Married Chinese couples may have up to three children, China announced on Monday, in a major shift from the existing limit of two after recent data showed a dramatic decline in births in the world's most populous country. Beijing scrapped its decades-old onechild policy in 2016, replacing it with a two-child limit to try and stave off risks to its economy from a rapidly aging population. But that failed to result in a sustained surge in births given the high cost of raising children in Chinese cities. The policy change will come with "supportive measures, which will be conducive to improving our country's population structure, fulfilling the country's strategy of actively coping with an ageing population. Among those measures, China will lower educational costs for families, step up tax and housing support, guarantee the legal interests of working women and clamp down on "sky-high" dowries.
German inflation pushes further above ECB target in May
Germany's annual consumer price inflation accelerated in May, advancing further above the European Central Bank's target of close
to but below 2%, the Federal Statistics Office said on Monday. Consumer prices rose by 2.4% in May, up from 2.1% in April. The
ECB's chief economist, Philip Lane, said earlier this month the bank had a "lot of work to do" to raise inflation back to its 2% goal and
market talk of rapidly rising prices is misplaced. Lane pushed back on this narrative, arguing that the labour market will take years to
get back to its pre-crisis level, corporate balance sheets are depleted and the economic rebound is still predicated on copious central bank and government support.
Exclusive-G7 to back minimum global corporate tax and support economy
Finance ministers from the group of seven rich nations (G7) will vow this week to support their economies as they emerge from the
pandemic and reach an "ambitious" deal on a minimum global corporate tax in July, a draft communique showed. G7 officials, set to
meet in London on June 4-5, will also say that once the recovery is well established, they will need to "ensure long-term sustainability
of public finances", which is understood to be code for a gradual withdrawal of stimulus. To help alleviate the strain on public
finances, the draft said the G7 strongly supported the efforts of the Organisation for Economic Cooperation and Development
(OECD) to set a global minimum corporate tax level that would ensure large multinationals paid their fair share of taxes. Such a tax
would aim to solve the problem of large companies that generate huge revenues but pay very little tax because they set up offices for
tax purposes in low-tax jurisdictions.
Dollar in doldrums as traders ponder Fed policy path; sterling soars
The 10-year government bond yield (interpolated) on the previous trading day was 1.85, +0.00 bps. The benchmark government
bond yield (LB31DA, 10.5 years) was 1.84, +0.00 bps. LB31DA could be between 1.81-1.86. Meantime, the latest closed US 10-year
bond yields was 1.58%, -3.00bps. USDTHB on the previous trading day closed around 31.23 Moving in a range from 31.15-31.20
this morning. USDTHB could be closed between 31.15-31.22 today. Meantime, The dollar languished near multi-month lows versus
major peers on Tuesday as traders pondered the prospects for early policy normalization by the Federal Reserve ahead of a key
jobs report at the end of the week.
Sources : Bloomberg, CNBC, Investing, CEIC
