By Ali Kucukgocmen and Can Sezer

ISTANBUL (Reuters) -Turkey’s central bank hiked its key rate by 650 basis points to 15% on Thursday and said it would go further in a reversal of President Tayyip Erdogan’s policy, although the post-election tightening missed expectations and the lira fell sharply.

In its first meeting under new Governor Hafize Gaye Erkan, the bank changed course after years of monetary easing in which the one-week repo rate had dropped to 8.5% from 19% in 2021 despite soaring inflation.

Analysts said the move suggested Erkan might have limited room to aggressively tackle inflation under Erdogan’s watch. The median estimate in a Reuters poll was for rates to rise to 21%.

Thirty minutes after the hike – Turkey’s first since early 2021 – the lira suddenly began to tumble and later touched an all-time low of 24.80 versus the dollar, some 5% weaker than Wednesday’s closing level.

The central bank’s policy committee said the tightening “will be further strengthened as much as needed in a timely and gradual manner until a significant improvement in the inflation outlook is achieved”.

Striking a more hawkish tone than a month earlier, it said it raised rates “in order to establish the disinflation course as soon as possible, to anchor inflation expectations, and to control the deterioration in pricing behaviour”.

Annual inflation was just below 40% in May after touching a 24-year high above 85% in October last year. The central bank said inflation will come under further pressure.

It added it will gradually “simplify and improve the existing micro- and macroprudential framework” to improve market mechanisms and stability – suggesting some of the dozens of regulations adopted since late 2021 could be rolled back, freeing up credit, forex and debt markets.

Erkan will meet with a group of bank executives on Friday, a banking source told Reuters on Thursday, after new Finance Minister Mehmet Simsek met with them last week and discussed the problems in the sector.

LIMITED ROOM FOR MANOEUVRE

A senior Turkish official said the rate hike was designed in part to avoid excessive market volatility and shows a determination to tighten policy, adding that such strong steps will continue in the future.

Erdogan had urged rate cuts over the last two years which sparked a late-2021 currency crisis and stoked prices. The lira lost 44% in 2021 and 30% last year, despite the central bank’s efforts to counter forex demand by using its forex reserves.

After his election victory last month, Erdogan signalled he was ready to backtrack on economic policy in appointing Simsek, who is highly regarded by markets, as finance minister and Erkan, a former Wall Street banker, as central bank chief.

Erdogan said last week he approved the steps Simsek would take, suggesting he had given the green light to rate hikes.

The policy decision could indicate that “Erkan has limited room for manoeuvre in restoring orthodoxy in monetary policy,” said Piotr Matys, senior FX analyst at InTouch Capital Markets.

“One could argue that it will take time to restore shattered confidence, but it would be more efficient to exceed expectations if Governor Erkan wants to convince investors that she is in charge of monetary policy and not President Erdogan,” he added.

Most economists in the Reuters poll expected further rate hikes this year, with the year-end forecast median at 30%. The central bank’s key rate remains below deposit rates that reach up to 40% and real rates are still deeply negative.

The bank’s net reserves fell to a record low of negative $5.7 billion last month before rebounding as Ankara loosened its grip on the forex market this month. The lira has shed 23% so far this year.

Turkey’s credit default swaps (CDS), the cost of insuring exposure to its debt, rose 21 basis points to 518 basis points after the smaller-than-expected rate hike.

Some analysts expressed doubt about Erdogan’s commitment to abandoning his unorthodoxy, citing examples of his previous shifts to orthodox policy only to quickly change his mind.

Authorities hope foreign investors and hard currency will return after a years-long exodus, potentially reducing the central bank’s need to intervene to keep the lira stable.

(Reporting by Ezgi Erkoyun, Ali Kucukgocmen, Can Sezer, Jonathan Spicer, Orhan Coskun, Daren Butler and Ebru Tuncay;Additional reporting by Karin Strohecker, Libby George; Editing by Christina Fincher and Angus MacSwan)

By Tim Hepher, Valerie Insinna, Joanna Plucinska and Allison Lampert

PARIS (Reuters) – The first Paris Airshow in four years has clocked up billions of dollars in commercial jet orders and offered some respite for suppliers as air travel springs back sharply from the pandemic.

The industry returned to Le Bourget with high expectations of commercial orders and low expectations regarding the supply chain, but generated a more balanced picture on both fronts.

Announced orders reached near-record levels but were heavily dominated by two airlines leading the charge in India, the world’s fastest growing market: IndiGo and Air India.

Airbus and Boeing collectively unveiled orders or commitments for some 1,100 jets, with Airbus at around 830 jets, led by a 500-plane deal with IndiGo.

But these fell short of some market forecasts of 2,000 orders, to the relief of some analysts who noted a less brash and more business-like tone than previous shows, from an industry scarred by its near-collapse during COVID-19.

India’s economic growth and growing middle class have made it the latest frontier for aviation deals worth tens of billions of dollars, though exact prices were not disclosed.

“That market is going to feed a lot of players in our industry, and we’d like to be the first one there for a long time, barring unforeseen events,” Airbus Chief Commercial Officer Christian Scherer said.

FINANCING METHOD

A total of 970 orders from two Indian carriers showed airlines willing to lock in positions for the next decade and manufacturers building a foundation for rising output rates.

The IndiGo deal also highlighted the growing importance of the so-called sale-and-leaseback model, a popular aircraft financing method that requires a constant flow of new jets.

Under such deals, freshly delivered jets are sold by airlines to leasing companies, rented back and then operated for six years or more before being moved on to another operator.

For passengers, it means the fleet is kept young. For airlines it can mean a key source of extra profit on the sale.

Such financing now makes up 34% of all aircraft financing, Airbus said in a presentation to investors on Wednesday.

India’s leasing market is facing some pressure, however, after the bankruptcy of carrier GoFirst sparked a dispute over lessors’ rights. IndiGo Chief Executive Pieter Elbers said he was not concerned about an impact on the wider market.

The latest deals, coming after a number of mainly Boeing orders before the show, left the largest planemakers mostly sold out until the latter part of the decade.

A key focus of the show was how those planes will be produced after the pandemic disrupted supply chains. Another was hiring more workers: to be tackled in a special event on Friday.

As their biennial jamboree wound up under pouring rain on Thursday, delegates also had to absorb news of a strike at a Spirit Aero Systems factory that makes Boeing 737 fuselages. A lengthy stoppage would impact suppliers worldwide.

Several major companies said they had built up more buffer stocks and were seeing signs of improvement in supply chains.

The conflict in Ukraine brought a raft of air defence order announcements and a growing focus on Europe’s patchy growth in defence spending after years of budgets constraints.

For many, the show diverted attention from the plush chalets where planemakers keep count of orders to the crowded supplier halls where more of the industry’s risk now resides.

“It was the most interesting European air show for a decade,” Agency Partners analyst Sash Tusa said.

“The newsflow was much more balanced between defence and civil – and no longer just a counting competition.”

(Reporting by Tim Hepher; Editing by Mark Potter)

BRASILIA (Reuters) -Brazil’s Senate on Wednesday approved fiscal rules proposed by President Luiz Inacio Lula da Silva’s government, considered vital in preventing a surge in public debt.

The project received 57 votes in favor and 17 votes against.

Since the senators modified the text that Brazilian deputies approved, it will require another round of voting in the lower house.

During the plenary vote, the text was amended to allow the government to use an annual inflation estimate to expand its spending limit in the elaboration of the 2024 budget law, which needs to be presented to Congress by August.

The initially approved version in the lower house established a limit on real growth in public spending based on inflation in the 12 months to June of the previous year, plus up to 70% revenue growth.

Due to lower inflation projected for the 12-month period ending in June this year, the Planning Ministry estimated that it would need to cut 32 billion to 40 billion reais ($6.6-8.3 billion) from next year’s budget. Inflation was lower due to tax cuts in 2022 on consumer items such as fuel and phone bills.

Now, the government will be authorized to produce an inflation estimate for the January-December period and use this difference to program expenses in next year’s budget, which will still be subject to the approval of additional credits by Congress later on.

“It will provide comfort so that I don’t ask the ministries to cut expenses,” Planning Minister Simone Tebet told journalists on Wednesday night.

The new fiscal framework is seen as essential in signaling a path toward sustainability of public accounts, particularly after Lula secured congressional approval for boosting social expenditures to assist the poorest people.

Under the proposal, government expenditures would not be allowed to rise by more than 70% of any increase in revenue, with spending growth also limited to between 0.6% and 2.5% per year above inflation.

If budget goals are not met, expenditure growth would be restricted to 50% of revenue increases.

The proposal’s progress in Congress has been praised by S&P, which last week upgraded Brazil’s credit rating outlook.

The sponsor of the bill, Senator Omar Aziz, has expanded a list of exceptions to the cap, including an education fund, a constitutional fund for the Federal District and expenditures related to science and technology.

(Reporting by Ricardo Brito and Maria Carolina Marcello; Editing by Sandra Maler, Chris Reese and Cynthia Osterman and David Gregorio)

By Shreyashi Sanyal and Bansari Mayur Kamdar

(Reuters) -European shares briefly hit their lowest level in nearly three months on Thursday, with London stocks falling after a bigger-than-expected rate hike by the Bank of England (BoE) .

The pan-European STOXX 600 index closed 0.5% lower, after falling as much as 1.3% earlier in the day, on fears of continued monetary policy tightening by major central banks.

Britain’s FTSE 100 index shed 0.8% after the BoE announced a jumbo half-point rate hike to 5%.

“Tackling inflation remains the firm commitment for the BoE, while consumers are getting squeezed from both ends of the spectrum – with the cost-of-living crisis at one end and higher mortgage premiums at the other end due to the rate rises,” said Richard Flax, chief investment officer at Moneyfarm.

Limiting losses on the UK benchmark index, Ocado Group soared 32.0% after The Times reported possible talk of bid interest in the company.

Meanwhile, the Swiss National Bank and Norges Bank also hiked their benchmark rates, underscoring fears about global inflation, while Powell, in his second day of testimony to lawmakers, said interest rate cuts must wait until he was confident inflation was moving down to 2%.

Some European Central Banks’ (ECB) policymakers echoed the sentiment on Wednesday, saying euro zone inflation is stubborn and may require a protracted period of high interest rates to contain, partly due to an exceptionally tight labour market.

Bank stocks tumbled 1.9%, eying their worst session in nearly a month.

“One of the things to consider with banks is the inverted yield curve,” Flax said.

“If they’re being forced to effectively borrow short and lend long, that inverted curve makes life harder for them.”

Real estate stocks extended losses for fourth consecutive day, down 1.3%.

The STOXX 600 is now on track for a lacklustre end to June, losing momentum from the first quarter of the year as high-interest rates catch up, investor preferences moves away from value-oriented stocks, and a disappointing China recovery.

The European auto sector slid 1.2%.

U.S. lawmakers on Wednesday urged the Federal Trade Commission to finalise new consumer protections for car buyers despite objections from auto dealers who argue the rules would actually raise the cost of buying a car.

SES SA rose 7.8% after it said it ceased merger talks with Intelsat.

Novo Nordisk slipped 0.7% as it said the European Union’s drug watchdog last month raised a thyroid cancer safety signal for several of its drugs.

Deutsche Bank is drawing up plans to cut 10% of its 17,000 German retail jobs over the next few years as part of cost savings, a person with knowledge of the matter said on Thursday. Shares of the company slid 1.4%.

(Reporting by Shreyashi Sanyal and Bansari Mayur Kamdar in Bengaluru; Editing by Janane Venkatraman and Angus MacSwan)

By Jonathan Stempel

NEW YORK (Reuters) -JPMorgan Chase has been fined $4 million by the U.S. Securities and Exchange Commission after about 47 million emails belonging to its retail banking group were mistakenly and permanently deleted.

The emails dated from Jan. 1 to April 23, 2018, and were deleted in June 2019 from about 8,700 mailboxes, including those belonging to as many as 7,500 employees who regularly worked with customers.

Many of the emails were business records that the largest U.S. bank was required under SEC rules to keep for three years.

The deletions occurred after JPMorgan’s corporate compliance technology department, which had been trying unsuccessfully to delete some communications from the 1970s and 1980s, sought help from an outside vendor managing the bank’s email storage.

According to a cease-and-desist order, the vendor failed to properly apply the three-year retention setting to “Chase” emails from early 2018.

“As a result, the troubleshooting exercise permanently deleted all of the emails in that domain from that period which were not subject to legal holds,” the order said.

JPMorgan, which is based in New York, did not admit or deny wrongdoing in agreeing to the civil settlement. It has adopted its own email coding procedures to avoid a recurrence.

“JPMorgan takes its record-keeping obligations seriously,” the bank said in a statement.

According to the SEC, JPMorgan has been unable in at least 12 civil securities-related regulatory probes to comply with subpoenas and document requests for communications that had been permanently deleted.

(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis)

By Karol Badohal and Supantha Mukherjee

WROCLAW, Poland/STOCKHOLM (Reuters) – Poland’s third-largest city Wroclaw beat rivals last week to be home to the next multi-billion dollar Intel chip factory in Europe, with a two-year campaign promising subsidies, infrastructure, talent and a slice of American life.

In the face of an unprecedented semiconductor shortage, Europe is offering billions of euros in subsidies to reduce its dependence on Asia. In return, Intel is committing big sums and with Germany already bagging a 30 billion euro investment, Poland decided to crash the party.

Its eventual success can be seen as a lesson in perseverance.

The U.S. chipmaker said last Friday that it had decided to invest up to $4.6 billion in the new semiconductor facility near Wroclaw.

Interviews with half a dozen Polish government officials and company executives revealed previously unreported details on how a small city in southwestern Poland ticked all the boxes to get what its Prime Minister said was the largest greenfield investment in its history.

Poland initially impressed Intel executives with the speed in which it responded to queries and addressed concerns, Intel said.

“When we began the process, we hadn’t considered Poland,” Intel CEO Pat Gelsinger told Reuters.

“As you are picking a location, imagine you are going on a date. You have a sense, oh they really want this to work,” Gelsinger said. “We definitely came away with a strong belief that the local government want to make this work.”

Poland started courting Intel in July 2021. Government and municipal officials met with the company repeatedly over the next two years, according to interviews with five officials and three Intel executives.

Two government agencies – the Polish Investment and Trade Agency (PAIH) and the Industrial Development Agency (ARP) played a key role in the process, officials said.

Many meetings were conducted remotely due to COVID-19 restrictions, officials said. Marcin Fabianowicz, director of the PAIH’s investment centre later met with a representative from ARP and two senior Intel executives.

“After the first (in-person) meeting I was convinced Poland had a shot at getting the project,” he said. “The talks were warm and heading in the right direction.”

But when Intel announced its European investments in March 2022, Germany was awarded a major factory in Magdeburg while Intel told Poland it would only expand its existing facility in Gdansk.

Poland was undeterred, eventually clinching a deal in a two-day meeting last month, officials said.

“We never said something can’t be done,” Fabianowicz said.

Codenamed “Project IQ”, government and municipal officials worked confidentially on strategies to lure the chipmaker.

A team from an agency promoting the development of Wroclaw put together a presentation highlighting its quality of life, family facilities, schools, bike lanes, swimming pools and economic and demographic data.

Intel executives were also impressed by Wroclaw being home to Poland’s American football and basketball champions.

‘SNOWBALL EFFECT’

Intel’s new plant will be on a 285 hectare plot, beside another chip factory, the edible variety made by PepsiCo and a factory which makes windows.

The global shortage of semiconductors has impacted production of everything from cellphones to electric vehicles, a shortage likely to continue throughout 2023, according to the European Parliament, as it takes two to three years to build a new chip-making factory.

The land at Wroclaw is divided between two municipalities — Miekinia and Sroda Slaska.

The region will invest in new roads to the factory, electric buses, a water treatment facility and high voltage power lines, the mayor of Sroda Slaska Adam Ruciński told Reuters.

Intel has also been allowed to construct buildings 50 metres (54.68 yards) high, more than the usual 20 metres restriction, he said.

Poland is hoping to lure other companies like Taiwan Semiconductor Manufacturing Corp (TSMC), the world’s largest contract chipmaker, to invest in the country.

Talks with TSMC started last year, several officials said.

“We are at a point where we are getting our 5 minutes (of fame), so a lot of entities are interested,” said Jakub Mazur, deputy mayor of Wrocław. “The snowball effect with Intel entering will cause talks from the Taiwan direction to come back to us.”

($1 = 0.9157 euros)

(Reporting by Karol Badohal in Wroclaw and Supantha Mukherjee in Stockholm; Editing by Matt Scuffham and Elaine Hardcastle)

(Corrects acronym of project to ‘ELMED’ in paragraph 3)

TUNIS (Reuters) – The World Bank Group has lent Tunisia $268.4 million to finance an electrical interconnection project with Italy that will link energy networks between Tunisia and Europe, TAP state news agency said on Thursday.

The agreement ends a temporary pause in the bank’s work with Tunisia that followed comments by Tunisian President Kais Saied about migrants from sub-Saharan Africa earlier this year that were blamed for triggering racist harassment and violence.

The total cost of the project, known as “ELMED”, is about 850 million euros.

Italy is looking to become a European energy hub and creating a link to Africa to import electricity generated from renewable energy sources plays into its strategy to eliminate its gas dependence from Russia.

(This story has been corrected to amend the acronym of the project to ‘ELMED’ in paragraph 3)

(Reporting by Tarek Amara; Writing by Clauda Tanios; Editing by Alison Williams and Alex Richardson)

(Reuters) – Lordstown Motors founder and former CEO Stephen Burns has sold his entire stake in the electric-vehicle maker, according to a regulatory filing.

The company in May implemented a reverse stock split to comply with Nasdaq’s minimum $1 listing requirement and appease investor Foxconn that had threatened to scrap a $170 million funding in the cash-strapped company.

Burns has sold his stake in three transactions between May and June, about 581,000 shares were divested before the reverse stock split and 791,572 shares after, the filing on Wednesday showed.

The EV startup declined to comment on the stake sale.

Earlier this month, Lordstown Motors said it planned to take legal action against Taiwanese contract manufacturer Foxconn to ensure the planned purchase of nearly 10% of the company’s shares was not derailed.

Burns in 2021 resigned from the role of CEO alongside then Chief Financial Officer Julio Rodriguez following an internal investigation by the company board into claims made by short-seller Hindenburg.

Lordstown has acknowledged that it had overstated pre-orders for its electric trucks but rejected Hindenburg’s claims that the company had misled investors about production plans and exaggerated the potential of its technology.

(Reporting by Tanya Jain in Bengaluru; Editing by Shinjini Ganguli)

By Stephanie Kelly and Nia Williams

NEW YORK (Reuters) – U.S. crude oil inventories at the Cushing, Oklahoma, storage hub have risen to their highest in two years, as outages at Midwestern refiners crimp demand and higher flows from Canada add to supply.

Stockpiles at Cushing, the delivery point for U.S. crude oil futures, have climbed for eight consecutive weeks after falling earlier this year. Overseas demand for U.S. crude and an end to refinery outages should reverse the build, said analysts.

“We’re going to be sending more (oil exported) abroad,” said Phil Flynn, an analyst at Price Futures Group. “The supply side continues to remain tight if you look at the big picture.”

A spate of unexpected refinery outages in the Midwest have added to the inventories, which rose to 42.1 million barrels in the week to June 9, the highest since June 2021, Energy Information Administration data showed.

IIR Energy was tracking 579,000 barrels per day (bpd) of oil offline in May in the central U.S., double the 256,000 bpd offline the same month a year ago, said Hillary Stevenson, a senior director at the company.

Outages at BP Plc’s and Cenovus Energy Inc’s 160,000-bpd Toledo, Ohio refinery and Phillips 66’s 149,000-bpd Borger, Texas refinery likely have contributed to higher Cushing stockpiles, Stevenson added.

Slightly higher flows from Canada also added to the supplies, with Enbridge Inc’s 702,000-bpd Flanagan South pipeline showing elevated flows in May and so far in June, said John Trischan, senior research manager of oil transportation at Wood Mackenzie.

Canadian crude may have been sent toward Cushing as feedstock for a restart of the Toledo refinery, which had a fire last year, said Matt Smith, lead oil analyst for the Americas at Kpler.

(This story has been corrected to fix attribution in paragraph 7)

(Reporting by Stephanie Kelly, Nia Williams and Arathy Somasekhar; editing by Jonathan Oatis)