International News 04/12
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This is the Impact of the Latest US Crackdown on Chinese Chips
The United States has introduced new export controls targeting China's semiconductor industry. These include restrictions on exports to 140 companies and limits on shipments of advanced memory chips and chip-making equipment. This is part of the Biden administration's strategy to impede China's progress in the semiconductor industry and safeguard national security. It is anticipated that the incoming Republican President-elect, Donald Trump, will support this course of action.
Euro exchange rate slumps, French political crisis fuels uncertainty
The euro saw a notable decline of 1% against the US dollar, marking its largest daily drop in recent times. The decline is attributed to unfavourable political sentiment in France, particularly with the French National Party (RN), and the release of robust economic data from the United States. RN President Jordan Bardella has indicated that he may support a no-confidence motion if there is not a significant change in policy. Marine Le Pen, another RN leader, has set a deadline of Monday for Prime Minister Michel Barnier to meet her party's budget demands. The yield differential between French and German government bonds, which measures the premium investors require to hold French debt, has risen to 87.3 basis points, reaching its highest level since the eurozone sovereign debt crisis of 2012. Conversely, the US dollar has been strengthened by positive economic data, including an uptick in manufacturing activity and lower input prices. Nevertheless, Federal Reserve Governor Christopher Waller has underscored the necessity of maintaining a tight monetary policy and expressed a willingness to reduce interest rates.
Singapore's central bank fines JPMorgan US$1.8 million
The Monetary Authority of Singapore (MAS) has issued a fine of S$2.4 million to JPMorgan Chase for failing to implement adequate procedures to prevent and detect offences committed by relationship managers. In 24 instances of over-the-counter bond transactions, JPMorgan relationship managers provided inaccurate or incomplete information to clients and charged spreads above the agreed interest rates. MAS stated that the bank did not have adequate processes and controls in place to ensure adherence to pre-agreed spreads. JPMorgan Chase has accepted responsibility for this failure and has paid a civil penalty to MAS. The bank has refunded the fees charged to affected clients and has implemented changes to prevent a recurrence of the breach. JPMorgan Chase stated that the matter represents a very small portion of the total trades processed during the relevant period.