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China orders small banks to curtail wealth management business, sources say

China’s banking regulator has given small banks a 2026 deadline to stop selling wealth management products unless they have a separate wealth subsidiary in a bid to curb financial risks, three people with knowledge of the matter told Reuters. A 2018 regulation and previous instructions had required banks to set up a wealth management subsidiary dedicated to such products, but the regulator did not give a timeline for when banks had to comply. In addition to stipulating a deadline, the latest instruction also requires some small banks to reduce their ...

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Switzerland makes second interest rate cut as major economies diverge on monetary policy easing

The Swiss National Bank on Thursday trimmed its key interest rate by 25 basis points to 1.25%, continuing cuts at a time when sentiment over monetary policy easing remains mixed among major economies. Two thirds of economists polled by Reuters had anticipated the SNB would decide in favor of a 25-basis-point-cut to 1.25%. The Swiss franc weakened in the wake of the announcement, with the Euro gaining 0.3% and the U.S. dollar up 0.5% against the Swiss currency at 8:55 a.m. London time. Following the Thursday decision, the Swiss central ...

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India economic inequality to persist despite roaring GDP growth

The Indian economy is likely to remain the fastest-growing major one in coming years, but a majority of independent economists and policy experts polled by Reuters are not confident it will make any difference in narrowing stark economic inequality. Despite over 8% economic growth last fiscal year and a roaring stock market in Mumbai that is easily one of the world’s most expensive, New Delhi still distributes free food grains to more than 800 million of its 1.4 billion people. Prime Minister Narendra Modi, sworn in for a third term ...

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Germany’s Ifo slightly raises 2024 GDP forecast, says progress slow

Germany’s Ifo institute slightly raised its 2024 forecast for economic growth in Europe’s top economy on Thursday, citing stronger consumer purchasing power and a recovery in global trade in goods and industrial production in the second half. Ifo raised its growth forecast to 0.4%, from 0.2% in March, which compares with the government’s spring projection of 0.3%. “We are slowly working our way out of the crisis. The emphasis is on slowly,” Ifo economist Timo Wollmershaeuser told a news conference. The German economy, which was the weakest performer among big ...

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Are you dreamscrolling? Three ways to avoid overspending

Beth Martin may be a designer in Charleston, South Carolina, but, in her head, she is in the south of France, touring a 1700s chateau. Real estate site Zillow is where Martin tends to take a break, procrastinate and wonder what she would buy if money were no object. “I’m not really going to buy all these things, whether it’s an $11 million house or a $30,000 vintage Hermes bag,” laughs Martin, 40. “But I do like to look at them. That’s my daydreaming.” Martin is hardly alone. There is ...

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Why France could be headed for a difficult return to reality

Another event in a chaotic campaign The election campaign for the parliamentary elections at the end of June is in full swing. It has already produced some major surprises, including the implosion of Les Républicains (LR) as several members – including the party’s president – have decided to rally to the cause of the far-right Rassemblement National (RN). Despite these turbulent times, the agenda for the European Semester was met, and as expected, the European Commission proposed that France be placed under the Excessive Deficit Procedure. For more details on ...

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France and six other countries face EU budget discipline measures

The European Commission said on Wednesday that France and six other countries should be disciplined for running budget deficits in excess of EU limits, with deadlines for reducing the gaps to be set in November. The move by the European Union’s executive arm is likely to constrain any plans for extra spending by the French government that emerges from a June 30-July 7 election. That would make it more difficult for the National Rally of Marine Le Pen, which leads in opinion polls, to deliver on promises of more public ...

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Stubborn UK services inflation not a Bank of England game-changer

For the first time since the spring of 2021, UK headline inflation is finally back to the 2% Bank of England target. It’s also a fall on April’s numbers, and we can point to areas like food, household goods and clothing which are all now contributing considerably less to inflation than just a few months ago. All of that is of course great news, but we think we’re probably towards the end of the disinflationary process for now. While headline CPI could conceivably drop another tenth of a percentage point ...

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EU countries agree 14th package of sanctions against Russia – diplomats

EU countries agreed a 14th package of sanctions against Russia over its war in Ukraine, diplomats said on Thursday, including a ban on transshipments of Russian liquefied natural gas (LNG). Belgium, which holds the European Union presidency until July 1, said on the X platform that the package “maximises the impact of existing sanctions by closing loopholes”. Source: Reuters (Reporting by Julia Payne; Editing by Kevin Liffey)

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Banks have a year to shift clearing from London to EU, Eurex says

A shift in chunks of euro derivatives clearing from London to European Union countries is now inevitable and banks should get ready, industry officials were told, but others warned the EU intervention would backfire. The EU approved a new law in February that will require banks and asset managers in the bloc to have an “active account” with a clearing house in the 27-member grouping for key contracts being cleared in London by ICE Clear and London Stock Exchange Group. The EU wants to directly supervise clearing worth trillions in ...

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The eurozone returns to fiscal prudency

The budget discipline holiday in Europe is over. While apparently the European Commission didn’t want to influence the European elections, it will now very likely affect the French national election campaign with the just-announced start of the so-called Excessive Deficit Procedures (EDP) for five eurozone countries and for Hungary and Poland outside of it. In the US, deficits continue to run between 6 and 7% of GDP, but the European Commission is tightening the screws on European countries. The EDP is part of the European Treaty and is not just ...

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G7 Summit talking points: From Ukraine and Gaza to the impact of AI

Every year, the leaders of the world’s seven largest economies meet to discuss economic and political issues at the Group of Seven, or G7, Summit. These annual events – attended by Canada, France, Germany, Italy, Japan, the UK and the US – are organized and hosted by a different member each time. For 2024, Italy has the presidency, and its summit has just drawn to a close. In a historic moment, Pope Francis became the first Pontiff to participate in the work of the G7. Leaders of other nations, including ...

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Business leaders see political instability as a threat to Europe

Europe must foster greater political stability, cut red tape and reduce energy price volatility to reverse falling foreign direct investment, EY said after a survey of business leaders. The more than 500 executives surveyed by the consulting firm ranked political instability, including upcoming elections, populism and polarisation as the second-biggest risk for Europe, trumped only by an increased regulatory burden. Europe has struggled economically for years on surging prices and the fallout from Russia’s war in Ukraine, fuelling populist sentiment that has lifted the far right in European Parliamentary elections ...

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Rare bulls in China property market stick to their bets

The few investment houses which are bullish on China’s property sector are holding on to their optimistic bets in defiance of a faltering stock market and a dominant view that Beijing’s latest support package was not enough. The positive calls, including from Citi and Bank of America, were made in the lead-up to easing measures announced on May 17, based on expectations the package would offer more than the piecemeal steps taken in the past two years. Authorities for the first time instructed local governments to buy unsold apartments through ...

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Indian debt expensive but rate cut clarity to trigger more buying, says Pictet

Indian debt is expensive compared to peers in other markets, a senior portfolio manager at Pictet Asset Management said, as she waits for clarity on interest rate cuts before adding more positions despite an “overweight” rating on Indian securities. Pictet, one of Europe’s largest fund managers, manages debt worth around $2.67 billion in its local currency emerging market fund. India is one of its top investment regions within Asia. “Even though we have an outright overweight, India overall is quite expensive,” said Sabrina Jacobs, senior client portfolio manager of Pictet’s ...

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