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EU watchdog tries to understand UK bond market moves By Reuters

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© Reuters. Sterling banknotes are shown in front of the stock chart displayed in this illustration taken on May 7, 2021. REUTERS/Dado Ruvic/Illustration

By Hugh Jones

LONDON (Reuters) – The head of the European Union’s securities watchdog, Verena Ross, said on Monday the European Union’s securities watchdog had asked Britain about recent extreme moves in British government bond yields and was monitoring “ramifications” in the bloc.

British Finance Minister Kwasi Quarting last month sparked a crisis in the bond market with plans for unfunded tax cuts. Pension funds struggled to meet margin calls on derivatives linked to mutual funds listed in EU countries such as Ireland and Luxembourg.

“It is clear that we are in close contact with the UK authorities to understand the market developments that are currently taking place,” Ross, head of the European Securities and Markets Authority (ESMA) told reporters.

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“I think we initially saw some reaction also in European markets.”

Ross said the UK bond market defeat showed how quickly developments can have a huge impact and spread from one market sector to another.

“This is something we are dealing with with national authorities, and obviously we are watching very carefully,” Ross said.

The Bank of England took additional steps on Monday to ease concerns about the expiration of its program to calm turmoil in the UK government bond market.

Ross was outlining ESMA’s supervisory priorities for the coming years, which will include helping the bloc implement its new rules for crypto assets from 2024, cracking down on ‘greenwashing’ or companies that reduce their environmental impact and how climate change will affect its streak.

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Georgieva of the International Monetary Fund to discuss the economy and Covid with Chinese authorities via Reuters

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© Reuters. International Monetary Fund Managing Director Kristalina Georgieva attends a press conference following a meeting at the Federal Chancellery in Berlin, Germany on November 29, 2022. REUTERS/Michel Tantosi

NEW YORK (Reuters) – International Monetary Fund Managing Director Kristalina Georgieva said on Thursday that she will travel to Beijing next week with heads of other international institutions to discuss China’s economic outlook and COVID-19 policies with the country’s leadership.

“This is the first time, and we hope we can sit down together and discuss the very pressing issues facing China and the world,” Georgieva told the upcoming Reuters conference.

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Dutch minister defends trade relations with China

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A senior Dutch minister has defended the country’s deepening trade ties with China and vowed not to overreact on high-tech exports as the Biden administration pushes its European partners to harden their stance on Beijing.

The Netherlands remains “very positive” about its relationship with China, Micky Adriansens, the economy minister, said, saying Dutch companies operating there are providing a boost to innovation and trade.

As the United States presses its partners to tighten controls on exports of high-end semiconductor equipment to China, it has insisted that the Netherlands and Europe “must have their own strategy.”

“We have to think about this through – what are the risks of doing business with China in terms of certain products and value chains,” she told the Financial Times. “In general, we in the Netherlands are very positive and always have good relations with China. We do a lot of business with China. There are a lot of Dutch companies operating.”

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China accounts for 11 percent of Dutch imports, second only to Germany, and about 5 percent of exports.

The minister said that the relationship “gives a real boost to innovation and trade which is fundamental for Europe. We must cherish that as well.”

The remarks appear to contradict those of US Secretary of State Antony Blinken this week, who said he has seen “growing rapprochement” between the US and its allies on China. Blinken’s comments follow the US decision in October to impose strict export controls aimed at slowing China’s development capacity and preventing it from obtaining advanced semiconductors that could be used for military purposes.

The Netherlands is home to ASML and ASM International, two world-leading manufacturers of chip equipment.

The United States is now trying to persuade the Netherlands and Japan, another big player in the global chip industry, to strike a three-way deal that would further limit China’s access to chip-making tools.

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US sanctions, which prevent companies from sending many US-made products to China, have already hurt Dutch industry. ASMI He said This week they will affect about 40 percent of sales to China, which accounts for 16 percent of the group’s revenue.

Adriaansens declined to comment on the possible time frame in the semiconductor talks, saying it’s “not a simple yes or no,” but a matter of examining many aspects of a very complex production process. “You have to be very clear about which aspect of the production process is the most important issue for China,” she said.

“The Netherlands and Europe should have their own strategy,” she said, when asked about the US talks. At the same time, they needed to be aware of the risks associated with “specific technologies”. She added, “You don’t want to overdo it, but on the other hand, you don’t want to open your doors where safety is the number one issue — it’s a balancing thing.”

She also warned that it may not be possible to prevent China from acquiring advanced technology. “The development cycle is going very fast in China. We must not be naive.”

Adriaansens said the US’s separate actions to provide massive green technology subsidies to local businesses are troubling The Hague.

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The European Union said that a large part of the $369 billion in tax breaks and tax support in the United States Inflation Reduction Act discriminatory and violates global trade rules, and is in talks with Washington.

“The law to reduce inflation has an impact on industry and the economy in the Netherlands and the EU as a whole,” said Adriaansens. Combined with lower energy prices, it would deter investors and hurt European business competitiveness.

The minister added that the West should have a level playing field and “the same set of rules”. I compared it to the upcoming World Cup match with the United States. “We would like to have the same goal size and the same lines on the field in both halves.”

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Brazil’s Economy Grows Less Than Expected In The Third Quarter, But Still At A Record High By Reuters

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© Reuters. FILE PHOTO: Containers to be loaded at a cargo terminal at the Port of Santos in Santos, Brazil on September 16, 2021. REUTERS/Carla Carnel

BRASILIA (Reuters) – Brazil’s economy slowed in the third quarter, with growth less than expected but still enough to put it at the highest level in the chain since its inception in 1996.

The country’s gross domestic product rose 0.4% in the three months through September, state statistics agency IBGE said on Thursday, less than the 0.7% growth expected by economists polled by Reuters.

It was the fifth consecutive quarter of expansion, again boosted by the services sector, which put Latin America’s largest economy 4.5% above the level recorded before the pandemic, in the last quarter of 2019.

However, the loss of strength highlights the challenges ahead as the central bank’s aggressive monetary tightening to fight inflation began to overshadow activity further, overshadowing government stimulus ahead of the presidential election in October this year that helped boost demand.

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The performance in the third quarter was mainly driven by 1.1% growth in the dominant services sector, while manufacturing grew 0.8% and agriculture fell 0.9%.

On the demand side, investment rose 2.8%, government spending grew 1.3%, and consumer spending increased 1.0%.

Brazil’s GDP expanded by 3.6% compared to the third quarter of 2021, while economists expected an increase of 3.7%.

IBGE also revised its second quarter result to expand 1.0% sequentially from the 1.2% previously reported. But growth in the first quarter has now picked up to 1.3% from 1.1% previously.

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