https://www.scmp.com/rss/32158/feed The European Central Bank was established by the Treaty of Amsterdam in 1998 and is headquartered in Frankfurt, Germany. The objective of the bank is to maintain price stability within the euro zone. en https://assets.i-scmp.com/static/img/icons/scmp-meta-1200x630.png https://www.scmp.com Nicholas Spiro Nicholas Spiro Last month, Brent crude, the international oil benchmark, experienced its largest monthly rise since the launch of the futures contract in 1988 as the war in Iran caused an unprecedented disruption to global energy flows. Brent surged 63 per cent to US$118 per barrel, exceeding the previous record increase in September 1990 following Iraq’s invasion of Kuwait. The price shock has been even more dramatic in refined products. Jet fuel costs have more than doubled since the war began, with diesel... https://www.scmp.com/opinion/asia-opinion/article/3348744/asian-central-banks-largely-powerless-face-iran-war-energy-shock?utm_source=rss_feed https://www.scmp.com/opinion/asia-opinion/article/3348744/asian-central-banks-largely-powerless-face-iran-war-energy-shock?utm_source=rss_feed Thu, 02 Apr 2026 08:30:07 +0000 Zhang Shidong Zhang Shidong Expectations of monetary tightening by global central banks have intensified, triggering a fresh wave of sell-offs in risk assets as the US-Israel war with Iran enters its fourth week. Rates traders are now projecting no rate cuts by the Federal Reserve this year after chair Jerome Powell said last week that rising oil prices added uncertainty to the monetary outlook. That stands in contrast to the forecast of two reductions before the outbreak of the hostilities in the Middle East. The European... https://www.scmp.com/business/china-business/article/3347552/global-markets-brace-rate-hikes-iran-war-and-us100-oil-stoke-tightening-fears?utm_source=rss_feed https://www.scmp.com/business/china-business/article/3347552/global-markets-brace-rate-hikes-iran-war-and-us100-oil-stoke-tightening-fears?utm_source=rss_feed Mon, 23 Mar 2026 06:09:38 +0000 Anthony Rowley Anthony Rowley Compared with the turmoil threatened by US President Donald Trump’s actions in everything from geopolitics to trade, the outcome of Japan’s parliamentary lower house election, set for February 8, may seem like small beer. Yet it could presage a great upheaval in global finance. The election outcome is widely expected to strengthen the political power base of the fiscally expansionist Japanese prime minister, Sanae Takaichi, and increase borrowing when government debt almost everywhere is already... https://www.scmp.com/opinion/asia-opinion/article/3341741/how-one-election-japan-could-upend-bond-markets-and-global-finance?utm_source=rss_feed https://www.scmp.com/opinion/asia-opinion/article/3341741/how-one-election-japan-could-upend-bond-markets-and-global-finance?utm_source=rss_feed Sat, 31 Jan 2026 08:30:07 +0000 Finbarr Bermingham Finbarr Bermingham If there was a sense of panic gripping European leaders at last week’s conclave of elites at the World Economic Forum, they could be forgiven a moment of relief as they departed the snowy peaks of Davos. That was not only because US President Donald Trump used a long, rambling speech to rule out taking the Danish territory of Greenland by force. Nor was it just the meeting on the sidelines with Nato chief Mark Rutte, which produced a formula to defuse immediate tensions by designating US... https://www.scmp.com/news/china/diplomacy/article/3341242/table-or-menu-europe-wakes-world-without-order?utm_source=rss_feed https://www.scmp.com/news/china/diplomacy/article/3341242/table-or-menu-europe-wakes-world-without-order?utm_source=rss_feed Mon, 26 Jan 2026 22:00:13 +0000 Hao Nan Hao Nan China and the European Union began 2026 with another trade clash. As the EU’s Carbon Border Adjustment Mechanism entered its definitive phase, Brussels tightened compliance and Beijing warned of countermeasures. However, this week, the two sides signalled progress on defusing the electric vehicle dispute; the EU issued guidance to Chinese EV exporters on submitting minimum price plans. The juxtaposition underlines the point: even when one high-profile area shifts from escalation to technical... https://www.scmp.com/opinion/china-opinion/article/3339329/can-europe-rebuild-its-strength-trade-china-without-fear?utm_source=rss_feed https://www.scmp.com/opinion/china-opinion/article/3339329/can-europe-rebuild-its-strength-trade-china-without-fear?utm_source=rss_feed Tue, 13 Jan 2026 08:30:10 +0000 Wendy Wu Wendy Wu Brussels and Beijing are both to blame for their strained ties and clear communication is needed to handle sensitive issues like Taiwan and rare earths, according to a veteran business leader and China watcher. Joerg Wuttke, former president of the European Union Chamber of Commerce in China, said the 27-member bloc should also redouble efforts to become more resilient. Wuttke – now a partner at consulting firm DGA Albright Stonebridge Group in Washington – also called for a new Manhattan... https://www.scmp.com/news/china/diplomacy/article/3332567/china-and-europe-need-clear-communication-thorny-issues-fix-ties-observer-says?utm_source=rss_feed https://www.scmp.com/news/china/diplomacy/article/3332567/china-and-europe-need-clear-communication-thorny-issues-fix-ties-observer-says?utm_source=rss_feed Thu, 13 Nov 2025 02:00:11 +0000 Reuters Reuters French Prime Minister Sebastien Lecornu promised on Tuesday to suspend a landmark pension reform until after the 2027 election, sacrificing one of President Emmanuel Macron’s legacy achievements to ensure the government’s survival. By bowing to pressure from leftist lawmakers who reviled the 2023 reform, Lecornu has managed to stave off a stark escalation in France’s months-long political crisis. The Socialists welcomed his concession, saying they would not vote to topple him in no confidence... https://www.scmp.com/news/world/europe/article/3329022/france-macrons-pm-suspend-pension-reform-until-2027-avoid-government-collapse?utm_source=rss_feed https://www.scmp.com/news/world/europe/article/3329022/france-macrons-pm-suspend-pension-reform-until-2027-avoid-government-collapse?utm_source=rss_feed Tue, 14 Oct 2025 14:34:07 +0000 Finbarr Bermingham Finbarr Bermingham Everywhere they look these days, Europe’s politicians see chaos. The United States is helping to trash the global order it built in its image. China is pulling the rug from under efforts to upgrade European industry by weaponising its monopoly on critical minerals. Russia is waging a hot war at the European Union’s borders, with the growing danger that it may spill over. So tumultuous have things become, some officials have turned to Chinese science fiction to describe it. “Where we are now,... https://www.scmp.com/news/china/diplomacy/article/3328853/europes-3-body-problem-collapsing-global-order-sparks-hunt-new-trajectory?utm_source=rss_feed https://www.scmp.com/news/china/diplomacy/article/3328853/europes-3-body-problem-collapsing-global-order-sparks-hunt-new-trajectory?utm_source=rss_feed Tue, 14 Oct 2025 03:00:10 +0000 Xiaofei Xu Xiaofei Xu A proposed increase to EU steel tariffs has already sown alarm among the continent’s car manufacturers, with stocks of major players plunging in the immediate aftermath of the announcement and industry insiders warning the measures could worsen cost pressures already weighing down growth in the sector. Following a Tuesday statement from the European Commission that it would cut tariff-free quotas for imported steel products by nearly half and double duties on excess shipments to 50 per cent – a... https://www.scmp.com/economy/global-economy/article/3328372/new-eu-steel-tariffs-meant-curb-chinese-imports-giving-carmakers-migraine?utm_source=rss_feed https://www.scmp.com/economy/global-economy/article/3328372/new-eu-steel-tariffs-meant-curb-chinese-imports-giving-carmakers-migraine?utm_source=rss_feed Thu, 09 Oct 2025 14:00:10 +0000 SCMP Editorial SCMP Editorial For people who monitor interest rates for a living, it has been a hectic week, with several major central banks making announcements. But besides finance professionals, Hong Kong people are also keenly interested. With their mortgages and business loans – and the economy in general – running on a currency pegged to the US dollar, the latest rate reduction by the US Federal Reserve also serves to indicate future rates’ movement. The main US lending rate has been lowered to 4-4.25 per cent in the... https://www.scmp.com/opinion/comment/article/3326135/us-rate-cut-offers-hong-kong-relief-uncertainties-remain?utm_source=rss_feed https://www.scmp.com/opinion/comment/article/3326135/us-rate-cut-offers-hong-kong-relief-uncertainties-remain?utm_source=rss_feed Sat, 20 Sep 2025 22:45:08 +0000 Bloomberg Bloomberg The US Federal Reserve losing its independence would pose a “serious danger” to the world, according to European Central Bank (ECB) President Christine Lagarde. But Lagarde told Radio Classique in an interview on Monday that US President Donald Trump would find it “very difficult” to take control of the US central bank, citing legal precedents that prevent the removal of Fed governors. “If he did manage to do so, I think it would pose a very serious threat to the US economy and the global... https://www.scmp.com/news/world/united-states-canada/article/3323917/trumps-attack-us-fed-risks-global-economic-stability-warns-ecb-chief-lagarde?utm_source=rss_feed https://www.scmp.com/news/world/united-states-canada/article/3323917/trumps-attack-us-fed-risks-global-economic-stability-warns-ecb-chief-lagarde?utm_source=rss_feed Mon, 01 Sep 2025 08:50:15 +0000 Anthony Rowley Anthony Rowley Why are central banks, including those of China and India, adding gold bullion to their reserves at an almost alarming rate, to the point where gold is now second only to the US dollar as an official reserve asset? It is not for the same reason that others are snatching up the yellow metal, which is to act as a hedge against inflation or stagflation. Central banks have instead joined the gold rush because they fear financial crises occurring, simultaneously and on multiple fronts, and these... https://www.scmp.com/opinion/world-opinion/article/3315943/central-banks-rush-gold-fears-us-dollar-crisis-mount?utm_source=rss_feed https://www.scmp.com/opinion/world-opinion/article/3315943/central-banks-rush-gold-fears-us-dollar-crisis-mount?utm_source=rss_feed Sat, 28 Jun 2025 08:30:07 +0000 Sylvia Ma Sylvia Ma China’s central bank set the yuan’s daily fixing against the US dollar at its strongest level in more than two months, as the greenback tumbled to a multi-year low amid expectations for more interest rate cuts from the Federal Reserve later this year. On Friday, the People’s Bank of China set the yuan’s midpoint rate – also known as the daily fixing rate – at 7.1772 per US dollar, its strongest showing since late March. The move came as the US dollar index plummeted to 97.61 on Thursday - a... https://www.scmp.com/economy/china-economy/article/3314323/chinas-yuan-fixing-rate-hits-two-month-high-us-dollar-drops?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/3314323/chinas-yuan-fixing-rate-hits-two-month-high-us-dollar-drops?utm_source=rss_feed Fri, 13 Jun 2025 09:30:08 +0000 Sylvia Ma,Ji Siqi Sylvia Ma,Ji Siqi As the United States faces renewed concern over unsustainable debts and its deficit outlook, ignited by the “One Big Beautiful Bill Act” and new tariff threats from US President Donald Trump, China’s yuan is being hailed by analysts for its resiliency during the ongoing trade war, with some pointing to a “renaissance of the renminbi”. Concerns over the sustainability of US debt levels intensified after the US House of Representatives last week passed a sweeping tax and spending bill, which is... https://www.scmp.com/economy/china-economy/article/3312008/how-us-dollar-doubts-risk-triple-whammy-could-give-rise-yuans-renaissance?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/3312008/how-us-dollar-doubts-risk-triple-whammy-could-give-rise-yuans-renaissance?utm_source=rss_feed Tue, 27 May 2025 15:00:08 +0000 Agence France-Presse Agence France-Presse The EU said on Tuesday that it was preparing to impose a €2 (US$2.25) flat fee on the billions of low-value packages that flood into the bloc each year, the great majority from China. Trade chief Maros Sefcovic told the European Parliament that e-commerce platforms would be expected to pay the levy per parcel, which aims to help the European Union tackle the challenges from the massive influx of inexpensive items. The fee would remove the customs-free status of packages worth less than €150... https://www.scmp.com/news/world/europe/article/3311129/eu-impose-us225-fee-cheap-parcels-mostly-china?utm_source=rss_feed https://www.scmp.com/news/world/europe/article/3311129/eu-impose-us225-fee-cheap-parcels-mostly-china?utm_source=rss_feed Tue, 20 May 2025 16:51:38 +0000 Yujie Xue Yujie Xue Mainland electric vehicle (EV) maker Leapmotor’s European production is expected to be moved to a Stellantis factory in Spain, Germany, Italy or Slovakia after the Dutch firm stopped making its Chinese partner’s cars in Poland earlier this year. Leapmotor and Stellantis were likely to make a decision on the matter in June or July, with the goal of commencing production around the middle of next year, said Michael Wu, Leapmotor’s co-president, in an interview on Monday. This was the first time... https://www.scmp.com/business/banking-finance/article/3310931/stellantis-relocating-chinese-ev-maker-leapmotors-european-production-poland?utm_source=rss_feed https://www.scmp.com/business/banking-finance/article/3310931/stellantis-relocating-chinese-ev-maker-leapmotors-european-production-poland?utm_source=rss_feed Mon, 19 May 2025 09:45:15 +0000 Bloomberg Bloomberg Investors faced yet another bumpy start to the trading week with US assets coming under fresh pressure, although it’s mounting concern over American debt rather than tariffs generating volatility this time. Longer-dated Treasuries dipped with US equity futures and the dollar in early Asia trading after Moody’s Ratings announced on Friday evening it was stripping the American government of its top credit rating, dropping the country to Aa1 from AAA. The company, which trailed rivals, blamed... https://www.scmp.com/business/markets/article/3310872/moodys-downgrade-us-debt-fears-unsettle-markets-reviving-mini-sell-america-trade?utm_source=rss_feed https://www.scmp.com/business/markets/article/3310872/moodys-downgrade-us-debt-fears-unsettle-markets-reviving-mini-sell-america-trade?utm_source=rss_feed Mon, 19 May 2025 04:45:42 +0000 Bloomberg Bloomberg Things are getting awkward for the Federal Reserve. With their eye on inflation, officials are inclined to hold rates steady when they meet in Washington on Tuesday and Wednesday. But fears of a slowdown are mounting, and President Donald Trump and some of his deputies keep hammering the central bank for an interest-rate cut. Caught in that bind, Fed Chair Jerome Powell may have been comforted by government data on Friday showing a healthy 177,000 jump in April payrolls. As long as the labour... https://www.scmp.com/business/article/3309025/us-federal-reserves-powell-may-defy-trumps-pressure-and-hold-interest-rates-steady?utm_source=rss_feed https://www.scmp.com/business/article/3309025/us-federal-reserves-powell-may-defy-trumps-pressure-and-hold-interest-rates-steady?utm_source=rss_feed Sun, 04 May 2025 10:46:02 +0000 The European Central Bank cut interest rates Thursday for the seventh time in a row to counter worries about economic growth fuelled by US President Donald Trump’s tariff onslaught. The bank’s move should support economic activity in the 20 countries that use the euro currency by making credit more affordable for consumers and businesses. ECB president Christine Lagarde said at a post-decision news conference that “the major escalation in global trade tensions and the associated uncertainty will... https://www.scmp.com/news/world/europe/article/3306972/ecb-cuts-interest-rates-7th-time-row-amid-tariff-tensions?utm_source=rss_feed https://www.scmp.com/news/world/europe/article/3306972/ecb-cuts-interest-rates-7th-time-row-amid-tariff-tensions?utm_source=rss_feed Thu, 17 Apr 2025 12:42:08 +0000 US President Donald Trump said Federal Reserve Chair Jerome Powell’s termination from his position cannot come quickly enough, arguing that the US central bank should have lowered interest rates already this year, and in any case should do so now. Trump, derisively nicknaming the Fed chairman he nominated in his first term as “Too Late”, wrote in a post on his Truth Social platform on Thursday morning that “Powell’s termination cannot come fast enough!” It was not immediately clear if the post... https://www.scmp.com/news/world/united-states-canada/article/3306969/trump-slams-us-fed-chair-powell-urges-termination-slowness?utm_source=rss_feed https://www.scmp.com/news/world/united-states-canada/article/3306969/trump-slams-us-fed-chair-powell-urges-termination-slowness?utm_source=rss_feed Thu, 17 Apr 2025 12:29:53 +0000 The European Union’s finance chief said the bloc is open to further extending the deadline for wresting euro clearing from London, casting doubt over a newly adopted timeline. EU Financial Services Commissioner Maria Luis Albuquerque said in an interview with Bloomberg earlier this week that she hopes a new proposed 2028 deadline can be achieved, but “didn’t know” if it would be the final extension to a post-Brexit exemption granting EU market access to UK clearing houses. The comments came just... https://www.scmp.com/news/world/europe/article/3297027/eu-finance-chief-casts-doubt-new-uk-clearing-deadline?utm_source=rss_feed https://www.scmp.com/news/world/europe/article/3297027/eu-finance-chief-casts-doubt-new-uk-clearing-deadline?utm_source=rss_feed Sat, 01 Feb 2025 11:17:35 +0000 As US president-elect Donald Trump completes his cabinet nominations, his policy intentions have become clearer. His nominees are almost all white, male, right-wing loyalists, many with media experience, who are inclined towards tariffs and have an isolationist bent. Tech mogul Elon Musk will co-head a new department of government efficiency while tariff-happy Howard Lutnick, the billionaire CEO of Cantor Fitzgerald, is the pick for commerce secretary. The three front runners for Treasury... https://www.scmp.com/opinion/world-opinion/article/3287608/trump-20-it-will-be-every-country-itself?utm_source=rss_feed https://www.scmp.com/opinion/world-opinion/article/3287608/trump-20-it-will-be-every-country-itself?utm_source=rss_feed Fri, 22 Nov 2024 12:30:08 +0000 Kawala Xie Kawala Xie European Central Bank President Christine Lagarde made a case for defending the euro as Russia and China touted de-dollarisation efforts at the annual Brics summit. At a discussion hosted by the Atlantic Council in Washington on Wednesday, the former IMF chief urged greater attention be paid to Beijing’s and Moscow’s advocacy of alternative currencies to the US dollar and euro. “[China and Russia] will clearly attempt to push other currencies,” Lagarde said during the non-partisan think tank’s... https://www.scmp.com/news/china/diplomacy/article/3283591/defend-euro-against-china-russia-push-alternative-currency-europes-bank-chief?utm_source=rss_feed https://www.scmp.com/news/china/diplomacy/article/3283591/defend-euro-against-china-russia-push-alternative-currency-europes-bank-chief?utm_source=rss_feed Wed, 23 Oct 2024 20:30:32 +0000 Even before global finance chiefs fly into Washington over the next few days, they’ve been urged in advance by the International Monetary Fund to tighten their belts. Two weeks ahead of a potentially era-defining US election, and with the world’s recent inflation crisis barely behind it, ministers and central bankers gathering in the nation’s capital face intensifying calls to get their fiscal houses in order while they still can. The fund, whose annual meetings begin there on Monday, has... https://www.scmp.com/news/world/article/3283093/global-debt-nears-us100-trillion-imf-urges-action?utm_source=rss_feed https://www.scmp.com/news/world/article/3283093/global-debt-nears-us100-trillion-imf-urges-action?utm_source=rss_feed Sun, 20 Oct 2024 05:06:12 +0000 The European Union must defend itself against the challenges from China and the United States without resorting to protectionism, former Italian prime minister Mario Draghi said on Monday. Draghi, also the former head of the European Central Bank, delivered the strong message just weeks after warning in a much-anticipated report that Europe faced “existential” challenges. EU chief Ursula von der Leyen last year asked Draghi to report back on how the 27-country bloc could boost its... https://www.scmp.com/news/china/diplomacy/article/3280620/eu-must-tackle-china-us-threats-without-being-protectionist-draghi?utm_source=rss_feed https://www.scmp.com/news/china/diplomacy/article/3280620/eu-must-tackle-china-us-threats-without-being-protectionist-draghi?utm_source=rss_feed Mon, 30 Sep 2024 18:51:44 +0000 The world economy is facing pressures similar to the 1920s, European Central Bank president Christine Lagarde warned in a recent speech at the International Monetary Fund in Washington. Her remarks are at odds with the current narrative of a soft landing for the global economy. Lagarde, a former IMF managing director and former finance minister of France, is widely respected for her extensive experience and incisive intellect, so it would be foolish to disregard her warnings. While drawing... https://www.scmp.com/opinion/world-opinion/article/3280143/can-central-banks-really-prevent-repeat-great-depression?utm_source=rss_feed https://www.scmp.com/opinion/world-opinion/article/3280143/can-central-banks-really-prevent-repeat-great-depression?utm_source=rss_feed Sat, 28 Sep 2024 08:30:08 +0000 Bloomberg Bloomberg US inflation probably picked up modestly in July, but not enough to derail the Federal Reserve from a widely anticipated interest-rate cut next month. The consumer price index on Wednesday is expected to have risen 0.2 per cent from June for both the headline figure and the so-called core gauge that excludes food and energy. While each would be an acceleration from June, the annual metrics should continue to rise at some of the slowest paces seen since early 2021. The recent easing of price... https://www.scmp.com/business/markets/article/3274047/small-us-inflation-pickup-july-will-do-little-derail-feds-rate-cut-september?utm_source=rss_feed https://www.scmp.com/business/markets/article/3274047/small-us-inflation-pickup-july-will-do-little-derail-feds-rate-cut-september?utm_source=rss_feed Sun, 11 Aug 2024 03:46:43 +0000 Rolf Strauch is the chief economist and management board member at the European Stability Mechanism (ESM) and the European Financial Stability Facility. Strauch, who holds a PhD in economics from the University of Bonn in Germany, previously worked at the European Central Bank and Deutsche Bundesbank. This interview first appeared in SCMP Plus. For other interviews in the Open Questions series, click here. Mr Strauch, you have mentioned that climate change is the next big financial threat. Why... https://www.scmp.com/economy/global-economy/article/3268478/climate-demographics-and-geoeconomic-cracks-top-challenges-eu-economist-rolf-strauch?utm_source=rss_feed https://www.scmp.com/economy/global-economy/article/3268478/climate-demographics-and-geoeconomic-cracks-top-challenges-eu-economist-rolf-strauch?utm_source=rss_feed Sun, 30 Jun 2024 22:00:15 +0000 Enoch Yiu Enoch Yiu The Hong Kong Monetary Authority (HKMA) has signed an agreement with its counterpart in France to become the first non-European central bank to join a system test in Europe on cross-border money transfers and settlement of tokenised-asset trades. The Banque de France (BDF), France’s central bank, and the HKMA said on Thursday that they had signed an agreement to work together on development of wholesale central bank digital currency (CBDC). From July to November, HKMA will participate in the... https://www.scmp.com/business/banking-finance/article/3268308/hkma-join-european-test-cross-border-payments-tokenised-assets?utm_source=rss_feed https://www.scmp.com/business/banking-finance/article/3268308/hkma-join-european-test-cross-border-payments-tokenised-assets?utm_source=rss_feed Thu, 27 Jun 2024 11:00:33 +0000 Distressed properties in Europe are presenting opportunistic gains for global investors because of supply and demand imbalances, with existing owners also facing pressure from high borrowing costs and demand from environmental standards. The outlook is bright in Europe because demand has remained buoyant amid higher savings, while supply has stagnated or declined because of little new investment during the recent economic crisis, according to UK-based fund manager Patron Capital Partners. Asian... https://www.scmp.com/business/article/3264147/europes-real-estate-assets-favoured-global-investors-japan-funds-distress-creates-opportunistic?utm_source=rss_feed https://www.scmp.com/business/article/3264147/europes-real-estate-assets-favoured-global-investors-japan-funds-distress-creates-opportunistic?utm_source=rss_feed Sun, 26 May 2024 06:41:39 +0000 The International Monetary Fund (IMF) will soon be debating the question of who among its 190 members gets to have how much influence. The outcome will help decide whether Western divisions with China heal or widen. The discussion gets under way at the spring meetings of the IMF and World Bank from mid-April. It crystallises the paradox that the world needs global cooperation more than ever, yet global institutions seem more polarised than ever too. It is not just threats of a climate crisis, or... https://www.scmp.com/opinion/china-opinion/article/3257974/why-imf-must-give-china-and-other-emerging-economies-greater-say?utm_source=rss_feed https://www.scmp.com/opinion/china-opinion/article/3257974/why-imf-must-give-china-and-other-emerging-economies-greater-say?utm_source=rss_feed Sat, 06 Apr 2024 21:30:18 +0000 Despite instructions from President Xi Jinping to resume the trading of central government bonds, China’s central bank is expected to take a cautious approach to mitigate unexpected consequences for inflation and the exchange rate, analysts said. At the twice-a-decade financial work conference, held last October, Xi requested the People’s Bank of China (PBOC) gradually increase the buying and selling of central government bonds in the secondary market – a tactic that has gone unused for more... https://www.scmp.com/economy/china-economy/article/3257251/chinas-central-bank-keeps-cautious-bond-trade-despite-xi-jinpings-mandate?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/3257251/chinas-central-bank-keeps-cautious-bond-trade-despite-xi-jinpings-mandate?utm_source=rss_feed Fri, 29 Mar 2024 14:00:24 +0000 Federal Reserve policymakers may finally be right on the verge of cutting interest rates. Going into this week’s two-day policy meeting, which wraps Wednesday afternoon in Washington, investors are assigning roughly even odds to the prospect that the US central bank will start lowering borrowing costs at its next decision in March. That makes Fed Chair Jerome Powell’s press conference, and any signal he may or may not choose to send, of critical importance. It all comes down to how Powell and... https://www.scmp.com/business/banking-finance/article/3250041/federal-reserves-decision-week-could-be-prelude-march-interest-rate-cut?utm_source=rss_feed https://www.scmp.com/business/banking-finance/article/3250041/federal-reserves-decision-week-could-be-prelude-march-interest-rate-cut?utm_source=rss_feed Sun, 28 Jan 2024 04:36:35 +0000 The latest round of central bank meetings in the US, UK and the euro zone all point to an end to interest rate rises. These central banks face similar conditions; inflation is moderating but is still some distance from their official targets. They should start to pay more attention to recession risks in the quarters ahead. Economic growth momentum is slowing, especially in the manufacturing sector. The manufacturing purchasing manager indices (PMI) for the US, UK and euro zone are all below 50.... https://www.scmp.com/comment/opinion/article/3236235/us-fed-must-watch-its-step-economic-recession-risks-loom?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3236235/us-fed-must-watch-its-step-economic-recession-risks-loom?utm_source=rss_feed Fri, 29 Sep 2023 12:30:24 +0000 Valeriy Shevchenko felt like he made the purchase of his lifetime when he beat a queue of prospective buyers to secure a two-bedroom flat in one of Berlin’s most popular districts. Two years on, the 33-year-old’s housing dreams have come crashing down after the developer of his new home, Project Immobilien, went bankrupt. Hit by a sudden jump in interest rates and raw material costs, twice as many developers have filed for insolvency over the last year than the previous 12 months. Like hundreds... https://www.scmp.com/business/article/3235734/germanys-housing-sector-slumps-crisis-1-5-developers-reportedly-cancelling-projects-august?utm_source=rss_feed https://www.scmp.com/business/article/3235734/germanys-housing-sector-slumps-crisis-1-5-developers-reportedly-cancelling-projects-august?utm_source=rss_feed Mon, 25 Sep 2023 09:41:00 +0000 Hong Kong will be among the first markets where interest rates are likely to fall next year along with the US, which could potentially boost the city’s property sector, according to analysts. With inflation in the US, the world’s largest economy, showing signs of cooling down, normalising of interest rates may come earlier than in the UK and the euro zone, said Liam Bailey, global head of research at Knight Frank. Hong Kong’s peg to the US dollar means an automatic adjustment to the city’s... https://www.scmp.com/business/article/3235623/interest-rates-likely-have-peaked-hong-kong-home-prices-will-soon-begin-look-knight-frank-analyst?utm_source=rss_feed https://www.scmp.com/business/article/3235623/interest-rates-likely-have-peaked-hong-kong-home-prices-will-soon-begin-look-knight-frank-analyst?utm_source=rss_feed Sun, 24 Sep 2023 23:30:13 +0000 Monetary policy is not the most exciting aspect of the economy, but it is a necessary one that garners a great deal of attention. Markets hang on central bankers’ every word and dissect what is – and often is not – said as they try to gauge where interest rates are heading in both the short and long term. As such, the annual central banker talkfest at Jackson Hole, Wyoming, was shaping up to be an important event for markets. The title of this year’s symposium – “Structural Shifts in the Global... https://www.scmp.com/comment/opinion/article/3233051/us-federal-reserve-still-seeking-interest-rate-sweet-spot-fall-inflation-slows?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3233051/us-federal-reserve-still-seeking-interest-rate-sweet-spot-fall-inflation-slows?utm_source=rss_feed Fri, 01 Sep 2023 14:30:13 +0000 It is crunch time for the world’s leading central banks. For the past year and a half, their overriding objective has been to quell inflation. Having underestimated the severity and duration of the price shock, central banks in advanced economies have raised interest rates aggressively, mainly to re-establish their inflation-fighting credibility. The dramatic tightening in monetary policy has helped ease price pressures. In the United States and the euro zone, annual headline inflation has... https://www.scmp.com/comment/opinion/article/3225863/high-inflation-or-economic-turmoil-central-banks-face-unpalatable-policy-choices?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3225863/high-inflation-or-economic-turmoil-central-banks-face-unpalatable-policy-choices?utm_source=rss_feed Thu, 29 Jun 2023 14:00:13 +0000 As economies reopened post Covid-19, the main responsibility of the US Federal Reserve and European Central Bank (ECB) was to be laser-focused on cooling inflation against the strong economic backdrop. In the past year, both central banks have been driving like racing cars, with the Fed revving up interest rates by 5 percentage points since March last year, while the ECB, having started its engine a bit later, in July 2022, has raised its rates by about 4 percentage points. The racetrack this... https://www.scmp.com/comment/opinion/article/3224891/despite-fed-pause-interest-rates-us-and-europe-are-likely-stay-higher-longer?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3224891/despite-fed-pause-interest-rates-us-and-europe-are-likely-stay-higher-longer?utm_source=rss_feed Fri, 23 Jun 2023 14:30:11 +0000 Central banks are supposed to be trusted guardians to promote the right conditions for sustainable growth and financial stability, but are they taking needless risks in their haste to drive down inflation? The undue speed at which global interest rates have been ramped up in the past year suggests they are turning a blind eye to global growth hitting the skids again. The euro zone witnessed this first-hand last week, sinking into recession while the European Central Bank (ECB) has carried on... https://www.scmp.com/comment/opinion/article/3223771/raising-interest-rates-central-banks-are-playing-russian-roulette-global-economy?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3223771/raising-interest-rates-central-banks-are-playing-russian-roulette-global-economy?utm_source=rss_feed Mon, 12 Jun 2023 13:30:19 +0000 Iris Ouyang Iris Ouyang Central bank digital currencies (CBDCs) will disrupt the banking industry, forcing traditional lenders to innovate and helping small businesses access financing, according to a report by Standard Chartered and PwC China. In addition to facilitating cross-border payments, the CBDCs – fiat virtual currencies issued by central banks – are expected to motivate lenders to integrate their traditional services with other payment service providers to provide more innovative products and services to... https://www.scmp.com/business/banking-finance/article/3222638/central-bank-digital-currencies-will-force-traditional-lenders-innovative-give-small-businesses?utm_source=rss_feed https://www.scmp.com/business/banking-finance/article/3222638/central-bank-digital-currencies-will-force-traditional-lenders-innovative-give-small-businesses?utm_source=rss_feed Thu, 01 Jun 2023 23:00:23 +0000 Investors see the US dollar sliding even further from last year’s two-decade highs, as the market has underpriced the Federal Reserve’s oncoming policy easing cycle. Some 87 per cent of 331 respondents expect the Fed to cut interest rates to 3 per cent or below – some significantly so – in a loosening cycle that 40 per cent believe will start this year, according to a weekly Bloomberg News survey. That contrasted with market pricing that puts the implied policy rate around 3.05 per cent in two... https://www.scmp.com/business/banking-finance/article/3218104/four-reasons-investors-expect-us-dollar-keep-sliding?utm_source=rss_feed https://www.scmp.com/business/banking-finance/article/3218104/four-reasons-investors-expect-us-dollar-keep-sliding?utm_source=rss_feed Mon, 24 Apr 2023 03:55:41 +0000 With the world likely to head towards a recession, what is the future of the US dollar and monetary policy? Two weeks ago, I explored how difficult it was to know where to put your money in a world turned upside down because of financial and geopolitical risks. There are no simple answers because how you allocate your money depends on your risk appetite and your exact circumstances, which is why broad strategies don’t work in times of massive change. Caught in a world between higher inflation,... https://www.scmp.com/comment/opinion/article/3217835/weaponising-us-dollar-and-monetary-policy-risks-setting-global-economy-fire?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3217835/weaponising-us-dollar-and-monetary-policy-risks-setting-global-economy-fire?utm_source=rss_feed Fri, 21 Apr 2023 19:30:16 +0000 Hong Kong’s major banks chose to keep their prime rate unchanged after a quarter-point increase by the city’s monetary authority in lockstep with the US Federal Reserve, which voted unanimously to put anti-inflation at the forefront of its monetary policy. HSBC was the first lender to announce at noon that it would keep its best lending rate unchanged at 5.625 per cent per annum, according to a statement by the largest of Hong Kong’s three currency-issuing banks. Its subsidiary Hang Seng Bank... https://www.scmp.com/business/banking-finance/article/3214506/hong-kong-raises-base-rate-quarter-point-amid-feds-belief-it-can-quell-inflation-without-deepening?utm_source=rss_feed https://www.scmp.com/business/banking-finance/article/3214506/hong-kong-raises-base-rate-quarter-point-amid-feds-belief-it-can-quell-inflation-without-deepening?utm_source=rss_feed Wed, 22 Mar 2023 23:03:21 +0000 Chad Bray Chad Bray Central bank digital currencies (CBDCs) have an important role to play in future as both an alternative to cash for the general public and as a way to speed settlement of cross-border payments, according to a panel of central bank chiefs. Speaking at the Bank of International Settlements’ Innovation Summit, Christine Lagarde, president of the European Central Bank (ECB), said central bank digital currencies can serve as an important anchor for monetary policy as use of physical banknotes... https://www.scmp.com/business/banking-finance/article/3214353/digital-currencies-have-important-role-future-financial-system-central-bank-chiefs-say?utm_source=rss_feed https://www.scmp.com/business/banking-finance/article/3214353/digital-currencies-have-important-role-future-financial-system-central-bank-chiefs-say?utm_source=rss_feed Tue, 21 Mar 2023 23:00:14 +0000 European banking supervisors, including the chief regulator for HSBC and Standard Chartered, sought to reassure bondholders on Monday about the adequacy of a class of riskier debt created to help avoid future bank bailouts after Credit Suisse’s regulator moved to wipe out some US$17 billion of the lender’s bonds. The European Central Bank and the Bank of England separately issued statements outlining the hierarchy for how shareholders and debtholders will bear losses in a bank... https://www.scmp.com/business/banking-finance/article/3214216/hsbc-standard-chartered-regulator-tries-reassure-bondholders-after-credit-suisse-rescue?utm_source=rss_feed https://www.scmp.com/business/banking-finance/article/3214216/hsbc-standard-chartered-regulator-tries-reassure-bondholders-after-credit-suisse-rescue?utm_source=rss_feed Mon, 20 Mar 2023 17:14:03 +0000 UBS will take over its troubled Swiss rival Credit Suisse for US$3.25 billion following crunch talks Sunday aimed at stopping the stricken bank from triggering a wider international banking crisis. The deal, in which Switzerland’s biggest bank will take over the second-largest in the country, was vital to prevent irreparable economic turmoil spreading throughout the country and beyond, the Swiss government said. The move was welcomed in Washington, Frankfurt and London as one that would support... https://www.scmp.com/business/banking-finance/article/3214097/ubs-agrees-buy-credit-suisse-more-us2-billion-contagion-fears-grow?utm_source=rss_feed https://www.scmp.com/business/banking-finance/article/3214097/ubs-agrees-buy-credit-suisse-more-us2-billion-contagion-fears-grow?utm_source=rss_feed Sun, 19 Mar 2023 17:31:10 +0000 UBS AG is asking the Swiss government to cover about US$6 billion in costs if it were to buy Credit Suisse, a person with knowledge of the talks said, as the two sides raced to hammer together a deal to restore confidence in the ailing Swiss bank. The 167-year-old Credit Suisse is the biggest name ensnared in the turmoil unleashed by the collapse of US lenders Silicon Valley Bank and Signature Bank over the past week, spurring a rout in banking stocks and prompting authorities to rush out... https://www.scmp.com/business/banking-finance/article/3214045/ubs-seeks-us6-billion-government-guarantees-credit-suisse-takeover?utm_source=rss_feed https://www.scmp.com/business/banking-finance/article/3214045/ubs-seeks-us6-billion-government-guarantees-credit-suisse-takeover?utm_source=rss_feed Sat, 18 Mar 2023 23:35:08 +0000 Credit Suisse Group said it would lean on Switzerland’s central bank to help it survive a crisis in market confidence that has eroded the bank’s value to a historic low and sent shockwaves through global financial markets. The Zurich-based bank will borrow as much as 50 billion Swiss francs (US$54 billion) from the Swiss National Bank’s liquidity facility and use it to buy back as much as 3 billion Swiss francs worth of debt securities from existing holders, according to a statement on... https://www.scmp.com/business/banking-finance/article/3213715/credit-suisse-borrow-us54-billion-swiss-central-bank-it-seeks-halt-confidence-crisis?utm_source=rss_feed https://www.scmp.com/business/banking-finance/article/3213715/credit-suisse-borrow-us54-billion-swiss-central-bank-it-seeks-halt-confidence-crisis?utm_source=rss_feed Thu, 16 Mar 2023 05:06:35 +0000 Central bankers and regulators from Spain, England, Japan, Singapore and mainland China will be among the financial heavyweights coming to Hong Kong next week, as the city hosts another event to mark its re-emergence onto the world stage after three years of Covid-19 restrictions. Pablo Hernández de Cos, governor of the Bank of Spain, and Victoria Saporta, executive director of the Bank of England, will be among the 45 members of the Basel Committee on Banking Supervision convening in Hong Kong,... https://www.scmp.com/business/banking-finance/article/3213266/hong-kong-host-worlds-central-bankers-next-week-basel-committee-meetings-city-shows-it-back-normal?utm_source=rss_feed https://www.scmp.com/business/banking-finance/article/3213266/hong-kong-host-worlds-central-bankers-next-week-basel-committee-meetings-city-shows-it-back-normal?utm_source=rss_feed Mon, 13 Mar 2023 00:30:09 +0000