Latest news with #TingLu
Business Recorder
20-05-2025
- Business
- Business Recorder
China cuts key rates to aid economy as trade war simmers
BEIJING: China cut benchmark lending rates for the first time since October on Tuesday, while major state banks lowered deposit rates as authorities work to ease monetary policy to help buffer the economy from the impact of the Sino-U.S. trade war. The widely expected rate cuts are aimed at stimulating consumption and loan growth in a weakening economy while still protecting commercial lenders' shrinking profit margins. The People's Bank of China said the one-year loan prime rate (LPR), a benchmark determined by banks, had been lowered by 10 basis points to 3.0% , while the five-year LPR was reduced by the same margin to 3.5%. Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages. The lending rate cut was announced just after five of China's biggest state-owned banks said they have trimmed their deposit interest rates. Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank and Bank of Chinareduced deposit rates by 5-25 basis points (bps) for some tenors, according to rates shown on the banks' mobile apps. The banks cut interest rates on time deposits by 5 bps to 0.05%, reduced rates on one-year time deposits by 15 bps to 0.95% and shaved off 25 bps on three-year and five-year time deposits. These deposit rate reductions should guide smaller lenders in making similar cuts. Reuters reported on Monday that China's major state banks plan to cut their deposit rates from Tuesday, citing sources. The rate cuts are part of a package of measures announced by PBOC Governor Pan Gongsheng and other financial regulators before talks between China and the U.S. in Geneva earlier this month that led to a de-escalation in their trade war. China's central bank to spur financing support for consumption, trade Global investment banks are raising their forecasts for China's economic growth this year, after Beijing and Washington agreed to a 90-day pause on tariffs, despite uncertainty around Sino-U.S. trade negotiations. 'We still believe it will be quite challenging for Beijing to achieve its 'around 5%' growth target unless it rolls out a sizable stimulus package,' Ting Lu, chief China economist at Nomura, said in a note this week. 'Considering the respite on the trade war, Beijing might be under less pressure to introduce the necessary stimulus and reforms.' Recent economic readings show growth remains patchy and lacklustre. China's new home prices were unchanged in April from a month earlier, official data showed on Monday, extending the no-growth trend to nearly two years despite policymakers' efforts to stabilise the sector. Meanwhile, new bank loans also tumbled more than expected last month.
Business Recorder
13-05-2025
- Business
- Business Recorder
China stocks flat, Hong Kong retreats as tariff optimism fades
HONG KONG: China stocks were flat on Tuesday, while Hong Kong shares pulled back, as initial euphoria over a US-China trade agreement to delay and slash tariffs gave way to growing caution over the lengthy negotiations ahead. The deal inked between US and Chinese officials after weekend talks in Geneva surpassed market expectations and led to a strong rally in global markets and the dollar overnight. However, fears that further negotiations could prove a long slog still linger and weighed on investor sentiment. China's blue-chip CSI 300 Index gained less than 0.1% and the Shanghai Composite Index added 0.2% in early morning trade. In Hong Kong, the Hang Seng China Enterprises Index lost 1.1%, while the benchmark Hang Seng Index weakened 1% to retreat from a six-week high. 'It might be just the beginning of the inevitable collision of the two largest economies. After enjoying a rebound, markets perhaps need to ponder the medium to long term risk,' Ting Lu, chief China economist at Nomura, said in a note. US Treasury Secretary Scott Bessent, speaking after talks with Chinese officials in Geneva, said on Monday the two sides had agreed on a 90-day pause on their tit-for-tat measures. The US will cut extra tariffs it imposed in April on Chinese imports to 30% from 145% and Chinese duties on US imports will fall to 10% from 125%, the two sides said on Monday. The consumer electronics sector added 0.3% on tariff relief. The energy sector advanced 0.8% and the banking sub-index climbed 0.7%, leading onshore markets higher. The strategically important rare-earths sector, which was not mentioned in the trade talks, slipped 0.4%. Chinese stock rally on US-China trade deal Still, China stocks have fully recovered from the sharp sell-off last month, which was triggered by US President Donald Trump's punitive tariff measures on 'Liberation Day'. The blue-chip CSI300 Index is now trading 0.3% above its April 2 level - the day Trump announced reciprocal tariffs. 'We have been adding to China over the past months on the view that in the long term the current level of tariffs would be significantly reduced,' said Kamil Dimmich, partner and portfolio manager at North of South Capital EM fund. 'Markets have been fairly quick to price in the anticipated 'normalization', so we are no longer in a rush to add but remain happy with our exposures in China. Most likely there will be further ups and downs over the coming weeks and months so there may be better times to add.'
Yahoo
30-04-2025
- Business
- Yahoo
The markets: China takes a beating while U.S. resilience continues
Markets in China were down this morning on gloomy macroeconomic data showing a possible contraction of activity caused by President Trump's trade war. The S&P 500, by contrast, notched six straight days of gains on hopes that as Trump makes further compromises on tariffs the worst may be behind us. The trade war has begun to take its toll on Chinese stocks, which until recently had been more resilient than U.S. equities to President Trump's incoming tariffs. China's SSE was down 0.23% today and the CSI 300 was down 0.12%, following news that new export orders in China fell in April to their lowest since COVID-19. China's purchasing managers' index for manufacturing fell to 49, indicating a contraction in activity. The context: China's CSI 300 is down 1.3% year to date compared to the S&P 500, which is down 5.45% over the same period. In recent days, however, new data emerged showing a drastic reduction in export shipping from China to the U.S. and investors appear to have reacted as a result. While the S&P has now notched six straight days of gains, the CSI has lost 0.45% over the same period. Here's a snapshot of where global markets stood this morning prior to the opening in New York: The S&P 500 was up 0.58% yesterday. Futures contracts on the S&P were down 0.058% this morning. Japan's Topix was up 0.63%. Hong Kong's Hang Seng was up 0.51%. India's Nifty 50 was flat. China's SSE was down 0.23%. The CSI 300 was down 0.12%. South Korea's Kospi was down 0.34% (it remains up 6.6% YTD). The Stoxx Europe 600 was up 0.3% in early trading. It is not surprising that Chinese stocks have taken a beating over the last few days. Analysts have been churning out gloomy estimates of the effect of the trade war. 'We estimate ~2.2% of China's GDP is directly hit by the tariffs. Assuming a 50% loss of exports to the US, China might lose ~1.1% of GDP in the near term. The actual loss will be larger as the shock ripples through to other sectors, especially the services sectors that facilitate merchandise exports,' Nomura's Ting Lu and team told clients in a recent note seen by Fortune. In New York, a note from Goldman Sachs' Vicki Chang was more upbeat about U.S. equities: 'We said that a shift in trade policy was the most obvious route for recovery in risk assets. We have seen a version of that, starting with the 90-day pause on reciprocal tariffs, product-specific tariff exemptions, and seeming openness to negotiating with China. Those are modest shifts that still leave significant tariffs and recession risk in place. But it is likely true that we are past the peak of new tariff 'shocks,' and possibly past peak policy uncertainty.' While investors in American stocks might be feeling more cheerful, their children could have a downside surprise coming in December. According to the New York Times, 'Factories in China produce nearly 80 percent of all toys and 90 percent of Christmas goods sold in America.' All of those toys are now stuck behind Trump's wall of tariffs. Tonight: Microsoft and Meta report earnings, followed by Amazon and Apple later in the week. This story was originally featured on Sign in to access your portfolio
Observer
09-04-2025
- Business
- Observer
Oil prices, markets tumble over US-China trade war
Major stock indexes sank in Asia on Wednesday after President Donald Trump's eye-watering 104% tariffs on China took effect. A savage sell-off in Treasuries sparked fears foreign funds were fleeing U.S. assets. The U.S. dollar fell against safe-haven currencies, but the onshore yuan hovered just above the lowest level since late 2007 as Beijing allowed the currency to depreciate further amid the sharp escalation in the trade war with the U.S. Few assets were spared the recession fears engulfing markets, with oil prices diving almost 4%. Oil prices settled down more than $1 a barrel on Tuesday at a four-year low as investors priced in an increasing likelihood of a recession due to the escalating trade war between the world's two biggest economies. Brent futures settled down $1.39, or 2.16%, at $62.82 a barrel. U.S. West Texas Intermediate crude futures settled down $1.12, or 1.85%, at $59.58. The pain is likely to spread to Europe too, with EUROSTOXX 50 futures pointing to a 3.7% drop upon open. Both S&P 500 futures and Nasdaq futures dropped 1.6%. Overnight, Washington confirmed 104% duties on imports from China would take effect at 12:01 a.m. Eastern Time (0401 GMT), as planned. That deadline passed without new developments on trade. "U.S. and China are stuck in an unprecedented, and expensive, game of chicken, and it seems that both sides are unwilling to back down," said Ting Lu, chief China economist at Nomura. "Given the extraordinarily fluid situation, it is impossible to reasonably estimate the impact of the ongoing U.S.-China trade war on China's economy." The shifting headlines on tariffs and the spectre of a prolonged trade war between the world's two biggest economies sparked sharp volatility in financial markets. The S&P 500 was swept up in one of the biggest reversals in at least the last 50 years, with the benchmark index losing 4.2 percentage points from a positive start to a negative finish. The index has lost $5.8 trillion in stock market value, the deepest four-day loss since it was created in the 1950s. Late on Tuesday, Trump said China was manipulating currency to protect against tariffs, but he thought China would make a deal at some point. China's blue chips reversed earlier losses to rise 0.3% likely underpinned by continued support from Beijing. Hong Kong's Hang Seng index fell 1.6%. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 1.9%. Other stock markets in Asia were also deep in the red. Japan's Nikkei tumbled 3.6%, after rallying 6% on Wednesday on hopes that Tokyo may get some trade deal with the U.S. Taiwanese stocks also fell 4.6% even though the government activated a $15 billion stabilisation fund. Analysts at JPMorgan believed the rapid escalation of U.S. tariffs on China was disruptive enough to push the global economy into recession. "Given the import bill from China, the China tariff alone amounts to a whopping $400bn tax hike on U.S. households and businesses," they said in a note to clients. "The currency is likely to be a release valve for China policymakers." On Wednesday, the People's Bank of China set its guidance for the yuan at 7.2066 per dollar, the weakest level since September 2023. That pushed the onshore yuan down to 7.3499 per dollar, just a tad stronger than the 7.3510 level which is the weakest since late 2007. In the Treasuries, the benchmark 10-year yield rose 24 basis points to 4.501%, an unusual move in the Asia time zone, which brought the total rise over the past three days to a whopping 51 bps. The 30-year yield surged 28 bps tp 5.023%, the highest since late 2023 In currency markets, safe-haven currencies like the yen and Swiss franc found some more love, with the dollar skidding 0.8% to 145.10 yen and down 0.5% to 0.8430 Swiss franc.
Gulf Business
09-04-2025
- Business
- Gulf Business
Global markets: Stocks tumble again as US hits China with 104% tariffs
Image credit: Getty Images Major stocks indexes sank in Asia on Wednesday after President Donald Trump's eye-watering 104 per cent tariffs on China took effect, while a savage selloff in Treasuries sparked fears foreign funds were fleeing US assets. The US dollar fell against safe-haven currencies, but the onshore yuan hovered just above the lowest level since late 2007 as Beijing allowed the currency to depreciate further amid the sharp escalation in the trade war with US. Assets that were spared recession fears Few assets were spared the recession fears engulfing markets, with oil prices diving almost 4 per cent. The pain is likely to spread to Europe too, with EUROSTOXX 50 futures pointing to a 3.7 per cent drop upon open. Both S&P 500 futures and Nasdaq futures dropped 1.6 per cent. Read- Overnight, Washington confirmed 104 per cent duties on imports from China would take effect at 12:01 a.m. Eastern Time (0401 GMT), as planned. That deadline passed without new developments on US-China war 'US and China are stuck in an unprecedented, and expensive, game of chicken, and it seems that both sides are unwilling to back down,' said Ting Lu, chief China economist at Nomura. 'Given the extraordinarily fluid situation, it is impossible to reasonably estimate the impact of the ongoing US-China trade war on China's economy.' The shifting headlines on tariffs and the spectre of a prolonged trade war between the world's two biggest economies sparked sharp volatility in financial markets. The S&P 500 was swept up in one of the biggest reversals in at least the last 50 years, with the benchmark index losing 4.2 percentage points from a positive start to a negative finish. The index has lost $5.8n in stock market value, the deepest four-day loss since it was created in the 1950s. What is China doing to protect against tariffs? Late on Tuesday, Trump said China was manipulating currency to protect against tariffs, but he thought China would make a deal at some point. China's blue chips reversed earlier losses to rise 0.3% likely underpinned by continued support from Beijing. Hong Kong's Hang Seng index .HSI fell 1.6 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 1.9 per cent. Other stock markets in Asia were also deep in the red. Japan's Nikkei tumbled 3.6 per cent, after rallying 6 per cent on Wednesday on hopes that Tokyo may get some trade deal with the US. Taiwanese stocks also fell 4.6 per cent even though the government activated a $15bn stabilisation fund. US tariffs on China: Are they pushing global economy into recession? Analysts at JPMorgan believed the rapid escalation with US tariffs on China were disruptive enough to push the global economy into recession. 'Given the import bill from China, the China tariff alone amounts to a whopping $400bn tax hike on US households and businesses,' they said in a note to clients. 'The currency is likely to be a release valve for China policymakers.' The People's Bank of China on Wednesday set its guidance for the yuan at 7.2066 per dollar, the weakest level since September 2023. That pushed the onshore yuan down to 7.3499 per dollar, just a tad stronger than the 7.3510 level which is the weakest since late 2007. In the Treasuries, the benchmark 10-year yield rose 24 basis points to 4.501 per cent, an unusual move in the Asia time zone, which brought the total rise over the past three days to a whopping 51 bps. The 30-year yield surged 28 bps tp 5.023 per cent, the highest since late 2023 Currency markets In currency markets, safe-haven currencies like the yen and Swiss franc found some more love, with the dollar skidding 0.8 per cent to 145.10 yen and down 0.5 per cent to 0.8430 Swiss franc. Elsewhere, the Reserve Bank of New Zealand cut interest rates by 25 bps to 3.5 per cent, and opened the door for potentially bigger cuts as it warned about downside risks to the economy from global trade barriers. Oil prices dived almost 4 per cent on Wednesday on concerns about demand from China. Brent futures plunged 3.7 per cent to $60.50 a barrel, while US crude futures also tumbled 4.1 per cent to $57.16 per barrel. Gold regained its upward momentum and was last up 0.7 at $3,005 per ounce.
