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China's fiscal policy has ample room, the government's debt ratio remains "reasonable" and risks are controllable, Finance Minister Lan Foan said on Friday, pledging a more flexible fiscal push to shore up economic growth.

The world's second-largest economy has been hobbled by persistently weak domestic demand, a multi-year property crisis and mounting US trade pressure. Exports slowed in August as the boost from a US tariff truce faded, fuelling calls for more stimulus.

"Fiscal policy...always keeps contingency measures in reserve and there remains ample room for stronger fiscal support in the future," Lan said at a press conference in Beijing.

"Next, the Finance Ministry will continue to maintain policy continuity and stability, enhance flexibility and foresight and strengthen forward-looking assessments of the situation," he added.

China late last year increased the amount of debt that local governments are allowed to raise through special bonds by six trillion yuan (US$840 billion or RM3.54 trillion) over 2024-2026. As of end-August, four trillion yuan had already been issued, Lan said.

By end-2024, China's overall government debt hit 92.6 trillion yuan, comprising 34.6 trillion yuan in national debt, 47.5 trillion yuan in legal local government debt and 10.5 trillion yuan in local government hidden debt, according to the minister.

China's government debt-to-gross domestic product ratio was 68.7%, compared with 118.2% for the average ratio of Group of 20 major economies and 123.2% for the Group of Seven, Lan said.

"Overall, China's government debt ratio is within a reasonable range, and risks are under control."

Transformation of local government financing vehicles (LGFVs), set up by local governments to fund infrastructure projects such as bridges and roads, has been under spotlight of China's debt clean-up.

Lan said as of end-June, more than 60% of LGFVs had cleared their hidden debt, while reforms are accelerating.

With key August data due next Monday, some analysts expect new spending plans and housing support.

Source: Theedgemarkets

Before iPhones and Androids came along and blew up its market, Nokia was one of the world’s biggest mobile-phone makers.In the late 1990s and early 2000s, Finland’s economy swelled on the success of its national champion, enjoying unprecedented growth and record tax revenue. Then, the arrival of more agile competitors — alongside a global financial crisis and a decline in Finland’s paper industry — not only upended Nokia, but dragged down the country’s entire economy.

Now, economists are worried the same might happen to Denmark.

In the past few years, the Danish economy has grown fat on the success of Novo Nordisk, maker of blockbuster drugs Wegovy and Ozempic. Thanks in part to the drugmaker’s runaway profits, the government has been able to increase spending on health care, green energy initiatives and defense, all while cutting income taxes.But with rival Eli Lilly gobbling up market share, Novo has fallen on hard times. This week, its new CEO cut expected profits for the third time this year and slashed 11% of its workforce, prompting many to ask: how close is the country to having its own Nokia moment?For now, the answer is: not anytime soon. Public finances are stable and even with reduced growth, Novo is still minting money for Denmark.

So perhaps a better question is whether Maziar Mike Doustdar, the new CEO, can fix what’s broken within Novo and reclaim the company’s dominance in the obesity market. He’s already given some indications of how he plans to try — by moving Novo away from a Danish work culture focused on flexibility and work-life balance to a more American emphasis on performance. In that capacity, he’s already announced an end to working from home.Since discovering oil in the 1960s, Norway has had to reconcile its environmental ambitions with the sometimes uncomfortable fact that oil and gas have made it enormously wealthy.

The results of this week’s national election could make that tension even harder to manage — at least in the country’s parliament. While Prime Minister Jonas Gahr Store and his Labor Party held on to power, they did so with only 28% of the vote, meaning that they’ll now have to rely on four smaller parties — and namely, the Greens — to get on with the business of governing.The Greens had their best-ever showing in the election, claiming eight seats in parliament. That gives the party a bigger mandate to push through policies aimed at phasing out fossil fuel.One target they’re likely to focus on is a forthcoming licensing round for oil and gas companies. Announced last month by the Labor-led government, the round invites corporates to bid on the rights to drill for oil in the Norwegian continental shelf.

With the Greens opposed and the three other small left-leaning parties similarly inclined, there’s a good chance the plan will be stopped in its tracks.The oil companies, for their part, are trying to stay above the political fray and hoping for the best. “We’ve had a good collaboration with governments for many years,” Jon Erik Reinhardsen, chairman of energy giant Equinor, told an audience of oil and gas investors on Wednesday.

“I think that will continue.”

President Alexander Stubb of Finland has defied the odds as the leader of a small country by earning a seat at the most important diplomatic tables. He has the ear of US President Donald Trump and has won the confidence of Ukraine’s leader, Volodymyr Zelenskiy. Stubb is the first guest on Bloomberg Originals’ new series, Leaders with Francine Lacqua, which premieres Friday and features interviews with international decision-makers. In the episode, the president opens up about his motivations and influences, and why Finland is worth listening to.

The Nordic IPO scene is waking up as Scandinavians return from their summer breaks. On Wednesday, Noba Bank signaled its intent to launch a third-quarter public offering, which would value it at $3.7 billion. That sets it up to be the biggest Stockholm-based listing since Volvo Cars went public in 2021. That title, however, could also be claimed by Verisure, a home security firm that has said it will list on Nasdaq’s Swedish market. The company has yet to announce a date, but a September timing has been reported. And while buy-now-pay-later giant Klarna opted to list in New York over Stockholm, the company’s trading debut on Tuesday will still deliver a windfall to its Swedish founders and investors. Across the sea, Finland is considering an initial public offering of the country’s postal service Posti Group on the Helsinki stock exchange as soon as this year, people familiar with the matter told Bloomberg.

One last job? That was what it looked like when 74-year-old Hakan Samuelsson came out of retirement in March to lead Volvo Cars. And the veteran CEO could hardly have chosen a more challenging task. During a recent visit to Bloomberg’s European headquarters in London, Samuelsson discussed the journey ahead for the Swedish carmaker and how the transition to electric will likely mean the end of some established car brands. “In the new world, there will be two or three very strong Chinese brands,” he said, warning that not all companies will be able to compete.

Swedbank CEO Jens Henriksson had been known to tell journalists that it would take five years for various investigations into the lender’s anti-money-laundering measures to wrap up. Turns out, he was at least partially right. On Saturday, the Securities and Exchange Commission announced that it would close an investigation that it opened in 2019 without penalizing the bank. But that doesn’t mean Henriksson can collect on any bets yet — two potentially more serious probes, both in the US, continue to circle the Stockholm lender.

Norway’s Svalbard archipelago is about as remote a location as can be found. It’s also home to critical communications and satellite infrastructure, and right near Russia’s Kola peninsula, which is key to the country’s nuclear capabilities. The High North “is our most strategically important area,” Prime Minister Jonas Gahr Store told Bloomberg in July.

Source: Bloomberg Europe

The dollar inched higher on Friday after falling the day before as a surge in U.S. jobless claims and a modest tick up in inflation kept investors zeroed in on likely Federal Reserve interest rate cuts next week and beyond.

The dollar indexwas up 0.1% at 97.66, having snapped a two-day winning streak on Thursday, but it was still on track to record its second consecutive weekly decline.

On Thursday, data showed the biggest weekly increase in the number of Americans filing new applications for jobless benefits in four years.

That overshadowed U.S. consumer inflation data for August, which showed prices rising at the fastest pace in seven months but still modest and broadly in line with expectations.

While the mixed data might add some wrinkles to the Fed's policy deliberations next week, investor focus is mostly centered on rate cut prospects for now.

"The hurdle to faster cuts is labour market weakness as long as inflation stays well behaved," said Dominic Bunning, head of G10 FX strategy at Nomura.

"I still think it's a very high bar to cut by 50 basis points next week," Bunning added.

Pricing of Fed fund futures indicates that the market believes the Fed is certain to cut its key interest rate by 25 basis points (bps) on September 17.

However, traders have reined in bets on a larger 50 bps rate cut next month, with pricing implying a shallower path of easing before the end of the year than anticipated earlier, according to the CME Group's FedWatch tool.

The yield on benchmark 10-year Treasury notesrose 2 bps to 4.0338% compared with its U.S. close of 4.011%, after a decline in yields that came close to crossing the 4% mark for the first time since April.

The euro was little changed at $1.1727 =EBS> after rising the day before as traders curbed their bets on another European Central Bank rate cut this cycle, now seeing another move at less than 50% after the bank sounded sanguine about the economic outlook.

The ECB kept its key interest rate on hold at 2% for a second straight meeting, with chief Christine Lagarde saying that the bank remains in a "good place" and said risks to the economy had become more balanced than before.

Fitch Ratings is expected to give its verdict on French public finances after markets close on Friday after the confidence motion on September 8.

"Fitch’s sovereign rating model is, if anything, likely to indicate a small improvement," analysts from Citi wrote in a research report.

"Going explicitly against the direction of its model and ‘manually’ downgrading the rating would require the agency to come to the conclusion that the balance of power between stakeholders of public funds has tilted further away from financial creditors since the last rating decision in spring."

Against the yen, the dollar was trading 0.4% stronger at 147.76after the U.S. and Japanese governments issued a joint statement on Friday, which reaffirmed that exchange rates should be "market determined" and that excess volatility and disorderly moves in exchange rates were undesirable.

Sterling traded at $1.3545, slipping 0.2% after data showed the British economy stagnated in July.

The offshore yuan was last at 7.1219 yuan per dollar, weakening 0.1%, while the Australian dollar was a touch softer at $0.665, although remained near a 10-month high.

Source: Reuters

Limited Operational Impact from Staff Changes

Strategic Production Diversification Beyond China

Geopolitical Context and Evolving Sino-Indian Relations

Source: Reuters

Source: Theedgemarkets

Market Indicators Reflect Confidence in Federal Reserve's Strategy

Mixed Signals from Labor Market and Political Pressure

Hartnett’s Warning Signals and International Preference

Source: Bloomberg