2024-04-18 11:26

BEIJING, April 18 (Reuters) - There is still room for China's central bank to take steps to support the economy, but efforts are needed to prevent cash from sloshing around the banking system as real credit demand weakens, senior officials at the bank said on Thursday. The world's second-biggest economy grew faster than expected in the first quarter, but several March indicators, such as property investment, retail sales and industrial output showed that domestic demand remains frail, weighing down momentum. The People's Bank of China (PBOC) has pledged to step up policy support for the economy this year and promote a rebound in prices. "A series of monetary policy measures introduced earlier are gradually taking effect, and the economy continues to rebound with a good start," Zhu Hexin, a deputy governor of the PBOC, told a news conference on Thursday. "There is still room for monetary policy going forward, and we will closely watch the policy effectiveness, economic recovery, and achievement of goals, and make good use of reserve tools at the appropriate time." China's central bank cautioned on Thursday against a "one-sided" pursuit of credit expansion after data showed a slowdown in bank lending, vowing to prioritise the quality of credit over size and move to revitalising existing loans. Zou Lan, head of the PBOC's monetary policy department, told the briefing that efforts should be made to prevent the accumulation of "idle funds" as some banks extend more loans than actually needed and some firms use low-cost loans to buy wealth management products or lend to other firms. "Credit demand has weakened compared to previous years, and the credit structure is also being optimised and upgraded," Zou said, adding that China's money supply growth could slow down and people should not simply look at year-on-year growth. The central bank has in recent weeks delivered modest cuts in banks' reserve requirement ratio (RRR) and interest rates as part of broad measures to support the economy, with more policy easing expected in the coming months. RATES CANNOT BE TOO LOW Real interest rates, when adjusted for producer prices, remain elevated for some industries - including ferrous metal producers, but high borrowing costs will help promote capacity control and inventory reduction among firms, Zou said. "We should avoid weakening the driving force of structural adjustments and prevent excessively low interest rates," he said. New bank lending in China rose less than expected in March from the previous month, while broad credit growth hit a record low, boosting the case for the central bank to roll out more stimulus steps to help achieve an ambitious growth target. China has set an economic growth target for 2024 of around 5%, which many analysts say will be a challenge to achieve without much more stimulus. The central bank said 2024 growth of money supply and total social financing - a broad measure of credit and liquidity in the economy - would match expected goals for economic growth and inflation. Analysts polled by Reuters expected the central bank to cut the banks' reserve requirement ratios (RRR) by 25 basis points (bps) in the third quarter, following a 50-basis point cut earlier this year, which was the biggest in two years. China's central bank might include the buying and selling of treasury bonds in its policy tool reserve in future, Financial News - a publication backed by the PBOC - quoted experts as saying. China has the conditions to keep its foreign exchange market stable, Zhu said. China's "goal and determination in keeping the yuan exchange rate basically stable will not change," he added. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/china/chinas-cbank-says-has-policy-room-credit-demand-slows-2024-04-18/

2024-04-18 10:47

BEIJING, April 18 (Reuters) - Two people were killed and four injured in an explosion at a chemical plant in northwest China's Ningxia region, state media outlet Xinhua reported on Thursday. The accident occurred at the site of Ningxia Baofeng Energy (600989.SS) New Tab, opens new tab, a Shanghai-listed group that produces chemicals from coal. Baofeng Energy did not immediately respond to Reuters' request for comment. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/china/two-killed-explosion-chemical-plant-chinas-ningxia-2024-04-18/

2024-04-18 10:04

A look at the day ahead in U.S. and global markets from Mike Dolan A sharp retreat in oil prices and a rare joint warning from major economies against excessive dollar strength have helped calm restive markets just as Big Tech earnings start to hit. A volatile start to April looked like getting out of hand this week as a combination of stern Federal Reserve warnings about stubborn inflation and geopolitical stress sent the dollar rocketing and seeded four straight daily losses for Wall St stocks. But there's been some respite into Thursday's session. Despite the Middle East tensions and punchy U.S. economic readouts, U.S. crude prices turned tail and have now recoiled some 6.5% from Friday's 2024 highs to levels last seen before Israel's attack on Iran's Syrian consulate on April 1. Surging U.S. crude inventories, poor economic numbers from China for March and a U.S. warning about releasing more of its Strategic Petroleum Reserve if necessary have all reined in oil. And it's retreat eases at least some of the inflation anxiety irking bond markets and the Fed and U.S. Treasury yields have fallen back in tandem. Having briefly topped 5% this week, two-year Treasury yields have dropped 10 basis points since. The dollar (.DXY) New Tab, opens new tab, similarly, has come off the boil - partly after a warning shot from Japan, South Korea and the United States about potentially destabilising currency moves in Asia. With markets keeping an eye on G7 and G20 finance chiefs in Washington at the International Monetary Fund meetings, the rare three-way statement agreed to "consult closely" on FX markets, acknowledging concerns from Tokyo and Seoul over their currencies' recent sharp declines. The dollar/yen pair fell back slightly from 34-year highs, although it remains stuck above 154, and South Korea's won backed away from its weakest in almost 18 months. Easing market concerns that China may allow its yuan to weaken into a competitive regional exporting scramble too, China's deputy central bank governor Zhu Hexin separately on Thursday restated Beijing's "determination in keeping the yuan exchange rate basically stable." The steadier bond and currency complex helped soothe edgy stock markets around the world as first quarter corporate earnings stream in and attention switches to major tech sector updates. After Dutch chip equipment firm ASML (ASML.AS) New Tab, opens new tab skidded more than 7% on its earnings miss on Wednesday, there was better news today from Taiwan's chipmaking giant TSMC (2330.TW) New Tab, opens new tab as it reported a beat that rides the wave of demand related to the artificial intelligence boom. Streaming firm Netflix (NFLX.O) New Tab, opens new tab kicks off the U.S. Big Tech reporting season later on Thursday. The upshot is U.S. stock futures are slightly firmer ahead of the bell today, but the VIX (.VIX) New Tab, opens new tab volatility gauge remains elevated above 18 after the four daily losses for the S&P500 in a row and cumulative losses of almost 5% from the record high set late last month. Financial stocks have had a rough week, with heavy earnings-related share price swoons for Travelers (TRV.N) New Tab, opens new tab and U.S. Bancorp (USB.N) New Tab, opens new tab on Wednesday. In the central banking world, the Fed warnings this week about keeping interest rates restrictive for longer were not matched by its European peers. European Central Bank Vice President Luis de Guindos said the ECB has made it "crystal clear" that interest rates could be cut in June - even if policy decisions beyond that remain up in the air. Elsewhere, Bitcoin steadied after a one-month slide of almost 20% took it to 6-week lows below $60,000 on Wednesday - with this weeks 'halving' event seen as largely priced in already. Key diary items that may provide direction to U.S. markets later on Thursday: * US corporate earnings: Netflix, Blackstone, Comerica, PPG, Intuitive Surgical, DR Horton, March & McLennan, Snap-On, KeyCorp, Elevance Health, Genuine Parts * Philadelphia Federal Reserve's April business survey, US March existing home sales, weekly jobless claims * G20 finance ministers and central bankers gather at International Monetary Fund's Spring meeting in Washington * New York Federal Reserve President John Williams, Fed Board Governor Michelle Bowman and Atlanta Fed chief Raphael Bostic speak; European Central Bank vice-president Luis de Guindos presents ECB annual report to European Parliament, ECB policymakers Isabel Schnabel Mario Centeno, Gediminas Šimkus and Boris Vujcic all speak; Bank of England policymaker Megan Greene speaks * US Treasury sells 5-year inflation-protected notes, 4-week bills Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-04-18/

2024-04-18 08:48

Vehicles submerged in water on roads abandoned Flooded roads bring Dubai to near standstill Airport operations remain disrupted DUBAI, April 18 (Reuters) - Dubai, a city in the desert proud of its futuristic gloss, was on Thursday busy clearing its waterclogged roads and drying out flooded homes two days after a record storm saw a year's rain fall in a day. Dubai International Airport, a major travel hub, struggled to clear a backlog of flights and many roads were still flooded in the aftermath of Tuesday's deluge. The rains were the heaviest experienced by the United Arab Emirates in the 75 years that records have been kept. They brought much of the country to a standstill and caused significant damage. Flooding trapped residents in traffic, offices and homes. Many reported leaks at their homes, while footage circulated on social media showed malls overrun with water pouring from roofs. Traffic remained heavily disrupted. A highway through Dubai was reduced to a single lane in one direction, while the main road that connects Dubai with the capital Abu Dhabi was closed in the Abu Dhabi direction. "This was like nothing else. It was like an alien invasion," Jonathan Richards, a Dubai resident from Britain told Reuters. "I woke up the other morning to people in kayaks with pet dogs, pet cats, suitcases all outside my house." Another resident, Rinku Makhecha, said the rain swamped her freshly renovated house she moved into two weeks ago. "My entire living room is just like ... all my furniture is floating right now," she said. In Dubai's streets, some vehicles, including buses, could be seen almost entirely submerged in water. Long queues formed at petrol stations. Dubai airport had yet to resume normal operation after the storm flooded taxiways, forcing flight diversions, delays and cancellations. Dubai Airports Chief Operating Officer Majed Al Joker told Al Arabiya TV he expected Dubai International Airport to reach 60-70% capacity by the end of Thursday and full operational capacity within 24 hours. The airport struggled to get food to stranded passengers with nearby roads flooded and overcrowding limited access to those who had confirmed bookings. RETURNING SUPPLIES The storm, which hit neighbouring Oman on Sunday, pounded the UAE on Tuesday, with 20 reported dead in Oman and one in the UAE. While some roadways into hard-hit communities remain flooded, delivery services across Dubai, whose residents are used to ordering everything at the click of a mouse, slowly began returning to the streets. Rains are rare in the UAE and elsewhere on the Arabian Peninsula, which is typically known for its dry desert climate. Summer air temperatures can soar above 50 degrees Celsius. Following Tuesday's events, questions were raised whether cloud seeding, a process that the UAE frequently conducts, could have caused the heavy rains. But climate experts blame global warming for such extreme weather events. Researchers anticipate that climate change will lead to heightened temperatures, increased humidity and a greater risk of flooding in parts of the Gulf region. Countries like the UAE where there is a lack of drainage infrastructure to cope with heavy rains can suffer the most. A UAE government agency that oversees cloud seeding - a process of manipulating clouds to increase rainfall - denied conducting any such operations before the storm. President Sheikh Mohammed bin Zayed Al Nahyan said in a statement he had ordered authorities to assess the damage and provide support to families impacted by the storm. Dubai's Crown Prince Sheikh Hamdan bin Rashid Al Maktoum said on X that the safety of citizens, residents and visitors was the utmost priority. "At a meeting with government officials in Dubai, we set directives to prepare comprehensive plans in response to natural crises' such as the unexpected current weather conditions," he said. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/middle-east/flooded-uae-counts-cost-epic-rainstorm-airport-still-facing-disruptions-2024-04-18/

2024-04-18 08:26

DUBAI, April 18 (Reuters) - The United Arab Emirates was still grappling on Thursday with the aftermath of a record-breaking storm this week that brought much of the country to a standstill. In Dubai, operations at the airport, a major travel hub, remain disrupted after Tuesday's storm flooded the runway, resulting in flight diversions, delays and cancellations. The airport said on Thursday morning it had resumed receiving inbound flights at Terminal 1, used by foreign carriers, but that flights continue to be delayed and disrupted. Emirates, the single largest carrier at the airport, said it would resume checking-in passengers in Dubai at 9 a.m. (0500 GMT) on Thursday, delaying the restart from midnight by nine hours. The airport struggled to get food to stranded passengers with nearby roads blocked by flood waters, and because of overcrowding limited access to those who had confirmed bookings. The storm, which hit neighbouring Oman on Sunday, pounded the UAE on Tuesday, flooding roads and causing hours-long gridlock as rainwater inundated homes. One person was reported dead in the UAE and 20 in Oman. Flooding trapped residents in traffic, offices and homes as the UAE recorded its heaviest rains in the 75 years that records have been kept, authorities said. Authorities have also told government employees and students to stay home while waterlogged roads are cleared. Climate experts say rising temperatures caused by human-led climate change are leading to more extreme weather events around the world, such as the storm that struck the UAE and Oman. "It's likely that the storm was kind of supercharged by climate change because there's just more moisture available in the air for any storm system to then precipitate out," said Colleen Colja, a climate scientist at Imperial College London. Researchers anticipate that climate change will lead to heightened temperatures, increased humidity and a greater risk of flooding in parts of the Gulf region. The problem can be worsened in countries like the UAE where there is a lack of drainage infrastructure to cope with heavy rains. A UAE government agency that oversees cloud seeding - a process of manipulating clouds to increase rainfall - denied that any such operations took place before the storm. The UAE state news agency late on Wednesday carried a statement from President Sheikh Mohammed bin Zayed Al Nahyan saying he had ordered authorities to assess the damage and provide support to families impacted by the storm. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/middle-east/uae-reels-third-day-after-record-breaking-storm-2024-04-18/

2024-04-18 08:21

DUBAI, April 18 (Reuters) - Cryptocurrency exchange Binance said on Thursday it had secured a licence from Dubai's regulator VARA that will allow the platform to target retail clients in addition to qualified and institutional ones. Under the Virtual Asset Service Provider (VASP) licence, unit Binance FZE will also be able to extend its current services beyond spot trading and fiat services by offering margin trading products - for qualified users - and staking products, it said in a statement. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/business/finance/binance-obtains-dubai-licence-target-retail-clients-2024-04-18/