2025-07-03 07:05

Chinese tech giants have applied for stablecoin licences Sources say Chinese policymakers receptive to idea of yuan stablecoin Exporters using Tether, undermining yuan in trade settlement July 3 (Reuters) - China's tech giants JD.com and Alibaba affiliate Ant Group are urging the central bank to authorise yuan-based stablecoins to counter the growing sway of U.S. dollar-linked cryptocurrencies, people with direct knowledge of the discussions said. The two firms propose China allow the launch of stablecoins in Hong Kong pegged to its offshore yuan to help promote global use of the Chinese currency and fend off the dollar's growing digital influence, the two sources said. Sign up here. The moves come as Hong Kong races the United States in setting up a regulatory framework for stablecoins, competing for a greater reach in global digital finance and trade. Their lobbying efforts, if successful, would mark a major shift in the way Beijing views cryptocurrencies, which it banned in 2021, and could reshape China's strategy in promoting international use of the yuan. Stablecoins are digital tokens, in the form of cryptocurrencies pegged to liquid assets, so far mostly the U.S. dollar but also in some cases gold or other currencies. Their underlying blockchain technology enables instant, borderless and round-the-clock transfer of funds at low cost, giving them the potential to disrupt traditional cross-border payment systems. Both JD.com and Ant already plan to issue stablecoins backed by the Hong Kong dollar, after the island's new legislation takes effect on August 1. But in closed-door discussions with the People's Bank of China, JD.com has argued that offshore yuan stablecoins are urgently needed as a tool to promote yuan internationalisation, the sources told Reuters. Such a view has also been expressed by other industry players. "The global expansion of U.S. dollar stablecoins is posing fresh challenges to yuan internationalisation," Wang Yongli, co-chairman of Digital China Information Service Group (000555.SZ) , opens new tab said in an article posted on his social media account last month. "It would be a strategic risk if cross-border yuan payment is not as efficient as dollar stablecoins," said Wang, former vice head of Bank of China. The PBOC, JD.com and Ant did not immediately respond to Reuters requests for comment. DOLLAR DOMINATES The global stablecoin market is currently small at about $247 billion, according to crypto data provider CoinGecko. However, Standard Chartered Bank estimates it could grow to $2 trillion by 2028. Over 99% of stablecoins are U.S. dollar-denominated, according to the Bank for International Settlements. China has long harboured ambitions for the yuan to be a global currency, similar to the euro or dollar and reflecting its weight as the world's second-biggest economy. One roadblock to this aim, however, is its reluctance to remove tight capital controls. The yuan's share as a global payment currency fell to 2.89% in May, the lowest in almost two years, according to payment platform SWIFT. The dollar commands a 48.46% market share. "China has reached a point where it can no longer avoid taking action," said Xiao Feng, chairman of Hong Kong-based crypto exchange operator HashKey. Many Chinese exporters now use dollar stablecoins as "more and more overseas merchants are sending payments in USDT", he said, referring to the world's more popular stablecoin Tether. Several exporters told Reuters capital controls at home, geopolitical tensions and the risks of currency volatility in smaller emerging markets have spurred the shift into stablecoins. Crypto HK, Hong Kong's biggest crypto OTC exchange, said the monthly volume of trading in the USDT token by its Chinese clients for trade settlement purposes has jumped five-fold since 2021. INEVITABLE? Marking a major U.S. shift, President Donald Trump backed stablecoins days after his inauguration in January and is establishing a regulatory framework that helps legitimise dollar-pegged cryptocurrencies. Even in China, where cryptocurrencies remain banned, policymakers are becoming increasingly interested in stablecoins. PBOC governor Pan Gongsheng said last month the boom in digital currencies and stablecoins poses huge challenges to financial regulation. PBOC advisor Huang Yiping told local media in a recent interview that an offshore yuan stablecoin in Hong Kong is "a possibility". Ant is preparing to apply for stablecoin licences in both Hong Kong and Singapore, one of the sources said. Ant is also preparing for offshore yuan stablecoins, he said. JD.com chairman Richard Liu has also disclosed plans to apply for such licenses in major currency countries globally, in a bid to facilitate foreign exchange and cross-border payment. In discussions with the PBOC, JD.com argued a yuan-pegged stablecoin was needed because the Hong Kong dollar is pegged to the U.S. dollar, which does not help promote the yuan's use in trade, one of the sources said. JD.com has proposed China allow yuan stablecoin issuance in Hong Kong, before expanding the pilot scheme to offshore markets within China's free trade zones, said a company source, adding the suggestion had been well received by regulators. https://www.reuters.com/world/china/chinas-tech-giants-lobby-offshore-yuan-stablecoin-sources-say-2025-07-03/

2025-07-03 06:53

Pause on US tariffs set to end on July 9 OPEC+ expected to raise output by 411,000 bpd US crude inventories rise unexpectedly LONDON, July 3 (Reuters) - Oil prices fell slightly on Thursday as the possibility of U.S. tariffs being reinstated raised demand concerns ahead of an expected supply boost by major producers. Brent crude futures fell 21 cents, or 0.3%, to $68.90 a barrel by 1217 GMT. U.S. West Texas Intermediate crude declined 15 cents, or 0.2%, to $67.30. Sign up here. Both contracts had hit one-week highs on Wednesday as Iran suspended cooperation with the U.N. nuclear watchdog, raising concerns the lingering dispute over its nuclear programme could again devolve into armed conflict. A preliminary trade deal between the U.S. and Vietnam also boosted prices. Tariff uncertainty looms large, however. The 90-day pause on the implementation of higher U.S. tariffs ends on July 9, with several large trading partners yet to wrap up trade deals, including the European Union and Japan. The OPEC+ group of oil producers, meanwhile, is expected to agree to raise output by 411,000 barrels per day (bpd) at its policy meeting this weekend. Adding to negative sentiment, a private-sector survey showed that service activity in China - the world's biggest oil importer - expanded at its slowest pace in nine months in June as demand weakened and new export orders declined. A surprise build in U.S. crude inventories also highlighted demand concerns in the world's biggest crude consumer. The U.S. Energy Information Administration said on Wednesday that domestic crude inventories rose by 3.8 million barrels to 419 million barrels last week. Analysts in a Reuters poll had expected a drawdown of 1.8 million barrels. The market will be watching for the U.S. monthly employment report on Thursday, which is likely to shape expectations over the depth and timing of interest rate cuts by the Federal Reserve in the second half of the year, analysts said. Lower interest rates could spur economic activity that would boost oil demand. https://www.reuters.com/business/energy/oil-falls-signs-weak-us-demand-ahead-key-jobs-report-2025-07-03/

2025-07-03 06:43

ABU DHABI, July 3(Reuters) - The expansion in Saudi Arabia's non-oil private sector activity accelerated in June, driven by robust client demand and a surge in hiring, a survey showed on Thursday. The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) rose to a three-month high of 57.2 from May's 55.8, putting it further above the 50-point line denoting growth. Sign up here. New order growth quickened to a four-month high, with the subindex rising to 64.3 in June from 62.5 in May. Domestic sales were the primary driver of this upturn, supported by successful client acquisitions and enhanced marketing strategies. However, export sales growth remained marginal. "Firms largely linked the pickup in activity to improving sales, new project starts, and better demand conditions, although the pace of output growth was softer compared to previous highs," said Naif Al-Ghaith, chief economist at Riyad Bank. Non-oil private companies hired staff at the fastest rate since May 2011, as firms expanded teams to manage increased workloads. Input prices also rose sharply, aligning with the second-quarter trend, leading firms to pass on higher costs to customers. Output prices increased solidly, the strongest rise in a year-and-a-half, following reductions in previous months. Despite cost pressures, Saudi non-oil firms remained optimistic about future activity, the survey showed, with the Future Output Index reaching a two-year high. Confidence was buoyed by resilient domestic economic conditions and robust demand. Last month, the International Monetary Fund raised its 2025 GDP growth forecast for Saudi Arabia to 3.5% from 3%, partly on the back of demand for government-led projects, and supported by the OPEC+ group's plan to phase out oil production cuts. (This story has been corrected to say June, not May, in paragraph 1) https://www.reuters.com/world/middle-east/saudi-arabias-non-oil-sector-growth-quickens-june-strong-demand-pmi-shows-2025-07-03/

2025-07-03 06:20

China's north and west on alert for heavy rains Storms in China's southwest led to deadly flash floods Extreme rainfall increasingly poses a major challenge for China BEIJING, July 3 (Reuters) - China's north and west braced for more flash floods and landslides on Thursday as annual 'Plum Rains' left a trail of destruction and prompted the mobilisation of thousands of rescue workers to pull people from floodwaters. Red alerts were issued tracing the rains as they moved from the southwestern province of Sichuan through the northwestern province of Gansu, and up to the northeastern province of Liaoning. Sign up here. While some Beijing-bound trains were suspended and one of the city's airports experienced flight delays and cancellations late on Wednesday and into the early hours. Extreme rainfall and severe flooding, which meteorologists link to climate change, increasingly pose major challenges for policymakers as they threaten to overwhelm ageing flood defences, displace millions and wreak havoc on China's $2.8 trillion agricultural sector. Economic losses from natural disasters exceeded $10 billion last July, when the 'Plum Rains' - named for their timing coinciding with plums ripening along China's Yangtze River during the East Asia monsoon - typically reach their peak. State media said over 1,000 rescue workers were dispatched to the town of Taiping in central China's Henan province on Wednesday, after torrential rains caused a nearby river to burst its banks, killing five people in a flash flood and leaving three others missing. Two more people died in a landslide at a construction side in Gansu province caused by heavy rains over Wednesday and Thursday, a separate state media report said. During a two-day visit to the northern province of Hebei, which borders Henan, Vice Premier Zhang Guoqing urged local officials to step up efforts ahead of anticipated heavy rain to minimise casualties by preemptively evacuating people, state news agency Xinhua reported on Wednesday. While China has a nationwide severe weather monitoring and forecasting system, scientists say very localised predictions remain a challenge, testing the ability of particularly rural communities with fewer forecasting resources to evacuate local populations quickly ahead of any extreme weather. Further south, in China's Guangxi region, several buildings slid down hillsides over the last two days after their foundations gave way in waterlogged soil, local media reported. Footage verified by Reuters shows a five-storey building under construction in the town of Xinzhou collapsing into a nearby river within seconds, as the ground beneath it suddenly gave way. Between June 30 and July 1, the Lengshui River which flows through Xinzhou experienced its worst flooding in records going back to 2005, said a separate local media report, citing the Ministry of Water Resources. The report also instructed readers on how to recognise early signs of flash flooding. Meanwhile, in Pingliu Village, some 80 km (50 miles) west of Xinzhou, 21 people from seven households were evacuated on Tuesday after a landslide collapsed two houses and damaged four others, other local media reported. In contrast, the national meteorological centre forecast scorching heat along the country's eastern seaboard. https://www.reuters.com/sustainability/climate-energy/chinas-north-west-alert-after-sweeping-rains-trigger-deadly-floods-2025-07-03/

2025-07-03 06:15

US job growth beats expectations in June Dollar rose after non-farm payrolls data US House Republicans head toward final vote on Trump's sweeping tax-cut bill July 3 (Reuters) - Gold fell 1% on Thursday as stronger-than-expected U.S. payroll data cemented expectations that the Federal Reserve is unlikely to cut interest rates as early as previously anticipated, denting the metal's appeal. Spot gold fell 0.9% to $3,328.63 per ounce as of 0200 p.m. EDT (1800 GMT), after falling over 1% earlier in the session. Sign up here. U.S. gold futures settled 0.4% higher at $3,342.9. The dollar (.DXY) , opens new tab and U.S. stock index futures rose after non-farm payrolls increased by 147,000 jobs last month, the Labor Department's Bureau of Labor Statistics showed. Economists polled by Reuters had forecast payrolls rising 110,000. A stronger dollar makes bullion more expensive for overseas buyers. "The better than expected jobs number means we see a lesser likelihood of a Fed rate cut earlier than currently anticipated. As a result, the dollar strengthened, which is adding pressure to the gold market," said David Meger, director of metals trading at High Ridge Futures. "The key is the fact that the idea or possibility of a July rate cut is off the table." Investors are now pricing in 51 basis points of Federal Reserve rate cuts by the end of the year, starting in October, down from around 66 basis points expected prior to the report. Non-yielding gold tends to perform well in a low-interest-rate environment. On the trade front, an agreement between the United States and Vietnam was announced on Wednesday ahead of a July 9 deadline when U.S. tariffs are set to take effect. Meanwhile, Republicans in the U.S. House of Representatives advanced Trump's massive tax-cut and spending bill, estimated to potentially add $3.4 trillion to the nation's debt, toward a final yes-or-no vote. "As the indebtedness of the U.S. continues to grow, investors might become more concerned about the U.S. dollar, which should benefit gold in the longer-term," said Carsten Menke, an analyst at Julius Baer. Spot silver was up 0.7% at $36.84 per ounce, while platinum lost 3.1% to $1,374.89 and palladium shed 1.5% to $1,137.69. https://www.reuters.com/world/india/gold-eases-investors-await-us-payroll-data-fed-policy-clues-2025-07-03/

2025-07-03 06:10

LITTLETON, Colorado, July 3 (Reuters) - The tariff deal between the United States and Vietnam sets the stage for a further climb in trade volumes between the countries and will also impact the energy generation mix that powers the fast-growing Vietnamese economy. U.S. President Donald Trump singled out U.S.-made SUVs as a potential beneficiary of the deal in a social media post, while U.S. energy firms will be hopeful that Vietnam will emerge as a key growth market for LNG. Sign up here. However, sellers of both bulky passenger trucks and pricey super-chilled gas may be disappointed over the near term as Vietnam's economy remains overwhelmingly reliant on cheap coal for domestic power and nimble motorcycles for transportation. Further, as Vietnam will remain saddled with 20% tariffs on goods sold to its top export market, corporate profits will remain compressed and may starve the economy of the funds needed to pay for the pricey goods the U.S. is hoping to sell. Below are key data points on vehicle ownership, power generation and manufacturing output to help monitor how trade and energy trends may evolve following the tariff agreements. 2 WHEELS BETTER THAN 4 While many in Vietnam may have ambitions to own one of the SUVs that President Trump hopes to sell more of, a vast majority of the vehicles in Vietnam are motorcycles, which make up more than 90% of all registered vehicles in the country. The motorcycle ownership rate is around 518 per 1,000 people, while car ownership stands at around 22 per 1,000, World Bank data shows. As Vietnam's economy continues to grow, car sales are expected to accelerate sharply, which bodes well for all global car exporters. However, the country's narrow streets and limited parking spaces in cities mean that finding space for even a small car can already be a challenge. What's more, automakers in China - the world's top car producer - along with Japan and South Korea already have a strong presence in Vietnam, and so will present stiff competition for U.S. SUV sellers hoping to grab market share. COAL CRUTCH U.S. sellers of LNG are also optimistic about Vietnam's growth potential, given the energy-intensive nature of its manufacturing-heavy economy. However, there are several reasons to expect Vietnam's LNG import appetite to only grow modestly from here. Firstly, coal currently generates around 50% to 55% of the country's electricity, and is far cheaper for cost-conscious utilities to burn compared to costly imported natural gas. The country relies on imports for over half of its coal needs, but is cheaply supplied by neighbour China and by top coal exporter Indonesia. Secondly, the country's domestic production of natural gas has steadily declined over the past decade due to depleting gas fields, and in 2024 was 40% less than was produced in 2015, according to the Energy Institute. The combination of an entrenched coal power system and declining gas reserves has served to squeeze natural gas out of the electricity mix, with gas's share now around 7% to 9% compared to around 12% to 15% in 2022, data from Ember shows. Reduced gas use has in turn stalled gas infrastructure development, with no gas power plants currently under construction in Vietnam, according to Global Energy Monitor (GEM). There is around 4 gigawatts (GW) of LNG import capacity under construction, and a further 17 GW in so-called pre-construction, GEM data shows, which is driving the optimism among LNG exporters. However, there is also an estimated 53 GW of wind power in pre-construction as well as 5 GW of utility-scale solar, which are being driven by clean energy policies set by the government and supported by civilians who want lower pollution. The country is also a major manufacturer of solar panels and components, which ensures that utilities have ready access to clean energy equipment that can be installed more quickly than any other power source. This may serve to curb future interest in building out more gas-handling capacity in Vietnam, regardless of U.S. hopes for higher LNG exports. MANUFACTURING DRIVE Vietnam's fast-growing manufacturing sector will play a big role in determining the country's energy needs and power mix. Rapid expansions to production lines over the past decade have resulted in total electricity demand more than doubling between 2014 and 2024, according to Ember. However, the need for manufacturers to remain cost competitive against peers in China and elsewhere has meant that power firms have been under pressure to keep energy prices as low as possible. That in turn has resulted in a strengthening of coal's grip on Vietnam's power sector, and the rapid uptake of cheap home-made solar systems. The country's heavy industry and producers of cars, chemicals and plastics will likely help sustain growth in gas demand over the coming years, and lift overall LNG imports. But with most manufacturers dependent on electricity rather than gas for power, most of the growth in future generation looks set to be a combination of coal and renewables, which are viewed as more economical than building new gas plants. The country has also sharply raised production of cables and other power sector components since 2022 as part of the global re-shoring of production outside of China. That in turn has only helped accelerate the drive towards electrification as cheaply as possible, and may also limit Vietnam's overall demand for LNG and other pricey U.S. exports. The opinions expressed here are those of the author, a columnist for Reuters. 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. https://www.reuters.com/markets/commodities/us-tariff-deal-with-vietnam-set-expand-trade-faces-hurdles-2025-07-03/