FirstFT: China boosts support for housing market and renminbi

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Chinese authorities have stepped up measures to support the renminbi and boost the country’s housing market in an effort to restore confidence in the world’s second-largest economy.

The People’s Bank of China said it would cut the amount of foreign currency that financial institutions are required to hold in reserve, signalling its resolve to support the renminbi, which has dropped more than 5 per cent against the dollar this year.

Beijing and Shanghai also lowered minimum mortgage interest rates for first-time homebuyers. The moves in China’s two largest cities followed similar cuts this week in Guangzhou and Shenzhen, and came after authorities yesterday announced cuts to both interest rates and downpayment ratios for mortgages.

Policymakers have recently picked up the pace of new measures to support China’s currency and economy, particularly in property, after the country’s sluggish recovery from the severe lockdowns that were abandoned at the end of last year. Here’s the reaction to the PBoC’s intervention.

• Xi skips G20 summit: China’s president is not planning to attend the meeting of G20 heads of state in New Delhi next weekend, in a blow to a forum of leading nations already beset by deep divisions.

Here’s what else I’m keeping tabs on today:

• Jobs data: The latest non-farm payrolls report is expected to confirm that the number of new jobs created last month slowed as rising interest rates hit hiring. Read our preview

• Manufacturing: The Institute for Supply Management is expected to confirm the US manufacturing sector contracted for a tenth consecutive month.

• Housing: Construction spending is expected to have risen slightly last month, data from the US Census Bureau will show.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. The US should use its leadership in semiconductors as a “chokepoint” to enforce minimum global standards for the use of artificial intelligence, according to the head of one of the country’s most ambitious AI start-ups. Mustafa Suleyman, chief executive of Inflection and a co-founder of DeepMind, also urged the US government to restrict the sale of Nvidia chips. Read the exclusive interview.

2. US hedge fund Millennium Management has amassed a $320mn bet against Mexican billionaire Carlos Slim’s telecoms empire amid a sharp fall in the company’s shares. The sizeable short position pitches the firm, led by founder Izzy Englander, against one of the largest telecoms companies in the world. Here’s the full story.

3. UK house prices contracted at the fastest annual pace since 2009 in August as the impact of higher interest rates hit the property market, according to one of the country’s largest mortgage providers. The average cost of a property fell to £259,153, down from a recent peak of £274,000 in August last year, the Nationwide said. Here’s the latest on the UK property market.

4. Europe’s largest copper producer said it had fallen victim to a huge theft that could lead to hundreds of millions of euros of losses and cause it to fall short of its full-year financial target. Aurubis said it identified serious discrepancies tied to its recycling business in Hamburg as a result of “criminal activity”. This is another scandal to rock the metals industry.

5. The US Supreme Court’s Clarence Thomas has disclosed that billionaire Harlan Crow paid for him to make three trips to New York and Texas last year. The disclosures came after revelations about the links between Crow and Thomas plunged the US’s highest court into an ethical crisis and sparked calls for reform. The delayed disclosure was released yesterday.

The Big Read

Can global warming be solved by reflecting the sun’s rays back into space? The niche idea of solar radiation management is becoming increasingly seriously studied, with proponents arguing that drastic measures are needed to combat further rises in global temperatures given humanity’s lack of progress in curbing carbon emissions. But is it a quick fix to our climate problems, or a risky distraction?

We’re also reading . . . 

• Deal of the century: UBS drew scepticism when it took over scandal-ridden rival Credit Suisse. Five months on, the deal has made it Europe’s second-most valuable lender.

• Argentina’s libertarian moment: Presidential hopeful Javier Milei is among a new generation of politicians reviving the movement.

• ‘Friday is just a dead day’: Summer Fridays, an executive perk that began in 1960s New York, is increasingly becoming an all-year-round phenomenon.

Chart of the day

A flurry of high-profile US initial public offerings this year have involved cornerstone investors — typically big-name backers that agree to being identified in a company’s prospectus in return for getting a guaranteed allocation of shares. Bankers predict a growing role for them as the difficulty of listing rises in a sluggish market.

Take a break from the news

Here are our six films to watch this week, including Passages, Ira Sachs’ complex love story that hosts a trio of superb performances.

Additional contributions from Tee Zhuo and Benjamin Wilhelm