2025-05-20 09:20

LONDON, May 20 (Reuters) - The Bank of England's Prudential Regulation Authority clarified its expectations around business conducted within branches of international banks in Britain, introducing a new threshold around deposits covered by the UK's compensation scheme. The PRA said on Tuesday it was introducing a new indicative threshold of 300 million pounds ($401 million) of total retail and small business instant access deposits, saying beyond this it expected international banks to operate as subsidiaries rather than branches. Sign up here. "These changes will maintain the UK’s very open approach to international banking, while filling a gap we identified in our regime and increasing some thresholds to support competitiveness and growth," the PRA said, adding that the clarification was partly a response to lessons learned from the failure of Silicon Valley Bank in 2023. ($1 = 0.7478 pounds) https://www.reuters.com/world/uk/bank-englands-pra-clarifies-status-international-bank-branches-2025-05-20/

2025-05-20 09:01

MUMBAI, May 20 (Reuters) - The Indian rupee hovered in a thin band on Tuesday, wedged between a modest decline in the Chinese yuan and dollar sales from foreign banks, while dollar-rupee forward premiums extended their decline on the back of rising U.S. bond yields. The rupee was at 85.4025 against the U.S. dollar as of 11:15 a.m. IST, nearly unchanged from its close of 85.40 in the previous session. Sign up here. The dollar index was down 0.2% at 100.2, while the offshore Chinese yuan slipped to 7.22. Other regional currencies were mixed. Dollar-rupee forward premiums, meanwhile, eased on the back of an uptick in U.S. bond yields amid persistent concerns about the fiscal position of the world's largest economy. The 1-year dollar-rupee implied yield dipped to 2.04%, its lowest since March. The 1-year U.S. Treasury yield was a tad higher at 4.13%. Expectations of a deep policy easing cycle by the Reserve Bank of India alongside uncertainty about the quantum of rate cuts the Federal Reserve may deliver over 2025 have also weighed on dollar-rupee forward premiums. It's "quite likely that the 1-year (implied yield) dips below 2% and could find support near 1.90%," a trader at a Mumbai-based bank said. The 1-year implied yield has eased 35 basis points from its peak of 2.39%, hit earlier in the month, amid worries about weakness in the rupee when the India-Pakistan conflict had flared up. A cooling of the dollar-rupee overnight swap rate has also helped bring down dollar-rupee forward premiums, traders said. In the medium term, currency markets are likely to keep their focus on developments surrounding individual countries' trade negotiations with the U.S. President Donald Trump said last week that India had offered a trade deal that proposed "no tariffs" for American goods. https://www.reuters.com/world/china/rupee-flat-forward-premiums-stick-downtrend-us-bond-yields-rise-2025-05-20/

2025-05-20 08:25

SINGAPORE, May 20 (Reuters) - Japan's longest-dated government bond yields climbed to all-time highs on Tuesday, after a poor auction sparked a selloff in the bond market as worries about the country's fiscal health grow. The 30-year JGB yield soared 17 basis points to 3.14%, while the 40-year yield surged 15 bps to 3.6%. Sign up here. Following is some reaction from analysts: FRED NEUMANN, CHIEF ASIA ECONOMIST, HSBC, HONG KONG : "Rising debt levels in developed markets have become a growing concern in recent years, and the seeming lack of urgency about fiscal consolidation is leaving government bond investors increasingly jittery. "For the Bank of Japan, this may mean that it may have to slow its quantitative tightening, helping to dampen yields in the Japanese government bond market. There is only so much central banks can do, however, in reining in government yields, without undermining their policy independence. After years of generous spending and tax cuts, fiscal constraints are starting to bite. Japan is not alone in facing the need for budget consolidation, but volatility in other developed economies’ bond markets adds an extra layer of urgency to put the fiscal house in order." MASAYUKI KICHIKAWA, CHIEF MACRO STRATEGIST AT SUMITOMO MITSUI DS ASSET MANAGEMENT, TOKYO "Supply-demand conditions in the super-long sector are unstable. Growth expectations globally have recovered to some extent, leading to some recovery in BOJ rate hike expectations." "People expect the BOJ will continue to raise rates and reduce holdings of JGBs. Many investors are probably thinking, especially for super-long bonds, what yield level is consistent with a policy rate at, for example, 1.25% and no support from BOJ buying. We are in a process of finding that equilibrium. It's a process of trial and error." JPMorgan analysts in a research note "Domestic investors' demand for duration is structurally slowing down. The BOJ's reduction in bond purchases is steadily progressing, making it increasingly difficult to absorb duration risk in the market. While price formation without intervention from the MoF and the BoJ is ideal, some form of action is needed to stop the collapse of super-long JGBs at present, or there could be further super-long bond shocks triggered by downgrades or additional fiscal measures." FRANCES CHEUNG, HEAD OF FX & RATES STRATEGY, OCBC, SINGAPORE "The 20Y JGB auction did not go very well and there has been spillover onto long end bonds in the secondary market. Recent market performance and the gauge on demand for JGBs will be inputs to be weighed, ahead of BOJ’s interim assessment of its QT plan in June. Decision is to be made as to whether to stick with its plan to further reduce the monthly JGB purchase amounts." HIROFUMI SUZUKI, CHIEF CURRENCY STRATEGIST, SUMITOMO MITSUI BANKING CORP, TOKYO "Amid the global trend of rising long-term interest rates, JGBs are no exception and are facing upward pressure on yields. Regarding the JGB market, market participants are currently in the process of assessing demand during each auction, and stability remains elusive. I think that the upward pressure is likely to persist for the time being." https://www.reuters.com/business/reaction-japanese-super-long-bond-yields-hitting-record-highs-2025-05-20/

2025-05-20 08:02

BEIJING, May 20 (Reuters) - Chinese President Xi Jinping urged relevant departments to work closely together to strengthen water allocation to ensure water supply for urban and rural residents and agricultural irrigation needs, the Xinhua news agency reported on Tuesday. Xi made the remarks during an inspection tour in central China's Henan province. Sign up here. https://www.reuters.com/business/environment/chinas-xi-urges-efforts-ensure-water-supply-amid-drought-state-media-reports-2025-05-20/

2025-05-20 07:58

TANGERANG, Indonesia, May 20 (Reuters) - Indonesian state energy firm PT Pertamina on Tuesday signed 10 gas sales agreements with domestic firms, including state gas utility PT Perusahaan Gas Negara (PGN) and its affiliates, and with state power firm PT Perusahaan Listrik Negara (PLN) and its units. The agreements were signed at an industry conference held by Indonesia Petroleum Association and included a deal to supply 11 billion British thermal units per day (BBTUD) of gas for industry clients of PGN in North Sumatra. Sign up here. Pertamina, through one of its units, would also supply 36 BBTUD gas to PLN to generate electricity in Tanjung Batu and Bontang. https://www.reuters.com/business/energy/indonesia-pertamina-signs-10-gas-sales-agreements-2025-05-20/

2025-05-20 07:57

DUBAI, May 20 (Reuters) - Qatar's offer to gift U.S. President Trump a Boeing BA.N 747-8 airplane is a "normal thing that happens between allies," Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani said on Tuesday at an economic forum held in Doha. Sign up here. https://www.reuters.com/business/aerospace-defense/qatars-offer-747-aircraft-trump-is-normal-thing-that-happens-between-allies-pm-2025-05-20/