BEIJING (Reuters) -China's new home prices fell at the fastest pace in nine years in June, official data showed on Monday, with the battered sector struggling to find a bottom despite government support measures to control oversupply and bolster confidence.

New home prices were down 4.5% from a year earlier, hitting the lowest since June 2015, deeper than a 3.9% slide in May, according to Reuters calculations based on National Bureau of Statistics (NBS) data.

Prices were down 0.7% month-on-month in June after a 0.7% dip in May.

Since 2021, the property market's steep downturn has led to a series of developers defaulting, leaving numerous construction sites idle. This has eroded confidence in the sector, traditionally favoured by Chinese households as a safe haven for their savings.

The property sector which at its peak accounted for a quarter of GDP, remains a major drag on the $18 trillion economy.

Authorities have rolled out a flurry of support measures, including cutting home buying costs in major cities and allowing local governments to buy some unsold apartments and turn them into affordable housing.

"The structure of supply and demand in the property sector has been fundamentally reversed. (The market) does not need to have excessively high expectations of the effects of the policies," said Zhang Dawei, analyst at Centaline Property Agency Ltd.

"It is unlikely that there will be a rise across the board in the sector in the future," Zhang said.

Property investment fell 10.1% in the first half of 2024 from a year earlier, and home sales by floor area fell 19.0%, deeper than a 20.3% slump in the first five months of the year, separate NBS figures showed.

Markets will closely scrutinise directives from the Communist Party leadership meeting starting on Monday where key economic issues will be discussed. Measures that redistribute income from central authorities to local municipalities and curbing an addiction to land sales laid bare by China's property crisis will top the agenda, policy advisers say.

Here’s your look at what's happening in markets for the week ahead.

1. Donald Trump speech at GOP convention

Former President Donald Trump was the target of an attempted assassination during a campaign rally in Butler, Pennsylvania. The assailant fired shots at Trump, hitting him in the right ear before being neutralized by security forces.

The incident occurred as Trump was addressing his supporters. According to Trump's own account shared on his Truth social media platform, he heard the sound of gunfire and felt the bullet as it pierced his skin.

Despite the attack, Trump was able to speak after the event, urging his audience to "Fight! Fight! Fight!"

Trump will receive his party's official nomination for US election this week at the four-day Republican National Convention in Milwaukee. His speech could be the first public appearance since the attempted assassination.

2. Fed Chair Powell speaks

Fed Chairman Jerome Powell will be interviewed by David Rubenstein at the Economic Club of Washington DC. A session including questions is scheduled after the interview. 

In his recent testimony on Capitol Hill, Powell highlighted the central bank's ongoing efforts to tackle inflation and its commitment to a dual mandate.

Powell also expressed cautious optimism about inflation trends, noting some confidence in inflation moving down towards the 2% goal.

However, he clarified that it was premature to assert that the trend towards the 2% target would be sustainable.

3. Earnings season continues

The Q2 earnings season has started last week, and it will continue as soon as Monday when Goldman Sachs and BlackRock (NYSE:BLK) are scheduled to report on their financial performance.

Later in the week, Bank of America, Morgan Stanley, ASML (AS:ASML), and Netflix (NASDAQ:NFLX) are also due to report their results.

Wall Street is expecting a very strong earnings season, much of which is already baked into current stock valuations. 

4. ECB interest rate decision

The European Central Bank (ECB) is widely expected to maintain its current rates after they eased in June. 

"We expect the ECB to be on hold at the July meeting. The press conference should focus on the future rate path and the developments in France," Morgan Stanley said in a note.

5. Jobless claims, Retail sales, Fed's Beige Book

Many pieces of economic data are expected to be released this week.

Among other things, the Federal Reserve will publish its Beige Book report, which is a collection of anecdotal information on current economic conditions from each of the twelve Federal Reserve Districts.

The report for the June FOMC meeting period highlighted that economic activity has continued to expand during the spring season. However, the expansion has been uneven across different sectors and districts.

The Beige Book detailed that businesses have observed a weakness in discretionary spending, attributing this to an increased price sensitivity among consumers.

Jobless claims and retail sales data are also due in the week ahead.

By Jamie McGeever

(Reuters) - A look at the day ahead in Asian markets.

A dramatic escalation in U.S. political tension and violence looms over world markets on Monday after the attempted assassination of former President Donald Trump on Saturday, with Asian assets the first to show what the impact - if any - will be on trading and investing.

If the shooting strengthens Trump's election hopes, analysts reckon so-called 'Trump-victory trades' could include a stronger dollar and a steeper U.S. Treasury yield curve. Bitcoin was up 4% at $60,000 early in Monday's global session.

Even before Saturday's violence, there was no shortage of meaty issues for investors in Asia to get their teeth into on Monday - from snowballing U.S. rate cut expectations to suspected Japanese FX intervention and a deluge of economic data from China including second quarter GDP.

Last week's surprisingly soft U.S. inflation can keep the 'risk on' flame burning if U.S. bond yields, implied rates and the dollar all ease. Rates traders expect the Fed to cut rates by 75 basis points this year, starting in September.

But if that's being driven by weakening growth and a softer labor market, exuberance will be consumed by caution, especially with the Q2 U.S. earnings season getting underway.

Asia's calendar on Monday is dominated by the June 'data dump' from China as Beijing releases house price, industrial production, urban investment, retail sales, and unemployment figures for last month, and Q2 GDP.

Analysts and investors have set their expectations low.

Asia's largest economy is expected to have expanded 1.1% from the January-March period, resulting in year-on-year growth of 5.1%. Both would be down from prior readings of 1.6% and 5.3%, respectively.

China continues to struggle with a prolonged property crisis that has curbed investment, soured consumer confidence and demand, and kept alive the specter of deflation. Trade, bank lending figures and key money gauges last week darkened the gloom further.

China's central bank, meanwhile, is widely expected to leave the interest rate on its one-year medium-term lending facility loan unchanged at 2.50% on Monday.

Japanese markets are closed for a holiday on Monday but the yen will be traded across the continent, going into the session near a four-week high against the U.S. dollar following its rise on Friday.

Japanese authorities remain tight-lipped on whether they intervened last week. But the yen's sharp rally and daily Bank of Japan money market balance projections strongly point to official action, analysts say.

The yen had languished at 38-year lows around 162.00 per dollar last week, but goes into Monday around 157.90 per dollar.

Does the short covering rally have more juice in it? Probably - hedge funds are holding their largest net short yen position in 17 years, U.S. futures market figures show.

The surging yen triggered a 2.4% slump in Japanese stocks on Friday, its steepest fall since April. Having hit a record high above 42,000 points on Thursday, it could have more room to fall.

Elsewhere in Asia on Monday, India's wholesale price inflation is seen rising sharply to a 3.5% annual rate in June from 2.6% in May.

Here are key developments that could provide more direction to markets on Monday:

- China 'data dump' (June)

- China GDP (Q2)

- India wholesale price inflation (June)

Investing.com-- Wall Street marked an unexpected reaction to softer-than-expected inflation data, with heavyweight technology stocks logging steep losses after the reading even as optimism over a September interest rate cut grew. 

Losses in U.S. futures suggested that this trend was set to continue on Friday. But key producer price index data, and the onset of the second quarter earnings season, are set to offer more cues to markets. 

President Joe Biden also reiterated his intention to run against Donald Trump in the 2024 elections, dismissing calls for him to pull out amid growing concerns over his mental state. 

September rate cut bets swell after soft CPI, PPI data awaited 

Markets were seen ramping up bets on a September interest rate cut by the Federal Reserve, following softer-than-expected consumer price index data on Thursday.

Traders were pricing in an 82% chance for a 25 basis point cut in September, up from expectations of a 64% chance seen last week, CME Fedwatch showed. This came last as CPI data showed inflation cooled a smidge more than expected in June, while core inflation increased only slightly.

Producer price index inflation data, which is due later on Friday, is now set to offer more cues on this trend. Any more signs of cooling inflation will likely factor into increased expectations of rate cuts.

Wall Street battered by tech rout

U.S. stock index futures fell in European trade, with losses in Nasdaq 100 Futures suggesting that a rout in technology stocks was set to extend into Friday.

Wall Street indexes had fallen sharply on Thursday as investors locked-in recent profits in heavyweight technology stocks, especially those that saw a stellar melt-up in recent weeks on hype over artificial intelligence.

This trend spilled over into Asian and European markets on Friday, with tech-heavy bourses clocking steep losses. 

But investors were also seen pivoting into more economically sensitive sectors, which are expected to benefit from improved growth as interest rates fall this year. 

Banks to kick off Q2 earnings season 

The second quarter earnings season is set to begin in earnest on Friday, with reports from a slew of major Wall Street banks on tap through the day.

JPMorgan Chase & Co (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Citigroup Inc (NYSE:C), and Bank of New York Mellon (NYSE:BK) are set to report earnings for the second quarter later in the day, with focus squarely on how corporate profits fared as the economy came under increasing pressure from high interest rates and sticky inflation. 

Friday’s reports will be followed by earnings from financial heavyweights Goldman Sachs Group Inc (NYSE:GS) and BlackRock Inc (NYSE:BLK) on Monday, while Morgan Stanley (NYSE:MS) and Bank of America Corp (NYSE:BAC) are set to report on Tuesday.

Biden says will still run in 2024 presidential race 

U.S. President Joe Biden reiterated his commitment to run against Donald Trump in the 2024 presidential elections, dismissing mounting concerns over his mental state. 

Biden said he was the “most qualified person to run for President,” while fielding questions from the press at a NATO summit on Thursday. Biden said that he had beaten Trump once and would do so again.

His comments came amid growing calls from several Democratic party members for the President to withdraw his reelection bid, in light of a seemingly disastrous performance in a debate with Trump in June. 

China trade data mixed, outlook dulled by import tariffs 

Markets were also grappling with mixed trade data from the world’s second largest economy. 

China’s trade balance surged to a bigger-than-expected surplus in June, underpinned by strong exports. But an unexpected drop in imports raised concerns over dwindling domestic demand.

Chinese imports of key commodities such as oil, iron ore and copper fell during the month, which set a negative tone for prices of the materials.

While exports were strong in June, they are also expected to face some headwinds in the coming months, especially as the European Union joined the U.S. in imposing tariffs on key Chinese industries, such as electric vehicles. The EU is a major EV market for China.

BEIJING (Reuters) -China suffered direct economic loss worth 93.16 billion yuan ($12.83 billion) in the first half of this year due to natural disasters, the government said on Friday.

This is the deepest first-half disaster-related loss since 2019, according to data available on the Emergency Management Ministry website, as the country suffered flooding, drought and extreme temperature in the first six months of the year.

China saw cold spells and heavy snow earlier in the year, a 7.1 magnitude earthquake in the northwestern region of Xinjiang, landslides in southwestern regions and flooding on the Yellow (OTC:YELLQ) River and in southern provinces this year.

At least 32.38 million people were affected due to natural disasters during January-June, including the disappearance or death of 322 people.

About 856,000 faced emergency resettlement and 23,000 houses were destroyed, while around 3.17 million hectares of crops were affected.

The impact on the economy was worse than the year-earlier period, when the country logged 38.23 billion yuan worth of loss and 95 people went missing or died.

For all of 2023, about 48.76 million people were affected due to natural disasters, according to the ministry's report from last year.

Funds channelled into disaster management has reached 4.17 billion yuan so far this year, according to a Reuters tally, with 546 million yuan allocated last month for agricultural production and disaster relief.

($1 = 7.2621 Chinese yuan)

By Makiko Yamazaki and Leika Kihara

TOKYO (Reuters) -Japan's top currency diplomat said on Friday authorities would take action as needed in the foreign exchange market, resuming his jawboning after the yen's spike overnight raised market speculation about currency intervention.

Masato Kanda, who is vice finance minister for international affairs, declined to comment on whether authorities had intervened in the currency market to prop up the yen, but told reporters recent yen moves were out of line with fundamentals.

Chief Cabinet Secretary Yoshimasa Hayashi also told reporters on Friday that authorities were ready to take all possible means on exchange rates, signaling readiness to step into the market to arrest excessive yen falls.

The remarks on the yen break the recent silence among Japanese officials, who have refrained from commenting on their readiness to intervene as analysts question the effectiveness of jawboning in stopping sharp yen declines.

"I've found recent big currency moves strange, from the perspective of whether they were in line with fundamentals, and it would be highly concerning if the excessive volatility, driven by speculation, pushes up import prices and negatively affect people's lives," Kanda said.

"Currency interventions should certainty be rare in a floating rate market, but we'll need to respond appropriately to excessive volatility or disorderly moves," he added.

Finance Minister Shunichi Suzuki also told a regular news conference on Friday that rapid, one-sided moves in the foreign exchange market were undesirable.

The yen surged nearly 3% on Thursday in its biggest daily rise since late 2022, shortly after U.S. consumer price figures revived market expectations the Federal Reserve will cut interest rates in September.

GUESSING GAME

Some local media attributed the yen's abrupt spike to a round of official buying to prop up a currency that has languished at 38-year lows. The dollar stood 158.79 yen in Asia on Friday, after falling to as low 157.40 yen overnight.

"Japan likely intervened as otherwise, the yen won't move that much so suddenly," Takahide Kiuchi, an economist at Nomura Research Institute, said of the yen's overnight jump.

"Japan's past interventions were made when the yen was plunging, some of which weren't necessarily effective. This time it worked because authorities took action just when the weak-yen trend was turning around," he said.

Meanwhile, the Nikkei newspaper reported that the Bank of Japan conducted rate checks with banks on the euro against the yen on Friday, citing several sources.

Finance minister Suzuki declined to comment on whether authorities made rate checks, which are seen by traders as a precursor to actual yen-buying intervention.

Japanese authorities have recently made it standard practice to not confirm whether they have intervened in the currency market or not.

Tokyo spent 9.8 trillion yen ($61 billion) intervening in the foreign exchange market at the end of April and early May, official data showed, after the Japanese currency hit a 34-year low of 160.245 per dollar on April 29.

Back then, authorities were suspected to have intervened in several stages to create a buffer to defend the 160 mark against the dollar.

If Tokyo were to have stepped in on Thursday, it would have been more aimed at accelerating the yen's rebound against the dollar that occurred shortly after the weaker-than-expected U.S. inflation data.

All the same, some currency analysts were unconvinced that Thursday's price action was caused by intervention.

"The yen's surge last night looks to have been caused by stops triggered by weaker-than-expected U.S. consumer price data," said Daisaku Ueno, chief FX strategist at Mitsubishi UFJ (NYSE:MUFG) Morgan Stanley Securities.

"Yen short positioning had been very stretched, not just against the dollar but other currencies," Ueno said, although he wouldn't rule out the possibility of intervention.

By Rae Wee

SINGAPORE (Reuters) - The yen swung between losses and gains on Friday in volatile trade, reflecting investors' skittishness after Tokyo was thought to have intervened to prop up the Japanese currency in the wake of a cooler-than-expected U.S. inflation report.

Moves in the yen against the dollar and other major currencies stole the spotlight on Friday, though in the broader market, Asian stocks cheered the growing bets for a September rate cut from the Federal Reserve.

The dollar was last 0.05% lower at 158.79 yen, after having risen more than 0.3% to an intraday high of 159.45 yen and falling 0.7% to a low of 157.75 yen within the span of the early Asian session on Friday.

Moves were similarly choppy in the other yen crosses, with the euro last up 0.02% against the yen while sterling rose 0.1%, both reversing earlier losses against the Japanese currency.

"It's either one of two things - the market's either jumping at shadows this morning waiting for a second round of intervention, and I think now that the (Bank of Japan) has committed again, there's good reason for them to come back," said Tony Sycamore, a market analyst at IG.

"The second thought is the market's just really skittish."

Speculation was rife that Japanese authorities had likely intervened in the currency market to shore up the yen on Thursday, after it surged nearly 3% against the dollar intraday.

Local media attributed the move to a round of official buying from Tokyo to prop up a currency that has languished at 38-year lows, though authorities as usual remained reticent on providing any hints.

The Nikkei newspaper reported that the BOJ conducted rate checks with banks on the euro against the yen on Friday, citing several sources.

ON TRACK

Elsewhere, MSCI's broadest index of Asia-Pacific shares outside Japan was little changed, though was on track for a 1.6% increase for the week, helped by growing bets of imminent U.S. rate cuts.

Those expectations were reinforced after Thursday's U.S. consumer price figures and as Fed officials showed increasing confidence that inflation was coming to heel.

Market pricing now shows an over 90% chance of a Fed easing cycle beginning in September, as compared to just over a 50% chance a month ago, according to the CME FedWatch tool.

"While the timing of eventual Fed rate cuts will depend on incoming data, this report, together with some softening in the labor market, has further tilted the balance of evidence towards an earlier start time," said David Doyle, head of economics at Macquarie.

However, Asian stocks failed to rally on Friday as they tracked a negative lead from Wall Street, after investors rotated into smaller companies following the U.S. inflation print.

"The broad move was driven by rotation and switching across styles and factors," said Chris Weston, head of research at Pepperstone. "It was the well-loved names that saw the selling and maybe this was partly technical given just how extended these plays are."

Japan's Nikkei similarly fell 2.3%, dragged down by technology stocks.

S&P 500 futures were little changed, while Nasdaq futures fell 0.02% and EUROSTOXX 50 futures were flat.

In other currencies, sterling eased 0.03% to $1.29095, though hovered near a roughly one-year high hit on Thursday, as comments from Bank of England policymakers and better-than-forecast GDP data led traders to reduce bets on an August rate cut in Britain.

The euro gained 0.04% to $1.0871, while the U.S. dollar was on the defensive and languished near a one-month low against a basket of currencies from the previous session.

Oil prices meanwhile rose in early Asian trading hours on Friday as signs of strong summer demand and easing inflationary pressures in the United States bolstered investor confidence. [O/R]

Brent futures rose 0.4% to $85.74 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 0.56% to $83.08 a barrel.

Gold edged 0.07% lower to $2,413 an ounce. [GOL/]

By Alexandra Alper and Christopher Bing

WASHINGTON (Reuters) -Republican lawmakers asked the Biden administration for an intelligence assessment of Microsoft (NASDAQ:MSFT)'s $1.5 billion investment in UAE-based artificial intelligence firm G42 over concerns about transfer of sensitive technology and G42's historic ties to China.

Representative Michael McCaul, chair of the House Foreign Affairs Committee, and John Moolenaar, leader of the Select Committee on China, made the request for a briefing in a letter dated Wednesday to White House national security adviser Jake Sullivan, the committees said.

The Republicans said they want the briefing on the deal, announced in April, before it advances to a second phase involving the transfer of export-restricted semiconductor chips and model weights, sophisticated data that improves an AI model's ability to emulate human reasoning.

The letter is a sign of growing concern about the lack of regulations around the export of sensitive AI models, as fears mount that companies like G42 might share the prized technology with U.S. adversaries like China.

"We remain deeply concerned by attempts to move quickly to advance a partnership that involves the unprecedented transfer of highly sensitive, U.S.-origin technology, without congressional consultation or clearly defined regulations in place," the lawmakers said in the letter.

They asked for a U.S. assessment of G42's ties to China's Communist Party, military and government before the Microsoft deal advances. They cited a recent visit by UAE President Sheikh Mohamed bin Zayed Al Nahyan to Beijing to discuss, according to Chinese state news agency Xinhua, cooperation in AI.

Microsoft said in a statement it was working closely with the U.S. government and "U.S. national security will continue to be a principal priority." The White House National Security Council spokesperson said in a statement that the administration has been in regular dialogue with lawmakers to ensure they are aware of the risks associated with digital infrastructure. "National Security Advisor Jake Sullivan looks forward to continuing this engagement, including with Chair McCaul," the person added.

Spokespeople for G42 and the United Arab Emirates embassy did not respond to requests for comment.

The Chinese Embassy said, "The U.S. has repeatedly undermined cooperation between Chinese companies and other countries on trumped-up security grounds."

CONCERNS ABOUT CHINA

A House Select Committee aide told reporters on a phone call on Thursday that based on conversations with Microsoft, the lawmakers expect the U.S. company to export otherwise severely restricted AI semiconductor chips to train models as well as AI model weights.

Microsoft President Brad Smith told Reuters in May that the deal with G42 could eventually involve the transfer of sophisticated chips and tools.

The Republicans' letter also cited G42's past "digital surveillance" work as an area of possible risk. The aide highlighted prior connections between G42 staff and Emirati cybersecurity firm DarkMatter, which was the subject of a 2019 Reuters investigation on its cyber espionage activities.

The U.S. has had deepening concerns about China's influence in the Middle East and the United Arab Emirates, a longstanding U.S. ally.

But G42 said in February it divested its investments in China and was accepting constraints imposed on it by the United States to work with U.S. companies. G42 previously had investments or partnerships in China with TikTok owner ByteDance, vaccine developer Sinopharm and U.S.-blacklisted biotech firm BGO Genomics.

The New York Times reported in April that the Microsoft deal with G42 was largely orchestrated by the Biden administration to box out China. Commerce Secretary Gina Raimondo told the paper that the Microsoft deal did not authorize the transfer to G42 of AI models or processors to develop AI applications.

Along with Microsoft, Abu Dhabi sovereign wealth fund Mubadala, the country's ruling family and U.S. private equity firm Silver Lake hold stakes in G42, whose chairman, Sheikh Tahnoon bin Zayed Al Nahyan, is the UAE national security adviser and a brother to the president.

Reuters reported in May that the Commerce Department was considering rules to restrict the export of proprietary or closed-source AI. Currently, nothing is stopping U.S. AI giants from selling them to almost anyone in the world without government oversight.

BANGKOK (Reuters) - The Thai government's flagship 500 billion baht ($13.8 billion) "digital wallet" handout scheme will spur job creation and stimulate underdeveloped provinces and regions, Prime Minister Srettha Thavisin said on Thursday.

Some minor changes to the policy reflect public opinion, he said in a speech to parliament, adding the government planned to announce all the details of the policy on July 24.

"The capital injection will help spur manufacturing and create jobs," Srettha told lawmakers.

The scheme, which would see about 50 million Thais receive 10,000 baht each to spend locally within six months, is slated to start in the fourth quarter but the government has struggled to find sources of funding.

Srettha did not mention the total budget cost of the policy in his speech. On Wednesday, a deputy finance minister said that based on past experience there might be a take-up rate of about 90%, which meant the scheme could cost around 450 billion baht.

Two former central bank governors and economists have criticised the plan as fiscally irresponsible, but the government has rejected those arguments.

"You are able to diagnose the issues, but the solution is unclear," said opposition lawmaker Sirikanya Tansakul in response to the Prime Minister's speech.

($1 = 36.2500 baht)

JAKARTA (Reuters) - Indonesian President-elect Prabowo Subianto will allow the nation's debt-to-GDP ratio to rise to 50% provided his administration can boost tax revenues, the Financial Times reported citing one of his closest advisers.

Prabowo's brother and adviser Hashim Djojohadikusumo told the Financial Times in a London interview that Indonesia could still retain its investment-grade rating even if the debt-to-GDP ratio rises to 50%.

"The idea is to raise the revenue and raise the debt level," Hashim said in the article.

"We don't want to raise the debt level without raising revenue," Hashim said, pointing to "taxes, excise taxes, royalties from mining and import duties".

Prabowo's economic team in Jakarta declined to comment on the interview when contacted by Reuters on Thursday.

His team had previously denied a media report that Prabowo planned to increase debt-to-GDP levels from under 40% to 50%. They said at the time the incoming president would continue to abide by existing fiscal rules.

Under those rules, the government's budget deficit is capped at 3% of GDP and the debt-to-GDP ratio cannot exceed 60%.

Concerns about Prabowo's borrowing plans weighed on bond prices and the rupiah last month, helping knock the currency to four-year lows against the dollar.

During campaigning, Prabowo had said he wanted to raise public debt levels, while also pledging to boost the tax-to-GDP ratio to 16% from around 10% now. He will take office in October.

Earlier this week Tempo magazine reported Prabowo had formed a team to explore ways to remove the fiscal deficit and debt-to-GDP ratio ceilings to fund his campaign pledges. His adviser for fiscal matters told Reuters he was not aware of any discussion to remove fiscal gap and debt ceilings.