Aurelia Butler

(Reuters) – A look at the day ahead in Asian markets.The mood across Asian markets on Wednesday is likely to be one of caution, for two main reasons that should keep markets in relatively narrow ranges – lingering concern over the health of the U.S. economy, and Nvidia (NASDAQ:NVDA)’s earnings later in the day.U.S. and world stocks climbed higher on Tuesday but only slightly, while the dollar dipped again and Treasury yields were little-changed across the curve. None of that offers investors in Asia much to run with on Wednesday. Given the lack of obvious global catalysts, regional events may take on added weight on Wednesday.Bank of Japan Deputy Governor Ryozo Himino is scheduled to speak. This follows BOJ Governor Kazuo Ueda’s first public remarks last week since the central bank’s ‘hawkish hike’ in July. Ueda’s tone on Friday was also hawkish, indicating that current rates are still well below ‘neutral’. This strengthens the case for further tightening this year beyond the mere 7 basis points of hikes rates markets are currently discounting.The main economic indicator across the Asia/Pacific region on Wednesday will be Australian inflation. Economists polled by Reuters expect annual weighted consumer price inflation to have slowed to 3.4% in July from 3.8% in June.That would be the lowest since February and closer to getting inflation back in the central bank’s 2%-3% target range for the first time since 2021. The Reserve Bank of Australia has held its cash rate at 4.35% since November last year, and last cut rates nearly five years ago.The Aussie swaps market shows no rate cut is fully priced until December, with 100 bps of easing in total expected by the end of next year. Thailand’s deputy finance minister Julapun Amornvivat and central bank governor Sethaput Suthiwartnarueput, meanwhile, both speak at a business seminar on Wednesday. This comes amid continued friction between the government and central bank over the path for interest rates.The Bank of Thailand last week left rates on hold at 2.50% for a fifth meeting. But newly-sworn in Prime Minister Paetongtarn Shinawatra has called central bank independence an “obstacle” to economic growth, and her predecessor repeatedly called for rates to be cut.Despite being an extremely low-yielding currency, the Thai baht has rallied strongly in recent weeks, perhaps because of the central bank’s refusal to cut rates just yet. It is now the only one of seven key Asian currencies to be up against the U.S. dollar so far this year.Indeed, if there is one discernible global driver for investors in Asia on Wednesday it is the U.S. dollar’s persistent weakness, as the currency slipped to a fresh low for the year against a basket of major currencies. Here are key developments that could provide more direction to Asian markets on Wednesday:- Australia inflation (July)- BOJ Deputy Governor Ryozo Himino speaks- Bank of Thailand Governor Suthiwartnarueput speaks More

SAN FRANCISCO (Reuters) -California legislators are set to vote on a bill as soon as this week that would broadly regulate how artificial intelligence is developed and deployed in California even as a number of tech giants have voiced broad opposition.Here is background on the bill, known as SB 1047, and why it has faced backlash from Silicon Valley technologists and some lawmakers:WHAT DOES THE BILL DO?Advanced by State Senator Scott Wiener, a Democrat, the proposal would mandate safety testing for many of the most advanced AI models that cost more than $100 million to develop or those that require a defined amount of computing power. Developers of AI software operating in the state would also need to outline methods for turning off the AI models if they go awry, effectively a kill switch.The bill would also give the state attorney general the power to sue if developers are not compliant, particularly in the event of an ongoing threat, such as the AI taking over government systems like the power grid. As well, the bill would require developers to hire third-party auditors to assess their safety practices and provide additional protections to whistleblowers speaking out against AI abuses.WHAT HAVE LAWMAKERS SAID?SB 1047 has already passed the state Senate by a 32-1 vote. Earlier this month, it passed the state Assembly appropriations committee, setting up a vote by the full Assembly. If it passes by the end of the legislative session on Aug. 31, it would advance to Governor Gavin Newsom to sign or veto by Sept. 30.Wiener, who represents San Francisco, home to OpenAI and many of the startups developing the powerful software, has said legislation is necessary to protect the public before advances in AI become either unwieldy or uncontrollable.However, a group of California Congressional Democrats oppose the bill, including San Francisco’s Nancy Pelosi; Ro Khanna, whose congressional district covers much of Silicon Valley; and Zoe Lofgren, from San Jose. Pelosi has called SB 1047 ill-informed and said it may cause more harm than good. In an open letter last week, the Democrats said the bill could drive developers from the state and threaten so-called open-source AI models, which rely on code that is freely available for anyone to use or modify.WHAT DO TECH LEADERS SAY?Tech companies developing AI – which can respond to prompts with fully formed text, images or audio as well as run repetitive tasks with minimal intervention – have called for stronger guardrails for AI’s deployment. They have cited risks that the software could one day evade human intervention and cause cyberattacks, among other concerns. But they also largely balked at SB 1047.Wiener revised the bill to appease tech companies, relying in part on input from AI startup Anthropic – backed by Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL). Among other changes, he eliminated the creation of a government AI oversight committee.Wiener also took out criminal penalties for perjury, though civil suits may still be brought. The revised bill has won support from some tech firms and executives, including billionaire Elon Musk and Anthropic.The AI startup had last week said its concerns about the bill potentially hindering innovation had been “greatly reduced” and the benefits likely outweighed the costs. Still, it flagged that some aspects of the bill seemed concerning or ambiguous.Tesla (NASDAQ:TSLA) CEO Musk, who runs an AI firm called xAI, said he has been an advocate for AI regulation and that California should pass the bill.Other companies have opposed it.Alphabet’s Google and Meta have expressed concerns in letters to Wiener. Meta said the bill threatens to make the state unfavorable to AI development and deployment. The Facebook (NASDAQ:META) parent’s chief scientist, Yann LeCun, in a July X post called the bill potentially harmful to research efforts. OpenAI, whose ChatGPT is credited with accelerating the frenzy over AI since its broad release in late 2022, has said AI should be regulated by the federal government but that SB 1047 creates an uncertain legal environment.In a letter to Wiener, OpenAI said it opposes SB 1047 because it is a threat to AI’s growth and could cause entrepreneurs and engineers to leave the state.Of particular concern is the potential for the bill to apply to open-source AI models. Many technologists believe open-source models are important for creating less risky AI applications more quickly, but Meta and others have fretted that they could be held responsible for policing open-source models if the bill passes. Wiener has said he supports open-source models and one of the recent amendments to the bill raised the standard for which open-sourced models are covered under its provisions.The bill also has its backers in the technology sector. Geoffrey Hinton, widely credited as a “godfather of AI”, former OpenAI employee Daniel Kokotajlo and researcher Yoshua Bengio have said they support the bill. More

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WASHINGTON (Reuters) -A Chinese hacking group exploited a software bug to compromise several internet companies in the U.S. and abroad, a cybersecurity firm said on Tuesday.Researchers at the firm, Lumen Technologies, said in a blog post that the hackers took advantage of a previously unknown vulnerability in Versa Director – a software platform used to manage services for customers of Santa Clara, California-based Versa Networks. It said four U.S. victims and one Indian victim had been identified, although it declined to identify them.Versa Networks issued an advisory on Monday acknowledging that the vulnerability had been exploited “in at least one known instance” by an advanced group of hackers, and urged customers to update their software to fix the bug.Lumen’s blog post said that its researchers assessed with “moderate confidence” that the hacking campaign, which kicked off as early as June 12, was carried out by an alleged Chinese government-backed group nicknamed “Volt Typhoon.” Lumen researcher Ryan English said that the internet companies were targeted for the attackers to surveil their customers.”They very rarely go in through the front door,” he said.Doug Britton, an executive with Virginia-based RunSafe Security, said the research appeared sound and that the access described by Lumen would allow a group like Volt Typhoon “the ability to do broad, silent surveillance.”The Chinese Embassy in Washington did not respond to a request seeking comment, although Beijing routinely denies allegations of its involvement in cyberespionage. On Friday, the U.S. Cybersecurity and Infrastructure Security Agency added the Versa vulnerability to its list of “known exploited vulnerabilities.” Brandon Wales, the recently departed executive director of CISA, was quoted by the Washington Post on Tuesday saying that China’s hacking effort had “dramatically stepped up from where it used to be.”Volt Typhoon has emerged as a group of particular concern to U.S. cybersecurity officials. In April, FBI Director Christopher Wray said China was developing the “ability to physically wreak havoc” on U.S. critical infrastructure. More

(Reuters) -Members of the boards of directors overseeing the Chicago and New York Federal Reserve banks voted in favor of lowering by a quarter percentage point the central bank’s discount rate during July, according to meeting minutes released on Tuesday. The Fed said in a press release that while 10 of the 12 regional Fed banks wanted to maintain the discount rate at 5.5% in votes taken last month, the Chicago and New York Fed directors wanted that borrowing rate to move down to 5.25%.The discount rate is what deposit-taking banks pay to borrow directly from the central bank. It is a rate that is generally set in relation to where the central bank’s interest rate target range is also set. At the month-ending July Federal Open Market Committee meeting, the Fed maintained its interest rate target range at between 5.25% and 5.5%, with the discount rate steady at 5.5%. The discount window meeting minutes offer an insight into the likely direction of monetary policy. With inflation pressures easing and risks around the job market rising, the Fed is almost certain to cut its rate target at the September policy meeting. Fed leader Jerome Powell said as much when he spoke on Friday at the Kansas City Fed’s annual research conference in Jackson Hole, Wyoming. Released last Wednesday, meeting minutes from the July FOMC noted the “vast majority” of policy makers are on board with a rate cut for next month. The discount rate meeting minutes said that as of last month the Fed’s Board of Governors expressed no view on the level of the rate. In the minutes, regional Fed directors “generally reported stable economic activity, with many directors noting moderating inflation.” The directors also said “labor market conditions reportedly continued to move into better balance, and wage growth stabilized or slowed in most districts.” The 12 regional Fed banks are overseen by directors drawn from the private sector. The minutes noted they were approved on July 22. More