Online retail sales during this period surged 9.8 percent year on year to 7.1 trillion yuan (about 996 billion U.S. dollars), of which the retail sales of goods reached 5.96 trillion yuan, marking an increase of 8.8 percent, according to data released by the Ministry of Commerce (MOC) on Friday.

THREE DRIVERS FOR CONSUMPTION GROWTH

The MOC said that digital products, services consumption, and trade-in programs were the three new drivers for consumption growth during the period.

In terms of digital products, AI learning machines and smart wearable devices grew 136.6 percent and 31.5 percent, respectively, the data showed.

For services consumption, surveyed online travel and catering services grew 59.9 percent and 21.7 percent, respectively.

E-commerce platforms in China coordinated to offer trade-in services for more than 400,000 products and recycling services covering over 300 categories of goods. The trade-in services saw sales of refrigerators, washing machines, mobile phones and TVs increase by 82.1 percent, 70.4 percent, 63.9 percent and 54.3 percent, respectively, on major online shopping platforms.

DEEPENING INTERNATIONAL COOPERATION

As e-commerce drives consumption recovery domestically, the sector’s international cooperation has also expanded further. In the first half of this year, China signed e-commerce cooperation memorandums with Serbia, Bahrain and Tajikistan, bringing the total number of Silk Road e-commerce partner countries to 33, according to the MOC.

China’s financial hub Shanghai has achieved a series of outcomes in institutional opening-up regarding the interoperability of cross-border e-invoicing and electronic bills of lading, the MOC said.

The city was given the green light in October last year by the State Council to set up the pilot zone for Silk Road e-commerce cooperation, an initiative aimed at exploring institutional innovation, further opening up the e-commerce sector, and improving digital economic cooperation, especially among Belt and Road Initiative participating countries.

According to the MOC, the pilot zone in Shanghai has also established a raft of public service platforms for training, think tanks and country pavilions.

TECHNOLOGICAL BOOST

This year, major e-commerce platform companies have invested over 48 billion yuan in R&D to optimize customer experience and reduce costs, according to the MOC.

“Artificial intelligence (AI) is widely used across various aspects, including consumption, operations and transportation,” the MOC said, adding that virtual shopping, AI customer service, and autonomous driving opened up a new era of smart e-commerce.

Intelligent operations and marketing tools have helped merchants reduce costs and increase efficiency, according to the MOC.

The ministry said e-commerce has also played a positive role in invigorating the agriculture sector. For instance, digital commerce campaigns conducted in Hubei and Hunan provinces in central China led to a 21.7 percent growth in online sales of local agricultural products in the first half of the year. 

The London Stock Exchange saw a delayed start to trading due to the glitch — the result of a faulty update to an antivirus program — which also affected airports, airlines, trains, banks, shops and even doctors’ appointments.

Later, the calculation of London’s blue-chip FTSE 100 index was frozen during part of the afternoon, as was the main index for the LSE-owned Milan stock exchange. Trading in stocks was unaffected.

“A global IT outage led to risk off sentiment,” said Axel Rudolph, senior market analyst at online trading platform IG.

The crash was caused by an update of CrowdStrike antivirus software on Microsoft’s cloud computing service.

Shares in CrowdStrike, which has already issued a software fix, tumbled 11.1 percent, while Microsoft lost 0.7 percent.

Wall Street’s main stock indices tried to push higher in morning trading but quickly tumbled into the red where they lingered for the rest of the day. 

The S&P 500 finished down 0.7 percent.

“The market was extremely overbought so it was just a matter of time before we had a pullback,” said Tom Cahill of Ventura Wealth Management.

European shares closed lower across the board, as did most Asian markets.

Oil prices were also decisively lower, with analysts citing unease about China’s economic outlook.

Aviation officials in the United States briefly grounded all planes, and airlines elsewhere cancelled or delayed flights as systems running Microsoft Windows crashed.

“The world grinding to a halt because of a global IT meltdown shows the dark side to technology and that relying on computers does not always make life easier,” noted Dan Coatsworth, investment analyst at stockbroker AJ Bell.

Markets had been enjoying a healthy run-up as Federal Reserve officials have lined up in recent days to suggest they are ready to begin reducing rates.

Analysts had seen a pullback in tech shares earlier this week as evidence of a rotation to other undervalued areas of the market. But losses Thursday and Friday were fairly broad-based. 

“It appeared that investors were happier taking some profits following the week-long rotation out of tech and into value, than adding to their exposure,” said David Morrison, senior market analyst at Trade Nation.

There is also increasing uncertainty over who will run against Donald Trump in November’s US election, as calls for President Joe Biden to step aside continue to grow owing to questions about his health.

– Key figures around 2030 GMT –

New York – Dow: DOWN 0.9 percent at 40,287.53 (close)

New York – S&P 500: DOWN 0.7 at 5,505.00 (close)

New York – Nasdaq Composite: DOWN 0.8 percent at 17,726.94 (close)

London – FTSE 100: DOWN 0.6 percent at 8,155.72 (close)

Paris – CAC 40: DOWN 0.7 percent at 7,534.52 (close)

Frankfurt – DAX: DOWN 1.0 percent at 18,171.93 (close)

EURO STOXX 50: DOWN 0.9 percent at 4,827.24 (close)

Tokyo – Nikkei 225: DOWN 0.2 percent at 40,063.79 (close)

Hong Kong – Hang Seng Index: DOWN 2.0 percent at 17,417.68 (close)

Shanghai – Composite: UP 0.2 percent at 2,982.31 (close)

Euro/dollar: DOWN at $1.0885 from $1.0897 on Thursday

Pound/dollar: DOWN at $1.2914 from $1.2944

Dollar/yen: UP at 157.47 from 157.37 yen

Euro/pound: UP at 84.27 pence at 84.18 pence

West Texas Intermediate: DOWN 3.2 percent at $80.13 per barrel

Brent North Sea Crude: DOWN 2.9 percent at $82.63 per barrel

by Roland JACKSON

Online retail sales during this period surged 9.8 percent year on year to 7.1 trillion yuan (about 996 billion U.S. dollars), of which the retail sales of goods reached 5.96 trillion yuan, marking an increase of 8.8 percent, according to data released by the Ministry of Commerce (MOC) on Friday.

The MOC said that digital products, services consumption, and trade-in programs were the three new drivers for consumption growth during the period.

In terms of digital products, AI learning machines and smart wearable devices grew 136.6 percent and 31.5 percent, respectively, the data showed.

For services consumption, surveyed online travel and catering services grew 59.9 percent and 21.7 percent, respectively.

E-commerce platforms in China coordinated to offer trade-in services for more than 400,000 products and recycling services covering over 300 categories of goods. The trade-in services saw sales of refrigerators, washing machines, mobile phones and TVs increase by 82.1 percent, 70.4 percent, 63.9 percent and 54.3 percent, respectively, on major online shopping platforms.

As e-commerce drives consumption recovery domestically, the sector’s international cooperation has also expanded further. In the first half of this year, China signed e-commerce cooperation memorandums with Serbia, Bahrain and Tajikistan, bringing the total number of Silk Road e-commerce partner countries to 33, according to the MOC. 

Equities sank Friday as hopes for US interest rate cuts were offset by uncertainty over the US presidential election and worries about China’s economy, while technical disruptions delayed London’s open as a widespread outage hit global computer systems.

Investors were already on edge after a report said the White House was considering a crackdown on firms supplying chip technology to Beijing, and following Donald Trump’s call for Taiwan to pay Washington for help defending itself against China.

Markets have been enjoying a healthy run-up as Federal Reserve officials have lined up in recent days to suggest they are ready to begin reducing rates.

Data Thursday provided fresh room for the central bank to act, with initial jobless claims rising more than expected last week.

However, the tech sector — which has led the surge in stocks this year — has taken a hefty hit after the report of the warning from the White House over supplying China and Trump’s remarks about Taiwan, home to some of the world’s biggest chip producers.

There is also growing uncertainty over who will run against Trump in November, as calls for President Joe Biden to step aside continue to grow following a series of gaffes and a poor debate that have raised questions about his health.

The New York Times cited several people close to Biden as saying they believe he has begun to accept that he may not be able to win and may have to drop out, with one quoted as saying: “Reality is setting in.”

Former president Barack Obama has reportedly told allies Biden should “seriously consider the viability of his candidacy”, The Washington Post said. 

While a Trump win is seen as positive for equities owing to likely tax cuts and corporate deregulation, there are worries about his plans to impose huge tariffs on Chinese imports — and those from elsewhere — which many say could fuel inflation again.

A closely watched meeting of China’s leaders in Beijing this week provided nothing concrete by way of supporting the world’s number two economy.

The Third Plenum, which meets twice a decade to decide key policies, saw few policy announcements, with state news agency Xinhua saying they had agreed to “prevent and resolve risks in key areas such as real estate, (and) local government debt”.

They also vowed to “actively expand domestic demand” days after data this week revealed retail sales — a gauge of consumption — rose far less than expected in June. 

Economists at HSBC said: “The communique’s emphasis on ‘opening up as a distinctive feature of China’s modernisation’ is worth noting. We expect the government to prioritise reforms that will facilitate foreign investment.

They pointed to persistent cross-border outflows, which are weighing on the yuan, and noted that the currency would likely remain under pressure owing to the big difference in US and Chinese interest rates, which makes it harder to attract investors.

“With the (yuan’s) yield disadvantage likely to stay wide for longer, China needs more opening-up and market-oriented policies to attract or retain foreign investment.

“This may help reduce imbalance in cross-border flows, and thus alleviate (yuan) depreciation pressure.”

Shares in Hong Kong fell owing to a lack of policy detail, though Shanghai eked out a gain. There were also losses in Tokyo, Sydney, Seoul, Singapore, Mumbai, Bangkok, Taipei, Wellington and Jakarta.

Paris and Frankfurt fell while London’s FTSE 100 retreated after opening late having been hit by technical issues, with services around the world including airports, rail operators, banks, media and shops also affected.

The disruption caused major US airlines to ground all flights over “communication issue”, the Federal Aviation Authority said.

Tech titan Microsoft said it was taking “mitigation actions” in response to service issues.

It was not clear if those were linked to the global outages.

The announcement came as Australia reported a large-scale outage of IT systems, with the country’s national broadcaster, its largest international airport and a major telecommunications company reporting issues.

– Key figures around 0810 GMT –

Tokyo – Nikkei 225: DOWN 0.2 percent at 40,063.79 (close)

Hong Kong – Hang Seng Index: DOWN 2.0 percent at 17,417.68 (close)

Shanghai – Composite: UP 0.2 percent at 2,982.31 (close)

London – FTSE 100: DOWN 0.7 percent at 8,149.92

Euro/dollar: DOWN at $1.0889 from $1.0900 on Thursday

Pound/dollar: DOWN at $1.2929 from $1.2946

Dollar/yen: DOWN at 157.30 yen from 157.36 yen

Euro/pound: UP at 84.21 pence at 84.17 pence

West Texas Intermediate: DOWN 0.9 percent at $82.12 per barrel

Brent North Sea Crude: DOWN 0.7 percent at $84.52 per barrel

New York – Dow: DOWN 1.3 percent at 40,665.02 (close)

Macau’s de facto central bank says there are now 101 licensed financial institutions in the city, an increase of 14 from 2019.

In an update on the city’s financial situation on Thursday, the Monetary Authority of Macau said it had optimised both the city’s hardware and software to create more favourable conditions for the development of modern finance.

Several mobile payment tools are now available for use in Hong Kong, mainland China and a number of overseas regions such as Japan and Europe, the authority pointed out.

From January to June this year, some 170 million transactions were recorded, with a total value of MOP14.48 billion (US$1.8 billion).

These figures represent an increase of 16 per cent and 3 per cent respectively over the same period last year.

In addition, local businesses can accept payments via e-wallet services from mainland China, Hong Kong, South Korea, Singapore, Thailand and Malaysia.

In terms of the northbound travel scheme for cars, the authority said it was currently in close communication with its mainland counterparts to expand the scope of cross-border insurance services.

Since December 2022, when such services between Guangdong and Macau became available on the market, eight Macau-registered companies have been approved as service providers for around 30,000 vehicles registered in Macau.

Hurricane Beryl became the latest weather phenomenon to jangle market nerves, boosting crude prices as it passed through Texas earlier this month.

Texas accounts for some 42 percent of total US crude oil production, according to Energy Information Administration data. It also possesses the largest number of crude oil refineries among US states.

“Almost half of the total US petroleum refining capacity is located along the Gulf, with Texas accounting for one-third of total US refining capacity,” Exinity analyst Han Tan told AFP.

And industry experts fear Beryl could herald a “super charged” hurricane season this year, according to Tan.

The World Meteorological Organization has warned that Beryl’s early formation and swift intensification could foreshadow similarly severe storms in the future.

Earlier this year meanwhile, oil market sentiment was jarred in May as forest fires broke out in Canada.

Traders took flight as out-of-control wildfires threatened to spread to the crude-producing hub of Fort McMurray, the nation’s largest oil sands mining facility.

– ‘More visible and more extreme’ –

Traders, more used to pricing in geopolitical turmoil, are now also weighing up the risks arising from the climate crisis.

“Climate change and its effect is a major source of risk in the oil markets, and I expect that that risk will only increase in the coming years as the effects of climate change become more visible and extreme,” Rystad Energy analyst Jorge Leon told AFP.

“Geopolitical risk is –- at least partly -– manageable by different actors. For example, international diplomacy could prevent a war.

“However, climate risk is less manageable in the short and medium run. In the long run, you can manage it by trying to reduce emissions,” he added.

At the same time, climate disruption is also having an increasingly visible impact on the operations of oil and gas companies, which are frequently slammed by environmentalists over their role in global warming.

“Climate change has been and will be affecting production,” summarised Tamas Varga, analyst at PVM Oil Associates.

He added that it also impacted refinery utilisation rates because “hot weather leads to malfunctioning” of the facilities.

Many European refineries were designed in the 1960s and 1970s to withstand colder rather than warmer temperatures, according to Tan.

Fossil fuels — coal, gas and oil — are responsible for over 75 percent of global greenhouse gas emissions, according to estimates from the United Nations.

At the COP28 UN climate conference in Dubai last December, almost 200 countries agreed to a call for a transition away from fossil fuels and a tripling of renewable energy capacity this decade. 

However, the text crucially stopped short of a direct call for phasing out fossil fuels, while there were major concessions to the oil and gas industry and producer countries.

– ‘Economics can’t find solution’ –

Analysts argue that the oil market participants are simply focused on generating profit rather than saving the environment.

That throws the onus onto the world’s politicians and regulators, they add.

“Investors can’t be rationally expected to reverse the phenomenon when they try to maximise profits,” SwissQuote analyst Ipek Ozkardeskaya told AFP.

“Unless financial costs of climate damages outweigh the financial benefits, the economics can’t find the solution to the climate problem.”

“So, the ball is in politicians’ hands. Only concrete, sharp and worldwide regulatory changes with meaningful financial impact/incentives… could shift capital toward clean and sustainable energies.”

Investment projects handled by the Commerce and Investment Promotion Institute in the first half of the year is worth more than the total for the whole of last year.

According to an update on Wednesday from the organisation, which was given a new name earlier this year, the January to June period saw MOP1.32 billion (US$160 million), more than the cumulative value for the whole of 2023.

There were 199 new investment programmes, creating a total of 817 job placements.

More than 40 per cent of the total was linked to the city’s ‘1+4′ diversification drive, with the surge in investment said to reflect investors’ confidence in the city’s business prospects.

In the summary, the institute said MICE events held in the first six months attracted more than 170,000 participants.

Equities were mixed Wednesday while gold hit a fresh record as expectations for a US interest rate cut played up against the prospect of another Donald Trump presidency that analysts say could see inflation-fuelling tax cuts and tariffs.

While Wall Street saw another day of record highs owing to bets on lower borrowing costs and a more market-friendly White House, Asian dealers trod more cautiously as they also kept tabs on a key economic meeting of China’s leaders in Beijing this week.

Federal Reserve boss Jerome Powell ramped up hopes for a rate cut last week when he acknowledged prices were being brought to heel and told lawmakers that bank officials did not need inflation to fall to their two percent target before moving.

His remarks came as other decision-makers expressed optimism that the battle was being won, with governor Adriana Kugler adding her voice on Tuesday.

She said that if economic indicators remain favourable, “I anticipate that it will be appropriate to begin easing monetary policy later this year”.

“If the labour market cools too much and unemployment continues to increase and is driven by layoffs, I would see it as appropriate to cut rates sooner rather than later.”

However, she added that she would be inclined to hold rates higher if she was not confident inflation was coming down.

While inflation is slowing, the IMF said in its World Economic Outlook update that it remained sticky and could still cause headwinds. However, some economists warned the Fed was waiting too long.

Also Tuesday, data showed US retail sales smashed expectations, leading observers to lift their economic growth outlook.

“While the underlying sales picture may not be quite as good as the headlines, the fact is, the consumption component of gross domestic product (i.e. most of it) looks like being decent,” said National Australia Bank’s Ray Attrill.

He added that there was now a growing belief the Fed will cut rates as many as three times this year.

The dollar dipped on rate bets but is holding its own against its peers due to a surge in Trump trade bets that he will win re-election in November after the weekend assassination attempt and questions about incumbent Joe Biden’s health.

“The dollar is currently influenced by two conflicting forces, each driving its path in different directions,” said ACY Securities analyst Luca Santos. 

“The anticipation of a second presidential term for Donald Trump could lead to increased fiscal stimulus and new tariffs on US imports. This, in turn, could elevate US inflation, thereby boosting rates and yields. 

“On the negative side, market expectations for Federal Reserve rate cuts have been growing due to recent weaker-than-expected US inflation and economic activity data.

“Presently, the latter force appears to dominate, reflecting its immediate impact with the first Fed rate cut anticipated in the upcoming months.”

Equities swung in Asian trade after the Dow posted a second straight record and the S&P 500 pushed to a fresh all-time high.

Hong Kong, Sydney, Wellington, Manila, Bangkok and Jakarta rose, while Tokyo, Shanghai, Singapore, Seoul and Taipei dipped.

London, Paris and Frankfurt all fell at the open.

Gold pushed to a new record of $2,482.42 an ounce, rising past its previous record of $2,450.07 reached in May thanks to rate-cut expectations, before easing slightly.

The precious metal usually rises when borrowing costs are lower as it is more attractive as an investment and the weaker dollar makes it cheaper for traders using other currencies.

– Key figures around 0710 GMT –

Tokyo – Nikkei 225: DOWN 0.4 percent at 41,097.69 (close)

Hong Kong – Hang Seng Index: UP 0.1 percent at 17,744.72

Shanghai – Composite: DOWN 0.5 percent at 2,962.85 (close)

London – FTSE 100: DOWN 0.2 percent at 8,150.06

Euro/dollar: DOWN at $1.0900 from $1.0903 on Tuesday

Dollar/yen: DOWN at 157.84 yen from 158.39 yen

Pound/dollar: UP at $1.2988 from $1.2974

Euro/pound: UP at 83.92 pence at 84.01 pence

West Texas Intermediate: DOWN 0.2 percent at $80.62 per barrel

Brent North Sea Crude: DOWN 0.2 percent at $83.57 per barrel

New York – Dow: UP 1.9 percent at 40,954.48 (close)

“I am delighted to confirm Georges as the next HSBC Group Chief Executive,” group chairman Mark Tucker said in a filing to Hong Kong’s stock exchange.

“The Board concluded that Georges was the outstanding candidate and we look forward to working together as he leads HSBC through the next phase of development and growth.”

Elhedery will take over on September 2 from current CEO Noel Quinn, who announced his shock retirement in April.

Elhedery joined HSBC in 2005 and previously held the role of Co-CEO of Global Banking and Markets before being appointed chief financial officer in January 2023.

The Lebanon-born, French-educated banker also led the bank’s Middle Eastern, North Africa and Turkey region from July 2016 to February 2019.

Before assuming the role of CFO in 2023, Elhedery had a six-month sabbatical that included spending time learning Mandarin, according to Bloomberg News.

Elhedery has a “track record of leading through change, driving growth, delivering simplification, containing costs and brings a strong focus on execution”, Tucker said.

Elhedery said he was “deeply honoured” by HSBC’s trust. 

“Working together with our talented team, I look forward to delivering exceptional value to our clients and investors by driving strong performance on a sustainable growth trajectory,” he said in the filing.

HSBC said it will announce the next chief financial officer in due course.

Quinn will work with Elhedery to ensure a “smooth and orderly” handover before stepping down, the bank added.

Quinn, 62, oversaw a transformation of the London-headquartered lender and saw record profits during almost five years in charge.

Under him, the lender has accelerated a years-long pivot to Asia — where it generates most of its revenue — vowing to develop its wealth business and target fast-growing markets.

The bank has concluded the sales of its Canadian operations and its retail bank operations in France. It will also sell its Argentina division.

Quinn last year led the effort to repel a bid by major shareholder Ping An to spin off its Asia assets, with the proposal eventually voted down by shareholders.

The break-up bid highlighted HSBC’s precarious position amid US-China tensions, with some observers questioning whether Europe’s largest lender can continue to straddle East and West.

Macau’s residential market has seen a glimmer of hope with a positive development in stamp duty on transferred units in the first half of the year.

According to the latest figures from the Financial Services Bureau, there were 413 transfers in June, up from 236 in the same period last year.

The average price per metre for the month was MOP99,489 (US$12,382), an increase of about 2.8 per cent compared to the same month last year.

In May this year, only 346 transfers were recorded, compared to 287 last year.

March and February saw only 143 and 132 cases respectively, while January saw 263.

The authorities unveiled two rounds of cooling measures last year to prop up the sagging housing market, with all major curbs removed in April.

The general downbeat sentiment was reflected by the overall house price index, which fell to 219.9 in the March-May period, a significant drop of over 12 per cent.

The gauge had previously been as high as 268.3 in the same period in 2019, before the economic hit from the Covid pandemic began to take its toll.

Quarter-on-quarter comparisons

In the second quarter, 1,028 transmission cases were recorded, compared with 538 in the previous quarter.

The average price per metre for the quarter was MOP93,118, down 1.99 per cent year on year.

Compared with the same quarter last year, this represents an increase of more than 24 percent.

In a quarterly update earlier this month, Centaline Property said that the buy-side appeared to be leaning towards first-hand offers selling at a discount of 20 to 30 per cent.

Secondary market transactions were said to have slowed significantly, accounting for only a quarter of total transactions.

The ETFs, managed by Huatai-PineBridge Investments and Southern Asset Management, respectively, offer Chinese investors an option to broaden their investment portfolio by trading equities in the Middle Eastern state.

Both funds, tracking the FTSE Saudi Arabia Index which covers over 50 medium and large-sized firms, opened on a high note Wednesday and rose by the daily limit of 10 percent during the morning trading session, following 10 percent surges on Tuesday, the first day of launch.

The funds, which raised a total of 1.22 billion yuan (about 171.06 million U.S. dollars), rank among the top Qualified Domestic Institutional Investor (QDII) programs, reflecting the growing appetite of Chinese investors for overseas assets.

Analysts believe that the funds offer Chinese investors a new avenue to diversify their global asset allocation as well as access to the yet-untapped Middle Eastern market.

With the debut of the Saudi Arabia ETF, the cross-border ETF investment destinations on the Shanghai Stock Exchange now include the United States, Germany, France, Japan, South Korea, Singapore, Saudi Arabia and China’s Hong Kong.

By the end of May, there were 68 cross-border ETFs listed on the Shanghai bourse, with a total size of 207.5 billion yuan.

In November last year, Asia’s very first ETF tracking shares listed in Saudi Arabia launched in Hong Kong, which analysts described as a milestone in Hong Kong’s financial cooperation with Saudi Arabia and no less a landmark of financial connectivity along the Belt and Road.

China has long been working to expand the two-way opening-up of its capital market. The latest step came as the country recently granted quotas totaling 2.27 billion U.S. dollars to 53 institutions under the QDII program, a prominent channel allowing Chinese investors to trade overseas securities within a prescribed quota.

The move aims to meet the reasonable demand of Chinese residents for overseas investment, said Zhu Hexin, deputy governor of the People’s Bank of China, in a financial forum held last month in Shanghai, urging efforts to promote the cross-border investment business of equity investment funds.

Earlier, the Shanghai and Shenzhen bourses signed agreements with Saudi Tadawul Group in September and December last year, respectively, to enhance capital market links and explore potential cooperation opportunities in cross-listing, fintech, data exchange and research, among other areas.

The Shanghai Stock Exchange has vowed to further expand and improve cross-border connectivity mechanisms in the capital market, and steadily promote high-level institutional opening-up of the capital market.

Markets fluctuated Tuesday as rising expectations that Donald Trump will return to the White House played up against fresh hopes that the Federal Reserve will cut interest rates at least once this year.

Traders struggled to extend gains on Wall Street, where the Dow chalked up its first record since May, while the dollar rose with Treasury yields on speculation that another Trump tariff battle with China and likely tax cuts could push inflation higher.

Recent polls show the former president’s chances of beating incumbent Joe Biden have surged since the assassination attempt on him at the weekend, while his choice of JD Vance saw US futures extend gains.

“Increased market confidence after Saturday’s failed assassination attempt that Donald Trump will be re-elected president in November has been reflected in market movements across US Treasuries, equities and currencies since the weekend,” said Ray Attrill at National Australia Bank.

“The US yield curve is steeper, the dollar modestly higher and energy and banking stocks leading the charge in the S&P500.”

While the Dow led gains in New York, Asia investors were a little more cautious.

Hong Kong dropped more than one percent owing to further losses in the tech sector, while Sydney, Singapore, Manila, Bangkok and Jakarta also fell, though Tokyo, Seoul, Wellington, Taipei and Mumbai edged up.

Shanghai was slightly higher with traders awaiting policy measures from China’s leaders as they hold a key economic meeting this week.

London, Paris and Frankfurt were also down.

There was some support after Fed chief Jerome Powell reiterated comments pointing to a possible rate cut following a recent run of positive readings on inflation.

“We didn’t gain any additional confidence in the first quarter, but the three readings in the second quarter, including the one from last week, do add somewhat to confidence,” he said in an interview with David Rubenstein of the Economic Club of Washington DC.

He added: “If we were to see an unexpected weakening in the labour market, then that might also be a reason for reaction by us.”

Powell’s remarks came after he told lawmakers last week that Fed officials did not need to wait for inflation to fall to their two percent target before cutting.

Also Monday, San Francisco Fed boss Mary Daly said there was growing optimism that the fight against surging prices was being won, though she did say she wanted to see more data.

The dovish comments over the past week have sent bets on a September rate cut soaring, while some traders are eyeing as many as three by the end of the year.

Despite that, the dollar held its gains as the possibility of a Trump win increases.

“The confluence of political developments, economic data, and central bank actions continues to create a complex landscape for global currencies,” said Luca Santos, market analyst at ACY Securities.

Key figures around 0810 GMT –

Tokyo – Nikkei 225: UP 0.2 percent at 41,275.08 (close)

Hong Kong – Hang Seng Index: DOWN 1.6 percent at 17,727.98 (close)

Shanghai – Composite: UP 0.1 percent at 2,976.30 (close)

London – FTSE 100: DOWN 0.3 percent at 8,155.34

Dollar/yen: UP at 158.55 yen from 158.09 yen on Monday

Euro/dollar: DOWN at $1.0894 from $1.0902

Pound/dollar: DOWN at $1.2966 from $1.2970

Euro/pound: UP at 84.05 pence from 84.03 pence

West Texas Intermediate: DOWN 0.9 percent at $81.21 per barrel

Brent North Sea Crude: DOWN 0.8 percent at $84.18 per barrel

New York – Dow: UP 0.5 percent at 40,211.72 (close)

Oversea-Chinese Banking Corporation has seen a drop of 10 per cent in its mortgage loan portfolio dedicated to Macau business, according to Lou Pou Hong, director and chief executive, OCBC Macau.

In a recent interview with Hong Kong media outlet Sing Tao Daily, Lou spoke of the challenges facing the second largest foreign bank in Macau with 11 branches.

Housing loans, as he pointed out, once accounted for over 70 per cent of the total at the peak of this business segment. However, it has now declined to approximately 60 per cent.

Upwards of 10,000 approvals were made prior to the Covid pandemic, with the number down to some 3,000 last year, he illustrated.

As a result, the amount of the annual issuance of fresh property loans has dropped to just one-fifth of its peak level.

Nonetheless, the banker said that the bank continued to maintain high-quality mortgage loans, with a delinquency rate of less than 0.5 per cent – still significantly lower than the market average of over 3 per cent.

His comments reflected the broader mood of caution surrounding home buying, with the latest residential property price index coming in at 219.9 – well below the comparable level of 268.3 in 2019.

Reflecting on how locals have historically accumulated wealth through property investment, Lou noted that the trend had led to a high proportion of mortgage loans.

Using himself as an example, he bought his first home in 2003, when a unit of over 1,000 square feet was priced at MOP600,000.

The price once peaked at around MOP8 million but has now settled back to over MOP6 million, he said.

A Chinese software maker whose name is a homophone for “Trump wins big” soared in mainland trading on Monday after a failed assassination attempt on the former US president.

Images of a bloodied Donald Trump waving his fist after the gunman opened fire at a campaign rally in Pennsylvania have prompted bullish bets by Chinese traders that he will win November’s presidential election.

Shares of Wisesoft Co, whose Mandarin name “Chuan Da Zhi Sheng” sounds like “Trump wins big”, rose by the maximum daily 10 percent limit in trading on the Shenzhen Stock Exchange.

Speculative trading behaviour based on so-called “meme stocks” are common in mainland China, with dramatic swings in prices often unrelated to underlying business prospects.

Wisesoft’s shares surged to their daily limit last month following President Joe Biden’s poor performance in his first presidential debate with Trump.

They also spiked in 2016 after Trump won the presidential election.

Traders were not the only ones in mainland China to jump on the massive international attention the attempted assassination of garnered.

T-shirts featuring a viral picture of Trump following the shooting flooded online e-commerce platform Taobao within hours of the incident.

Many had been removed as of Monday, however, though they were still available for shipment from China on overseas platforms.

China’s President Xi Jinping on Sunday expressed his “compassion and sympathy” to Trump following the shooting.

Beijing and Washington have clashed in recent years on flashpoint issues from technology and trade to human rights as well as over the self-ruled island of Taiwan and the South China Sea.

Trump has vowed to step up a trade war against China if he returns to the White House.

In March, he floated levies of 60 percent or higher on Chinese goods, warning: “You screw us and we’l

ECB governors lowered the closely-watched deposit rate from a record four percent to 3.75 percent at their June meeting, following an unprecedented campaign of monetary tightening to tame red-hot inflation.

ECB president Christine Lagarde said the cut was made possible thanks to steadily falling consumer prices. But she stressed it would not automatically kick off a rapid rate-cutting cycle.

Speaking in Portugal’s Sintra earlier this month, Lagarde said “it will take time” for the bank to “gather sufficient data” before deciding the next move.

“The ECB will probably go into the summer break without lowering interest rates again,” said Fritzi Koehler-Geib, chief economist at German public lender KfW.

After a surprise uptick in May, eurozone inflation slowed again in June to reach 2.5 percent.

While still above the ECB’s two-percent target, it’s a far cry from a 10.6-percent peak in 2022 after Russia’s war in Ukraine sent energy and food prices surging.

Inflation is “heading in the right direction”, Lagarde said in Sintra.

But it is still “likely to be a bumpy road until the end of 2024”, she warned.

Sticky services –

In June’s updated forecasts, the ECB said it now expects inflation to return to target in late 2025.

But policymakers still see several risk factors on the path to disinflation, and have reiterated their “data-dependent” approach.

They are in particular keeping a close eye on wages in the 20-nation euro area, as workers have in recent years pushed for salary hikes to compensate for higher living costs. 

Although wage growth remains elevated, ECB officials appear less concerned than a few months ago amid signs that wage increases could ease over the course of the year.

Stubbornly high inflation in the services sector is another headache for the ECB, staying sticky at 4.1 percent in June.

The eurozone economy meanwhile emerged from recession with greater-than-expected growth of 0.3 percent in the first quarter.

Policymakers will only be armed with new forecasts on growth and inflation in September, strengthening the case for a July pause.

Most observers believe the ECB will lower borrowing costs again at the September meeting, and then once more before the end of the year.

France deficit, Fed shift –

“A key prerequisite” for a September cut however “is that there are signs of a slowdown in wage growth by then”, said the KfW’s Koehler-Geib.

“In addition, the ECB’s scope for cutting interest rates also depends on the fiscal policy of European governments,” she said.

Concerns have grown about France’s government finances after snap elections produced a hung parliament, plunging the eurozone’s second-largest economy into uncertainty.

French central bank chief Francois Villeroy de Galhau last week called for reducing the country’s large deficit, and warned that “excessive wage costs” or “taxes that are too heavy” could harm France’s competitiveness.

Across the Atlantic meanwhile, the US Federal Reserve is also increasingly expected to opt for a September rate cut.

Initially tipped to begin lowering borrowing costs before the ECB, stalling progress on US inflation has seen the Fed keep rates frozen at a 23-year high for months.

But observers say Fed chair Jerome Powell recently hinted at a September cut when he told Congress that waiting “too long” to lower rates could weaken economic activity.

Equity markets were mixed Monday as investors weigh the impact of the assassination attempt on Donald Trump with data suggesting it has boosted his chances of being re-elected president.

Eyes are also on a key meeting of China’s top leadership in Beijing, with hopes for measures to boost the world’s number two economy, which grew less than expected in the second quarter.

Investors struggled to extend the rally enjoyed on Wall Street last week, where all three main indexes ended on a positive note despite a forecast-topping read on US wholesale prices.

The figures were not enough to overshadow Thursday’s news that the consumer price index had slowed more than expected in June, which ramped up bets on a Federal Reserve interest rate cut in September.

That came after central bank chief Jerome Powell told lawmakers that inflation did not need to come in at decision-makers’ two percent target for them to begin lowering borrowing costs.

However, investors are keeping a close eye on developments in the United States after Trump was wounded Saturday at a rally ahead of the Republican convention this week.

While the odds of him beating President Joe Biden had been rising in recent weeks, they got an extra lift from the shooting.

Observers said a Trump victory could see lower corporate taxes — a boost for companies’ bottom lines — but also an increase in tensions with China with fresh tariffs possible.

Still, Katrina Ell at Moody’s Analytics said: “The assassination attempt might lead to a temporary boost in the polls for Trump, but a lot can change before November.

“Financial markets are expected to soon refocus on the Federal Reserve and the growing likelihood of a rate cut in September.”

The dollar rose Monday, having softened last week owing to the prospect of lower rates, while equity markets were mixed.

Hong Kong, Taipei, Wellington, Bangkok and Jakarta dropped, while Shanghai, Seoul, Mumbai, Sydney, Singapore and Manila rose.

London opened lower Monday, while Paris and Frankfurt also retreated.

Official data showed the Chinese economy expanded just 4.7 percent in the second quarter, well below the 5.1 percent forecast in a survey by Bloomberg and short of the government’s five percent goal.

Separately, retail sales slowed sharply in June as the country’s army of consumers remain cautious.

The readings highlight the tough work leaders face as they grapple with a real estate debt crisis, weakening consumption, an ageing population and trade tensions with Western rivals.

President Xi Jinping and other top leaders are gathered in Beijing to hammer out plans to kickstart growth, though analysts warned there was unlikely to be any major announcement for the short term.

The “data releases showed that the road to five percent growth remains difficult, and more fiscal and monetary policy support will be needed in the second half of the year if this year’s key growth target is to be achieved”, said Lynn Song at ING.

Key figures around 0710 GMT –

Hong Kong – Hang Seng Index: DOWN 1.6 percent at 18,007.30

Shanghai – Composite: UP 0.1 percent at 2,974.01 (close)

London – FTSE 100: DOWN 0.7 percent at 8,193.15

Tokyo – Nikkei 225: Closed for a holiday

Dollar/yen: UP at 158.12 yen from 157.88 yen on Friday

Euro/dollar: DOWN at $1.0889 from $1.0906

Pound/dollar: DOWN at $1.2969 from $1.2989

Euro/pound: DOWN at 83.96 pence from 83.97 pence

West Texas Intermediate: DOWN 0.1 percent at $82.15 per barrel

Brent North Sea Crude: DOWN 0.2 percent at $84.90 per barrel

New York – Dow: UP 0.6 percent at 40,000.90 (close)

The storied New York financial giant, which was under pressure for much of 2023 over an ill-fated push into Main Street lending, reported profits of $2.9 billion for the quarter ending June 30, more than double the year-ago level.

Revenues rose 17 percent to $12.7 billion.

With the consumer banking experiment in the rear-view mirror, Goldman excelled in its bread-and-butter enterprises in the just-finished quarter.

In global banking, the New York giant scored increased fees for debt underwriting and equity underwriting, while reporting higher revenues in both fixed income and equities trading.

The investment bank’s asset and wealth management division also prospered behind a buoyant performance in equity holdings and a much better time in real estate investments, which suffered significant losses in the year ago period.

Operating expenses were essentially flat compared with the year-ago level, while results were also assisted by a decrease in provisions for bad loans.

Chief Executive David Solomon described the results as “solid,” saying in a statement that the firm is deepening its relationship with clients and “serving them in an improving, but complex environment.”

Shares of Goldman Sachs rose 1.0 percent in pre-market trading.

By José Carlos Matias

Photos by Lei Heong Ieong

The city’s first locally registered money market open fund solely denominated in patacas has been launched. It’s the brainchild of Bernardo Alves and Abraham Kot, who are looking to make a splash in the city’s financial industry.

A&P Investment Fund Management Company Limited received approval in early May from the Monetary Authority of Macau and secured a special license—the first of its kind—to establish the “A&P Macau Patacas Money Market Fund,” which was launched on July 3.

In an exclusive interview with Macau Business and Business Intelligence, A&P’s chairman and founder, Bernardo Alves, and CEO, Abraham Kot, discuss the rationale behind launching their new fund, the city’s nascent fund industry, and the prospects for modernizing Macau’s financial services. The fund leverages Alves’ nearly two decades of experience in public and private equity investments, and Kot’s over three decades of experience across retail, commercial, and corporate banking, as well as investment fund management.

Tell us about the backstory behind setting up this investment fund.

Abraham Kot: First of all, I think that Bernardo Alves and I share the same idea about how to approach people’s wealth management in Macau. In 2016, I was coming from banking, and we realised something really important and astonishing at that time. Clients told us that it was difficult to find a responsible investment fund manager. As you know, most of the public funds are created in Hong Kong, and every time issues arise, people seem to struggle to see a response from them.

So, I said, why not create something for the local people? I believe that Bernardo and I really wanted to create something at that time. We wanted to develop tailor-made investment products for locals.

In 2021, Bernardo and I thought, why not apply to create an investment fund management company in Macau, according to the local regulations? The company was eventually established in early 2023, with the special registration from the Monetary Authority of Macau (AMCM) being granted in June 2023.

It then took another three months to complete our application for the first public fund.

We submitted the application to AMCM in October 2023, and in May 2024, we secured the permit.

This [having a locally registered MOP-denominated open public investment fund] is something entirely new for the city. How would you describe the whole process and the main challenges you faced throughout this process?

A.K.: When we recall the year 2022, it was a time of financial turmoil. In the property market in China, equities and bonds nosedived. As you know, we are very close to the local banking sector. We heard numerous negative investment stories. People were afraid of making investments. They believed that high risk would not translate into high returns.

So, we were struggling a lot. Finally, we made a decision. We tried to model our fund after well-known, stable, and reliable ones. We searched for the most popular public funds, particularly money market investment funds. Then we identified a very stable model, one that is good for the city’s local residents.

Why start with a public money market investment fund and not, let’s say, a private fund? What’s the rationale behind this approach?

A.K.: First of all, we believe that a private fund shouldn’t be our first project. The competition is very fierce in Hong Kong and Macau, and I don’t believe that it’s the right move for A&P to start with a private fund.

Secondly, given the complicated financial situation in 2022, we had to find something very safe in everybody’s eyes, where transparency is very high, and it’s easy for people to understand the portfolio and how they can see their investment returns.

What exactly are the components of a money market fund, and of your fund in particular?

A.K.: Basically, money market funds are very simple. They’re just like a savings product. We collect the investors’ money and deposit it into the fund, and then we place the money as large-scale deposits into big banks that can offer us a very attractive interbank interest rate.

Bernardo and I thought about something a little bit creative. By 2022, the US Federal Reserve had started to increase interest rates. By that time, we noticed the interest rate gap between the US dollar and the Hong Kong dollar. We also saw from AMCM information that the composite interest rate for MOP is substantially lower than that of the HKD. So, we took a bet: why not attract MOP deposits?

Of course, there’s one criterion that we have to explain to our investors very carefully. Do you have confidence in the peg system between the US dollar, the Hong Kong dollar, and the Macau pataca? If yes, that would be a fantastic financial plan for your money.

Some people think: What am I going to do with the salary I receive every month (in MOP)? Many people exchange it to HKD and then put it in an HKD deposit account. Some are even smarter: they change it into US dollars.

That’s why we are going to create a portfolio, bringing together bank deposits and one more item: US Treasury bills. The trading volume of these US Treasury bills is huge. You can easily invest and recover your money.

What’s the significance of having an MOP-denominated investment fund, the very first one? Is it also a kind of stance?

Bernardo Alves: Well, I think so. We could have constituted a fund of this kind since late 1999 [when the law governing the establishment of investment funds was enacted], but funds have always been constituted mostly in Hong Kong and denominated in HKD and USD.

I think it goes back to the mentality of Macau and its population.

When it comes to basic purchases, we all use MOP, but for big investments in our lives, most of which are in real estate, we use Hong Kong dollars. Naturally, there has been a predisposition for investment funds and insurance products to be quoted in Hong Kong dollars. Therefore, I understand the reasoning behind using HKD.

For us to be an investment fund company in Macau and not use MOP would’ve been a bit of a shame.

It also revolves around my belief that A&P can play a crucial role in redefining the relationship with capital. Since this is the first time an investment fund manager is locally based and we are doing something different, I think that it is a stance in a sense.

Coming back to your main point, yes, it is the objective of the company to make a statement. Something I wholeheartedly believe is that we, as a society and as locals, need the ability to invest in the currency in which we earn our salaries. It’s natural. So we are going to test this market.

A.K.: Local people are very conservative. Actually, I think we are shaking and shaping the local financial ecosystem, particularly the fund industry, by creating the first MOP money market fund. What is the meaning behind this? One crucial aspect is that the relationship between the investor and the fund manager has never been closer. We are a local company, so anytime any investor or person who wants to talk, share their wishes, or ask for advice about their money can come to our office.

Customer service plays a key role here, right?

A.K.: Exactly.

B.A.: Investment is psychological. To be close to the investor, or for the investor to feel or need an understanding of the investments themselves, is also very soothing, I would say.

The relationship we had with funds in Macau has been the opposite. When the fund is performing well, the fund managers come and show; when the fund is not performing so well, it’s natural that they don’t come.

That’s also a potential breach of transparency.

It’s all about the communication channel and the availability to say, ‘Look, we are here.’ We can talk about and explain the results. I think the explanation is the key part that will differentiate us from other companies.

As you are the very first locally licensed investment fund management company, are you expecting any kind of first-mover advantage?

B.A.: The fund’s application wasn’t easy. I don’t think any non-local company could have come here and tried to apply for it because, firstly, there was no precedent case. And when there’s no precedent, there is no timeline. This is an investment, and capital abhors uncertainty, of course.

We have been called pioneers. We’ve been called white lab rats. It’s natural. If there’s a first-mover advantage, it’s incidental.

I really wanted to develop this, and I found this fire in Abraham too, which was, “Let’s try to do something different in the financial industry.” There have always been complaints that there’s no innovation. Okay, let’s try something innovative.

You are working with Bank of China, the two Macau licenses. 

A.K. – Yes, Bank of China Macau Branch is our custodian and also provides the administrator of the unit of the fund. We are also working with Bank of China (Macau) which is our distributor, to sell our fund to customers. The other banks are our counterparty.

B.A. –  When we constitute the fund there’s a whole infrastructure behind it that supports the fund. One of these pillars is the  depositary [custodian]. But both of them are extremely valuable because they control the assets of the fund too, and they supervise the transactions of the fund, whereas we control the investors and the investment. So this relationship is symbiotic. So we were lucky to have Bank of China be innovative.

And of course, we have an auditor and all the legal contracts behind us. So just the single movement of a new company that germinated in the industry created a shockwave along the industries in Macau. So that’s development. The objective of development is to try and push one company and see how other companies will also have to reinvest or maybe have to invest in new mechanisms that will hopefully propel our industry a little bit forward, and hopefully attract more capital. Because I believe the success of A&P is also the success of Macau in terms of showing that it’s indeed possible to develop a new idea and the conceptualization of an idea into the practicality of it.

You are, to some extent, in competition with the banking and insurance sectors. How do you address this?

B.A.: The money market fund, yes. It’s very important for any financial center to have its own products that can be bought as an investment, not only to combat inflation. As a savings mechanism, as a savings idea, it’s important. Not having such a product is problematic for a city like Macau in this instance.

The objective of launching the money market fund is also based on the idea that we need to start to populate certain investment silos, which have their own risk-return profiles in the market.

We could have launched an equity fund, and I would be as happy as everyone, you know, because that’s my expertise. But we realized very early, when we did the application to AMCM, that Macau needed a solid foundation.

So the money market fund is something that is required. This will be called the parking fund. A money market fund is the third-most traded asset class in the world. So naturally, Macau has to have it.

A.K.: I truly believe that we are not competitors to the banks’ income. We are their partners.

Traditionally, banking activity is mostly about deposits. But A&P and our funds are focusing on the wealth management industry, which is much bigger.

Don’t forget that our central government really wants us to move into the Greater Bay Area, which is a huge market for Macau companies and banks as well. So actually, we are partners. We work together, shoulder to shoulder.

There has been much talk about the GBA Wealth Management Connect scheme. Will you be playing a role in this respect as well?

A.K.: That’s why we have designed this fund under a low-risk structure. Only a low-risk public fund will be allowed into the Greater Bay Area.

B.A.: We have to be careful because, in terms of legislation, what is considered a risky factor in one jurisdiction might not be in another. I really hope that we can work with AMCM to push this product along in the Greater Bay Area.

Looking further down the road, you have a business development plan with regard to having a portfolio of funds. What would be the next steps? Income funds? Bond-based funds? Private equity funds?

B.A.: This has to be worked out in conjunction with AMCM. They’re the ones capable of approving certain types of funds. Hopefully, we can tap into the main criteria, which are bonds and equity. I think this is something that is missing, but again, it depends on the financial development of Macau and the city’s financial literacy. And we need a lot of feedback from this first fund to see what worked and what didn’t work. This whole process is very market dependent too.

If everything aligns again, and if we think that the income side is important, then it’s something that we will tap into.

Right now, we are launching a prime money market fund, which is based on fixed time deposits and similar money market instruments. Hopefully, in the future, we can launch a government money market fund, which is actually the most popular version of a money market fund, and that’s based on government-issued securities only.

That will also depend on how far the regulator will go in terms of allowing the secondary markets to have access to certain tools, right?

B.A.: Well, this relates to M-bills (AMCM issued Monetary Bills) which are being traded in the primary market but not yet tradable in the secondary market. Taking such a step is a great opportunity, not only as a testing ground but also to gauge the depth of an instrument that is based in MOP. So it’s circular. One of my objectives is to see how we can unblock that.

A&P’s life has always been about proving people wrong and trying to break barriers. I think M-bills are one barrier, but for me, the money market fund is not done yet. And I think we still, as a population, require a government money market fund, and Monetary Bills perfectly reflect that. So hopefully, we can, in the near future, work with the authorities to try and unblock certain barriers.

This brings us to the wider issue of the overall infrastructure to develop the city’s modern finance industry. Where are we in this respect?

B.A.: When we say modern, we have to say modern with Macau characteristics. This is a very important idea. Otherwise, many aspects of Macau remain underdeveloped. When we compare ourselves to financial centres abroad, it’s understandable to feel we’re behind. So, when we discuss digital currencies or blockchain, these are significant 21st-century developments. But are we embracing them fully in Macau? That was my initial concern. Our journey to launch this fund has revealed that much of our industry still lags behind. While modern financial developments are a commonplace in Hong Kong and other financial hubs, Macau has a different story.

When we aim to develop modern finance or a new industry, we need to work closely with the regulator. However, there’s often a discrepancy in the pace we should adopt. Tomorrow might be too early for the regulator, but for us on the private side, today could be too late.

So, we need to find a marriage and a balance. We must test things step by step to see what works and what is viable.

In a broader sense, what are the main drivers and takeaways of this project?

B.A.: My idea for A&P is that it’s not just a slogan; it’s really the truth: we are genuinely trying to redefine the capital relationship. And the first chapter is MOP as an investment currency.

A.K.: We are trying to connect with people from around the world. Let’s build a team and then roll out more tools and products for Macau, Hong Kong, mainland China, Singapore, or even Portugal and the Portuguese-speaking countries. This is our platform.

JPMorgan Chase earned 18.15 billion U.S. dollars of net income in Q2, rising 35 percent from the previous quarter and up 25 percent from the same period of 2023, according to a release by the banking giant.

JPMorgan Chase had 4.26 U.S. dollars of adjusted earnings per share and 50.99 billion U.S. dollars of revenues in the last quarter, higher than analysts’ estimate of 4.19 U.S. dollars per share and 49.87 billion U.S. dollars, respectively.

Still, JPMorgan Chase would see shrinkage of net income in the quarter if the one-time income related to Visa shares is excluded.

JPMorgan Chase recorded a net gain of 7.9 billion U.S. dollars related to conversion of its holdings of Visa shares and 1 billion U.S. dollars of donation of Visa shares to pre-fund contributions to JPMorgan’s foundation in the second quarter.

Notably, JPMorgan Chase booked 22.9 billion of net interest income in Q2 up 4.5 percent year on year, as the Federal Reserve continues to refrain from lowering benchmark interest rates so as to tame inflation.

JPMorgan Chase registered 2.3 billion U.S. dollars of investment banking fees in Q2 surging 50 percent year on year.

“While market valuations and credit spreads seem to reflect a rather benign economic outlook, we continue to be vigilant about potential tail risks,” said Jamie Dimon, chairman and chief executive officer of JPMorgan Chase.

Dimon warned of the complex and dangerous geopolitical situation and the existence of multiple inflationary forces including large fiscal deficits, infrastructure needs, restructuring of trade and remilitarization of the world.

Inflation and interest rates may stay higher than the market expects and the full effects of quantitative tightening on this scale remains unknown, he added.

Markets mostly rose Friday after a largely negative day on Wall Street despite growing confidence of a US interest rate cut, while the yen saw big swings as speculation swirled that Japan had stepped into forex markets to support the currency.

A smaller-than-expected read on the June consumer price index ramped up bets on the Federal Reserve lowering borrowing costs in September, and possibly again before January.

The news came after the central bank’s boss Jerome Powell said decision-makers would not wait until inflation had hit the bank’s two percent target before loosening monetary policy, warning that “if you waited that long, you’ve probably waited too long”.

On Thursday, San Francisco Fed chief Mary Daly said: “I do think with the incoming information on inflation, growth and the labour market, some policy adjustments are likely to be warranted.”

However, while the figures appeared to give the all-clear for a cut in two months, the S&P 500 and Nasdaq tumbled from record highs, with observers blaming a shift from big-name tech titans such as Amazon and into smaller, largely overlooked stocks.

But most of Asia extended Thursday’s rally. 

Hong Kong climbed more than two percent, while there were also advances in Singapore, Sydney, Wellington, Mumbai, Bangkok, Jakarta and Manila. London, Paris and Frankfurt were all slightly higher. 

However, Tokyo sank with Seoul and Taipei. Shanghai was flat.

Analysts, meanwhile, said the softer US inflation print provided Japanese authorities the perfect opportunity to step into forex markets to provide support to the yen, which surged against the dollar Thursday.

The Japanese currency spiked from around 161.50 per dollar to as strong as 157.44, fuelling talk that officials had intervened again, having done so in April when the yen hit a 38-year low.

“The pronounced move in the yen appears to be coming on the back of combined impact from US inflation and intervention by Japanese authorities,” Charu Chanana at Saxo Markets told AFP.

“There seems to be a new playbook for Japanese interventions, coming in along with supportive fundamentals, making the strength in yen somewhat more durable.”

And National Australia Bank’s Ray Attrill told Friday’s “NAB Morning Call” podcast that the “outsized move” makes it “fairly inconceivable that it hasn’t had a helping hand”.

The Bank of Japan has “been pretty smart here… pushing on an open door rather than the idea that they would just intervene and do anything other than just gift speculators the opportunity to resell the yen at better levels”.

While speculation swirled about official involvement, Japan’s top currency diplomat Masato Kanda told reporters late Thursday that authorities were “not in a position to comment on whether they intervened in the market”, according to public broadcaster NHK.

“Objectively speaking, there have been quite rapid fluctuations, which has affected people’s lives.”

There was little major reaction to data showing Chinese exports surged more than expected last month but imports confounded estimates to increase and fell.

The figures came ahead of next week’s Third Plenum, a key meeting of leaders in Beijing that traders hope will see announcements aimed at kick-starting lacklustre economic growth.

The gathering will kick off the same day China is expected to release its gross domestic product figures for the second quarter.

“The success of the Third Plenum hinges on lifting household spending,” said Harry Murphy Cruise and Sarah Tan at Moody’s Analytics in a note.

“And that means reforms targeting housing, labour markets and tax. To be clear, policy changes are likely to be modest because of budget constraints and fears of reinflating a property bubble.”

Key figures around 0810 GMT –

Tokyo – Nikkei 225: DOWN 2.5 percent at 41,190.68 (close)

Hong Kong – Hang Seng Index: UP 2.6 percent at 18,293.38 (close)

Shanghai – Composite: FLAT at 2,971.30 (close)

London – FTSE 100: UP 0.4 percent at 8,252.60

Dollar/yen: UP at 159.29 yen from 158.86 yen on Thursday

Pound/dollar: UP at $1.2927 from $1.2912

Euro/dollar: UP at $1.0874 from $1.0870

Euro/pound: DOWN at 84.12 pence from 84.15 pence

West Texas Intermediate: UP 1.0 percent at $83.44 per barrel

Brent North Sea Crude: UP 0.9 percent at $86.14 per barrel

New York – Dow: UP 0.1 percent at 39,753.75 (close)

New York – S&P 500: DOWN 0.9 percent at 5,584.54 (close)

New York – Nasdaq Composite: DOWN 2.0 percent at 18,283.41 (close)

Asian and European stocks on Thursday tagged along with a Wall Street rally that saw another round of record highs as bets on a September interest rate hike surged following comments by Federal Reserve boss Jerome Powell.

The advances also saw Hong Kong and Shanghai push higher after struggling in recent weeks over worries about the Chinese economy, with investors awaiting a key Communist Party meeting next week.

On a second day of testimony to lawmakers, Powell said decision-makers would not wait until inflation had hit the bank’s two percent target before loosening monetary policy, adding: “If you waited that long, you’ve probably waited too long.”

His remarks came before the release of the latest consumer price index reading on Thursday, which is expected to show a further slowdown.

Traders ramped up bets on the Fed reducing borrowing costs in two months’ time, with analysts saying Powell was telegraphing to markets that the decision had been made.

The comments soothed recent fears among investors that officials might keep rates at their two-decade high for some time owing to a still strong labour market and inflation staying stubbornly above two percent.

The S&P 500 ended with a sixth straight record, while the Nasdaq also finished at an all-time peak.

And the upbeat mood filtered through to Asia, where Hong Kong jumped two percent, while Tokyo, Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei, Manila, Bangkok and Wellington also rose.

London rose in the morning as data showed the UK economy grew last month at a faster pace than expected. Paris and Frankfurt also advanced.

Eyes are also turning to the start of China’s Third Plenum gathering on Monday, where top officials including President Xi Jinping are expected to discuss ways to kickstart the world’s number two economy in the face of an ongoing property crisis and geopolitical issues.

However, while there is hope for some sort of major policy announcement, commentators remain cautious.

Andrew Batson, of Beijing-based consultancy Gavekal Dragonomics, told AFP he did not expect a “fundamental departure from the course Xi has already laid out”, in which technological self-sufficiency and national security outweigh economic growth.

Nomura’s Ting Lu added that the meeting was “intended to generate and discuss big, long-term ideas and structural reforms instead of making short-term policy adjustments”.

Economic growth in the first quarter of the year came in above forecasts and is tipped to top the government’s five percent goal for April-June, but the meeting comes amid ongoing concerns that officials are not providing enough support. 

Taylor Nugent at National Australia Bank warned: “Further monetary policy easing is constrained by a reluctance to allow further depreciation in the renminbi, and expectations are low for any big policy shift at the Third Plenum.”

Key figures around 0820 GMT –

Tokyo – Nikkei 225: UP 0.9 percent at 42,224.02 (close)

Hong Kong – Hang Seng Index: UP 2.1 percent at 17,832.33 (close)

Shanghai – Composite: UP 1.1 percent at 2,970.39 (close)

London – FTSE 100: UP 0.1 percent at 8,203.47

Euro/dollar: UP at $1.0838 from $1.0833 on Wednesday

Pound/dollar: UP at $1.2867 from $1.2848

Dollar/yen: DOWN at 161.62 yen from 161.71 yen

Euro/pound: DOWN at 84.23 pence from 84.29 pence

West Texas Intermediate: UP 0.6 percent at $82.55 per barrel

Brent North Sea Crude: UP 0.6 percent at $85.57 per barrel

New York – Dow: UP 1.1 percent at 39,721.36 (close)

In June, overall consumer prices declined 0.1 percent on-month for the first time since 2020, US data showed.

The better-than-expected reading comes as markets increasingly wager that the Federal Reserve will soon cut interest rates, lifting equities to a series of recent records.

About 15 minutes into trading, the Dow Jones Industrial Average was down 0.1 percent at 39,687.52.

The broad-based S&P 500 rose less than 0.1 percent to 5,636,34, while the tech-rich Nasdaq Composite Index also climbed slightly to 18,654.59.

Among individual companies, Delta sank 7.8 percent after reporting a 29 percent drop in quarterly profits to $1.3 billion.

The carrier scored record revenues for the June quarter but said it would temper plans to add capacity in the second half of 2024 due to moderating demand.

PepsiCo lost 1.5 percent as it reported higher profits but saw “subdued” performance in some North America products where it encountered some product recalls.

Chinese mobile transportation service provider Ontime made its debut on the main board of the Hong Kong Stock Exchange on Wednesday, becoming the first stock in autonomous driving operation technology.

Founded by GAC Group and Tencent in 2019, with Pony.ai as a strategic shareholder, Ontime provides services like ride-hailing and robotaxi, along with AI data and model solutions and high-definition maps. Headquartered in Guangzhou, Ontime also offers comprehensive support for drivers and fleet operators, including vehicle sales and maintenance.

In 2022, Ontime launched an open robotaxi operation technology platform, making it the first global mobility platform to commercialize a mixed operation of ride-hailing and robotaxi services. Ontime’s robotaxi service is currently operational in the central districts of Guangzhou and Shenzhen, key cities in the Guangdong-Hong Kong-Macao Greater Bay Area.

As of 2023, Ontime’s robotaxi fleet includes 281 vehicles, the largest among domestic mobility platforms. Their services have operated for a cumulative total of 20,080 hours and safely covered a trial operation distance of 450,699 kilometres.

Asian markets diverged Wednesday after fresh records on Wall Street and remarks by the Fed chief that hinted the US central bank would cut interest rates later this year, without offering a clear timeframe.

While Europe’s main stock markets were dragged down Tuesday by political uncertainty in France, the S&P 500 and Nasdaq in the United States edged to all-time highs.

The records came after Federal Reserve Chair Jerome Powell pointed to “modest” progress in the battle to bring down inflation.

Although his Senate testimony did not indicate when cuts may come, analysts are predicting the first in September and a second before year’s end.

“Fed Chair Powell’s testimony overnight was pervaded with a somewhat dovish tone, mentioning that the Fed was confronted with ‘two-sided risks’,” Alvin Tan of RBC Capital Markets said in a note.

“He suggested that the Fed’s reaction function is shifting to an easing bias given the ‘significantly’ cooling labour market, but he nonetheless declined to offer a clear timeline on rate cuts.”

“In any event, the market has been pricing in almost two full Fed rate cuts this year, and Powell’s statements didn’t shift those expectations much,” Tan added.

Powell is set to testify before a House committee on Wednesday, and investors will also be eyeing US consumer inflation data due Thursday for further insight that price rises are still easing as hoped.

“Thursday’s CPI data could be crucial in determining whether the probability of a September rate cut increases further from the current 70 percent,” said SPI Asset Management’s Stephen Innes.

In Asia on Wednesday, Hong Kong stocks fell after rising above one percent in morning trade.

Shanghai closed lower, and Sydney, Mumbai and Manila were also down.

China consumer prices edged up 0.2 percent on-year in June, official data showed Wednesday, but fell short of analyst expectations and were down from May’s 0.3 percent increase.

While the world’s second-largest economy emerged from a period of deflation in February, prices have grown at a modest rate, in contrast to other major economies which have seen prices soar.

Zhiwei Zhang of Pinpoint Asset Management said with weak domestic demand and fiscal spending, and a high real interest rate, the risk of deflation in China has not disappeared.

“China relies on exports to be a key driver for growth in the first half of this year. In the long term China will need a rebound of domestic demand to drive the economy,” he said.

If the Fed does cut rates in September, he added, China’s central bank could follow suit.

Tokyo stocks advanced, with the benchmark Nikkei 225 reaching an all-time high.

Seoul was flat, while Taipei, Wellington, Bangkok, Singapore, Jakarta and Kuala Lumpur all rose.

London, Frankfurt and Paris all opened higher.

Key figures around 0710 GMT –

Tokyo – Nikkei 225: UP 0.6 percent at 41,831.99 (close)

Hong Kong – Hang Seng Index: DOWN 0.1 percent at 17,504.36

Shanghai – Composite: DOWN 0.7 percent at 2,939.36 (close)

London – FTSE 100: UP 0.3 percent at 8,160.64

Euro/dollar: UP at $1.0822 from $1.0819 at 2040 GMT on Tuesday

Euro/pound: UP at 84.57 pence from 84.56 pence

Pound/dollar: UP at $1.2797 from $1.2790

Dollar/yen: UP at 161.37 yen from 161.29 yen

Brent North Sea Crude: DOWN 0.7 percent at $84.08 per barrel

West Texas Intermediate: DOWN 0.6 percent at $80.91 per barrel

New York – Dow: DOWN 0.1 percent at 39,291.97 (close)

Powell’s appearance before the Senate Banking Committee comes amid expectations for interest rate cuts later in 2024 that have contributed to a string of recent records.

“There’s not much news,” said CFRA Research’s Sam Stovall. “So therefore, there’s not anything out there to upset the upward trend.”

About 10 minutes into trading, the Dow Jones Industrial Average was down 0.2 percent at 39,281.58.

The broad-based S&P 500 added 0.2 percent at 5,584.73, while the tech-rich Nasdaq Composite Index advanced 0.4 percent to 18,475.66.

Besides Powell’s appearance, this week’s calendar includes key inflation data and a spate of earnings from JPMorgan Chase and other large banks, kicking off the second-quarter reporting season.

Asian markets advanced Tuesday with Tokyo climbing to a record high ahead of Fed chief Jerome Powell’s testimony to Congress which will be parsed for hints on the timing of rate cuts, with investors betting on a first trim in September.

The US central bank has held interest rates at the highest levels in more than two decades to bring inflation down to its long-term two percent target without doing too much damage to either the labour market or the broader economy.

After years of focusing primarily on inflation, Federal Reserve officials have now turned their attention increasingly to the labour market, which has shown some signs of weakness in recent months despite remaining strong overall.

Traders will be keenly watching Powell’s remarks to Congress on Tuesday and Wednesday for any indications of when the Fed will start cutting rates.

The Fed chair last week fanned hopes of a cut, saying the battle against inflation had made “progress” and the job market was cooling.

“We expect Powell to reiterate the need to see more evidence of slowing inflation before cutting interest rates. But with the recent signs of softer growth and labour market, markets will closely watch if Powell gives any hints on the timing of rate cuts,” said Carol Kong at Commonwealth Bank of Australia.

“The Fed Funds futures market has currently attached almost an 80 percent chance of the first rate cut in September,” she said.

Investors are also looking to US consumer inflation data due Thursday for further indications that price increases are still easing as hoped, which would give the Fed greater confidence to start cutting rates.

“Powell is expected to hint at possible rate cuts starting in September if inflation continues to decline. A softer core CPI print would likely support this outlook, keeping the US dollar on a weaker trajectory,” said Luca Santos, market analyst at ACY Securities.

Wall Street’s main indices mostly advanced on Monday, with the S&P 500 and Nasdaq both reaching new records.

The optimistic mood continued into Asia, with Tokyo climbing two percent to close at a record high.

Shanghai reversed early losses to end 1.3 percent higher ahead of a key policy meeting next week and after Moody’s Ratings revised up its 2024 GDP forecast for China to 4.5 percent from 4.0 percent previously.

Moody’s said it expected “steady GDP growth across most emerging market countries this year and next” and revised its 2024 Asia Pacific forecast to 4.8 percent growth from 4.5 percent previously.

“The region-wide revision reflects an upward adjustment for China as its post-pandemic manufacturing and export-focused growth strategy takes shape, although with lacklustre household consumption,” the ratings agency said.

Hong Kong, Taipei, Seoul, Singapore, Kuala Lumpur, Jakarta, Manila and Mumbai were also in the green with Bangkok the sole decliner across the region.

European markets however opened lower, with London, Paris and Frankfurt all down as investors eye the new political landscapes in France and Britain, and await Powell’s testimony.

“With the prospect of a soft landing and rate cuts on the horizon, investors seem perfectly content with high valuations, causing a ripple effect where one mega-cap rise lifts all mega-cap boats,” said SPI Asset Management’s Stephen Innes.

US Treasury bond yields, which are closely watched as a proxy for interest rates, were little changed.

On forex markets the euro was flat against the dollar Tuesday following the inconclusive outcome of France’s snap elections, with the single currency trading at $1.0827.

“Following the recent French elections, political uncertainty remains high, yet the euro has shown remarkable stability during the Asian trading session,” said Santos, with its narrow trading range “reflecting a muted market response”.

– Key figures around 0715 GMT –

Tokyo – Nikkei 225: UP 2.0 percent at 41,580.17 points (close)

Hong Kong – Hang Seng Index: UP 0.1 percent at 17,548.09

Shanghai – Composite: UP 1.3 percent at 2,959.37 (close)

London – FTSE 100: DOWN 0.2 percent at 8,177.71

Euro/dollar: FLAT at $1.0827 from $1.0827 at 2030 GMT on Monday

Euro/pound: UP at 84.53 pence from 84.50 pence

Dollar/yen: UP at 160.85 yen from 160.80 yen

Pound/dollar: DOWN at $1.2808 from $1.2810

West Texas Intermediate: DOWN 0.1 percent at $82.22 per barrel

Brent North Sea Crude: DOWN 0.1 percent at $85.66 per barrel

New York – Dow: DOWN 0.1 percent at 39,344.79 points (close)

In France, the left emerged as the biggest group in a new parliament, beating out a resurgent far right in a vote called by President Emmanuel Macron three years ahead of schedule.

Macron’s centrist alliance obtained fewer seats in parliament but held up better than expected.

The outcome, in which no bloc has an outright majority, has left the country in a “thick fog” of uncertainty, according to one pollster.

Yet European equities advanced on relief that despite polls the far-right National Rally (RN) of Marine Le Pen had neither won a parliamentary majority nor was in a dominant position.

“European stocks have recovered from earlier losses as investors recover from the shock of the French election result,” City Index analyst Fiona Cincotta told AFP.

“Of course, there are concerns over a left-wing alliance, but this is a preferred result to a right-wing win that the market had been dreading.”

Ahead of the vote, investors voiced concern about high-spending pledges by the far right.

The left-wing New Popular Front and its allies won 187 seats in the 577-seat National Assembly, Macron’s centrist group won 159 seats and the National Rally and its allies won 142 seats, interior ministry figures show.

All three blocs fell far short of the 289 seats required for a clear majority. 

Rabobank analyst Jane Foley sounded a note of caution regarding the impact on the French stock market.

“There is also speculation as to whether a politically fractured France and a weakened Macron means that France’s leadership position within the eurozone has been weakened,” she said.

She added that “France’s political and budgetary uncertainties” remain a negative factor for the euro.

Kathleen Brooks, head of research at XTB, said the left’s pledges not to push forward with macroeconomic reforms could exacerbate concerns.

“This is weighing on sentiment for now, however any downside could be limited as the horse trading around who will govern and how the government will be formed could take months,” she said.

Wall Street’s main indices advanced at the opening bell, with shares in Boeing rising by more than two percent after the aircraft manufacturer reached a deal with the US Department of Justice over two fatal 737 MAX crashes. 

The plea deal, criticised by the families of the 346 people killed in the crashes, sees Boeing avoid a criminal trial, instead agreeing to a series of terms including another $243.6 million in fines.

In Asia on Monday, stock markets mostly sank with Hong Kong’s Hang Seng Index closing down more than 1.5 percent.

Tokyo’s Nikkei index seesawed in and out the red throughout the day before finally ending slightly down, while the broader Topix shed more than one percent after hitting a new high last week.

Taipei was a rare bright spot, posting solid gains on the back of a surge in shares of chipmaking giant TSMC, which added nearly three percent over the course of the day.

European stock markets edged up on Monday after early losses as investors digested snap French elections in which a hung parliament appeared the likeliest outcome.

In France, the left was set to emerge as the biggest group in a new parliament, beating out a resurgent far-right in a vote called by President Emmanuel Macron three years ahead of schedule.

Macron’s centrist alliance will have fewer seats in parliament, but held up better than expected.

The outcome, in which no bloc is expected to have an outright majority, has left the country in a “thick fog” of uncertainty, according to one pollster, with the euro dropping around 0.4 percent from Friday’s levels before clawing back most of the losses.

“The best that can be said is that neither the (left-wing) NFP nor (far-right) National Rally will be able to implement their respective electoral manifestos in full, which would most worry investors fretful about France’s fiscal situation,” Alvin Tan of RBC capital markets said.

While “the worst outcome for the euro has been averted for now”, Tan added, uncertainty remains “and the fiscal balance is unlikely to improve significantly as a result”.

Paris’s CAC 40 benchmark stocks index sank at the open Monday, but recovered to post modest gains in morning trade, as did Frankfurt’s DAX. The FTSE 100 index in London also inched up.

Asian markets mostly sank, with Hong Kong’s Hang Seng Index down more than 1.5 percent at the close.

Tokyo’s Nikkei index seesawed in and out the red throughout the day before finally ending slightly down, while the broader Topix shed more than one percent after hitting a new high last week.

Taipei was a rare bright spot, posting solid gains on the back of a surge in shares of chipmaking giant TSMC, which added nearly three percent over the course of the day.

Sydney, Seoul, Mumbai, Jakarta and Singapore were down, while Manila rose.

Thousands of workers in South Korea walked off the job at tech giant Samsung on Monday morning as they kicked off a three-day general strike, according to a union rep, who warned key memory chip production would be affected.

Samsung Electronics is the world’s largest memory chip maker and accounts for a significant chunk of global output.

Workers gathered outside the company’s foundry and semiconductor factory in Hwaseong, Gyeonggi, an hour south of Seoul, with National Samsung Electronics Union head Son Woo-mok warning: “Today’s general strike is just the beginning.”

However, the tech giant’s shares were slightly up from Friday’s price, which was buoyed by a company forecast that second-quarter profits would beat expectations by more than 25 percent.

On Wall Street, the Nasdaq and S&P 500 hit fresh highs on Friday, and the Dow Jones Industrial Average also ticked upwards after official data showed the US labour market cooling, raising expectations of a September interest rate cut.

Investors will be looking for more clues in an appearance by Federal Reserve boss Jerome Powell before the US Senate banking committee on Tuesday, as well as fresh consumer price index data due later in the week.

– Key figures around 0815 GMT –

Tokyo – Nikkei 225: DOWN 0.3 percent at 40,780.70 (close)

Hong Kong – Hang Seng Index: DOWN 1.6 percent at 17,524.06 (close)

Shanghai – Composite: DOWN 1 percent at 2,922.45 (close)

London – FTSE 100: UP 0.1 at 8,208.88

Pound/dollar: DOWN at $1.2811 from $1.2816 on Friday

Euro/pound: FLAT at 84.58 pence

Euro/dollar: DOWN at $1.0838 from $1.0842

Dollar/yen: UP at 160.84 yen from 160.78 yen

West Texas Intermediate: DOWN 0.6 percent at $82.63 per barrel

Brent North Sea Crude: DOWN 0.5 percent at $86.14 per barrel

New York – Dow: UP 0.2 percent at 39,375.87 points (close)

The amount shrank by 0.3 percent compared with the previous month, the State Administration of Foreign Exchange (SAFE) said, attributing the decrease to the combined impact of currency translation and asset price changes.

Affected by various factors such as major economies’ monetary policies, market expectations and macroeconomic data, the U.S. dollar index and global financial asset prices climbed in June, the SAFE explained.

The Chinese economy has sustained its recovery momentum and continued its high-quality development, which is conducive to maintaining the stable scale of the country’s foreign exchange reserves, the regulator said.

According to data released Sunday by the People’s Bank of China, the country’s gold reserves remained unchanged in June at 72.8 million ounces, equivalent to about 169.7 billion U.S. dollars.

Asian markets were largely down on Friday, a day after Tokyo’s indexes hit record highs as traders prepared for a key US jobs report while European exchanges edged up on calming electoral news from the United Kingdom and France.

Japan’s Nikkei 225 ended flat while the broader Topix index, which a day earlier surpassed its previous peak set in 1989, also shed some of its gains. 

“The fact that the Topix, which indicates the overall performance of the Japanese market, has in turn broken its own record, is news of great importance,” said analyst Takuma Ikemoto of the Tokai Tokyo Intelligence Lab. 

The capitalisation of Japan’s Prime market has also increased significantly, showing “that Japanese companies are constantly strengthening their ability to generate profits and… indicates that the Japanese stock market has entered a new phase”, he said.

The yen continued strengthening against the dollar after hitting its lowest level in nearly four decades.

Samsung Electronics’ forecast that second-quarter profits would beat expectations by more than 25 percent, due to rising chip prices and growing demand for generative AI, sent its share price higher and spurred the market in Seoul.

But shares in Hong Kong ended a four-day winning streak, while stocks in mainland China were trading lower after the European Union slapped extra provisional duties of up to 38 percent on Chinese electric car imports on Thursday.

A European Commission probe launched last year concluded that state subsidies for Chinese EV manufacturers were unfairly undercutting European rivals, which Brussels wants to shield as they transition from thermal to electric power.

Chinese markets have suffered losses for weeks, with the world’s second-largest economy beset by a debt crisis in the property sector, persistently low consumption and high youth unemployment.

European markets built on gains Friday after a Labour win in the UK and moves to block a far-right ascent in France. 

London, Paris and Frankfurt all moved higher in early trading.

The return of the main opposition Labour Party to power in Britain ended 14 years of Tory rule and strengthened the pound even before results were announced.

An expected period of stability has ushered in optimism for investors after a prime ministerial game of musical chairs in Downing Street. 

In France, the withdrawal of 200 centrist and left-wing candidates from this weekend’s runoff to avoid splintering the vote in favour of the far-right National Rally of Marine Le Pen boosted the euro and breathed life into European markets. 

But analysts remain wary that the second-biggest economy in the European Union could be headed for a period of political deadlock if there is no overall winner in the polls.

Investor sentiment was also lifted Thursday as softer US labour market data gave the Federal Reserve room to cut interest rates, with another key jobs report due Friday.

“We expect US labour market data will show more signs of cooling in June,” Alvin Tan of RBC Capital Markets said.

Gains were capped, with Wall Street shut for the July 4 Independence Day holiday in the United States.

– Key figures around 0815 GMT –

Tokyo – Nikkei 225: FLAT percent at 40,912.37 (close)

Hong Kong – Hang Seng Index: DOWN 1.0 percent at 17,799.61 (close)

Shanghai – Composite: DOWN 0.3 percent at 2,949.93 (close)

London – FTSE 100: UP 0.3 percent at 8,266.78 points 

Paris – CAC 40: UP 0.5 percent at 7,731.29 

Euro/dollar: UP at $1.0826 from $1.0813 

Pound/dollar: UP at $1.2779 from $1.2765

Dollar/yen: DOWN at 160.73 yen from 161.16 yen 

Euro/pound: UP at 84.71 pence from 84.69 pence

West Texas Intermediate: UP 0.3 percent at $84.10 per barrel

Brent North Sea Crude: UP 0.1 percent at $87.51 per barrel

New York – Dow: Closed for public holiday

he Hong Kong Monetary Authority fined the local arm of Singapore’s DBS Bank HK$10 million ($1.3 million) for breaches of its anti-money laundering law, the banking regulator said on Friday.

The HKMA said the bank failed to “continuously monitor business relationships and conduct enhanced due diligence in high risk situations” over a seven-year period.

The “control deficiencies” found during a HKMA investigation also included failure to keep records for some of its customers stipulated by the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, the regulator said in a statement.

Parent group DBS, Southeast Asia’s largest bank, was among lenders caught up in a billion-dollar money-laundering scandal in Singapore last year.

Banks are required to “put in place effective customer due diligence measures to combat money laundering and terrorist fiancing” and those measures should be regularly reviewed, said Raymond Chan, an executive director at HKMA. 

DBS Hong Kong said in a statement that it accepted the HKMA’s decision and takes anti-money laundering obligations seriously.

“The issues at hand were sporadic and historical in nature, having occurred between April 2012 and April 2019,” it said. 

DBS Hong Kong has been working with regulators to improve anti-money laundering controls and has implemented policies that “materially improved our capabilities to detect and mitigate money laundering risks”, the bank said.

Equities rose and the dollar slipped further on Thursday as investors welcomed more data pointing to a softening labour market that gives the Federal Reserve room to cut interest rates, with another key jobs report due.

The advances saw Tokyo end at all-time highs following another record day on Wall Street, while national elections in Britain and France are also on the radar over the next few days.

After a recent poor run for stocks, the mood on trading floors has lightened this week thanks to figures indicating the US labour market was tightening and inflation retreating.

Figures on Wednesday showed the private sector created fewer jobs than expected last month, while first-time and continuing claims for jobless benefits also topped forecasts.

A survey also showed services sector activity contracted in June at the fastest pace in four years.

That all came after news Friday that the personal consumption expenditures (PCE) index — the Fed’s preferred gauge of prices — had dipped further in May.

Adding to the feel-good factor were comments this week from Fed chief Jerome Powell, who said the battle against inflation had made “progress” and “substantial” work had been done on softening the labour market.

Markets are pricing in nearly two rate reductions this year, starting in November. 

Still, minutes from the central bank’s June policy meeting showed officials remained cautious about cutting too soon and wanted to see more evidence prices were under control.

While inflation remains sticky and is tempering expectations, softening data in May “adds to our growing confidence that price rises won’t reaccelerate from here”, said Henk-Jan Rikkerink of Fidelity International.

“The range of outcomes when it comes to the magnitude of potential rate cuts by the Fed have narrowed significantly since the start of the year.

“We think that the bar for the cutting cycle to start remains high but recent progress on the inflation front has been encouraging.”

On Wall Street, the Dow ended slightly lower but the S&P 500 and Nasdaq chalked up more record highs.

And the gains filtered through to most of Asia, with Tokyo’s Nikkei topping the all-time high hit in March while the Topix closed at a record for the first time since late 1989.

There were also gains in Hong Kong, Sydney, Singapore, Seoul, Taipei, Manila, Mumbai, Bangkok and Jakarta.

However, Shanghai bucked the trend again, with traders still on edge about the state of the world’s number two economy.

Zhiwei Zhang at Pinpoint Asset Management warned “people don’t have strong confidence in economic outlook. Stronger policy support would help, from both monetary and fiscal fronts. China has a high real interest rate and a conservative fiscal policy stance for now”.

And Capital Economics’ Thomas Mathews said there were concerns among Chinese investors domestically and globally, and while they could ease over time “Chinese equities seem set to go their own way for a while yet”.

London, Paris and Frankfurt rose in the morning.

The dollar dipped further against its major peers after the jobs readings, with the euro getting a little help from news that more than 200 centrist and left-wing candidates had pulled out of Sunday’s legislative election runoff in France in a bid to beat the far right.

President Emmanuel Macron hopes the move will unify the vote and thus block the far-right National Rally of Marine Le Pen from gaining power after it saw massive gains in the first round Sunday.

However, analysts warned that France — the second-biggest economy in the European Union — could be headed for a period of political deadlock if there is no overall winner in the polls.

The pound was enjoying support as Britons began voting in a general election, which is expected to see the opposition Labour Party win a landslide against the Conservatives after 14 years in government.

– Key figures around 0810 GMT –

Tokyo – Nikkei 225: UP 0.8 percent at 40,913.65 (close)

Hong Kong – Hang Seng Index: UP 0.3 percent at 18,028.28 (close)

Shanghai – Composite: DOWN 0.8 percent at 2,957.57 (close)

London – FTSE 100: UP 0.6 percent at 8.217.80

Euro/dollar: UP at $1.0796 from $1.0786 on Wednesday

Pound/dollar: UP at $1.2754 from $1.2737

Dollar/yen: DOWN at 161.29 yen from 161.52 yen 

Euro/pound: DOWN at 84.64 pence from 84.65 pence

West Texas Intermediate: DOWN 0.9 percent at $83.10 per barrel

Brent North Sea Crude: DOWN 0.9 percent at $86.60 per barrel

New York – Dow: DOWN 0.1 percent at 39,308.00 (close)

The city’s first locally registered open investment fund solely denominated in patacas is being launched today (Wednesday).

Leading this initiative is A&P Investment Fund Management Company Limited, which secured a special license from the Monetary Authority of Macau—the first of its kind—and received approval in May to establish the “A&P Macau Patacas Money Market Fund.”

Being denominated in the SAR’s local currency carries special significance, explains Bernardo Alves, chairman and founder of the company. “Something I wholeheartedly believe is that we, as a society and as locals, need the ability to invest in the currency in which we earn our salaries. It’s natural. So we are going to test this market,” Alves told Macau Business in an interview to be published in the magazine’s July edition.

The company aims to impact the local financial ecosystem with this step. “I think we are shaking and shaping the local financial ecosystem, particularly the fund industry, by creating the first MOP money market fund,” A&P CEO Abraham Kot emphasised.

The fund leverages Alves’ nearly two decades of experience in public and private equity investments, and Kot’s over three decades of experience across retail, commercial, and corporate banking, as well as investment fund management.

In 2021, Bernardo Alves and Abraham Kot decided to apply to create an investment fund management company in Macau, which was eventually established in early 2023, with a special registration from the Monetary Authority of Macau (AMCM) granted in June 2023. The permit to launch the “A&P Macau Patacas Money Market Fund” was published in the Official Gazette in early May.

The dollar rose Tuesday and Asia equities were mixed as investors weighed the possibility of another Donald Trump presidency after last week’s poor debate performance by incumbent Joe Biden.

Speculation about a second term for the Republican rose on the Supreme Court’s ruling that all former leaders had “absolute immunity” from criminal prosecution for “official acts” taken while in office but could still face criminal penalties for “unofficial acts”.

The decision comes as Trump faces criminal charges over his attempts to overturn his 2020 election loss to Biden, but that trial had been put on hold while judges considered his immunity claims.

Bets on a second term for the controversial tycoon rose after Thursday’s debate, in which he was widely considered to have come out on top after Biden struggled through answers and stumbled over his lines.

That led to calls for him to step down due to worries over his mental state, but Democrats have pushed back and are reportedly seeking a vote next month that would formally make him the party candidate for November’s poll.

“Those two headlines, and given the reaction to President Biden’s first debate, continue to suggest a Trump presidency is looking more likely at this stage,” Tapas Strickland at National Australia Bank said in a commentary.

Observers said the prospect of another Trump presidency fuelled talk of tax cuts and a fresh spike in inflation, pushing up yields and denting hopes for interest rate cuts.

That, in turn, boosted the dollar against its main peers, pushing back to 38-year highs against the yen, putting Japanese authorities on alert after they previously warned they were ready to intervene in forex markets to support the unit.

The euro was also a little softer, though it managed to hold most of the gains made Monday in a relief rally that came after the far-right National Rally (NR) looked unlikely to win an absolute majority in French legislative elections as had been feared.

President Emmanuel Macron and his allies are now involved in intense campaigning and horse-trading ahead of the second round of polls Sunday as they look to deny NR an absolute majority and control of government.

However, Luca Santos at ACY Securities said: “Based on current results, the two most probable outcomes are a hung parliament without an absolute majority or an RN cohabitation government.

“The high number of constituencies won by the RN, coupled with tight races between left and centre candidates, complicates strategic withdrawals and heightens the risk of an RN cohabitation government, which would be less favourable for the euro.

“Consequently, the euro’s current relief rally is unlikely to persist ahead of the second election round.”

Asian stock markets were mixed, with Hong Kong enjoying a rare surge after a recent run of losses, while Tokyo piled on more than one percent to end above 40,000 points for the first time since April.

Shanghai, Singapore, Mumbai and Jakarta also rose.

However, Sydney, Seoul, Wellington, Bangkok, Taipei and Manila fell along with London, Paris and Frankfurt.

Key figures around 0810 GMT –

Tokyo – Nikkei 225: UP 1.1 percent at 40,074.69 (close)

Hong Kong – Hang Seng Index: UP 0.3 percent at 17,769.14 (close)

Shanghai – Composite: UP 0.2 percent at 2,997.01 (close)

London – FTSE 100: DOWN 0.6 percent at 8,119.33

Euro/dollar: DOWN at $1.0717 from $1.0743 on Monday

Dollar/yen: UP at 161.65 yen from 161.46 yen 

Pound/dollar: DOWN at $1.2624 from $1.2648

Euro/pound: DOWN at 84.89 pence from 84.92 pence

West Texas Intermediate: UP 0.1 percent at $83.43 per barrel

Brent North Sea Crude: UP 0.1 percent at $86.67 per barrel

New York – Dow: UP 0.1 percent at 39,169.52 (close)

Chinese stocks closed higher on Monday, with the benchmark Shanghai Composite Index up 0.92 percent to 2,994.73 points.

The Shenzhen Component Index closed 0.57 percent higher at 8,899.17 points.

The combined turnover of stocks covered by the two indices stood at 658.04 billion yuan (about 92.34 billion U.S. dollars), down from 703.24 billion yuan recorded on the previous trading day.

Shares related to coal, furniture and environmental protection led the gains, while those in wine-making and plastics sectors suffered losses.

The ChiNext Index, tracking China’s Nasdaq-style board of growth enterprises, lost 0.04 percent to close at 1,682.69 points Monday

The yen extended losses to a fresh 38-year low Friday, putting investors on guard for a possible intervention by Japanese authorities ahead of the release of key US inflation data later in the day.

Asian equity markets advanced following a positive lead from Wall Street, though there is speculation of a possible pull-back on profit-taking and concerns the recent tech-fuelled rally may have run too far.

Traders took the Japanese unit to as much as 161.27 per dollar as they pushed the envelope with officials in Tokyo, who stepped into forex markets twice in April and May after the yen tumbled.

However, while vice finance minister Masato Kanda said this week that the government was ready to act 24 hours a day, analysts said authorities were more concerned about the pace of the movements rather than any particular red line.

On Thursday, finance minister Shunichi Suzuki added that “we have strong concerns” about the yen’s weakness and “necessary measures” would be taken if needed.

But Luca Santos, at ACY Securities, said: “While these verbal interventions may temporarily slow the yen’s decline, they must be backed by direct market intervention to be effective.

“However, the success of such measures remains uncertain, considering previous efforts in late April and early May took about two months to counteract losses before the (dollar) surged to new highs this week.”

Commentators say Japan is unlikely to move before the release later Friday of the personal consumption expenditures (PCE) index reading — the Federal Reserve’s preferred gauge of inflation that could determine its plans for interest rates.

The report is tipped to show a further slowdown in prices, though there is a fear that a forecast-busting reading could dent hopes for a cut this year, while a lower-than-expected figure could ramp up bets for more than one before January.

There was some hope for a softer number after data Thursday showed a pick-up in continuing jobless claims, a slowdown in personal consumption and an economy still in rude health.

Fed officials have tried to temper rate cut expectations, warning they wanted to see more evidence that inflation was being brought under control.

On Thursday, the bank’s Atlanta boss Raphael Bostic said he saw one reduction this year.

Asian equity markets were on course to end a choppy week on a positive note, tracking gains on Wall Street, with investors also keeping an eye on the election debate between US President Joe Biden and his predecessor Donald Trump.

Tokyo, Shanghai, Sydney, Seoul, Taipei, Manila, Mumbai and Jakarta were all in the green, with Hong Kong marginally higher.

London and Frankfurt rose, but Paris dipped.

France’s weekend first-round legislative polls were also in view, with President Emmanuel Macron’s centrist alliance facing potential defeat to a surging far right, whose spending plans could put Paris on course for a standoff with the European Union.

That is followed by the general election in the United Kingdom on Thursday, which is expected to see the ruling Conservatives of Prime Minister Rishi Sunak ousted after 14 years in government and replaced by the opposition Labour Party.

Key figures around 0810 GMT –

Dollar/yen: UP at 160.95 yen from 160.79 yen on Thursday

Tokyo – Nikkei 225: UP 0.6 percent at 39,583.08 (close)

Hong Kong – Hang Seng Index: FLAT at 17,718.61 (close)

Shanghai – Composite: UP 0.7 percent at 2,967.40 (close)

London – FTSE 100: UP 0.4 percent at 8,208.66

Euro/dollar: DOWN at $1.0698 from $1.0707

Euro/pound: DOWN at 84.60 pence from 84.67 pence

Pound/dollar: UP at $1.2646 from $1.2642

West Texas Intermediate: UP 0.8 percent at $82.37 per barrel

Brent North Sea Crude: UP 0.6 percent at $86.91 per barrel

New York – Dow: UP 0.1 percent at 39,164.06 (close)

Insurer Fidelidade Macau is closely monitoring potential business opportunities in Hengqin and the Greater Bay Area as it celebrates its 25th anniversary, the company told MNA on Friday.

“Fidelidade Macau is now more than ever ready to seize future opportunities, not only in Macau but also in the Greater Bay Area,” said André Simões Cardoso, chairman of Fidelidade Macau’s Board of Directors.

To take steps in the neighbouring In-depth Cooperation Zone and other GBA cities, there needs to be a suitable regulatory environment and flexibility to develop products and services that meet the market’s needs, he added.

“Should we have that window of opportunity (to enter the GBA market), we have the willingness and the company is ready in terms of capital, team members, and platforms,” Mr. Cardoso noted, adding that he hopes to see the necessary regulatory framework take shape across the border.

Fidelidade Macau CEO Paulo Barbosa also emphasized the company’s financial strength and willingness to expand to Hengqin and beyond. “The company has sufficient capital to initiate an expansion project. We are now waiting for both Macau and mainland authorities to allow us to expand our business activities to other areas, hopefully in the short term to Hengqin and in the longer term to the wider GBA market.”

The local market itself has become more competitive with increasingly demanding customers. Fidelidade Macau Executive Director Ivan Cheung noted, “Macau citizens are more knowledgeable about insurance. We need to create more innovative products to make breakthroughs.”

Operating in Macau since 1999, Fidelidade Macau, which provides life and non-life insurance products, is owned by Portugal’s insurance group Fidelidade. Chinese private multinational conglomerate Fosun International is the group’s main shareholder with about an 85 percent stake, while the remaining 15 percent is held by Portuguese state-owned bank Caixa Geral de Depósitos.

In 2023, the group saw robust growth in its Gross Written Premiums (GWPs) in both the life and non-life segments, with 15.8 percent and 27.3 percent expansions compared to 2022.

The CEO of parent company Fidelidade, Rogério Campos Henriques, said the group “remains fully committed to Macau and the SAR’s development,” as he praised the “good results and success,” and highlighted the decision last year by US financial rating agency Fitch to upgrade Fidelidade Macau’s Insurer Financial Strength (IFS) rating to ‘A’ (Strong) from ‘A-’ (Strong) with a Stable Outlook.

These comments were made during a cocktail reception held on Friday in the SAR to celebrate the 25th anniversary of Fidelidade Macau.

The Japanese currency edged up against the dollar after hitting a 38-year low Wednesday, putting investors on alert for a possible intervention by Japanese authorities.

The Japanese unit’s latest retreat came as uncertainty surrounded the Federal Reserve’s timetable for cutting interest rates, and the Bank of Japan’s caution in tightening monetary policy.

Investors were meanwhile awaiting the outcomes of French and British general elections due over the next week.

Wall Street stocks wobbled ahead of the first presidential debate between Joe Biden and Donald Trump and key inflation data.

The debate, to take place on Thursday evening, “has imbued the market with a bit of a wait-and-see attitude”, said Briefing.com analyst Patrick O’Hare.

Friday sees the release of the PCE index, the US Federal Reserve’s preferred measure of inflation.

“Should this point towards a further slowdown in price growth then the final day of June trading might go the same way as May’s, which saw a strong rally,” said Chris Beauchamp, chief market analyst at online trading platform IG.

“A softer PCE reading could renew hopes of a September rate cut, which have taken a knock of late,” he added.

Data out Thursday showed a modest increase in continuing unemployment benefits claims in the United States and a drop in business investment spending.

O’Hare said “today’s data was generally on the softer side of things, prompting a drop in Treasury yields and some improvement in the equity futures market, which has leaned on the notion that a rate cut before November could still be possible”.

In Japan, vice finance minister Masato Kanda said this week that authorities were keeping a close eye on movements in foreign exchange markets and were ready to step in with yen support 24 hours a day.

Their determination was put to the test after the yen fell to 160.87 per dollar late Wednesday — its weakest since 1986 — as US Treasury yields spiked.

Analysts say it is possible traders will keep pushing the envelope to see at what point the government will act, with some saying the currency could hit 170.

In Europe, France’s political future was up in the air with the far right surging in polls but other forces fighting to the end three days before the first round of a high-stakes parliamentary vote. Paris stocks ended the day down 1.0 percent.

The French election comes ahead of a UK national vote on July 4, with the right-wing Conservatives led by Prime Minister Rishi Sunak expected to lose power to the centre-left Labour party. London’s blue-chip FTSE 100 index shed 0.6 percent.

Asian and European markets mostly rose Wednesday following a tech-led bounce on Wall Street as investors prepared for the release of crucial US inflation data, while the yen fell back towards levels that have stirred intervention warnings from Japanese officials.

The euro also remained under pressure ahead of weekend elections in France that polls suggest will see big wins for the far-right and left-wing parties pushing President Emmanuel Macron’s centrists into third. 

With few catalysts to drive action, investors were jockeying ahead of Friday’s personal consumption expenditures index — the Federal Reserve’s preferred gauge of inflation — hoping a softer reading will allow the bank to cut interest rates soon.

Comments from two monetary policymakers Tuesday did little to lift hopes for a move anytime soon.

Fed governor Michelle Bowman warned: “We are still not yet at the point where it is appropriate to lower the policy rate.

“I will remain cautious in my approach to considering future changes in the stance of policy,” she said in prepared remarks.

Fellow governor Lisa Cook added that she saw inflation slowing this year, and even more so next, and that borrowing costs could come down “at some point”.

Their remarks were broadly in line with those of their bank colleagues, who have said they wanted to see more evidence that prices were under control before deciding to lower rates.

The Fed’s so-called “dot plot” guide for rates points to one cut before January — down from three predicted in March — though there is much debate on whether it will make two, or even none at all.

Equity markets have been well supported this year by an expectation that officials will ease policy after a long-running campaign against sticky inflation.

However, the rally is showing signs of petering out owing to a string of data indicating the US economy and labour market remain strong, while investors are also concerned valuations may have gone too far, particularly among tech firms.

On Tuesday, the Nasdaq and S&P 500 both recovered from a recent sell-off thanks to a bounce in AI chip titan Nvidia from three days of heavy selling.

Asian markets mostly rose after struggling in early trade.

Tokyo, Shanghai, Hong Kong, Seoul, Wellington, Mumbai, Manila, Taipei, Bangkok and Jakarta rose, while Sydney and Singapore fell.

London rose at the open, while Paris and Frankfurt were both also higher. 

The uncertainty over US rates was keeping the dollar elevated, with the yen in focus as it approaches the level that forced Japan to step into forex markets earlier this year.

The country’s top currency official has said authorities were ready to act 24 hours a day if the unit fell too far. Billions were pumped in to support the yen when it hit a 34-year low of 160.17 in late April.

Traders are also poring over any comments from the Bank of Japan, which many say has been too cautious in moving away from its ultra-loose monetary policy.

It is tipped to hike interest rates next month and begin winding down its bond purchases that help keep borrowing costs down.

The euro held Tuesday’s losses before Sunday’s first round of legislative elections in France.

Macron called the snap polls after his centrists were trounced by the far-right National Rally (RN) in European Parliament elections two weeks ago. 

There are fears that big wins for the RN and left-wing alliance could put France, Europe’s number two economy and key EU player, on course for a battle with Brussels over spending plans.

– Key figures around 0810 GMT –

Tokyo – Nikkei 225: UP 1.3 percent at 39,667.07 (close)

Hong Kong – Hang Seng Index: UP 0.1 percent at 18,089.93 (close)

Shanghai – Composite: UP 0.8 percent at 2,972.53 (close)

London – FTSE 100: UP 0.4 percent at 8,280.92

Dollar/yen: UP at 159.90 yen from 159.68 yen on Tuesday

Euro/dollar: DOWN at $1.0694 from $1.0715

Euro/pound: DOWN at 84.38 pence from 84.43 pence

Pound/dollar: DOWN at $1.2672 from $1.2686

West Texas Intermediate: UP 0.4 percent at $81.12 per barrel

Brent North Sea Crude: UP 0.3 percent at $85.27 per barrel

New York – Dow: DOWN 0.8 percent at 39,112.16 (close) 

Asian markets edged higher Tuesday after recent losses as investors ignored another tough day for tech titans on Wall Street that has raised concerns about a correction in markets following a string of record highs.

Investors are also keeping tabs on Tokyo after Japan’s top currency official warned authorities were ready 24 hours a day to intervene to support the yen as it sits around three-decade lows against the dollar. 

With US data indicating the world’s top economy remains in rude health and the jobs market is still tight, investors are unsure about the Federal Reserve’s plans for interest rates, with debate centred on when — or even if — it will cut this year.

The focus is now on the release Friday of the personal consumption expenditures (PCE) index — the Fed’s favoured inflation gauge — with traders hoping for another slowdown that would give decision-makers room to start loosening policy.

Uncertainty surrounding rates has done little to hold back US equities as a blistering surge in tech giants — fuelled by an explosion in all things linked to artificial intelligence — has helped push the S&P 500 and Nasdaq to multiple records this year.

However, profit-taking and worries that the rally has gone too far has started to weigh on the sector, with the latest market darling Nvidia leading the losses by diving more than 15 percent from its high on Thursday.

It had briefly become the world’s biggest publicly listed firm two days earlier, with a market capitalisation of more than $3.3 trillion.

The recent sell-off has led to fears of contagion setting in, sending stocks into a downward spiral.

Still, while the S&P 500 and Nasdaq retreated Monday, Asia mostly enjoyed a positive day.

Hong Kong, Tokyo, Sydney, Seoul, Singapore, Mumbai, Bangkok, Wellington, Taipei and Manila were all in the green, though Shanghai dipped after giving up early gains.

London rose while Paris and Frankfurt fell. 

The yen strengthened, having edged close to 160 to the dollar Monday on fading expectations for a US rate cut any time soon and the Bank of Japan’s slow pace of tightening.

The unit’s weakness led vice finance minister Masato Kanda to reiterate officials’ determination to step in with support, having done so in April after the currency hit 160.17 to the greenback.

However, some observers warn that the yen could fall to 170 as they say the impact of any intervention is usually short-lived.

“The pair continues to find resistance around the big (160 per dollar) figure with Japanese officials increasing verbal intervention,” said National Australia Bank’s Rodrigo Catril. 

He added that the BoJ had left many investors disappointed this month when it delayed cutting back its bond-buying activities, which are used to keep borrowing costs down. 

“After the BoJ failed to deliver… the market has been encouraged to increase the pressure on the yen given a BoJ too slow on its policy-normalisation process while the Fed stays higher for longer, waiting for the inflation data to make the case for easing.”

The euro held its own against the dollar ahead of the first round of French elections this weekend.

President Emmanuel Macron called the snap legislative polls after his centrist party was trounced by the far-right National Rally (RN) in European Parliament elections two weeks ago.

The unit remains supported even as some opinion polls show the RN leading, with a left-wing alliance in second and Macron’s centrists third.

Key figures around 0810 GMT –

Tokyo – Nikkei 225: UP 1.0 percent at 39,173.15 (close)

Hong Kong – Hang Seng Index: UP 0.3 percent at 18,072.90 (close)

Shanghai – Composite: DOWN 0.4 percent at 2,950.00 (close)

London – FTSE 100: UP 0.1 percent at 8,289.36

Dollar/yen: DOWN at 159.42 yen from 159.63 yen on Monday

Euro/dollar: DOWN at $1.0724 from $1.0740

Euro/pound: DOWN at 84.52 pence from 84.61 pence

Pound/dollar: UP at $1.2690 from $1.2689

West Texas Intermediate: DOWN 0.1 percent at $81.57 per barrel

Brent North Sea Crude: DOWN 0.1 percent at $85.92 per barrel

New York – Dow: UP 0.7 percent at 39,411.21 (close)

A series of nations have recognised the State of Palestine amid the war between Israel and Hamas, drawing strong rebukes from Israeli officials.

Shortly after the former Soviet republic announced the recognition, Israel’s foreign ministry said it summoned Yerevan’s ambassador for a “severe reprimand”.

Yerevan noted it is “genuinely interested in establishing long-term peace and stability in the Middle East.”

“Confirming its commitment to international law, equality of nations, sovereignty and peaceful coexistence, the Republic of Armenia recognises the State of Palestine,” Armenia added. 

Yerevan, which has itself been ridden by conflict with neighbouring Azerbaijan for decades, slammed Israel’s military conduct in Gaza. 

“Armenia deplores using civilian infrastructure as shields during armed conflicts and violence towards civilian populations,” Yerevan said.

It also criticised Hamas for “the captivity of civilian persons” and said Armenia “joins the demands of international community on freeing them.”

– ‘Thank you Armenia’ –

A senior official from the Palestinian Authority, Hussein Al-Sheikh, welcomed the move.  

“This is a victory for right, justice, legitimacy and the struggle of our Palestinian people for liberation and independence,” he said on social media.  

“Thank you our friend Armenia,” added Al-Sheikh, who is also secretary general of the Palestine Liberation Organisation executive committee.

The Islamist Palestinian movement Hamas, which is at war with Israel in Gaza, also welcomed Yerevan’s decision Friday.

“We consider this an additional and important step towards solidifying international recognition of our people’s rights and their aspirations to end the occupation of their land”, the movement said in a statement.

In late May, Spain, Ireland, and Norway officially recognised the State of Palestine, stating they saw the move as a step towards peace in the region. 

Israeli authorities accused the European trio of “rewarding terrorism”.

The Gaza war was sparked by Hamas’s October 7 attack on southern Israel, which resulted in the deaths of 1,194 people, mostly civilians, according to an AFP tally based on Israeli official figures. 

Militants also took 251 hostages, 116 of whom remain in Gaza, including 41 the army says are dead.

Israel’s retaliatory offensive has killed at least 37,431 people in Gaza, also mostly civilians, according to the territory’s health ministry.

Israel is a major arms supplier to Armenia’s arch-foe neighbour Azerbaijan, with which Yerevan had been locked in a decades-long territorial dispute over the Nagorno-Karabakh region that Baku recaptured last year from Armenian separatists. 

Bank of America, Citigroup, Goldman Sachs, and JPMorgan Chase all had a “shortcoming” in their resolution plans, also known as “living wills”, which detail their bankruptcy plans in the event of failure or “material financial distress,” the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) said in a statement. 

The FDIC went even further than the Fed in its analysis of Citigroup’s plans, considering them to contain a “deficiency” which could undermine the plan’s feasibility. 

Under the rules of the review, because the two agencies did not agree on Citigroup’s living will, it remains listed as a “shortcoming”, meaning that it does not need to submit a new plan immediately. 

But it still raises questions about the bankruptcy plans at the US banking giant, which was the only US lender out of the eight considered to be global systemically important banks (G-SIBs) that was found to have shortcomings during the previous review, published in 2022.

Under the terms of the resolution plan review, the four US G-SIBs identified must address their shortcomings in the next resolution plans, due by July 1, 2025. 

Asian markets mostly fell Friday following a broadly negative lead from Wall Street, where tech giants led a sell-off on profit-taking, while traders are on intervention watch as the yen retreats back towards a three-decade low.

A batch of worse-than-forecast US data provided further signs that the world’s number one economy was softening, but that was not enough to help push the S&P 500 and Nasdaq to record highs.

The readings showed more people claiming for unemployment benefit than estimated, housing starts falling and a key gauge of business confidence for June well down from May.

Minneapolis Fed boss Neel Kashkari said it could take a year or two to bring inflation back down to the central bank’s two percent target, echoing his colleagues’ warnings that they wanted to take their time before cutting borrowing costs.

The economic figures boosted interest rate cut hopes but were overshadowed by losses in market titans including Nvidia, Apple and Microsoft who have spearheaded the recent tech-fuelled rally in US markets.

The 3.5 percent drop in Nvidia meant it relinquished its crown as the world’s most valuable publicly traded firm to Microsoft, which it had overtaken earlier this week.

Asian traders tracked the weak lead, with Tokyo, Hong Kong, Shanghai, Seoul, Wellington, Taipei, Mumbai and Manila all down. Singapore, Sydney, Bangkok and Jakarta edged up.

“The selloff in US tech overnight is weighing,” Chamath de Silva, of BetaShares Holdings, said. “We’ve also had some broad (dollar) strength in recent sessions, which often weighs on Asian equities.”

London, Paris and Frankfurt all opened lower, after chalking up healthy gains Thursday.

Attention is once again being given to the yen as it edges back towards the 34-year low against the dollar, which led to a suspected intervention by Japanese authorities in April.

Fading hopes that the Fed will cut interest rates more than once this year — if at all — have pushed the dollar up against its peers in recent weeks, with the yen taking a hit owing to the Bank of Japan’s refusal to tighten monetary policy quicker.

While BoJ is expected to announce further normalisation measures at its next meeting, the big difference in yields between the two central banks means investors are sticking with US assets for now.

The yen was barely moved Friday, a day after weakening to around 159 per dollar from 157.80.

That led top currency official Masato Kanda to repeat that the government was ready to act when appropriate and movements were too quick — he said this year that a 10-yen move in either direction was considered too much.

Authorities are suspected to have intervened when the Japanese unit fell past 160 to the dollar two months ago.

However, analysts have said interventions had little long-term impact.

And Monex’s Helen Given added: “I’m more and more convinced that currency officials are giving up on the yen.

“The yield differential is just too much to overcome right now, and with the US now only eyeing one cut this year it’s not going to materially improve anytime soon.”

– Key figures around 0715 GMT –

Tokyo – Nikkei 225: DOWN 0.1 percent at 38,596.47 (close)

Hong Kong – Hang Seng Index: DOWN 1.5 percent at 18,057.43

Shanghai – Composite: DOWN 0.2 percent at 2,998.14 (close)

London – FTSE 100: DOWN 0.1 percent at 8,266.80

Euro/dollar: UP at $1.0711 from $1.0705 on Thursday

Euro/pound: UP at 84.63 pence from 84.56 pence

Dollar/yen: UP at 158.98 yen from 158.91 yen 

Pound/dollar: UP at $1.2659 from $1.2657

West Texas Intermediate: DOWN 0.2 percent at $81.16 per barrel

Brent North Sea Crude: DOWN 0.2 percent at $85.54 per barrel

New York – Dow: UP 0.8 percent at 39,134.76 (close)

While annual inflation slowed in May to a near three-year low of 2.0 percent, matching the central bank’s target, the BoE had been expected to keep the rate at 5.25 percent ahead of the national vote on July 4.

“It’s good news that inflation has returned to… target,” Bank of England governor Andrew Bailey said following the regular policy meeting.

“We need to be sure that inflation will stay low and that’s why we’ve decided to hold rates at 5.25 percent for now.”

– August cut? –

Analysts said there was strong chance that the BoE would cut at its next meeting in August following a series of hikes that have help bring down UK inflation from the highest level in more than four decades.

Prospects of a looming decrease weighed on the British pound, while London’s top-tier FTSE 100 stocks index rose in early afternoon trading.

Shortly before the latest BoE announcement, the Swiss National Bank unveiled a second straight interest-rate cut, after becoming in March the first Western central bank to slash borrowing costs that had been raised to battle inflation. Norway froze rates Thursday.

Analysts had widely expected no change to the BoE rate owing to UK services inflation remaining well above two percent and with energy bills set to rise towards the end of the year.

Seven members of the bank’s Monetary Policy Committee (MPC) voted to hold the rate steady, while two wanted a cut — the same outcome as the last meeting in May.

The BoE noted that for some members who voted for no change this time around, the decision was “finely balanced”.

This indicated “that they could be swayed in August”, noted Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“Bets have increased now that a rate cut will come in August, but financial markets are still not fully pricing in a rate cut until September,” she added.

– ‘Election not relevant’ –

Analysts added that the UK central bank would have wanted to avoid a decision Thursday that could have been perceived as taking sides during a high-profile election campaign.

However, the BoE stressed that its announcement was in no way influenced by politics.

The MPC “noted that the timing of the general election… was not relevant to its decision”, said minutes of the meeting.

The BoE’s main role is to keep the UK annual inflation rate close to two percent.

Having hit the target last month, according to official data Wednesday, analysts argued that the news had handed a much-needed boost to embattled Prime Minister Rishi Sunak.

They added, however, that the inflation slowdown was unlikely to prevent his Conservatives from losing the election to the main opposition Labour party. 

Holding the interest-rate steady was viewed as dealing another blow to Sunak’s faltering campaign. 

Keir Starmer’s Labour has consistently led the Conservatives by around 20 points in opinion polls for nearly two years.

Elevated interest rates have worsened a UK cost-of-living squeeze because they increase borrowing repayments, thereby cutting disposable incomes and crimping economic activity.

The BoE began a series of rate hikes in late 2021 to combat inflation, which rose after countries emerged from Covid lockdowns and accelerated after the invasion of Ukraine by key oil and gas producer Russia.

UK annual inflation peaked at 11.1 percent in October 2022 — the highest level in 41 years — weighing on Britain’s economy.

Gross domestic product stagnated in April after the country exited recession in the first quarter of the year, as businesses and households weathered the cost-of-living crunch.

BoE policy on rates mirrors that of the US Federal Reserve, which says it is not yet ready to cut. It contrasts, however, with the European Central Bank, which has started to reduce borrowing costs.

The annual Lujiazui Forum, themed “promoting world economic growth with high-quality financial development,” runs from Wednesday to Thursday in Shanghai.

On Wednesday, government officials delivered speeches at the forum, pledging to advance China’s high-standard financial opening-up and improve the financial sector’s support for the real economy, especially new quality productive forces.

Following are the key points of their speeches:

— Deepening reform of STAR market

China will roll out eight new measures to deepen the reform of its Nasdaq-style Science and Technology Innovation Board (STAR) market, according to China Securities Regulatory Commission Chairman Wu Qing.

The measures include giving priority to the listing of enterprises making breakthroughs in new industries, new business patterns and new technologies.

“Only by creating a favorable atmosphere that encourages innovation and tolerates failure can we promote the development of new quality productive forces,” Wu said.

Efforts will also be made to reform the pricing mechanisms for initial public offerings, improve the financing of listed companies on the STAR board, optimize the trading mechanisms, strengthen monitoring, forestall market risks, as well as encourage merger, acquisition and restructuring, Wu said.

— Keeping monetary policy accommodative

China will continue to keep its monetary policy accommodative as well as strengthen counter-cyclical and inter-temporal adjustments, said Pan Gongsheng, governor of the People’s Bank of China (PBOC).

The move will help facilitate economic recovery and create a favorable monetary and financial environment for economic and social development.

Pan said the PBOC has adopted a variety of monetary policy instruments, such as cutting the required reserve ratio and policy rates, and bringing down market rates such as the loan prime rates, which created a favorable monetary and financial environment for the high-quality development of the economy.

— Facilitating foreign investors investing in domestic securities

China will simplify and improve fund management for the dollar-denominated Qualified Foreign Institutional Investor scheme (QFII) and its yuan-denominated sibling, RQFII, said Zhu Hexin, deputy governor of the PBOC.

The QFII and RQFII programs are designed to allow overseas investors to invest in China’s domestic capital market.

“We are revising relevant fund management regulations,” said Zhu, who is also head of the State Administration of Foreign Exchange.

He added that China will also support domestic institutions in making cross-border investments.

— Promoting insurance sector’s development

Accelerating the development of the insurance industry will help improve China’s financial market structure, optimize the allocation of financial resources, and enhance the stability of the financial system, said Li Yunze, head of the National Financial Regulatory Administration.

Li implied the sector’s growth potentials, saying that China’s insurance industry assets only accounted for 7 percent of the country’s total financial industry assets, while the international average was around 20 percent.

“As people’s demands for elderly and medical care as well as the need to support others in society are constantly increasing, demand for diversified insurance protection is also rapidly rising,” he said.

With a view to boosting the development of new quality productive forces, Li said the insurance sector should beef up support for strategic emerging industries, advanced manufacturing, new infrastructure and venture capital.

Noting that opening up is an important driving force for the reform and development of China’s financial industry, Li said that China sincerely welcomes more foreign institutions and long-term capital to come to China for businesses.

Asian markets were mixed Thursday as investors tried to gauge the outlook for US interest rates, while also keeping tabs on developments in France as it heads for crucial elections.

With Wall Street closed, there were few catalysts to drive buying, though sentiment has been buoyed this week by recent data indicating the world’s top economy is slowing gradually, giving the Federal Reserve some freedom to ease monetary policy.

Traders are closely following the utterances of US central bank officials on their outlook for rates, with most warning that while inflation was on a downward trajectory, they wanted to see more evidence before committing to a cut.

Analysts say this means there will be two reductions at most, with many predicting just one this year — in line with the Fed’s “dot plot” gauge released last week.

While there is a level of uncertainty over rates, equity markets have enjoyed plenty of support, with dealers optimistic that borrowing costs will come down eventually as prices are brought under control, the economy eases and the jobs market loosens.

However, there is some concern that the rally, which has been largely driven by a voracious appetite for tech and all things related to artificial intelligence, could see a correction at some point.

Chris Weston at Pepperstone Group in Melbourne said there is some talk about what could cause this, warning that “all is not so rosy under the hood, where index market breadth has been poor, with participation underwhelming, suggesting the rally has been built on a shaky foundation”.

“It has simply been a tough trade to bet against AI in its various guises — so until we lose these behemoths then pullbacks at an index level will likely be shallow and well-supported.”

Shares in Tokyo, Seoul, Wellington, Taipei, Mumbai and Jakarta edged up but Hong Kong, Shanghai, Sydney, Bangkok, Manila and Singapore were in the red.

London was flat at the open and Frankfurt was up.

Paris opened higher as well as traders eyed developments in France ahead of polls at the end of the month, with President Emmanuel Macron’s centrist alliance in third place behind far-right and left parties.

There are fears for the French economy — the European Union’s second biggest — as both leading parties have pledged to spend huge sums at a time when the country needs to make cuts, potentially putting Paris on course for a standoff with the bloc.

On Wednesday, the European Union’s executive arm reprimanded France for breaching Brussels’ budget rules — the first time it has been put in the sin bin since Macron rose to power in 2017.

Investors are also awaiting a Bank of England policy decision later in the day, when it is expected to stand pat on rates at a 16-year high owing to ongoing price risks, analysts said.

That is despite data Wednesday showing headline consumer inflation had finally come down to the bank’s two percent target. 

Julian Jessop, at the Institute of Economic Affairs think tank, added that officials would likely sit tight because services inflation remained well above two percent, while energy bills are set to rise towards the end of the year.

– Key figures around 0715 GMT –

Tokyo – Nikkei 225: UP 0.2 percent at 38,633.02 (close)

Hong Kong – Hang Seng Index: DOWN 0.5 percent at 18,331.52

Shanghai – Composite: DOWN 0.4 percent at 3,005.44 (close)

London – FTSE 100: FLAT at 8,207.28 

Euro/dollar: DOWN at $1.0731 from $1.0745 on Wednesday

Euro/pound: UP at 84.47 pence from 84.44 pence

Dollar/yen: UP at 158.12 yen from 157.90 yen 

Pound/dollar: DOWN at $1.2705 from $1.2726

West Texas Intermediate: DOWN 0.2 percent at $81.42 per barrel

Brent North Sea Crude: UP 0.1 percent at $85.17 per barrel

New York – Dow: Closed for a public holiday

Li Yunze, head of the National Financial Regulatory Administration, said that from the perspective of financial structure, China’s insurance industry assets only accounted for 7 percent of the country’s total financial industry assets, while the international average was around 20 percent, indicating the sector’s growth potentials.

In a speech that focused on promoting the insurance sector’s high-quality development to push forward China’s modernization, delivered Wednesday at the ongoing Lujiazui Forum in Shanghai, Li said that in the process of building a modern socialist country in all respects, the insurance industry was facing a historic opportunity for high-quality development and would play an irreplaceable role.

“As people’s demands for elderly and medical care as well as the need to support others in society are constantly increasing, demand for diversified insurance protection is also rapidly rising,” Li said.

He said that due to the continuous expansion of the country’s middle-income group and the high savings rate of residents, insurance businesses ranging from old-age to health insurance had broad prospects for growth.

Each permanent resident of Macau has about MOP100,814 (US$12,567) in their non-mandatory Central Provident Fund account, according to the manager of the Social Security Fund.

In a media briefing on Wednesday, Chan Pou Wan, vice-president of the fund, said the government had injected MOP31.8 billion into the government-initiated provident fund since it was set up in 2010.

Each account holder has received MOP84,000 and has earned about MOP16,814 in interest, she pointed out.

Under the city’s two-tier social security mechanism, eligible senior citizens are entitled to 13 monthly payments per year, with each payment amounting to MOP3,740.

In addition, every permanent resident has a non-mandatory central provident fund account. The Macao government would make a cash injection into this account if there was a budget surplus.

As many as 389,346 residents are eligible for the 2024 payment of MOP7,000.

Meanwhile, 9,178 residents who meet the eligibility criteria for the first time this year are eligible for a one-time incentive payment of MOP10,000.

A total of MOP 2.8 billion has been earmarked for 2024.

The MOC said in a statement on Tuesday that in order to further relax the restrictions on strategic investment by foreign investors in listed companies and innovate regulatory methods, it will revise the administrative measures accordingly.

This forms part of the ministry’s 2024 plan to refine a raft of administrative rules and measures. These include establishing administrative measures for the circulation of refined oil, revising administrative measures for the operation of catering businesses, and establishing administrative measures aimed at promoting the high-quality development of China’s foreign contracted projects, the MOC said.

According to the 2024 government work report, China seeks to strengthen services for foreign investors and make it a favored destination for foreign investment.

The country will also expand the Catalog of Encouraged Industries for Foreign Investment and encourage foreign-funded enterprises in China to reinvest in the country, pledging national treatment for foreign-funded enterprises, according to the government work report.

MOC data showed that in the first quarter of this year, the number of newly established foreign-invested enterprises in China hit 12,000, up 20.7 percent year on year. During the same period, foreign direct investment remained at a high level, at 301.67 billion yuan (42.39 billion U.S. dollars).

Asian equities were mixed on Wednesday following yet another record day in New York fuelled by data that boosted US interest rate cut hopes, with expectations tempered by cautious comments from Federal Reserve officials.

In Europe, London fell at the open even after data showed UK inflation had eased to the Bank of England’s two percent target.

The below-forecast May US retail sales figures pointed to signs of fatigue among American consumers — a crucial driver of growth — suggesting the world’s number one economy was slowing and giving the central bank room to ease monetary policy.

The reading helped to slightly offset a surprisingly large jump in US jobs creation that pointed to a still-resilient labour market despite a long-running campaign of rate hikes and stubbornly high inflation.

The S&P 500 and Nasdaq clocked up more records, driven again by a surge in demand for Big Tech, with chip giant Nvidia overtaking Microsoft to become the world’s most valuable publicly traded company.

Nvidia, a titan in the artificial intelligence sector, hit a market capitalisation of $3.349 trillion after cruising nearly 3,500 percent higher in the past five years. And one analyst predicted it could even hit $5 trillion in the coming year, according to Bloomberg News.

Shares in Hong Kong piled on nearly three percent after a recent run of weakness, with analysts saying investors were hopeful for fresh market-friendly measures to be announced at a forum in China being attended by securities regulator chief Wu Qing and central bank boss Pan Gongsheng.

“There’s anticipation of positive policies and expectations of reforms for banks regarding shareholder returns. I suspect the policies could be more relevant for Hong Kong-listed shares,” said Billy Leung, at Global X ETFs.

Tokyo, Singapore, Seoul, Mumbai, Jakarta and Taipei also rose but Shanghai, Sydney, Manila, Bangkok and Wellington edged down.

London opened slightly lower. Investors were unfazed by news that inflation had hit two percent in May, in line with expectations. The pound was barely moved.

Paris and Frankfurt were also down.

“The (retail sales) data clearly reflects a shift in US consumer behaviour, which is becoming more conservative, feeling the pinch from higher interest rates, curbing wage increases and a depletion of savings,” said Rodrigo Catril of National Australia Bank.

“Importantly, too, we expect more of the same over coming quarters.”

The Fed’s so-called “dot plot” guidance to interest rates showed officials see just one cut before January, down from three predicted in March, and while some observers are optimistic for two, or even three, decision-makers remain reluctant.

On Tuesday, Fed governor Adriana Kugler said the policy was “sufficiently restrictive to help cool the economy and bring inflation back toward 2 percent without a sharp contraction in economic activity or a significant deterioration of the labour market”.

And St. Louis Fed boss Alberto Musalem added that he needed to see a “period of favourable inflation, moderating demand and expanding supply” before he could consider easing.

“These conditions could take months, and more likely quarters to play out,” he warned.

Key figures around 0810 GMT –

Tokyo – Nikkei 225: UP 0.2 percent at 38,570.76 (close)

Hong Kong – Hang Seng Index: UP 2.9 percent at 18,430.39 (close)

Shanghai – Composite: DOWN 0.4 percent at 3,018.05 (close)

London – FTSE 100: DOWN 0.2 percent at 8,175.10

Euro/dollar: DOWN at $1.0736 from $1.0743 on Tuesday

Euro/pound: DOWN at 84.36 pence from 84.50 pence

Dollar/yen: DOWN at 157.76 yen from 157.85 yen 

Pound/dollar: UP at $1.2725 from $1.2711

West Texas Intermediate: DOWN 0.3 percent at $81.35 per barrel

Brent North Sea Crude: DOWN 0.2 percent at $85.15 per barrel

New York – Dow Jones: UP 0.2 percent at 38,834.86 (close)