Economy

SINGAPORE (Reuters) – The dollar headed for a third weekly gain in a row on Friday, helped by a dovish European Central Bank and strong U.S. data that is pushing out expectations for how fast U.S. rates can fall, particularly if Donald Trump wins the presidency.The euro is down almost 1% for the week so far, has fallen through its 200-day moving average, and at $1.0828 in early Asia trade is parked near a 2-1/2 month low.On a rolling basis, the dollar’s 3.1% three-week gain on the euro is the sharpest rally since the middle of 2022, and it has forged to the strong side of 150 yen for the first time since early August. It last bought 150.24 yen.On Thursday, data showed U.S. retail sales growth was higher than expected and the ECB cut interest rates by 25 basis points.Four sources close to the matter told Reuters the ECB was likely to cut again in December unless economic data suggests otherwise.Meanwhile, markets have been disappointed at the lack of detail offered by Chinese authorities on plans to revive the slowing economy, and the yuan is headed for its largest weekly fall in more than 13 months. [CNY/]”All of that has played in to a stronger dollar,” said Jason Wong, senior strategist at BNZ in Wellington.”There’s also been a Trump trade going on in the background,” he said, with the dollar tracking Trump’s newfound lead in election prediction markets, since his tariff and tax policies are seen as likely to keep U.S. interest rates high.Trump’s prospects have also set bitcoin rallying since his administration is seen as taking a softer line on cryptocurrency regulation. It was last at $67,335, up 13% since Oct. 10. The U.S. goes to the polls on Nov. 5.Later on Friday, Chinese growth and activity data is due and is likely to show a slowdown that puts this year’s economic growth target of around 5% at risk.The Australian dollar, sensitive to China’s outlook owing to commodity exports, steadied at $0.6697 on Friday for a fall of around 0.8% on the week. [AUD/]It had received a boost on Thursday when stronger-than-expected jobs data reduced bets on interest rates cuts. The New Zealand dollar is also down 0.8% on the week and was a fraction lower at $0.6055 early in the Asia session.Israel said it had killed Hamas leader Yahya Sinwar in Gaza, a mastermind of the Oct. 7, 2023, attack that triggered war.Israel’s shekel rose and touched a two-week high after the news, though Israeli Prime Minister Benjamin Netanyahu said fighting would go on and broader markets had little immediate reaction.Sterling regained the $1.30 level overnight but is also headed for a weekly loss after a bigger-than-expected drop in British inflation raised bets the Bank of England might cut interest rates twice before the end of the year. [GBP/]British retail sales and U.S. housing starts data are due later on Friday, as are plans from Japan’s largest union group, Rengo, for the year’s wage negotiations. Data showed Japan’s core consumer prices were up 2.4% year-on-year in September, a bit higher than expected. The U.S. dollar index hit a 2-1/2 month high on Thursday at 103.76 and is up 0.8% this week.China’s yuan hovered at 7.1370 in offshore trade, ahead of the onshore open. More

BEIJING (Reuters) – China’s economy is expected to have slowed in the third quarter, dragged by a prolonged property downturn and weak consumption, maintaining pressure on policymakers as they consider more stimulus steps to revitalise growth.Data released on Friday is forecast to show the world’s second-largest economy grew 4.5% year-on-year in July-September, slowing from 4.7% in the second quarter and hitting the weakest pace since the first quarter of 2023, according to a Reuters poll.Beijing will report the latest figures at a time when authorities have started to sharply increase stimulus measures in an effort to ensure the economy meets the government’s 2024 growth target of around 5%.The Reuters poll showed China’s economy is likely to expand 4.8% in 2024, undershooting Beijing’s target, and growth could cool further to 4.5% in 2025.China’s economy has stuttered through uneven growth this year, with industrial production outstripping domestic consumption, fanning deflationary risks amid the property downturn and mounting local government debt.Policymakers, who have traditionally leaned on infrastructure and manufacturing investment to drive growth, have pledged to shift focus towards stimulating consumption, but markets are awaiting further details of a planned fiscal stimulus package.On a quarterly basis, the economy is forecast to have expanded 1.0% in the third quarter, compared with 0.7% growth in April-June, the poll showed.GDP data is due on Friday at 0200 GMT. Separate data on September activity is expected to paint a mixed picture, with retail sales picking up while investment slowing.Recent data raised the risk of China sliding into an entrenched phase of deflationary pressures as prospects for exports, the economy’s lone bright spot this year, look to be dimming amid foreign trade curbs.China’s export growth slowed sharply in September while imports also decelerated, undershooting forecasts by big margins and suggesting manufacturers are slashing prices to move inventory ahead of tariffs from several trade partners.China’s consumer inflation unexpectedly eased in September, while producer price deflation deepened, heightening pressures on Beijing to take steps to spur demand as exports lose steam.Last week, China’s finance minister pledged to “significantly increase” debt to revive growth, but left investors guessing on the overall size of the stimulus package.China may raise an additional 6 trillion yuan ($842.60 billion) from special treasury bonds over three years to help bolster the sagging economy through expanded fiscal stimulus, Caixin Global reported, citing multiple sources with knowledge of the matter.Reuters reported last month that China plans to issue special sovereign bonds worth about 2 trillion yuan this year as part of fresh fiscal stimulus. The central bank in late September announced the most aggressive monetary support measures since the COVID-19 pandemic, including interest rate cuts, a 1 trillion yuan liquidity injection and other steps to support the property and stock markets.Analysts polled by Reuters expect a 20-basis points cut in China’s one-year loan prime rate, the benchmark lending rate, as well as a 25-basis points cut in banks’ reserve requirement ratio in the fourth quarter.($1 = 7.1208 Chinese yuan renminbi) More

WASHINGTON (Reuters) – International Monetary Fund Managing Director Kristalina Georgieva said on Thursday that she expected U.S. presidential candidates Donald Trump and Kamala Harris would both take a “very pragmatic” approach to the IMF and the World Bank.Georgieva told Reuters in an interview that it was up to the American people to choose their leader on Nov. 5, and that she has had a positive experience working with current and past U.S. administrations, including former President Trump’s.As global finance leaders gather in Washington next week for IMF and World Bank annual meetings, a huge question on their minds will be the future of U.S. leadership at the institutions given the close contest between Republican candidate Trump and Democratic candidate Harris.Trump has promised massive tariff increases on Chinese goods and other imports, part of a return to his “America First” retreat from multilateralism.The conservative Republican “Project 2025″ agenda, from which Trump has distanced himself, calls for U.S. withdrawal from the IMF and World Bank to pursue only bilateral development and financial aid in line with U.S. interests.Georgieva presented a more sanguine view of potential U.S. election outcomes.”My experience with the U.S. – any administration – has been always very positive,” Georgieva said. “The U.S. is very pragmatic. It brings a can-do attitude. It is demanding, and I like that.”She worked with the Trump administration as the CEO of the World Bank in 2018 to land a $13 billion capital increase, and later, as head of the IMF, to channel rapid COVID-19 relief financing to struggling economies across the world.The U.S. Treasury at the time was complaining about excessive World Bank lending to China, and Georgieva said the Trump administration had demanded reforms to raise borrowing costs for larger middle-income countries to discourage such loans in exchange for backing the capital increase. “So from that perspective, I think we can see the same very practical, pragmatic attitude in the future,” from U.S. administrations, she added.On Tuesday, World Bank President Ajay Banga cited the 2018 capital hike as evidence that Trump recognizes the value of U.S. leadership of the two institutions. He added that the World Bank can multiply development dollars and can help turn poor countries into thriving markets for U.S. companies. The U.S. is the largest shareholder in both the IMF and the World Bank and holds effective veto power over major structural decisions.Georgieva said rather than denouncing proposed new trade restrictions as “wrong,” the IMF was working to understand the impetus for increased trade restrictions, particularly in advanced economies like the U.S. and Europe.”Let’s try to understand the drivers in each and every country, and then analyze what is the possible response and what are the costs and benefits, and then work with our members to bring forward more rational decision-making,” she said. More

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WASHINGTON (Reuters) – The United States will use restrictive tools like tariffs to push back against China’s practice of making far more goods than it needs in order to dominate global markets, White House official Daleep Singh said on Thursday.Singh, deputy national security adviser for international economics, said the Asian giant has amassed growing market power that it uses for economic and geopolitical leverage, and Washington viewed the costs as unacceptable.”So that’s the problem, and it’s not abstract. You can see it in the numbers,” Singh told an event hosted by the Alliance for American Manufacturing. “They’re a big outlier and we’ve got to do something about it.”Beijing and Washington have had tense relations for years due to multiple issues ranging from trade tariffs and the origins of COVID-19 to human rights, intellectual property and Taiwan. Singh gave no details on any new measures being considered by Washington.Data showed that China had a significant overcapacity relative to projected demand for electric vehicles, batteries or semiconductors, Singh said, noting that Chinese producers were reporting “persistent losses.””We’re seeing an unrivaled level and rate of growth in China’s subsidies, and … forget about the numbers, look at their public pronouncements to dominate key sectors and diffuse them with military pre-eminence,” Singh said at the event, a week before finance officials from around the world gather in Washington for the annual meetings of the International Monetary Fund and World Bank.Singh said that “a growing number of countries”, including Brazil, India, South Africa and the European Union, were starting to see industrial overcapacity as a major problem like the U.S. did, adding China was using production to gain dominance in a number of sectors.”China is flooding strategic sectors with supply that’s well beyond what global demand can plausibly absorb, and therefore wiping out the competition,” he said.He said China had long used the same tactics for two decades to gain dominance in steel and solar and medical devices, but the trend was now “broadening and intensifying” to include electric vehicles, batteries and semiconductors, where Washington has been investing heavily.Washington has previously said the U.S. may need to take further and “more creative” actions beyond tariffs to protect U.S. industries and workers against China’s growing excess industrial capacity.U.S. Treasury Secretary Janet Yellen, speaking at a separate Council on Foreign Relations event in New York, said every province in China is competing to try to invest more in advanced manufacturing sectors, such as clean energy and semiconductors. “So the level of subsidization is utterly enormous. There are many profit-losing firms that are kept in existence. And so there is a gigantic amount of overcapacity that is threatening our own attempts to build in these areas,” she said. More

(Reuters) – Huntington Bancshares (NASDAQ:HBAN)’ third-quarter profit beat expectations on Thursday, as higher underwriting and wealth management fees offset a hit from bigger deposit costs.The bank has diversified beyond lending into fee-earning businesses – a strategy that paid off as companies sold stocks and bonds and pursued deals, driving up the fee that banks charge for these transactions.Capital markets and advisory fees jumped 50%, while wealth and asset management revenue rose 18%, Huntington said.Zach Wasserman, chief financial officer of the bank, said the value-added fee businesses provide a cushion to the balance sheet and are a significant support to bank financials.Net interest income (NII) – the spread between earnings on loans and deposit costs – dipped 1% to $1.35 billion but was 3% higher than the second quarter.Banks have paid more interest on deposits to prevent customers from fleeing to higher-yielding alternatives.Wasserman expects 2025 to be a record year for NII.Huntington forecast fourth-quarter NII to be flat or up 1% from last year. Analysts polled by LSEG had expected a rise of 3.9%.”Our increased loan growth should help boost NII,” Wasserman said on a call with Reuters.”We have been seeing growth in small business banking, middle markets, consumer auto are some of the areas where we are seeing good loan growth,” he said adding that loan growth is expected to sustain at the current 6% levels.CEO Steve Steinour also expressed optimism about next year.”Loan pipelines are robust as we enter the fourth quarter, and we believe this growth momentum establishes a foundation for growing revenue and expanded profitability heading into 2025,” Steinour said.Provision for credit losses rose 7%, reaffirming a trend that was also seen in reports from big banks as consumers exhaust their savings built up during the pandemic.However, banks believe that the U.S. consumer is still healthy.”Outlook around the economy is gradually improving and also based on what we’re seeing in our own portfolio, which continues to indicate that we’re not going to see any significant worsening conditions,” Wasserman said.Profit fell 5.5% to $517 million, or 33 cents per share, for the three months ended Sept. 30, compared with expectations of 30 cents.Shares were down over 2%. They have gained nearly 22% this year, underperforming the S&P 500 banks index’s .SPXBK 27.7% jump. More

SAN FRANCISCO (Reuters) – – Worldcoin, a cryptocurrency project founded by OpenAI CEO Sam Altman, said on Thursday it was rebranding to World Network and was ramping up efforts to scan every human’s iris using its “orb” devices.Its core offering is its World ID, which the company describes as a “digital passport” to prove that its holder is a real human and tell the difference with AI chatbots online. World Network, which is facing scrutiny over its data collection, introduced a new version of its orb iris-scanning device at an event in San Francisco on Thursday, which it said features 5G connectivity and enhanced privacy and security features.It also unveiled a slew of new ways to make it easier to access the orb, such as purpose-built retail locations and a partnership with Latin American delivery service Rappi to bring orbs to people.To get a World ID, a customer signs up to do an in-person iris scan using World Network’s “orb”, a silver ball approximately the size of a bowling ball. Once the orb’s iris scan verifies the person is a real human, it creates a World ID. As an enticement, those who sign up in certain countries receive a cryptocurrency token called WLD.The company behind World Network is San Francisco and Erlangen, Germany-based Tools for Humanity. Since the project launched in July 2023, over 6.9 million people have signed up to have their irises scanned, according to the company.Privacy campaigners have criticized the project over the collection, storage and use of personal data. Earlier this year, Spain and Portugal issued temporary bans, and Argentina and Britain said they would examine World Network. More

(Reuters) – A look at the day ahead in Asian markets. Anyone hoping for a quiet end to the trading week in Asia will be disappointed, as investors brace for a batch of top-tier economic data on Friday that includes Japanese inflation, Malaysian GDP, and the main event – Chinese GDP.Other Chinese indicators – September’s retail sales, house prices, industrial production, unemployment, and investment – will also be released. But all eyes will be on third quarter growth and how close it is to the 5.0% mark.That’s Beijing’s 2024 target, but most analysts say it will be missed. The wave of fiscal stimulus measures announced recently has come too late to boost growth this year but has prompted some economists to raise their 2025 forecasts.Overall, however, analysts remain pretty glum. Their consensus forecast in a Reuters poll is that gross domestic product expanded 4.5% in the third quarter from a year earlier, slowing from 4.7% in the previous quarter.For 2024 as a whole they forecast growth of 4.8%, undershooting the government’s target, and expect a further deceleration next year to 4.5%. Citi’s Chinese economic surprises index has been inching higher in recent weeks but remains firmly in negative territory, where it has been since June. Investors are realizing that Beijing’s fiscal, monetary and liquidity support, however successful they prove to be, will take time to bear fruit. This is perhaps reflected in Chinese stocks’ third decline in a row on Thursday – Shanghai’s blue chip index is down 15% from its October 8 peak, although still up around 18% since the first stimulus measures were unveiled last month.Elsewhere in Asia on Friday Japan releases September inflation figures, with economists expecting a marked slowdown in the annual core rate to 2.3% from 2.8% in August. That would be the biggest month-to-month decline since February last year.It would also support the thinking of Bank of Japan officials who favor a more cautious approach to tightening monetary policy. The BOJ will forgo raising interest rates again this year, according to a very slim majority of economists in a Reuters poll published this week, although nearly 90% still expect rates to rise by end-March.Japanese interest rate swaps traders are pricing in a 15 basis points rate hike from the BOJ in January, and only 35 bps of tightening in total next year.The global market picture looks fairly positive though. On Thursday chip-making giant TSMC delivered an upbeat outlook and U.S. economic data was strong, lifting the Dow to a new high. Treasury yields and the dollar also rose on Thursday, which is not so positive for emerging markets, however. The dollar is its strongest in two and a half months and has appreciated in all but two of the last 14 trading days. Here are key developments that could provide more direction to markets on Friday:- China GDP (Q3)- Japan inflation (September)- Malaysia GDP (Q3) More