and Beijing agreed on a framework to ease bilateral retaliatory tariffs. Under the agreement, Beijing will lift export restrictions on rare earths minerals while the US will restore Chinese students' access to its universities, Trump said on Truth Social. Yet the terms remain subject to final approvals with details notably absent. The 55 per cent tariffs on Chinese imports will also remain unchanged, US Commerce Secretary Howard Lutnick said. "We still don't know if what Trump says will actually happen. It's disappointing that the tariffs rates was not dialled down at all and tech curbs on China was not even mentioned," said Jason Chan, senior investment strategist at Bank of East Asia, Hong Kong. The talks left key issues like chip exports unaddressed, meaning conflicts are set to emerge in the future, while no one knows how long the current truce will last, he added. At the midday trading break, China's blue-chip CSI 300 Index was up 0.03 per cent, reversing an earlier loss of as much as 0.6 per cent and climbing back to a three-week high touched in the previous session. Hong Kong's benchmark Hang Seng index fell 0.5 per cent to pull back from its highest level in nearly three months. Tech shares led losses in both onshore and offshore markets. The CSI Semiconductor Index declined 1.1 per cent, while the Hang Seng Tech Index lost 1 per cent in Hong Kong. Among major losers, chipmaker SMIC declined 1.7 per cent to a one-week low. Alibaba weakened around 2 per cent and EV-maker Xpeng slid 5 per cent. The CSI Rare Earth Index edged up 0.4 per cent after slipping nearly 1 per cent in the morning session, touching the highest level since November. Chinese markets have been struggling to recover from trade shocks for the past two months, after Trump announced sweeping tariffs on April 2 that threatened the global trade system. The CSI 300 Index has barely eked out any gains since then, while Hong Kong's benchmark Hang Seng Index has climbed around 4 per cent, with both lagging the around 10 per cent bounce in the MSCI World Index. Wang Zhuo, partner at Zhuozhu Investment, said the market is less sensitive to trade talks and investors are shifting their focus to economic fundamentals.
New Straits Times
an hour ago
- New Straits Times
China's yuan ticks up as US-China trade truce lifts sentiment
SHANGHA: China's yuan strengthened against the dollar on Thursday, as the latest trade truce between Washington and Beijing raised hopes that the world's two largest economies could avoid any further escalation in their tariff row. However, the gains were capped by a weaker-than-expected midpoint guidance fix, which markets interpreted as an official attempt to keep the yuan stable in the face of broad dollar weakness. Deepening deflationary pressure and slowing exports also dragged on the Chinese currency. US President Donald Trump on Wednesday said he was very happy with a trade deal that restored a fragile truce in the US-China trade war, a day after negotiators from Washington and Beijing agreed on a framework covering tariff rates. "This was a conversation that enabled more conversations and prolong the trade truce," Maybank analysts said in a note. "However, there was little seen in terms of resolving core differences and issues such as national security, tariffs and technology race. There was little to suggest what can turn this trade truce a tad more permanent." As of 0342 GMT, the onshore yuan was 0.13 per cent higher at 7.1800 per dollar, while its offshore counterpart was up 0.24 per cent in Asian trade to 7.1818. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate at 7.1803 per dollar, its strongest since April 2. The spot yuan is allowed to trade 2 per cent either side of the fixed midpoint each day. The central bank had set firmer-than-expected midpoint guidance rates on most of the days since November to prevent excess yuan weakness. However, Thursday's official guidance was 100 pips weaker than a Reuters' estimate of 7.1703, with some traders interpreting it as an attempt to prevent any large upswing in the yuan at a time of broader dollar weakness. Overnight, a milder US inflation report for May led traders to ramp up bets of a Federal Reserve rate cut as early as September, keeping pressure on the dollar. Also, a slew of recent Chinese economic data, including inflation and trade, pointed to a slowing economy and may not support a strong yuan in the near term, traders and analysts said. "Economic momentum remains weak, amid persistent deflation, while exports remain the main engine of growth," FX analysts at Barclays said in a note. "We continue to see yuan depreciation as a necessary release valve alongside incremental fiscal and monetary policy easing." Hu Yifan, regional chief investment officer and chief China economist at UBS Global Wealth Management, expects a loose monetary policy stance to be maintained for the remainder of this year. "We think there will be another 50 to 100 basis points of reserve requirement ratio (RRR) cuts in the second half of this year, and interest rates to be reduced by 20 to 30 basis points, due to low inflation," Hu said. "If tariffs are lowered, fiscal policy may not be needed, and China may not want to use up all its firepower."
