China to Flood Economy With Cash as Global Markets Lose Faith
BEIJING—The selloff in Chinese stocks accelerated Monday , adding pressure on Beijing, which is planning to flood its banking system with new liquidity to offset effects of its recent surprise currency devaluation , according to Chinese officials and advisers to the central bank. Stocks fell sharply in morning trading, with the Shanghai Composite Index down about 8%, bringing its losses since its mid-June peak to roughly 37%. Stock markets also were down Monday morning in Japan and South Korea. The expected move to free up more funds for lending—by reducing the deposits banks must hold in reserve—is directly aimed at countering the effects of a weaker currency, which could send more funds away from Beijing’s shores. The moves reflect an economy increasingly failing to cooperate with Chinese leaders’ playbook to control the world’s No. 2 economy. Beijing’s struggles this summer have spooked many investors into viewing China as a […]
China share slide: Pension fund to invest in stock market
Chinese lady in front of stock price board China plans to let its main state pension fund invest in the stock market for the first time, the country’s official news agency, Xinhua, has reported. Under the new rules, the fund will be allowed to invest up to 30% of its net assets in domestically-listed shares. China’s main pension fund holds 3.5tn yuan ($548bn; £349bn), Xinhua said. The move is the latest attempt by the Chinese government to arrest the slide in the country’s stock market. The fund will be allowed to invest not just in shares but in a range of market instruments, including derivatives. By increasing demand for them, the government hopes prices will rise. The Shanghai Composite Index closed down more than 4% on Friday after figures showed monthly factory activity contracting at its fastest pace in six years. It capped a tough few days for Chinese […]
Foreign Car Factories Curb Output in China
SHANGHAI—China’s foreign-car factories, once among the world’s busiest, are starting to slack off. New weakness in the world’s largest car market has led companies such as General Motors Co. and Volkswagen AG to run their plants there at less than full capacity for the first time, according to industry data. The global auto makers, which have been some of the biggest beneficiaries of Chinese consumers’ increasing appetite for…
China Poised to Raise Banks’ Liquidity to Boost Lending
BEIJING—The People’s Bank of China is preparing to flood the banking system with liquidity to boost lending, according to officials and advisers to the central bank, as its recent currency moves are squeezing yuan funds out of the market and renewing concerns over capital leaving Chinese shores. The planned step—which involves cutting the deposits banks are required to hold in reserve—signals that the Chinese central bank’s exchange-rate maneuvering in the past two weeks is backfiring, forcing it to again resort to the reserve-requirement reduction, the same easing measure that so far has failed to help spur economic activity. The move, which could come before the end of this month or early next month, would involve a half-percentage-point reduction in the reserve-requirement ratio, potentially releasing 678 billion yuan ($106.2 billion) in funds for banks to make loans. It would be the third comprehensive reduction in the reserve requirement this year. […]
Lundberg Says U.S. Gasoline to Extend Slump on Crude’s Rout
U.S. gasoline prices at the pump will extend a decline after crude oil tumbled to a six-year low, said Trilby Lundberg, the president of Lundberg Survey Inc. “Retail price cuts are in the cards” for gasoline, Lundberg said Sunday in a telephone interview. “It would take a powerful oil-price hike to reverse them.” The average for regular gasoline at U.S. pumps fell 0.35 cent to $2.7073 a gallon in the two weeks ended Aug. 21, Camarillo, California-based Lundberg said Sunday. Her report is based on information from about 2,500 filling stations. The price is 77.12 cents lower than a year ago. Motorists will get the benefit of lower crude, Lundberg said. On Aug. 21, West Texas Intermediate futures for October delivery dropped 87 cents, or 2.1 percent, to settle at $40.45 a barrel on the New York Mercantile Exchange, the lowest close since March 2009. The contract touched $39.86 […]
Refinery Woes Stall Gasoline Price Drops
U.S. oil prices briefly dropped below $40 a barrel on Friday—hitting a six-year low that adds to pressure on pump prices for Labor Day road trips. But cheap gasoline isn’t a sure bet everywhere. Even as most drivers around the country are spending 25% less on fuel than they did a year ago, California drivers have missed out on the gasoline price windfall because of refinery outages. Many drivers in the state are saving less than 10%…
Russian PM says Russia to boost FX flows to support ruble
An employee counts Russian ruble banknotes at a private company’s office in Krasnoyarsk, Siberia, December 17, 2014. Russia’s Prime Minister Dmitry Medvedev said on Saturday that the government and central bank were preparing measures to boost foreign currency sales in response to the weakening ruble. His comments suggest Russia is again putting pressure on major exporters to help buttress the ruble by selling more of their foreign currency, a tactic used last December when the government ordered state exporters to sell part of their foreign currency over an agreed time frame. "Naturally we, I mean the government, will help the central bank in the sense of additional foreign currency inflows," Medvedev said. "In the near future we will launch foreign currency sales by our largest exporters, which will affect the ruble’s rates. So we, together with the central bank, will undertake a definite collection of agreed measures." It was […]
NOAA: July Was Hottest Month Ever Worldwide
July was a scorcher, globally speaking. Last month was the warmest on record worldwide with many countries and the world’s oceans experiencing intense heat waves, the U.S. National Oceanic and Atmospheric Administration said today in a report . The report found that “the July average temperature across global land and ocean surfaces was 1.46°F above the 20th century average.” And since July is “climatologically the warmest month for the year, this was also the all-time highest monthly temperature in the 1880–2015 record, at 61.86°F, surpassing the previous record set in 1998 by 0.14°F.” It comes as no surprise that Arctic sea ice hasn’t fared well with all this warmth. The average Arctic sea ice extent was the eighth smallest since records began in 1979. Click on chart for larger view. Graphic credit: NOAA Click on chart for larger view. Graphic credit: NOAA The report also found that it’s been […]
Feels like 1986: Oil on track for longest weekly losing streak in 29 years
A customer holds a nozzle to fill up his tank in a gasoline station in Nice December 5, 2014. Oil prices resumed their downward trend on Friday pulled lower by weaker global stock markets and a sharp contraction in China’s manufacturing activity, with the U.S. benchmark on track for its longest weekly losing streak since 1986. Activity in China’s factory sector shrank at its fastest pace in almost 6-1/2 years in August as domestic and export demand dwindled, adding to worries about lower demand for crude in the world’s second biggest oil consumer. Asian stocks also fell on Friday, following Wall Street down as fears took hold of a China-led deceleration in global growth. [MKTS/GLOB] Key oil benchmarks were trading near 6-1/2 year lows, with the U.S benchmark headed for its eighth straight weekly decline, the longest weekly losing streak since 1986. In late 1985, oil prices slumped to […]