China warns automakers to prioritise safety, state media reports
The warning was issued during a meeting attended by China's industry ministry, market regulator and the national fire and rescue authority, Xinhua reported.
The meeting called for an end to the industry's excessive competition and warned of "short-term cost reduction and efficiency" leading to shoddy products.
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Reuters
4 minutes ago
- Reuters
OPEC+ gets lucky as it brings back oil output amid uncertainty
LAUNCESTON, Australia, Aug 4 (Reuters) - A couple of months ago it would have been a brave call to say that OPEC+ would be able to bring back 2.5 million barrels per day of crude production and still keep oil prices anchored around $70 a barrel. But this is exactly what has occurred, with the eight members of the producer group winding back the last of their 2.2 million bpd of voluntary cuts by September, as well as allowing a separate increase for the United Arab Emirates. The eight OPEC+ members met virtually on Sunday, agreeing to lift output by 547,000 bpd for September, adding to the increases of 548,000 bpd for August, 411,000 bpd for each of May, June and July, as well as the 138,000 bpd for April that kickstarted the unwinding of their voluntary cuts. OPEC+ stuck to their recent line that the rolling back of production cuts was justified by a strong global economy and low oil inventories. It's debatable as to whether this is actually the case. Certainly, demand growth in the top-importing region of Asia has been lacklustre. Asia's oil imports were about 25.0 million bpd in July, down from 27.88 million bpd in June and the lowest monthly total since July last year, according to data compiled by LSEG Oil Research. While China, the world's biggest crude importer, has been increasing purchases in recent months, much of this is likely because of lower prices that prevailed when June- and July-arriving cargoes were arranged. It's also the case that China has likely been adding to its stockpiles at a rapid pace, and while it doesn't disclose inventories, the surplus of crude once refinery processing is subtracted from the total available from domestic output and imports was 1.06 million bpd over the first half of 2025. It appears more likely that OPEC+ has largely been fortunate in that it has been increasing output at a time of rising risks in the crude oil market, largely from geopolitical tensions. The brief conflict between Israel and Iran in June, which was later joined by the United States, did lead to an equally brief spike in crude prices, with benchmark Brent futures reaching a six-month high of $81.40 a barrel on June 23. The price has since eased back to trade around the $70 mark, with some early weakness in Asia on Monday seeing Brent drop to around $69.35. But the point is that the Israel-Iran conflict arrested a downtrend in oil prices that had been in place for much of the first half of the year. Crude prices have also been supported in recent days by U.S. President Donald Trump's threats of wide-ranging sanctions against buyers of Russian oil unless Moscow agrees to a ceasefire in its war with Ukraine. As with everything Trump, it pays to be cautious as to whether his actions will ultimately be as drastic as his threats. But it would also be foolhardy to assume that there will be no impact on crude supplies even if any eventual measures imposed by the United States are not as drastic as feared. There are effectively only two major buyers of Russian crude, India and China. Of these two, India is the far more exposed given its refiners export millions of barrels of refined products, many made with Russian oil. India imported 2.1 million bpd of Russian oil in June, according to data compiled by commodity analysts Kpler, which is the second-highest monthly total behind only 2.15 million bpd in May 2023. In recent months, India has been buying about 40% of its crude from Russia and if it were to replace that with other suppliers, it would have a severe impact on oil flows, at least initially. It's likely that a combination of Middle East, Africa and Americas exporters could make up for India's loss of Russian barrels, but this would tighten supplies considerably and likely keep prices higher. Whether Russia and its network of shadowy traders and shippers could once again work around sanctions remains to be seen, but even if they could, it would still take some time for them to get Russian crude through to buyers. For now, much remains up in the air and OPEC+ members are following a smart strategy in taking advantage of the uncertainty to bring their production back and rebuild market share. How long this play can work is the question. Even if Russian barrels do leave the market, it's also possible that demand growth disappoints in the second half as the impact of Trump's trade war becomes more apparent, cutting global trade and lowering economic growth. Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, opens new tab and X, opens new tab. The views expressed here are those of the author, a columnist for Reuters.
Reuters
4 minutes ago
- Reuters
Asia shares sideswiped by US economic jitters, oil slips
SYDNEY, Aug 4 (Reuters) - Asian share markets followed Wall Street lower on Monday as fears for the U.S. economy returned with a vengeance, spurring investors to price in an almost certain rate cut for September and undermining the dollar. Some early resilience in U.S. stock futures and a continued retreat in oil prices did help limit the losses, but the bleak message from the July payrolls report was hard to ignore. Not only had revisions meant payrolls were 290,000 below where investors had thought they would be, but the three-month average slowed to just 35,000 from 231,000 at the start of the year. "The report brings payroll growth closer in line with big data indicators of job gains and the broader growth dataset, both of which have slowed significantly in recent months," noted analysts at Goldman Sachs. "Taken together, the economic data confirm our view that the U.S. economy is growing at a below-potential pace." Neither did the reaction of President Donald Trump instil confidence, as the firing of the head of Labor Statistics threatened to undermine confidence in U.S. economic data. Likewise, news that Trump would get to fill a governorship position at the Federal Reserve early added to worries about the politicisation of interest rate policy. Analysts assume the appointee will be loyal to Trump alone, though the president did grudgingly concede that Fed Chair Jerome Powell would likely see out his term. "It opens the prospect of broader support on the Fed Board for lower rates sooner rather than later," said Ray Attrill, head of FX research at NAB. "Fed credibility, and the veracity of the statistics on which they base their policy decisions, are both now under the spotlight." Markets moved quickly to price in a lot more easing with the probability of a September rate cut swinging to 90%, from 40% before the jobs report. Futures extended the rally on Monday to imply 65 basis points of easing by year-end, compared to 33 basis points pre-data. Markets have essentially already eased for the Fed with two-year Treasury yields down another 4 basis points at 3.661%. They tumbled almost 25 basis points on Friday in the biggest one-day drop since August last year. The prospect of lower borrowing costs offered some support for equities and S&P 500 futures inched up 0.1%, while Nasdaq futures rose 0.2%. Asian share markets, however, were still catching up with Friday's retreat and the Nikkei (.N22%), opens new tab fell 2.1%, while South Korea (.KS11), opens new tab dipped 0.2%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab broke the mould and firmed 0.3%. Wall Street has also taken comfort in an upbeat results season. Around two-thirds of the S&P 500 have reported and 63% have beaten forecasts. Earnings growth is estimated at 9.8%, up from 5.8% at the start of July. Companies reporting this week include Disney (DIS.N), opens new tab, McDonald's (MCD.N), opens new tab, Caterpillar (CAT.N), opens new tab and some of the large pharmaceutical groups. The dismal U.S. jobs data did put a dent in the dollar's crown of exceptionalism, snuffing out what had been a promising rally for the currency. The dollar dipped 0.1% to 147.24 yen , having shed an eye-watering 2.3% on Friday, while the euro stood at $1.1585 after bouncing 1.5% on Friday. The dollar index was pinned at 98.659 , having been toppled from last week's top of 100.250. Sterling was more restrained at $1.3287 as markets are 87% priced for the Bank of England to cut rates by a quarter point at a meeting on Thursday. The BoE board itself is expected to remain split on easing, while markets still favour two further cuts by the middle of next year. In commodity markets, gold was flat at $3,361 an ounce , having climbed more than 2% on Friday. Oil prices extended their latest slide as OPEC+ agreed to another large rise in output for September, which completely reverses last year's cuts of 2.2 million barrels per day. Brent dropped 0.6% to $69.24 a barrel, while U.S. crude also fell 0.6% to $66.93 per barrel.
Reuters
2 hours ago
- Reuters
Korean equity surge risks stuttering without stronger reform push: Raychaudhuri
HONG KONG, August 4 (Reuters) - The Korean equity market, which went from being among the worst performers in Asia last year to the best regional performer in 2025, stumbled over the past week. The rally has fundamental support, but it could sputter if expected shareholder-friendly reforms don't materialize. The well-known 'Korea discount' afflicting the country's stocks has narrowed considerably this year. Korean equities typically trade at a sharp valuation discount to Asian stocks excluding Japan, with the exception of a brief period of AI-fuelled euphoria in 2023. But this discount fell from around 40% at the peak of political upheaval last year to under 30% in mid-July, thanks largely to expectations of shareholder-friendly reforms and greater clarity around the shape of the new government. However, Korean equities hit a hurdle in late July. The market corrected 4% in the last two trading days of the month after President Lee's government raised the peak corporate tax rate from 24% to 25% and the securities transaction tax from 0.15% to 0.20%. The announcement of a Korea-U.S. trade deal removed some uncertainties, but ambiguities about execution remain, and, overall, disappointment regarding the tax tweak overshadowed the trade truce relief. Korean equity performance in 2025 has been driven not just by political shifts but by several fundamental factors in a few large sectors. Financials, which constitute 13% of Korea's equity market, appreciated by 57% in the year through July 25, benefitting from investors' preference for high dividend yields and expectations of increased loan growth after a stream of rate cuts by the Bank of Korea. Meanwhile, industrials, representing 17% of Korea's market, have been lifted 54% over that period, thanks to the global defence and infrastructure spending boom. Technology, the country's largest sector at almost 30% of the market, has seen share prices rise by 45% in this time. The flagship technology stocks Samsung and SK Hynix are up 24% and 55%, respectively, as they continue to be propelled by AI optimism and the success of some specific new products, most notably Hynix's High Bandwidth Memory chip, an essential input to advanced AI servers and Nvidia's GPUs. Beyond these sector-specific catalysts, one of the most significant trends spurring investor enthusiasm for Korea this year has been the expectation of regulatory changes designed to protect minority shareholders. Korea's 'Value Up' program, initiated in February 2024 by the country's previous government led by former President Yoon Suk Yeol, began to tackle key issues plaguing Korean corporate governance, but many investors believe it did not go far enough. The unaddressed concerns include the prevalence of cross-holding structures that give founding families disproportionate control over companies and, relatedly, companies' reluctance to distribute excess cash to shareholders. Former President Yoon's declaration of martial law in December 2024 and his subsequent impeachment led to presidential elections in June 2025, and the formation of a seemingly stable government under President Lee Jae Myung. Soon after, on July 3, the National Assembly passed, opens new tab a corporate governance reform bill, which, among other things, requires company directors to act in the best interest of shareholders, limits large shareholders' voting rights when appointing audit committee members, mandates that hybrid virtual shareholder meetings must be held by publicly traded firms above a certain size, and raises the required proportion of independent directors on boards from one-quarter to one-third. Even before these measures were taken, corporate behaviour was already changing in anticipation of government pressure. Korean dividend payouts have been rising since 2022, and so have buybacks, according to FactSet. Indeed, buybacks in the first half of 2025 are higher than in all of 2024. These positive changes may have helped spur the rush of foreign capital flows into the country's equity market since April. Foreign institutions sold a net $28 billion of Korean equities from August 2024 to April 2025, and bought back a net $6 billion over the next three months. The currency has also been supportive of inflows. The Korean won has appreciated 7% against the U.S. dollar in 2025, second only to the Taiwanese dollar in the Asian leaderboard. Valuations remain attractive in Korea's market despite the sharp rally. Korean equities trade at a forward price-to-earnings multiple of 12.3x, far lower than its Asian peers that have similar earnings growth profiles. Of course, Korea's PE ratio is based on an 18% earnings growth forecast in 2026, the FactSet consensus expectation, and some investors may be sceptical about this figure. But such scepticism seems unjustified, as Korea's consensus EPS forecasts have been rising since March, a period marked by significant geopolitical and economic uncertainties that are, in many cases, now being resolved. Can the Korean rally regain its momentum? While the market's response to the U.S.-Korea trade deal may not have been overly positive, the outcome – a 15% tariff for many Korean goods versus the 25% rate feared – removes a massive risk, given that 15% of Korean companies' aggregate revenue comes directly from the U.S., according to FactSet. Investors, however, would be well-advised to keep an eye on the country's reform calendar, as several governance-enhancing reforms are still not finalized, most notably a tax amendment to incentivize higher dividend payouts. Moving forward, the fate of the Korean equity rally could depend, to a large extent, on what happens in government. (The views expressed here are those of Manishi Raychaudhuri, the founder and CEO of Emmer Capital Partners Ltd. and the former Head of Asia-Pacific Equity Research at BNP Paribas Securities). Enjoying this column? Check out Reuters Open Interest (ROI),, opens new tab your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI,, opens new tab can help you keep up. Follow ROI on LinkedIn,, opens new tab and X., opens new tab
