Tag Archive for: financial resilience

Political Polarisation and the Impending US Government Shutdown: A Deep Dive into Governance Challenges

US Government Shutdown Shows Deep Political Split, Raises Governance Fears

October 2, 2025, 19:40 GMT – By Eiko Sievert, FXEmpire

The shutdown of the US government shows a growing gap between Republicans and Democrats. Each point sticks close to policy issues like planned changes in healthcare. This pause in federal work links tight disagreement to wider splits in state rules. The situation makes people worry about the way power holds together.

Political Gridlock Points to Wider Governance Strains

US politics meet a hard block. Parties stand side by side yet hold words that remain apart. Scope Ratings keeps its view close. It places the US at AA with a negative edge. This view ties investor fears to the state’s money plans.

Key groups feel pressure from these moves. The Federal Reserve faces weight from political orders. The push to fire Governor Lisa Cook tests how far a president may reach into groups kept aside from party fights.

Some law experts and law firms, not in line with President Trump’s plans, now feel public heat. People ask if economic stats keep their steady mark after Erika McEntarfer, who once led the Bureau of Labor Statistics, lost her post. This act ties doubts to the daily flow of numbers.

Falling Public Trust and Shaken Norms

Scholars and media meet strong public scorn. This trend pulls trust from the base of US power. The military now shows up in large cities to keep order when state leaders say no. This close use of force in city streets may shake state control and add weight to the growing gap.

Fiscal Future and Debt Ceiling Talks

The political split makes plans for money even tougher. A recent $5 trillion raise of the debt cap gets named with a big bill. Yet another raise may come by 2028 in a time of hard money views.
Scope Ratings ties a view of overall government deficits to about 6% of GDP in the next five years. Debt may grow to near 127% of GDP. The words link technical default as far off, yet show rising risk when talks stall. The chance of a breakdown carries heavy negative marks.

The mid-term votes in 2026 hold old power ideas. If Republicans fall short in the House or Senate, finding fast deals on budget talks will grow even harder. This link makes state work face bigger challenges.

Looking Ahead: Governance Risks and Political Divides

This shutdown stands as a clear sign of new state work and a rising political rift. As the sides grow further apart, stops in policy talk and strain on state groups get nearer. The splits touch not only US scenes at home but also global money moves and world market calm.

Readers and watchers look close to new votes and talks. They wait to see if both sides can work side by side once more or if the links between splits and state strain keep their hold.

About the Author:
Eiko Sievert is an Executive Director in the Sovereign and Public Sector Ratings group at Scope Ratings, known for ratings and research on state borrowers.

For more news and clear forecasts, see FXEmpire’s Economic Calendar and Market News sections.

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Assessing China’s Golden Week: Will Tourism and Retail Drive GDP Growth?

China Golden Week: Can Tourism and Retail Lift GDP Prospects?

By Bob Mason | Published October 2, 2025, 03:27 GMT

China starts its annual Golden Week holiday. Investors and economists now watch the new data. They want to see if Beijing can hit a 5% GDP rise in 2025. Golden Week shows consumer trust and buying strength in shops, travel, and rides. Each word connects closely, and this makes the meaning clear.

Golden Week’s Economic Role

Golden Week is a time to learn about China’s economy. The government puts out data on how people spend, travel, and move. This short period shows what happens as the year nears its end.

In 2024, spending during Golden Week helped grow GDP by 5%. Shops saw a 4.8% jump in sales in October 2024 versus 3.2% in September. Trips inside China grew by 5.9%, and travel spending went up by 6.3% over the same period last year. More people also left the country, a jump of 40%. This rise came as visa rules returned to normal and more flights ran after COVID-19 rules eased.

What to Watch: Key Points During Golden Week 2025

This Golden Week, experts will check several points that may shape views on the economy:

  • Consumer Spending: Data from stores in dining, fun, and shopping.
  • Payment Activity: Totals run via digital payment systems.
  • Tourism Numbers: Facts on local journeys and overall travel.
  • Transportation: How many people ride to move around.

These points tie words together. They show trust and need, which matter for steady growth.

Challenges for Spending and Growth

Even with the cheer of Golden Week, China’s economy faces hard times. US tariffs on Chinese goods and new shipping steps have cut demand from abroad. This has sparked price cuts and lower margins. Companies now cut jobs to keep profits.

Job data adds to these signs. The overall jobless rate in China moved from 5.2% in July to 5.3% in August 2025. More worrisome is youth joblessness, which grew to 18.9% in August. This is up from 17.8% in July and 14.5% in June.

Problems in the housing market also make people worried. Sales in shops slowed in 2025. In August, sales rose by 3.4% year-on-year. This is lower than 3.7% in July and 4.8% in June.

If spending falls further this Golden Week, doubt may grow about Beijing’s plan for 5% GDP growth this year.

Possible Policy Moves and Stimulus Hopes

China’s banks, like Goldman Sachs, expect the People’s Bank of China (PBOC) to cut interest rates. This move may boost work and spending. Some analysts note that Beijing may wait to change rules unless the growth rate slips.

Recent lawmakers repeated their goal to act fast on economic steps when risks come up. The National Development and Reform Commission (NDRC) says the government will speed up new smart devices and set up fresh subsidies for buyers. It will also sharpen tools for watching, predicting, and warning on the economy.

Equity Markets: Hope Despite Uncertainty

Mainland stock markets have shown strength. They rose over the past three quarters, though the pace slowed in the third quarter of 2025. Progress in fields like artificial intelligence and semiconductors, along with hope for new rules, kept investor views high.

The CSI 300 index climbed nearly 18% this year. It reached a three-year high. The Shanghai Composite Index also went up by about 15.8%, its best mark in ten years. Yet, these numbers are still below past peaks. They might go higher if Golden Week data look good and if new policy steps come.

In Hong Kong, the Hang Seng Index lifted 36% this year. The Hang Seng Tech Index grew by 48.8% during the same period.

Looking Ahead: Trade and Market Views

After Golden Week, events in US-China trade will affect views at home and abroad. A drop in trade tension or a new trade deal may boost demand for Chinese goods and stocks. On the other hand, new trade issues may cut confidence and slow growth.

Leading economist Hao Hong says there is no simple cure for low trust at home except a rise in the stock market. His words show a tight link between market moves and consumer spending, especially when issues like housing troubles and rising jobless rates are in the mix.

Conclusion

The data from China’s Golden Week will help show the country’s growth path in 2025. Past Golden Weeks have pushed GDP up, but this year, customers face hard times from both outside and in. Policy makers stand ready to act if signs turn bad, and their moves will depend on the new numbers.

For both investors and onlookers, this Golden Week will show China’s strength and hint at Beijing’s next steps as the year nears its end.

About the Author:
Bob Mason brings more than 28 years of work in financial markets. He worked with global rating groups and large banks. He now writes on currencies, goods, different asset classes, and world stocks, with a close look at European and Asian scenes.

Find steps to guide your way through this week’s market trends [here].

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Gold and Silver Remain Steady Amid Falling Yields and Mixed Job Market Data

Gold and Silver Stay Stable as Yields Drop and Dollar Weakens After Unexpected ADP Jobs Report

On October 1, 2025 gold and silver held their value. Yields on government bonds dropped. The U.S. dollar grew weaker. An ADP report came out. It showed that private jobs fell in September. No official data came because the government was shut.

Private Payrolls Experience Sharp Drop Amid Data Blackout

In the ADP report, private payrolls lost 32,000 jobs. This drop is the largest since March 2023. Economists had expected 45,000 more jobs. With the government closed, the usual labor figures did not arrive. This made the ADP report more useful for those watching the market. Policymakers and market actors noted its details. The Federal Reserve will meet on October 28–29, 2025. Broad-Based Labor Market Weakness Raises Concerns

Job losses were seen in many sectors. Leisure and hospitality lost 19,000 positions as summer travel ended. Other services saw 16,000 fewer roles. Professional and business services dropped by 13,000 jobs. Trade and transportation lost 7,000 roles. Construction cut 5,000 jobs. Only education and health services grew, adding 33,000 roles as schools reopened and healthcare needs stayed high.

An Uneven Impact on Businesses of Different Sizes

Small businesses with fewer than 50 employees lost 40,000 jobs. Mid-sized firms with 50 to 499 staff cut their payrolls too. Large companies with 500 or more workers added 33,000 jobs. This shows that small firms stay cautious when hiring, while big companies move ahead.

Wage Growth Moderates Despite Steady Year-Over-Year Gains

Wages grew by 4.5% over the year in September. This change stayed much the same as the previous month. For workers who switched jobs, wage growth slowed to 6.6% from 7.2% in August. This hints at a slower rise in pay. Even with an unemployment rate of 4.3%, Federal Reserve officials worry that labor demand may drop further. Boston Fed President Susan Collins warned of risks to the market.

Market Reactions Reflect Cautious Sentiment Ahead of Fed Meeting

After the ADP data came out, the 10-year U.S. Treasury yield fell further. The U.S. Dollar Index also dropped. Prices for gold and silver stayed steady as they remain safe choices in uncertain times. U.S. equity futures fell at first and then held above their low points as investors watched for the delayed official report from the Bureau of Labor Statistics.

Outlook: Labor Market Data Fuels Expectations for Fed Rate Pause or Cut

The unexpected drop in private jobs, along with missing official data and soft comments from Fed officials, feeds thoughts of a more cautious approach at the next FOMC meeting. Signs of slower wage growth and weaker hiring hint that the labor market might be softening. Investors see these changes as a sign that Treasury yields could fall and that assets sensitive to interest rates might do well if policy shifts.

About the Author

James Hyerczyk is an experienced U.S.-based technical analyst and teacher with over 40 years in market analysis and trading. He studies chart patterns and price movements. He has written two books on technical analysis and is skilled in both futures and equities trading.

This article has been prepared based on information available as of October 1, 2025, and is intended for educational and informational purposes only. It does not constitute financial advice or a recommendation to trade any financial instruments. Investors should conduct their own research or consult a qualified financial advisor before making investment decisions.

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China’s Manufacturing Woes Deepen: Margin Pressures and Job Losses Challenge Economic Recovery as AUD/USD Dips

China Manufacturing Margin Pressures Return and Job Losses Mount; AUD/USD Dips

By Bob Mason | Published: September 30, 2025, 02:43 GMT

China’s latest economic data shows two clear facts. Manufacturing margins feel pressure. Job cuts increase. These facts make financial markets act with care. Some numbers show more work in factories. Other numbers show profit gaps and more job losses. This mix affects key prices like the AUD/USD exchange rate.

China’s Private Sector Shows Uneven Economic Momentum

China’s private sector sends mixed signals. The purchasing managers’ report finds that orders in factories rise. The RatingDog Manufacturing PMI climbs from 50.5 in August to 51.2 this month. This rise, the highest seen since early this year, shows work growing slowly. New orders come in fast, as seen since February. New export orders show slow growth after a quiet period since March.

The report on services drops a little. The Services PMI stands at 52.9, just down from 53.0 last month. Staff numbers fall for the third time in four months. This drop raises job worries. Input prices jump at the fastest pace in almost a year. At the same time, average selling prices drop as firms face stiff cost pressure. This mix of price changes shows that even if demand grows a bit, profit margins shrink. Analysts note that higher input costs and lower output prices push margins down.

Official PMIs Present a More Cautious View

China’s official numbers add another layer. The National Bureau of Statistics (NBS) shows the Manufacturing PMI rise gently from 49.4 to 49.8. This value still lies under the 50-point mark that separates shrinking from growing. The Non-Manufacturing PMI dips to 50 from 50.3 in August. The difference in these reports and the RatingDog survey comes from the range of companies asked. The private survey looks mainly at small firms that work for export.

Economic Challenges Persist Amid External Headwinds

China faces many challenges. The impact of U.S. tariffs cuts demand from other countries. This action pushes up costs for many makers. At home, retail sales slow. In August, retail sales grew 3.4% year by year. This pace is low when past growth often beat 12%. On the job side, unemployment inches up to 5.3% in August. Young workers feel this strain most. Their jobless rate jumps to 18.9% from 14.5% only three months ago.

These signals point to a slow market. Firms cut workers as profit margins shrink. Fewer jobs may slow private spending, which is important for China’s rebound.

Market Reaction: Initial Gains Fade Amid Margin Concerns

Market moves mirror these worries. The Hang Seng Index, a gauge of local stocks, climbs briefly to 26,785 points. Soon, it falls back to 26,712 as margin issues and hiring woes return to the mind of traders. In the world of currency, the Australian dollar also sways. The AUD/USD pair reaches $0.65845 before dropping to $0.65751. By the morning session on September 30, AUD/USD sits higher at $0.65809. This move shows a mix of hope and fear about China’s path and its effect on linked currencies.

Policy Support and Trade Talks Under Microscope Ahead of Golden Week

Beijing takes action when times are tough. Officials promise to adjust macro policies to suit the new facts. The National Development and Reform Commission (NDRC) plans to keep support steady and send in consumer subsidies ahead of China’s key Golden Week holiday, which starts on October 1. Investors now watch discussions on U.S.-China trade with care. Steps that cut tariffs may ease cost issues for exporters and help profits. A rise in trade tensions or delays with policy steps may add to global uncertainty and strain market feelings.

Outlook

The upcoming Golden Week holiday may shape spending and travel. Market watchers will track new data on buying trends and shifts in support plans. Bold new stimulus and progress in trade talks might revive market mood. At the same time, ongoing pressure on margins and job cuts may slow growth.

About the Author

Bob Mason brings over 28 years of experience in the global financial world. He studies currency, commodity, and stock markets across Europe and Asia.

For more detailed forecasts and strategies on navigating the evolving market landscape, see the economic calendar and related analysis at FXEmpire.

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Navigating the Storm: Ukraine’s Debt Sustainability Crisis Amid Accelerating IMF Talks

Ukrainian Debt Sustainability Challenges Persist Amid Accelerated IMF Programme Talks

By Dennis Shen, Updated September 29, 2025, 14:21 GMT

The conflict between Russia and Ukraine drags on into its fifth year. War pushes Ukraine into hard debt management and budget stress. Ukraine turns to frozen Russian funds and may alter its debt. Kyiv now talks with the IMF for new help.

Economic Growth and Fiscal Outlook

Scope Ratings shows that slow activity in early 2025 leads to weaker growth. Ukraine sees real GDP at 2.0% in 2025 and a slight rise to 2.25% in 2026. The budget gap stays wide at about 18.3% of GDP this year and 15.3% next year.
Debt climbs fast. End-2025 debt tops 95% of GDP, up from 91.2% at year-end 2024 and 49% in 2021. War spending and economic disruption keep debt on the rise.

The Impending IMF Programme and Financing Constraints

Ukraine runs an IMF Extended Fund Facility that gives USD 15.5 billion, set to end in March 2027. Kyiv now asks for a new four-year plan as war continues.
Military costs claim around 60% of the budget. This heavy use stops funds from flowing to pensions, public wages, and social aid. Ukraine now needs large sums from outside backers.
The IMF may support Ukraine only if debt stays manageable and repayment plans are set. War adds doubt and makes these checks tougher. Ukraine set goals to cut debt to 82% of GDP by 2028 and down to 65% by 2033. The long conflict now puts these targets at risk.

Funding Gap and the Role of Frozen Russian Assets

Scope Ratings and the IMF now see a need for nearly USD 65 billion more by 2027. This gap far exceeds Ukraine’s estimate of USD 38 billion.
Long-term, the budget gap may stick close to 20% of GDP each year, meaning about USD 50 billion must come each year from friends abroad. If US funds fall short, the EU may face more strain. The EU stands as Ukraine’s single largest funder even as it deals with its own limits.
Usual finance routes run nearly dry. The EU’s Macro-Financial Assistance+ and G-7 ERA loans (using cash from seized Russian assets) are nearly spent.
The European Commission now plans a new use of frozen Russian money. It will swap cash with short-term, zero-coupon EU bonds that keep Russian legal claims close. With this swap, Ukraine gets zero-interest “reparations” loans. These loans need to be repaid only if Russia stops fighting and later compensates Ukraine. Most now view these loans as free support rather than loans to pay back.
For cases where some political groups oppose, options like bilateral bond guarantees come into play. German leaders now back the plan for defense needs, and the UK now shows a similar idea with about GBP 25 billion.

Debt Restructuring Considerations

A worsening budget leads Ukraine to think about a bigger fix for its external debt. The latest IMF check finds Ukraine’s debt unsustainable without a strict debt fix plan.
Ukraine still works with G-7 banks on “perimeter external claims” that include GDP-linked securities. A new fixing round is set for late 2026. Today, talks focus on some G-7 loans, but a broader fix might show up if war costs remain high.

Conclusion

Ukraine now faces hard finance tests as the conflict goes on. Managing debt becomes tougher on a daily basis. Fast IMF programme talks and new plans that use frozen Russian funds may help steady Ukraine’s path. How well these steps work will shape Ukraine’s strength and its speed to recover when war finally ends.

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Score Media Executive Settles Insider Trading Case, Facing Nearly $600,000 in Penalties and Profits from Tipping Scheme

Couple Settles Insider Trading and Tipping Case in Score Media Acquisition

By Barbara Shecter | Financial Post | September 26, 2025

A former executive at Score Media & Gaming Inc. reached a settlement with the Ontario Securities Commission. The commission charged him with insider trading and tipping. The charges relate to the US$2 billion acquisition by Penn National Gaming Inc.

Insider Trading Allegations and Settlement Details

Huy Le Huynh worked as a Vice President of Finance at Score Media. He admitted that he used secret information when he traded. He bought call options with a third party just before the public learned of the takeover. The purchase cost around US$7,000 and made him profits of over US$311,000. Each word here connects closely to the next to keep ideas tight and clear.

Use of Intermediaries and Trading Arrangement

Huynh learned of the acquisition plans before they were public. He told his wife, Thi Anh Nguyet (Nancy) Pham, who was on leave from Bell Canada. Both knew that buying or selling Score Media securities was banned at that time. Huynh then asked his wife’s long-time friend, Jessica Tam, for help. He gave Tam US$10,000 to deposit in her Tax-Free Savings Account. Huynh told her, in person and on the phone, to buy Score Media call options. The plan was simple: split the profit so that 80 percent went to Huynh and Pham, and 20 percent to Tam.

In late July 2021, Tam bought 184 options for US$5,152. She then bought another 120 options for US$1,800. After the takeover was announced, Tam paid Huynh and Pham about US$270,000 in cash. The trio used coded language—terms like “toys” referred to sums of money—over WhatsApp to share the plan details.

Efforts to Conceal Involvement

After trading, Huynh told Tam to delete his contact details from her phone. He also gave her a lawyer’s contact in case anyone questioned the trades. Next, he asked Tam to use some of the remaining money to invest in other securities. Here, every instruction connects directly with its purpose, ensuring the steps stay clear.

Pham admitted that she knew about the acquisition before it was announced. She also said she was aware of the plan that Huynh and Tam made. However, she did not know all of the finer details of the scheme.

Cooperation and Penalties

The couple had no past record of securities violations. They cooperated fully with the OSC investigation. This cooperation helped reduce the penalties. In the end, Huynh and Pham paid nearly US$600,000 in penalties and disgorged profits. Huynh accepted his role in the insider trading, and Pham admitted that her actions hurt the public interest.

Broader Implications

This case shows that Canadian regulators remain alert to insider trading. The OSC works hard to keep markets fair and to protect confidential details. They continue to monitor trades and enforce penalties for misusing private information.

Stay informed about developments in Canada’s key industries and regulatory actions by subscribing to the Financial Post’s newsletters.

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Germany’s 2025-26 Spending Plans: Delays Threaten Economic Growth and Stability

Germany’s Bold 2025-26 Spending Plans Face Delay, Slowing Short-Term Growth

By Julian Zimmermann | Published: September 26, 2025

Germany may delay extra spending on infrastructure and defense in 2025 and 2026. The delay casts doubt on near-term growth. Scope Ratings notes that the boost to the economy will come slowly. The government’s extra funds may not boost growth as quickly as planned.

Gradual Spending Increase and Its Impact on Growth

Scope Ratings sees that extra government spending could add 0.3 to 0.4 percentage points to GDP growth each year from 2026 to 2030. This spending might bring real GDP growth to about 1.2% per year on average. The positive effect depends on a rise in public investment from 2026, even when spending falls short of set targets.

Half of the planned EUR 59 billion from a EUR 500 billion special fund for infrastructure is set to be used in 2026. Spending is then expected to rise slowly to around EUR 40 billion each year. This sum equals roughly 0.92% of GDP.

Risks Threaten Spending and Economic Output

Several risks may weaken this plan. Under-spending in the public sector can lower private investments and slow growth. Legal and administrative issues can delay projects. Spending may be spread over many years, which would lessen its impact in the short run.

For example, Germany’s federal states receive EUR 100 billion from the fund. They have until 2043 to use these funds. Only one third of the total is set for use by 2029 if projects are approved by 2036. This long timeline shows how hard it is to speed up spending.

Structural Problems Add to the Delay

Slow investment may increase Germany’s growth problems. The country also faces a shrinking working-age population. Other pressures come from high tariffs set by the United States and stronger competition from Chinese manufacturers.

Tax and Debt Predictions Change

Scope Ratings now predicts that Germany’s debt-to-GDP ratio will reach about 70% by 2030. In 2024, this ratio was around 62%. This figure is lower than the earlier estimate of 74% in 2030. Though Germany reached a debt ratio of 81% in 2010, its current level remains high compared to similar nations, which averaged 36% in 2024. Germany’s fiscal deficit is predicted to fall to roughly 2.5% of GDP in 2025 from 2.7% in 2024. This drop comes after the 2025 federal budget was approved on September 18, leaving little time to spend funds. From 2026 through 2030, investment in defense and infrastructure is expected to increase, but still below government targets, leading to an average fiscal deficit of 3.6% of GDP.

Political issues limit extra fiscal flexibility. Changes to the debt brake rule seem unlikely because the current government lacks a two-thirds majority. This situation is hard to change in the current divided political climate.

New Funding Plans and Debt Sales

Germany’s finance agency raised its target for the last quarter of 2025 by EUR 15 billion to EUR 425 billion. A similar increase of EUR 19 billion was made in the third quarter. Although this marks the lowest gross issuance since 2021, net issuance should jump to EUR 94 billion in 2025 from EUR 67 billion in 2024. Net funding needs are expected to average EUR 130 billion each year during 2026-2028. This sum equals roughly 2.7% of the projected GDP.

Targeted and Timely Investment Spending is Needed

The law on the special fund requires that investments in the core government budget stay above 10% of total spending, as in 2024. With flexible accounting and parliamentary choice, the government decides if the rule stays in force.

The 2025 budget shows shifts between the core budget and the special fund. For example, the Federal Ministry of Transport faced net cuts of around EUR 11 billion, with funds moving to the special fund. Meanwhile, the Federal Ministry of Labour and Social Affairs saw a spending rise, mostly for unemployment insurance. This shift shows the government’s ability to move funds quickly, even as it makes the overall economic impact less clear.

For the full economic calendar and the latest updates on global markets, visit FXEmpire.

Julian Zimmermann is a Director who rates Sovereign and Public Sector and Financial Institutions at Scope Ratings. His work focuses on macroeconomics and public finance.

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Turbulent Waters Ahead: How U.S.-Canada Tensions Threaten Canadian Banks’ Capital Stability

Former OSFI Deputy Warns Rising U.S. Tensions Heighten Risks to Canadian Bank Capital

September 25, 2025 – Toronto

A former top banking regulator from Canada has warned the nation’s largest banks. He sees rising tensions with the United States as a risk to their overseas assets and capital. Mark Zelmer, who served as deputy superintendent at the Office of the Superintendent of Financial Institutions (OSFI), points out that Canadian banks are more exposed because they work heavily across borders, mainly in the U.S.

On Thursday, the C.D. Howe Institute published a paper by Zelmer. He states that the world is changing. Foreign authorities might soon block assets held by Canadian financial firms when economies are under stress. Such actions could block banks’ access to vital capital. This in turn may lead to serious challenges in liquidity and stability.

Potential Asset Ring-Fencing Amid Rising Tensions

Zelmer recalls the case of Maple Bank in Canada. In 2016, a German bank saw its Canadian assets blocked after it ran into trouble. This past event shows that regulators can stop cross-border capital flows during crises. He warns that the United States or other nations may take similar or even stricter measures. This is especially true for Canadian banks that have large deposits and operations overseas.

Zelmer writes, "The risk of such behavior is more acute today. International cooperation is harder, especially with the United States."

Canada’s "Big Six" banks—Royal Bank of Canada, Toronto-Dominion Bank, Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, and National Bank of Canada—have strong ties in the U.S. For banks like BMO and TD, their U.S. operations sometimes match the size of their Canadian business in both assets and revenue. This closeness may allow foreign regulators to restrict capital in a crisis. This would make bank runs and financial shocks harder to manage.

Recommendations to Mitigate Risk

Zelmer advises banks and insurers in Canada to keep more surplus capital and liquidity at home. While this may cost more or pay lower tax benefits than investing offshore, it lowers the control that foreign regulators have during hard times.

He also asks for clearer public disclosure and more regulatory openness. Banks should share how their Canadian and overseas parts work together. Knowing this will help policymakers and market players see the risks of asset blocks by foreign authorities.

Zelmer explains, "If these investments sit in foreign systems or custody accounts, there is a risk they might be blocked or frozen." He warns that Canada’s biggest banks have large investments in foreign securities that also appear on their home balance sheets.

He stresses that even strong banks can suffer from bank runs. He mentions Home Capital Group, which faced liquidity issues in 2017. Zelmer calls on OSFI and other policymakers to watch bank practices closely. They must manage liquidity risk while thinking about the threat of foreign asset restrictions.

Ongoing Engagement with Canadian Banks

Zelmer notes that OSFI is in active talks with major banks across Canada. They discuss steps to face these new challenges. While details have not yet been finalized, regulators clearly see the risks that come from cross-border capital exposure. This understanding is vital given today’s uncertain global politics.

This report offers the views of an expert former regulator. It points out key vulnerabilities in Canada’s banking system as international relations worsen. The report calls for careful capital management and strong regulation to protect financial stability.

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Reviving the Dragon: How China’s Housing Stimulus Sparks Market Rally and Consumer Hope

China Housing Stimulus Bets Lift CSI 300 and Shanghai Composite

By Bob Mason, Published September 25, 2025

China stock markets get a boost. Investors sense that Beijing will soon use new help for the housing market. Housing stands as a key part of the country’s overall growth. On Thursday, September 25, 2025, mainland stocks rose strongly. The CSI 300 Index reached a level unseen since March 2022. The Shanghai Composite Index hit a 10-year high.

Housing Sector Struggles and Economic Impact

China’s housing market has faced hard times all year. These issues lower consumer hope. Real estate work dropped 12.9% from January to August. Residential housing area shrank by 4.7% during this time. Total home sales fell 7.3%. These numbers mark a steady fall that began earlier in the year.

Investor mood for real estate has dropped for five months now. Consumer confidence slipped to 87.9 in June, which is near the November 2022 low of 85.5. This trend slows spending and makes Beijing’s goal of a spending-led economy harder.

Calls for Policy Support

Huang Yiping from the People’s Bank of China urged officials to add fiscal help for the housing market. He spoke about the real estate sector and its weight on the overall economy. His clear words sparked hope among investors. They now expect that soon new measures will support housing. Recovery here may lift consumer hope and boost domestic buying.

The Consumption Challenge and Economic Indicators

Private spending makes up about 40% of China’s GDP. Falling external demand, hurt by US tariffs, now shifts focus to local buying. Retail sales grew 3.4% in August. This pace is slower than 3.7% in July and far behind the 6.4% seen in March. In the past, typical growth reached around 12.09%.

Exports slowed, growing only 4.4% in August after a 7.2% rise in July. These lower numbers put pressure on the government’s 5% GDP goal. They add weight to the need for new policy help.

Rising unemployment adds to the strain. The overall rate climbed to 5.3% in August from 5.2% in July. Youth unemployment reached 18.9%. These trends hurt spending and lower consumer hope.

Market Response and Outlook

The expected support has raised Chinese stocks. The CSI 300 Index now stands at 4,590. The Shanghai Composite has climbed to 3,900. These levels are high, and they mark strong gains. Year-to-date, the CSI 300 and Shanghai Composite have grown by 16.7% and 15.0% respectively, even under tariff pressures, a weak housing market, and soft demand.

Investors also see promise in high-tech fields like artificial intelligence and semiconductors. When compared with the 32.3% rise of the Hang Seng Index this year, mainland stocks seem more appealing.

Looking Ahead: Stimulus and Trade Dynamics

Focus now turns to Beijing and its next steps. Upcoming policy words will likely target help for the housing market and boost local spending. US–China trade talks also hold weight. The APEC Summit, set in South Korea from October 31 to November 1, will host key discussions. Talks may include tariff cuts and broader economic work. Such progress could support China’s recovery and steady stock gains.

For context, the CSI 300 once peaked at 5,931 in February 2021. The Shanghai Composite reached its all-time high of 6,124 in October 2007. Future private sector Purchasing Managers’ Index data for September will be watched for signs of what is next.

Conclusion

China’s housing market stays a key sign for the nation’s economic health. Calls for fiscal help and the rising stocks show clear hope. Policy moves may come soon to support and revive this important sector. A stronger housing market may spark consumer hope, raise local buying, and back steady growth amid many challenges.

For more real-time updates on China’s policy moves and stock trends, visit our economic calendar and market analysis sections.

About the Author:

Bob Mason has over 28 years of experience in the financial industry, covering currencies, commodities, alternative asset classes, and global equities, with a focus on European and Asian markets.

Sources: FX Empire, People’s Bank of China (PBoC), China National Bureau of Statistics

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Navigating Turbulent Waters: China’s Labor Market Challenges and Economic Future

China Labor Market Struggles Deepen, Clouding Economic Outlook

By Bob Mason, Published September 23, 2025, 03:58 GMT

China’s labor market shows clear struggles. Beijing set a 5% GDP goal this year, but weak export demand, low prices, and rising unemployment pull the economy down. The close links among these issues make it hard for China to switch to a consumption-led model.

Rising Unemployment and Weak Demand

The latest data for August show China’s unemployment rate at 5.3%, just above July’s 5.2%. Youth unemployment now sits at 18.9%, the highest since December 2023. This high rate adds stress for new graduates and young workers who face a tight job market.
Exports from China drop as trade tensions make deals hard. Price wars in the domestic market squeeze profit margins, and companies must cut jobs to save money. Fewer jobs mean consumers spend less. Retail sales in August grew by 3.4% year-on-year, down from 3.7% in July and 4.8% in June. Smaller growth shows that workers worry about their jobs.

Impact of US Policies on China’s Labor Market

US rules now bar some Chinese workers from the American job market. President Trump raised the H-1B visa fee to $100,000 to limit visitors with skills. This change may cut demand for Chinese talent at a time when over 12 million new graduates look for work.
These shifts have led to a drop in consumer confidence. The confidence index fell to 87.9 at the end of Q1 2025, while the long-term average is 108.95. With more doubt about future jobs, private spending slows, which puts more strain on Beijing’s plans to boost domestic demand.

Challenges for Policy Makers and Market Response

Policymakers now face a loop where weak jobs lead to low spending, which then pressures company profits and lowers jobs even more. The housing market also suffers, and global change adds to worries over steady growth.
The People’s Bank of China (PBoC) kept loan rates at 3% for one-year loans and 3.5% for five-year loans. This move shows a careful balance between pushing for growth and keeping finance stable. Bank leaders seem to wait for US–China trade talks to finish before they change policies further.

After talks between President Xi Jinping and President Trump on September 19, many see a chance for trade ease before the Asia-Pacific Economic Cooperation (APEC) Summit. Trump also stopped $400 million in military aid to Taiwan. Some see this as a sign that trade talks may move ahead.

Market Reactions and Outlook

Financial markets now show mixed signs. The CSI 300 and the Shanghai Composite dropped slightly by 0.01% and 1.67% respectively this month, even though both have risen by more than 13% year-to-date. In contrast, Hong Kong’s Hang Seng Index climbed 4.3% in September.
Market experts warn that without more policy help—especially support for the housing sector and more trade break—stocks in China may drop more. Key problems stay, such as US tariffs, a weak labor market, and low export demand.

The Road Ahead: APEC Summit and Economic Prospects

The APEC Summit in South Korea from October 31 to November 1 becomes more important as both Presidents Xi and Trump plan to attend. Many hope the meeting will help ease trade problems between the US and China. Still, experts think that some tariffs will stay, and the global economy must work with them.
Alicia Garcia Herrero, Chief Economist at Natixis Asia Pacific, notes that China has two sides: progress in IT and semiconductors, and struggles in the large real estate market. She points out that limits on Chinese imports—such as the ban on some Nvidia GPUs—may change supply chains further.
Data from the private sector Purchasing Managers’ Index (PMI) in September, due next week, will help guide views on the economic future. If export and job cuts continue, market hope may fall even more. If prices steady and domestic demand picks up, some worries might fade.

Conclusion

China’s job market gets tougher as US trade issues continue, and the economic outlook grows dimmer. As more people lose jobs and worry about spending, Beijing must find strong actions that work. The coming APEC meeting and talk between the US and China will draw much attention as any progress might help bring back trust and guide China toward its growth targets.

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