By Jihoon Lee

SEOUL (Reuters) – South Korea’s exports were set for a second month of declines in November and by the steepest pace in 2-1/2 years, hurt by an economic slowdown in China and a downcycle in the tech industry, a Reuters poll showed on Tuesday.

The country’s outbound shipments were projected to have fallen 11.0% in November from the same month a year ago, according to the median forecast of 20 economists – the worst annual slump since May 2020, and accelerating from a 5.7% loss in October.

The two straight months of year-on-year declines followed a 23-month growth streak through September.

“Exports to China are declining at an accelerating pace due to the country’s economic slowdown, while semiconductor exports, which account for about a fifth of South Korea’s total exports, remain sluggish,” said Chun Kyu-yeon, an economist at Hana Securities.

“Given the global economic slowdown and falling trade volume, we expect South Korea’s exports to continue their declining trend through the first half of 2023.”

During the first 20 days of this month, South Korea’s total exports shrank 16.7% year-on-year. By product, semiconductors fell 29.4%, and by destination, shipments to China – its biggest trading partner – dropped 28.3%.

Imports were expected to have grown only marginally, by 0.2%, just enough to extend their run of gains to a 24th month but much slower than the 9.9% growth a month before, according to the median forecast from a range of -5.0% to +6.4%.

Overall, the trade balance is set to remain in deficit for an eighth consecutive month, putting it on track for the first annual shortfall in 14 years and the largest-ever.

Full monthly trade data is scheduled for release on Thursday, Dec. 1, at 0900 in local time (0000 GMT).

The survey also forecast the country’s consumer price index for November to be up 5.1% than a year ago, cooling from 5.7% in October and hitting the weakest annual rate in seven months.

On South Korea’s factory output, economists expected production to have extended its downturn for a fourth month in October, falling 1.0% on a seasonally adjusted monthly basis, after a 1.8% decline in September.

(Reporting by Jihoon Lee in Seoul, Polling by Vijayalakshmi Srinivasan and Veronica Khongwir in Bengaluru; Editing by Shri Navaratnam)

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By Soyoung Kim and Jack Kim

SEOUL (Reuters) – South Korea will offer “tailored” incentives to encourage Tesla to set up an electric vehicle gigafactory in the country and will minimise any risks posed by militant unions, President Yoon Suk-yeol told Reuters.

Yoon held a video call with Tesla Chief Executive Elon Musk last week and Yoon’s office cited Musk as saying South Korea is among the top candidate locations for a new Tesla factory.

“If Tesla, Space X or other companies are considering more investment in Korea including constructing a gigafactory, the government will do our best to support the investment,” Yoon told Reuters during a broader interview in his office on Monday.

Yoon said South Korea offers highly skilled workers and his government would ensure regulations align with international standards so that foreign firms do not face unexpected financial or regulatory hurdles.

“We are preparing a tailored approach to grant some advantages to these specified companies,” Yoon said through an interpreter, when asked about what advantage South Korean can offer to Tesla over other locations being mentioned.

Tesla has said it would consider building another gigafactory. Canada, Indonesia, India and Thailand have also been mentioned in media reports as possible locations, but analysts noted that those countries do not have the kind of automotive supply chain that South Korea does, although some are abundant in natural resources like nickel.

Yoon credited his government’s tough response to labour union strikes this year for starting the process of establishing a rule of law in industrial relations for both management and labour.

Yoon’s government is taking steps to use an administrative order to force unionised truckers to go back to work after talks aimed at ending their strike ended on Monday without an agreement.

About 9,600 truckers have joined the strike organised by the truckers’ union, demanding a permanent guarantee of a minimum freight rate to protect against rising and unpredictable fuel costs and overwork.

“The militant union culture is a serious problem in South Korean society,” Yoon said. He said he told Musk the goal of his labour policy is to establish the rule of law to eliminate the risks of unfair labour practices.

South Korea saw an average of 39 days of work stoppage annually due to labour disputes over the past 10 years, nearly five times higher than that of the United States’ eight days and nearly 200 times higher than Japan’s 0.2 days, according to the Korea Enterprises Federation.

Yoon blamed frequent compromises made by previous governments with powerful labour unions for creating a vicious cycle of illegal strikes leading to more severe strikes and unlawful action by labour unions.

(Reporting by Jack Kim, Soyoung Kim, Josh Smith, Heekyong Yang and Joyce Lee; Editing by Susan Fenton)

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(Reuters) – S&P Global Ratings lowered its 2023 growth forecast for emerging economies on Tuesday, citing persistent pressures from the Russia-Ukraine conflict, a lingering COVID-19 pandemic and tight monetary policy conditions.

The ratings agency now projects real gross domestic product growth of 3.8% next year, down from its previous forecast of a 4.1% expansion.

“The downward revision to growth comes from all EMs (emerging markets) excluding China and Saudi Arabia, with most economies poised to expand below their longer-run trend rates,” it said, adding that forecasts for 2024 and 2025 remain broadly unchanged, averaging at 4.3%.

While inflation in emerging markets have passed the peak or are peaking soon on the back of declining food and fuel inflation, it is still poised to remain above central banks’ targets in many economies, forcing monetary policies to stay restrictive, the agency warned.

“But the deceleration in inflation–coupled with a worsening growth outlook–could bring policy easing onto the agenda in several EMs, especially in Latin America, by the middle of next year,” S&P said.

(Reporting by Susan Mathew in Bengaluru; Editing by Dhanya Ann Thoppil)

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A look at the day ahead in European and global markets from Anshuman Daga

Support for weary Chinese property developers boosted Chinese and Asian stocks on Tuesday but inflation clearly tops the agenda for European investors this session.

German and Spanish consumer prices will set the tone for markets ahead of Wednesday’s preliminary reading of euro zone inflation for November.

Though the numbers are set to show a slight cooling from the record levels hit in October, it might take a lot more to convince the European Central Bank that it can slow the pace of rate hikes.

ECB President Christine Lagarde warned on Monday that euro zone inflation had not peaked and risks turning out even higher than currently expected.

Adding to the hawkish sentiment, Bundesbank President Joachim Nagel said inflation would likely stay above 7% next year in Germany.

The double whammy of rising rates and the prospect of a recession spells bad news for European stocks as they head into next year, a Reuters poll of fund managers and strategists showed.

Money markets are pricing in more than 150 basis points of ECB interest rate increases by the end of June.

Inflation in the euro zone hit a record 10.6% on an annualised basis last month, but economists polled by Reuters expect it to ease to 10.4% in a flash reading due to be published on Wednesday.

One swing factor could be weak oil prices as concerns about China’s strict COVID-19 curbs have pulled global benchmarks to their lowest levels in nearly a year.

In Britain, focus will be on Bank of England governor Andrew Bailey’s address to the ‘State of the Nation.’

Meanwhile, cryptocurrency lender BlockFi became the latest industry casualty as it filed for Chapter 11 bankruptcy protection, after the firm was hurt by exposure to the spectacular collapse of FTX exchange earlier this month.

Key developments that could influence markets on Tuesday:

Economic data: Germany Nov state, national inflation, Spain Nov flash CPI, UK Oct mortgage lender, Euro zone Nov sentiment index

U.S. economic data: Sept home price data

Speakers: ECB vice president Luis de Guindos, ECB board member Isabel Schnabel, Bank of England Monetary Policy Committee member Catherine Mann

(Reporting by Anshuman Daga; Editing by Ana Nicolaci da Costa)

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TOKYO (Reuters) – Toyota Motor Corp reported on Tuesday a 23% rise in October global vehicle output, beating its own target for a third month in a row, as the industry strives to get past persistent chip shortages that have hobbled production.

The Japanese automaker produced 771,382 vehicles globally in October, above a downgraded target of 750,000 units and up 23% from the same month a year earlier.

But growth slowed from record monthly output of more than 887,000 cars manufactured in September, and Toyota continues to face supply chain disruptions as China battles nationwide COVID-19 outbreaks and implements restrictions and lockdowns.

The company said on Tuesay it was adjusting some operations in China due to COVID lockdowns.

Earlier this month Toyota cut its annual output target, as it battles surging material costs and a persistent chip shortage.

A Toyota executive in charge of purchasing said at the time that the global auto chip shortage would continue, as chipmakers have prioritised supplies for electronics goods, while natural disasters, COVID lockdowns and factory disruptions have slowed a recovery in auto chip supplies.

Toyota expects to produce 9.2 million vehicles this fiscal year ending March 2023, down from the previous forecast of 9.7 million but still ahead of last finacial year’s production of about 8.6 million units.

(Reporting by Satoshi Sugiyama; Editing by Muralikumar Anantharaman and Edmund Klamann)

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By Alexander Marrow

MOSCOW (Reuters) – Russia’s stock market will claw back some of the heavy losses sustained this year in 2023, according to a Reuters poll of 12 market experts, with sanctions, geopolitical tension and an embargo on Russian oil set to hamper a significant recovery.

The Russian market crashed in February after Moscow sent tens of thousands of troops into Ukraine, triggering sweeping western sanctions. Risk aversion has soared but some fundamentals, such as a strong price of oil, Russia’s main export, have underpinned the market.

Russian stocks had been rising since mid-2020 and hit a record high in October 2021, before the sell-off erased 56% of the rouble-denominated market capitalisation in the first two months of 2022.

The MOEX rouble-denominated index was expected to reach 2,500 by mid-2023, up about 13.9% from Friday’s close of 2,195.17, according to the Nov. 14-28 Reuters poll. Forecasts were less optimistic than in the previous poll conducted in August.

“The Russian market is continuing to adapt to the sanctions environment, but at the same time the scale of potential new restrictions from Western countries already looks limited,” said Veles Capital analyst Elena Kozhukhova. “As a result, Russian companies are likely to stabilise in the coming months.”

Russia has restricted trading for foreign investors, drastically reducing external liquidity on stock markets, and domestic retail investors have become the main driving force.

Geopolitical developments hold sway over the market, but while uncertainty shrouds the outlook concerning the conflict in Ukraine, investors will soon have more clarity on the likely impact of an upcoming oil embargo and price cap.

“A very significant threat to the Russian economy in the coming year is the likely decline in revenues from oil and natural gas exports,” said Vitaly Manzhos, senior risk manager at Algo Capital.

The G7, European Union and Australia, are set to implement a price cap on seaborne exports of Russian oil on Dec. 5. Oil and gas exporters have a strong weighting in Russian stock indexes.

“For Russian oil producers, the 2023 outlook is closely linked to the effect from the EU oil embargo on Russian oil and oil products, and also the effect from the price ceiling,” said Mikhail Shulgin, head of global research at Otkritie Investment.

Forecasts for the MOEX index reading in late 2023 in the November poll varied from 2,257 to 3,700.

The dollar-based RTS index was forecast to trade at 1,299 points by mid-2023, almost 14% higher than Friday’s close of 1,141.07.

(Other stories from the Reuters global stock markets poll package:)

(Reporting and polling by Alexander Marrow; additional reporting by Elena Fabrichnaya; additional polling by Susobhan Sarkar and Sarupya Ganguly; editing by Barbara Lewis)

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(Reuters) -U.S. Representative Donald McEachin, a Democrat from Virginia who was recently re-elected to his fourth term in Congress, died on Monday aged 61, his office said.

McEachin had been battling colorectal cancer since 2013, his chief of staff, Tara Rountree, said in a statement.

“Until a new representative is elected, our office will remain open and continue to serve our constituents,” she said.

No details about a special session to replace McEachin were announced, but regardless of the outcome, the Republicans are expected to maintain a thin majority over the Democrats in the House of Representatives.

“It is with great sadness that I join Virginians tonight in mourning the loss of Congressman Donald McEachin: a tireless champion for Virginia families and a force for economic opportunity and environmental justice,” U.S. House Speaker Nancy Pelosi said in a statement.

Republicans won at least 220 seats in the Nov. 8 election against 213 by the Democrats, with five seats still to be determined.

McEachin defeated Republican challenger Leon Benjamin Sr. by about 30 points in Virginia’s fourth congressional district, which includes the state capital, Richmond.

(Reporting by Daniel Trotta; Additional reporting by Urvi Dugar; Editing by Robert Birsel and Clarence Fernandez)

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By Soyoung Kim

SEOUL (Reuters) -South Korea’s government and the central bank should pay greater attention to addressing any financial instability, President Yoon Suk-yeol told Reuters, as the money market grapples with a steep selloff amid rising interest rates and a property slump.

“There are increasing opinions that inflation has passed its peak and it’s time to slow down the speed and reduce the breadth of the rate hikes. However we must still continue to closely monitor any possible financial instability,” Yoon said during a broader interview in his office on Monday, when asked if it is time for the Bank of Korea to slow monetary tightening.

Yoon’s comments come as the BOK last week signalled that it could be nearing the end of an unprecedented streak of policy tightening in Asia’s fourth-largest economy to curb inflation.

Yoon spoke hours after the finance ministry and the BOK announced a second round of support measures to ease strains in its short-term money market, as yields on three-month commercial paper reached a fresh 13-year high on Monday.

South Korea’s money market, especially at the short-end of the bill curve, has experienced one of the worst routs in Asia as investors sold-off in the wake of rising interest rates and a broader property market downturn.

The nation’s households are among the world’s most-indebted, and some of them are struggling to meet their repayment schedule as mortgage rates hit a decade-high in the mid-4% levels, a recent BOK survey showed.

South Korea’s household debt-to-GDP ratio stood at 102.2% in the second quarter, the highest level among 35 major economies tracked by the Institute of International Finance.

The BOK’s monetary policy committee unanimously agreed to hike interest rates by a quarter-percentage point to 3.25% at its Nov. 24 review – taking the benchmark rate to its highest since 2012. It was a smaller tightening after a half-percentage point increase in October, reflecting a slowdown in inflation to 5.7% in the same month from a near 24-year high reached in July.

Asked whether the risk of a mild recession next year could prompt extra stimulus spending, Yoon said the plan is to stick to the current 639 trillion won ($481.7 billion) budget for 2023 and focus on tightening expenditure.

“We will make our budget as it is until next year,” Yoon said, adding that the government will seek to pursue effective fiscal policy by cutting unnecessary expenditure and prioritising spending in areas where it is required.

Yoon’s first budget proposal for 2023 announced in August showed the country will cut spending for the first time in 13 years, pivoting away from pandemic-era stimulus to help the BOK temper inflationary pressures.

($1 = 1,326.6900 won)

(Writing by Cynthia Kim; Editing by Himani Sarkar & Shri Navaratnam)

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(This Nov. 28 story has been corrected to say employees will work from office 80% of the time, not that 80% of employees will return to office, in headline and paragraph 1 and changes source to company)

(Reuters) – Snap Inc will require employees to work from its offices 80% of the time, starting from the end of February, the company said on Monday.

“After working remotely for so long, we’re excited to get everyone back together next year with our new 80/20 hybrid model,” a spokesperson for the social media platform said in an emailed statement.

Bloomberg News first reported the development and said the owner of photo messaging app Snapchat had asked employees to be in office four days a week from February.

Santa Monica, California-based Snap said in August it would lay off 20% of all staff and shut down projects to cut costs amid a deteriorating economy.

The tech industry was among the first to allow employees to work from home when COVID-19 hit the United States in 2020. But the extent to which tech companies are embracing permanent remote work is now diverging.

Last month, ride-hailing service Uber asked its employees to work from office twice a week. Earlier this month, Elon Musk told Twitter employees that remote work would no longer be allowed and that they would be expected to be in office for at least 40 hours per week.

Reuters had earlier reported citing a memo that Snap Chief Executive Officer Evan Spiegel wrote saying that despite reducing spending in some areas, the company must now “face the consequences of our lower revenue growth and adapt to the market environment”.

(Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Subhranshu Sahu)

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By Andrew Chung

WASHINGTON (Reuters) -The U.S. Supreme Court’s legal counsel on Monday defended Justice Samuel Alito after two Democratic lawmakers demanded answers about a former anti-abortion leader’s claim that he was told in advance about the outcome of a major 2014 ruling the conservative jurist wrote in a case concerning contraceptives.

“There is nothing to suggest that Justice Alito’s actions violated ethical standards,” legal counsel Ethan Torrey wrote in a letter to Senator Sheldon Whitehouse and Representative Hank Johnson.

At issue was a Nov. 19 report in the New York Times quoting Christian minister Rob Schenck as saying he was informed of the 2014 ruling weeks before its public announcement after two conservative allies of his dined at the home of Alito and his wife.

The court has not yet disclosed its findings in an investigation announced by Chief Justice John Roberts into the May leak of a draft of a ruling overturning the landmark 1973 Roe v. Wade decision that had legalized abortion nationwide.

Torrey, whose role is to support the nine justices on case-related issues and provide legal services for the court as an institution, wrote in his letter that Alito has already stated that neither he nor his wife revealed the decision in that case and that any such allegation is uncorroborated.

“Relevant rules balance preventing gifts that might undermine public confidence in the judiciary and allowing judges to maintain normal personal friendships,” Torrey wrote.

The 2014 decision in the case called Burwell v. Hobby Lobby, like the June abortion decision, represented a victory for religious conservatives. The Hobby Lobby decision exempted family-owned businesses that objected on religious grounds from a federal requirement that any health insurance they provide to employees must cover birth control for women.

Torrey was responding to a Nov. 20 letter sent by Whitehouse and Johnson asking Roberts whether the court is investigating the claims involving Schenck or re-evaluating its practices related to judicial ethics.

“It seems that the underlying issue is the absence of a formal facility for complaint or investigation into possible ethics or reporting violations,” the lawmakers wrote in their letter.

In a joint statement on Monday, Whitehouse and Johnson said Torrey’s letter “reiterated Justice Alito’s denials but did not substantively answer any of our questions.” They called the letter “an embodiment of the problems at the Court around ethics issues.”

Democratic Senator Dick Durbin, who heads the Senate Judiciary Committee, has said his panel is reviewing the matter. Durbin urged passage of legislation that would create a code of ethics for the Supreme Court.

Schenck, who formerly led an evangelical Christian nonprofit group in Washington, was quoted as saying that he used his knowledge of the Hobby Lobby ruling to prepare a public relations campaign and that he also tipped off the president of the craft store chain about the outcome. Schenck, according to the Times, wrote to Roberts about his claim.

Schenck in the Times report described how two of his star donors, Ohio couple Donald and Gayle Wright, dined with the Alitos in early June 2014. Schenck said one of the Wrights then told him that Alito had authored the Hobby Lobby opinion and that it would favor the company, the newspaper reported. The decision was publicly announced three weeks later.

In a statement released after the Times report was published, Alito said he and his wife have had a “purely social relationship” with the Wrights and that he would have strongly objected to any effort to obtain confidential information.

(Reporting by Andrew Chung; Additional reporting by Nate Raymond, Matt Spetalnick and Laura Sanicola; Editing by Will Dunham)

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TAIPEI (Reuters) – Taiwan’s central bank’s “flexible” monetary policy structure during a period of high uncertainty can help maintain price and financial stability as well as economic growth, its governor Yang Chin-long said on Tuesday.

The central bank has raised its benchmark interest rate three times already this year, and will hold its next quarterly rate-setting meeting on Dec. 15.

At the last meeting in September, the bank raised it by 12.5 basis points to 1.625%.

It has repeatedly said it will tighten monetary policy this year, in line with counterparts elsewhere, but that inflation will be a key decider. The consumer price index, or CPI, rose an on-year 2.72% in October, the third month in a row is has been below 3%.

Speaking at an academic forum, Yang said Taiwan’s rate of tightening had been relatively mild compared with the United States and other major economies.

Though the current inflation “shock” is mainly driven by supply-side costs, the central bank must still adopt a tightening monetary policy to restrict inflation expectations in order to maintain price stability, he added.

But the central bank’s flexible monetary policy structure “in an era of high uncertainty” can help the bank achieve its statutory goals of price stability, financial stability and economic growth, Yang added.

While Taiwan’s export-dependent economy grew a much faster than expected 4.1% in the third quarter, according to a preliminary reading, trade numbers have been wilting.

Taiwan’s export orders contracted more severely than expected in October on weak consumer demand hit by global inflation and interest rate hike woes.

The central bank will also give its revised forecast for 2022 economic growth on Dec. 15. In September, it predicted a 3.51% expansion, down from a previous prediction of 3.75%.

(Reporting by Liang-sa Loh; Writing by Ben Blanchard; Editing by Stephen Coates)

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By Kantaro Komiya

TOKYO (Reuters) – The Bank of Japan’s next policy move will unwind, rather than strengthen, its massive monetary easing, according to more than 90% of economists polled by Reuters, though most said the change was unlikely before the latter half of 2023.

The direction and timing of the BOJ’s next move are subject to more than usual attention. Not only is the BOJ an outlier as central banks elsewhere tighten, but the 10-year tenure of the governor who has presided over the prolonged loose policy, Haruhiko Kuroda, will end in April. Also, inflation is at a 40-year-high, partly because low Japanese interest rates have helped weaken the yen.

Twenty-four of 26 economists in the Nov 15-25 poll said the BOJ’s next action, if any, would be “unwinding its ultra-easy monetary policy”.

However, 20 of them said the BOJ would not make the move until the second half of 2023 or later. Two respondents said the timing would be June 2023. One each chose earlier options: April and January.

“Japan’s economy hasn’t fully recouped the pandemic-induced dip, so any early unwinding of easing would kill the chance of further recovery,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.

“Unlike in the U.S. or Europe, the BOJ has no reason to hasten a tightening, since the yen’s weakening pace has slowed down and consumer inflation here remains modest when food and energy items are not counted.”

The most likely option for the BOJ, were it to scale back its easing, would be tweaking the wording of its forward guidance, according to 13 of 24 respondents to a question allowing multiple selections.

Widening the controlled range of 10-year government bond yields from the current “around plus and minus 0.25 percent” was the second-most likely means, chosen by 10 respondents. Eight selected shortening of the maturity of the yield target to less than 10 years, and eight others thought the BOJ would cease to keep short-term interest rates negative.

BOJ watchers were almost evenly divided when asked about the need to revise a joint statement set in 2013 between the Japanese government and the central bank. Widely known as the policy accord, it requires the central bank to achieve its 2% inflation target “at the earliest date possible.”

Twelve BOJ watchers said it should be revised; 13 said it should not.

Among those who wanted a revision, seven called for more flexibly judging achievement of the inflation target. BOJ leaders have said “sustainable and stable” 2% inflation is needed.

One BOJ watcher calling for change wanted a lower inflation target, and another said the BOJ’s mandate should be enlarged to include targeting employment or wage rises.

On Monday, Prime Minister Fumio Kishida rejected the idea of adding wage growth as a new monetary policy goal.

Two economists in the poll said the accord should simply be abolished. “Japan’s economy is no longer in deflation” unlike when the policymakers crafted the agreement nine years ago, said Nobuyasu Atago, chief economist at Ichiyoshi Securities.

WEAK YEN RISK REMAINS

Another question asked how long the yen would be at risk of weakening against the U.S. dollar. Twelve of 26 economists said it would until the end of this year, while eight thought the risk would last “until the first half of 2023”.

“While many in the market see a trend shift, the risk of another dollar gain lingers at least for the rest of the year with uncertainties over the U.S. inflation and the Fed’s rapid tightening outlook,” said Hiroshi Watanabe, senior economist at Sony Financial Group.

Only three said “there’s no risk of further yen weakening”, but just as many thought currency would keep facing a risk of depreciation until the second half of 2023 or later.

Elsewhere in the poll, a median estimate of 32 respondents showed the Japanese economy growing an annualised 3.1% in October-December, faster than the 2.0% projection in an October poll, following an unexpected contraction in the third quarter.

But economists’ forecast for Japan’s fiscal 2022 economic growth was cut to 1.7% from 1.9% in the previous poll, while the core consumer inflation rate for the same period was slightly upgraded to 2.7% from 2.6%.

(For other stories from the Reuters global economic poll:)

(Reporting by Kantaro Komiya; Polling by Vijayalakshmi Srinivasan and Anant Chandak; Editing by Bradley Perrett)

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FRANKFURT (Reuters) -Euro zone inflation has not peaked and it risks turning out even higher than currently expected, European Central Bank President Christine Lagarde said on Monday, hinting at a series of interest rate hikes ahead.

Her comments, along with remarks by Dutch central bank chief Klaas Knot earlier, were likely to dampen speculation that the ECB was about to take a gentler path with future rate increases.

Inflation in the euro zone hit a record 10.6% on an annualised basis last month, but economists polled by Reuters expect it to edge down to 10.4% in a flash reading for November due to be published this week.

Contrary to some investors and even her own deputy, Luis de Guindos, Lagarde pushed back on expectations the high watermark for price growth had been reached.

“We do not see the components or the direction that would lead me to believe that we’ve reached peak inflation and that it’s going to decline in short order,” Lagarde told the European Parliament.

She added that ECB economists still saw clear “upside” risks – financial jargon for the risk that inflation readings could come in higher than expected.

Economists polled by Reuters see euro zone inflation at 8.5% this year, 6.0% next year and 2.3% in 2024 before finally hitting the ECB’s 2% target in 2025.

The ECB has increased its rate on bank deposits by a record 200 basis points to 1.5% in three months to dampen demand in a bid to lower price growth.

The ECB’s top economic thinkers, Isabel Schnabel and Philip Lane, are now sparring over the outlook for inflation and interest rates, leaving investors scratching their heads over the ECB’s next policy moves.

Markets have been swinging back and forth about whether the ECB will raise its policy rates by 50 or 75 basis points at its next meeting on Dec. 15 and about the level at which borrowing costs will peak, which they generally see around 3%.

Lagarde, who praised the debate between Lane and Schnabel, said both questions depended on a number of variables including wages and inflation expectations.

But she added she thought there was “a way to go” with further rate hikes – a phrase also used by Federal Reserve Chair Jerome Powell.

“We clearly have to continue increasing interest rates … and my suspicion, although I do not want to venture too much into the future, is that we still have a way to go,” she said.

‘NOT IN LINE’

The Dutch central bank’s Knot was more explicit in his remarks, saying worries about “overtightening,” which were expressed by ECB board member Fabio Panetta in recent weeks, were a “a joke”.

“We are still in the process of merely removing accommodation, removing stimulus, so then to already talk about the risk of overtightening is a bit of a joke,” he told a conference.

Knot also urged caution about the ECB’s expectations for a rapid decline in inflation over the next several years and about the prospect of an imminent recession while warning about the risk of wages driving up prices.

“If you look at the most recent wage deals, they’re clearly not in line with sort of having a 1% productivity growth plus a 2% inflation target,” Knot said.

(Reporting by Balazs Koranyi, Editing by William Maclean, Gareth Jones and Paul Simao)

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TEXARKANA, Texas– A Cleveland, Texas man and woman have been sentenced to federal prison for wire fraud violations in the Eastern District of Texas, announced U.S. Attorney Brit Featherston today.

Clifton Pape, 47, and Sally Jung, 59, each pleaded guilty on May 6, 2022 to wire fraud violations and were sentenced to federal prison today by U.S. District Judge Robert W. Schroeder III.  Pape was sentenced to 121 months in federal prison and Jung received a sentence of 66 months in federal prison.  They were also ordered to forfeit $680,710.31 and pay more than $3.7 million in monetary penalties.

According to court documents, Pape and Jung operated a sophisticated telemarketing scheme under the name My Buddy Loans from a house in Cleveland, Texas. In exchange for a fee, My Buddy Loans took personal identifying information from victims and promised to file an application for an agricultural grant, which they said was available to those who owned as little as one acre of land. Instead, Pape and Jung actually filed fraudulent EIDL applications with the SBA that contained the victims’ personal identification information. Based on these fraudulent applications, the SBA issued more than $1.56 million in EIDL Advances to people who were not eligible. Pape and Jung also submitted applications for an additional $1.44 million in EIDL Advances that were not funded because–among other reasons–the congressionally appropriated funds for the EILD Advance program were exhausted.

Pape and Jung used Square’s credit and debit card processing service to charge third parties the fee. Pape and Jung completed at least 700 successful charges, obtaining at least $700,000 in fees. Pape and Jung then transferred the proceeds of the fraud scheme into a bank account they controlled.  On one occasion, Pape used the fraud proceeds to pay a traffic ticket.  On another occasion, Pape and Jung used more than $3600 from the fraud scheme to pay for a stay at La Cantera Resort in San Antonio.  A picture from that stay shows Pape and Jung celebrating over sparkling wine and other beverages.

“This investigation closed down one of the largest COVID fraud schemes in the country in terms of the number of fraudulent EIDL applications,” said U.S. Attorney Brit Featherston. “Well intended and needed economic assistance (taxpayer dollars) was brazenly stolen from legitimate deserving applicants. We are asking those with information about the My Buddy Loan fraud scheme, including those who believe they may be victims, to call the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or file a complaint using the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.”

“The Small Business Administration’s Economic Injury Disaster Loan program (EIDL) was designed to help businesses adversely affected by the pandemic,” said Resident Special Agent in Charge William Mack of the U.S. Secret Service Tyler Resident Office.  “Clifton Pape and Sally Jung, however, viewed the government’s direct response to the unprecedented size and scope of pandemic relief fraud as an opportunity to illicitly line their own pockets.  As this sentencing illustrates, the Secret Service, along with its law enforcement partners, is committed to holding these criminals accountable for their fraudulent activities.”  

“Conspiring to defraud SBA’s programs is a flagrant attempt to rob the nation’s small businesses of vital funds that are used to assist in building the economy,” said SBA OIG’s Central Region Special Agent in Charge Sharon Johnson. “OIG is focused on rooting out bad actors in these vital SBA programs.  I want to thank the Department of Justice and our law enforcement partners for their dedication to justice.”   

The CARES Act is a federal law enacted in March 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization or EIDL advances and low-interest loans to small businesses to meet financial obligations and operating expenses that could have been met had the disaster not occurred. Under the EIDL program applicants were eligible for a forgivable advance of up to $10,000 if the applicant had ten or more employees.

This case was investigated by the U.S. Secret Service and the Small Business Administration-Office of Inspector General and prosecuted by Assistant U.S. Attorney Jonathan R. Hornok.

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SYRACUSE, NEW YORK – Jonas Whaley, age 37, of Chenango County, New York, was sentenced today to 87 months in prison for possession with intent to distribute methamphetamine and possession of a firearm in furtherance of a drug trafficking crime.

The announcement was made by United States Attorney Carla B. Freedman; John B. Devito, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), New York Field Division; Chenango County District Attorney Michael D. Ferrarese; New York State Police Acting Superintendent Steven Nigrelli; Chenango County Sheriff Ernest R. Cutting Jr.; and Broome County Sheriff David E. Harder.

As part of his earlier guilty plea, Whaley admitted that he possessed with intent to distribute 50 grams or more of a mixture and substance containing methamphetamine. Whaley further admitted that he possessed two pistols and a revolver, which he used in furtherance of his drug trafficking to protect himself, the drugs he planned to distribute, and drug proceeds.

United States District Judge Glenn T. Suddaby also ordered Whaley to serve a 4-year term of post-imprisonment supervised release and the forfeiture of $3,600 in drug proceeds.

This case was investigated by ATF, New York State Police Violent Gang and Narcotics Enforcement Team (VGNET), Chenango County Sheriff’s Office, and the Broome County Sheriff’s Office, and was prosecuted by Assistant U.S. Attorney Matthew J. McCrobie.

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(Reuters) – Thousands of employees at Foxconn’s flagship iPhone plant in China have quit since last week, as the major Apple supplier battles the latest bout of labour unrest that began in late October due to strict zero-COVID policy.

Following are reactions from experts:

PIA GISGARD, HEAD OF SUSTAINABILITY AND GOVERNANCE AT SWEDBANK ROBUR

“The events taking place at Foxconn’s production facility are worrying and highly undesirable from workplace health, safety and general wellbeing, and harmony perspectives.”

“We see that in these times of unrest, Apple needs to intensify its dialogue with Foxconn management, and if possible Chinese authorities, to communicate in strong terms what its policy expectations are around labour rights, and find solutions to stabilise the situation.”

“Foxconn is bound to follow Chinese government orders regarding COVID lockdowns. The important thing is that the company implements these orders in a way which respects people’s rights and doesn’t go beyond the government requirements resulting in unnecessarily harsh measures.”

ERIC PEDERSEN, HEAD OF RESPONSIBLE INVESTMENTS, NORDEA ASSET MANAGEMENT

“The situation at Foxconn is concerning.”

“We note the role Foxconn plays as a subcontractor, to Apple, among others. As a first step, we have contacted Apple to understand how management views and addresses the on-going situation and what measures they are taking.”

JANNE WERNING, HEAD OF ESG CAPITAL MARKETS & STEWARDSHIP AT UNION INVESTMENT

“This shows the importance of labour standards in the supply chain. We expect Apple, as one of the main buyers, to reassert its influence at Foxconn. As a result, the situation at Foxconn with regard to labour standards has already improved in recent years, according to our findings, so that Foxconn is in a better position compared to other factories in China.

“However, there is still a great need for improvement in an international comparison.”

CHRISTINA O’CONNELL, SENIOR MANAGER FOR SUMOFUS, A NON-PROFIT CORPORATE ACCOUNTABILITY GROUP

“The extreme dependence of Apple on China, both as a (consumer) market and as its place of primary manufacturing, we see that a very risky situation.”

(Reporting by Simon Jessop in London and Ross Kerber in Boston; Editing by Sam Holmes)

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By Danilo Masoni

MILAN (Reuters) – Tightening financial conditions and the prospect of an economic recession are going to be a toxic brew for European shares going into 2023 with a key regional benchmark seen sliding towards October lows, a Reuters poll has found.

The poll of fund managers and strategists surveyed over the past two weeks forecasts the STOXX 600 equity benchmark to reach 408 points by mid of next year, a near 8% drop from Friday’s close.

Even as Europe has joined a recent global stock market recovery, fuelled by hopes of a pause in U.S. interest rate hikes, the STOXX 600 remains on course for its biggest one-year drop since 2018, down around 10% year-to-date.

“The impact of aggressive rate hikes will be felt on the real economy and hence earnings growths in the next few quarters. Based on our economists, we expect a shallow recession in Europe which leads to forecast an earnings decline of 12%” next year, said Barclays strategist Emmanuel Cau in London.

Graphic: STOXX 600 poll https://fingfx.thomsonreuters.com/gfx/mkt/lbpggnmmrpq/STOXX%20Nov%202022%20poll.PNG

The index could recover in the second half, aided by expectations of peaking rates and reach 434 points by end-2023, down 1.5% from Friday’s close and over 12% away from the lifetime high hit in January, according to the poll.

“The rise in risk premiums across asset classes will eventually reach a tipping point where a shift to more return-oriented investments will be warranted,” said Tomas Hildebrandt, Senior Portfolio Manager at Evli in Helsinki.

“Things could change, for example, if the inflation outlook were to start improving significantly or if at least a ceasefire is achieved in Ukraine.”

For the coming months, though, investors fear euro zone equities could lag other markets. The region’s economy is seen as particularly vulnerable due to an energy crisis exacerbated by the Ukraine war and as the European Central Bank is steadily raising interest rates to fight price pressures in the bloc.

“The economic outlook looks challenging as our economists forecast a recession in the euro zone,” said Marc Haefliger, Head of Global Equity Strategy at Credit Suisse in Zurich.

“We expect earnings to deteriorate and see the region underperforming on our tactical horizon. The economic slowdown will hit the cyclical euro zone market disproportionately,” he added.

The STOXX index of the euro zone’s top 50 blue chip stocks is seen falling another 7.9% from Friday’s close to 3,650 points by mid-2023. It should stay anchored around that level throughout next year before picking up in early 2024.

Money markets are pricing in more than 150 basis points of ECB interest rate hikes by the end of June.

Among country benchmarks, Germany’s DAX is seen ending the first half of 2023 at 13,209, down 9.2% from Friday’s close. France’s CAC 40 and Italy’s FTSE MIB are both seen falling over 15% and Spain’s IBEX by 17%.

Britain’s FTSE 100 is seen at 6,700 points by mid-2023, down 10.5% from last week’s close, but by end-2023 it should climb back to 7,373 points.

(Other stories from the Reuters global stock markets poll package:)

(Reporting by Danilo Masoni; additional reporting by Samuel Indyk; polling by Susobhan Sarkar and Sarupya Ganguly, Editing by William Maclean)

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LONDON (Reuters) -The United States is still talking to Russia about a deal to free jailed Americans Brittney Griner and Paul Whelan but Moscow has not provided a “serious response” to any of its proposals, a senior U.S. diplomat said in comments published on Monday.

Elizabeth Rood, the U.S. chargée d’affaires in Moscow, told Russia’s state-owned RIA news agency that talks were continuing through the “designated channel”.

“The United States, as we have said, has put a significant proposal on the table. We have followed up on that proposal and we have proposed alternatives,” she said. “Unfortunately, so far the Russian Federation has not provided a serious response to those proposals.”

In Washington, the White House said conversations with Russia were ongoing. “We want them both home as fast as possible, and this administration is going to stay committed to that task,” national security spokesman John Kirby said.

Basketball star Griner was taken this month to a penal colony in the Russian region of Mordovia to serve a nine-year drug sentence after being arrested in February with vape cartridges containing cannabis oil. She said at her trial she used them to relieve the pain from sports injuries and had not meant to break the law.

Whelan, a former U.S. Marine, is serving 16 years in the same region on charges of espionage, which he denies.

His brother, David Whelan, said on Monday he was concerned that the family had not heard from Paul Whelan in days. Paul Whelan told them to contact the U.S. Embassy in Moscow if he didn’t call home for more than three days, his brother said. When they did so, the consular staff said it had not heard from him either.

“It’s incredibly unusual for Paul to miss trying to call home on a holiday like Thanksgiving,” David Whelan said in a statement.

Russian Deputy Foreign Minister Sergei Ryabkov said on Nov. 18 he was hopeful of agreeing a prisoner swap that could see the release of Viktor Bout, a convicted Russian weapons trafficker who is in prison in the United States.

In her interview, Rood also held open the possibility of a follow-up to a meeting between CIA Director William Burns and Russian foreign intelligence chief Sergei Naryshkin in Istanbul two weeks ago – the first publicly announced face-to-face meeting between top officials of the two countries since Russia invaded Ukraine in February.

“The United States has channels for managing risk with the Russian Federation, particularly nuclear risks, and that was the purpose of CIA director Burns’ meeting with his Russian counterpart,” Rood said.

“Director Burns did not negotiate anything and he did not discuss a settlement of the conflict in Ukraine. I’m sure if there’s a need for another conversation in that channel, it can happen. There’s not anything scheduled that I know of.”

Washington has said Burns used the meeting to warn about the consequences of any Russian use of nuclear weapons. Russia has declined to comment on what was discussed, describing the subject matter as sensitive.

(Writing by Mark Trevelyan, Additional reporting by Doina Chiacu, Jeff Mason and Andrea Shalal in Washington; Editing by Kevin Liffey and Cynthia Osterman)

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By Emma Farge and Shivani Tanna

GENEVA (Reuters) -The World Health Organization said on Monday it would start using a new preferred term, “mpox”, as a synonym for monkeypox and urged others to follow suit after receiving complaints that the current name for the disease was racist and stigmatising.

“Both names will be used simultaneously for one year while ‘monkeypox’ is phased out,” the WHO said in a statement.

The WHO launched a public consultation process to find a new name for the disease earlier this year and received more than 200 proposals. The United States, which was among the countries and bodies supporting the name change, welcomed the announcement.

The U.S. Centers for Disease Control and Prevention (CDC)will also begin using the term “mpox”, CDC Director Rochelle Walensky said in a tweet.

“We welcome and support the renaming to mpox to reduce stigma and barriers to care for those most impacted,” Walensky added.

U.S. Health and Human Services Secretary Xavier Becerra said “reducing stigma associated with disease is one critical step in our work to end mpox.”

One of the more popular public suggestions was “mpox” or “Mpox”, put forward by men’s health organisation RÉZO among others. Its director said at the time that the removal of monkey imagery helped people take the health emergency seriously.

Some ideas were farcical such as “Poxy McPoxface” which alluded to Boaty McBoatface – the choice of a public vote on the name of a British polar research vessel, before a decision to give it another name – Sir David Attenborough.

The WHO said global experts settled on “mpox” after considering the scientific appropriateness, extent of current usage as well as pronounceability among other factors.

Mpox, discovered in 1958 and named after the first animal to show symptoms, mostly spread in a group of countries in west and central Africa until this year.

Around 100 countries where mpox is not endemic have now reported outbreaks of the viral disease.

The WHO has a mandate to assign new names to existing diseases under the International Classification of Diseases.

Generally, it seeks to avoid associating any disease or virus with a country, region, animal or ethnic group.

Last year, it assigned the letters of the Greek alphabet to new coronavirus variants to stop a practice of linking them with specific countries.

(Reporting by Emma Farge in Geneva, Shivani Tanna and Baranjot Kaur in Bengaluru; Additional reporting by Ahmed Aboulenien and Jeff Mason in Washington; Editing by Mark Heinrich & Simon Cameron-Moore)

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WASHINGTON (Reuters) – The White House on Monday said it supported the Chinese people’s right to peacefully protest against COVID-19 lockdowns and it did not see supply chain impacts from the demonstrations.

“People should be allowed … the right to assemble and to peacefully protest policies or laws or dictates … that they take issue with,” White House national security spokesperson John Kirby told reporters. “The White House supports the right of peaceful protest.”

Kirby also said the United States had not received any requests from China for COVID-19 vaccines.

(Reporting by Andrea Shalal and Jeff Mason; Editing by Mark Porter)

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By David Milliken

LONDON (Reuters) -British Prime Minister Rishi Sunak said on Monday that the so-called “golden era” of relations with China was over, saying Beijing’s systemic challenge to Britain’s interests and values was growing more acute.

In his first major foreign policy speech, Sunak said Britain’s approach to China needed to evolve and Beijing was “consciously competing for global influence using all the levers of state power”.

“Let’s be clear, the so-called ‘golden era’ is over, along with the naive idea that trade would lead to social and political reform,” Sunak said in London’s financial district, a reference to former finance minister George Osborne’s description of Sino-British ties in 2015.

Some in Sunak’s Conservative Party have been critical of Sunak, regarding him as less hawkish on China than his predecessor Liz Truss. Last year when he was finance minister, he called for a nuanced strategy on China to balance human rights concerns while expanding economic ties.

However, a planned meeting between Sunak and China’s President Xi Jinping at this month’s G20 summit in Bali fell through and last week London banned Chinese-made security cameras from sensitive government buildings.

“We recognise China poses a systemic challenge to our values and interests, a challenge that grows more acute as it moves towards even greater authoritarianism,” he said, referring to the BBC statement that one of its journalists had been assaulted by Chinese police.

“Of course, we cannot simply ignore China’s significance in world affairs – to global economic stability or issues like climate change. The U.S., Canada, Australia, Japan and many others understand this too.”

Sunak said under his leadership Britain would not choose the “status quo” and would confront international competitors “not with grand rhetoric but with robust pragmatism”.

On Ukraine, he said the government would maintain military aid to Kyiv next year, maintaining the strong support offered by former prime ministers Boris Johnson and Truss.

“So be in no doubt, we will stand with Ukraine for as long as it takes. We will maintain or increase our military aid next year. And we will provide new support for air defence,” he said.

In September, Britain said it was the second-largest military donor to Ukraine after the United States, providing 2.3 billion pounds ($2.8 billion) of aid this year.

Sunak said Britain needed to take the same long-term approach as its adversaries and competitors such as Russia and China.

“In the face of these challenges, short-termism or wishful thinking will not suffice. We can’t depend on Cold War arguments or approaches, or mere sentimentality about the past,” he said.

($1 = 0.8288 pound)

(Reporting by David Milliken and Michael Holden; Editing by David Gregorio and Cynthia Osterman)

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By David Shepardson

WASHINGTON (Reuters) -U.S. President Joe Biden on Monday called on Congress to intervene to avert a potential rail strike that could occur as early as Dec. 9, warning of a catastrophic economic impact if railroad service ground to a halt.

Biden asked lawmakers to adopt the tentative deal announced in September “without any modifications or delay – to avert a potentially crippling national rail shutdown” and added that up to 765,000 Americans “could be put out of work in the first two weeks alone.”

House Speaker Nancy Pelosi said lawmakers would take up legislation this week “to prevent a catastrophic nationwide rail strike, which would grind our economy to a halt.”

On Monday, more than 400 groups called on Congress to intervene in the railroad labor standoff that threatens to idle shipments of food and fuel and strand travelers while inflicting billions of dollars of economic damage.

A rail traffic stoppage could freeze almost 30% of U.S. cargo shipments by weight, stoke inflation and cost the American economy as much as $2 billion per day by unleashing a cascade of transport woes affecting U.S. energy, agriculture, manufacturing, healthcare and retail sectors.

“A rail shutdown would devastate our economy,” Biden said. “Without freight rail, many U.S. industries would shut down … Communities could lose access to chemicals necessary to ensure clean drinking water. Farms and ranches across the country could be unable to feed their livestock.”

Biden hailed the contract deal that includes a 24% compounded wage increase over a five-year period from 2020 through 2024 and five annual $1,000 lump-sum payments.

Workers in four unions have rejected the tentative deal, while workers in eight unions have approved it.

Labor Secretary Marty Walsh, Transportation Secretary Pete Buttigieg and Agriculture Secretary Tom Vilsack have been involved in discussions with the rail industry, unions and agriculture industry stakeholders.

Senator Roger Wicker, the top Republican on the Commerce Committee, praised Biden’s call to Congress to act and said no one side was fully happy with the compromise contract deal “but the responsible thing to do is avoid the strike.”

The Association of American Railroads said “congressional action to prevent a work stoppage in this manner is appropriate … No one benefits from a rail work stoppage – not our customers, not rail employees and not the American economy.”

In a letter on Monday, the U.S. Chamber of Commerce, National Association of Manufacturers, National Retail Federation, American Petroleum Institute, National Restaurant Association, American Trucking Associations and other groups warned that impacts of a potential strike could be felt as soon as Dec. 5.

Biden said Congress “should set aside politics and partisan division and deliver for the American people. Congress should get this bill to my desk well in advance of December 9th so we can avoid disruption.”

“The risks to our nation’s economy and communities simply make a national rail strike unacceptable,” says the letter to congressional leaders first reported by Reuters, warning a strike could halt passenger railroad Amtrak and commuter rail services that “would disrupt up to 7 million travelers a day.”

Biden’s Presidential Emergency Board in August released the framework for the tentative deal forged in September between major railroads and a dozen unions representing 115,000 workers. Those carriers include Union Pacific, Berkshire Hathaway Inc’s BNSF, CSX, Norfolk Southern and Kansas City Southern.

Unions and railroads have until Dec. 9 to resolve differences. If they do not, workers could strike or railroads could lock out employees – unless Congress intervenes. But railroads would halt hazardous materials shipments at least four days ahead of a strike deadline.

(Reporting by David Shepardson in WashingtonEditing by Lisa Shumaker and Matthew Lewis)

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By Jonathan Stempel

NEW YORK (Reuters) – A U.S. judge on Monday said Devin Nunes, the former California congressman and an ally of former U.S. President Donald Trump, can sue NBCUniversal for defamation over a comment by Rachel Maddow concerning his relationship with a suspected Russian agent.

Without ruling on the merits, U.S. District Judge Kevin Castel in Manhattan said Nunes “plausibly allege[d] actual malice” with respect to a statement from a March 2021 broadcast of MSNBC’s “The Rachel Maddow Show.”

Maddow was discussing a package addressed to Nunes from Andriy Derkach, a pro-Russia Ukrainian legislator, and said Nunes “refused to hand it over to the FBI, which is what you should do if you get something from somebody who is sanctioned by the U.S. as a Russian agent.”

Nunes’ complaint, which seeks damages, said MSNBC and Maddow knew the package had been turned over, but instead “set out to inflict maximum pain and suffering on plaintiff in order to harm plaintiff’s reputation.”

In a 22-page decision, Castel said Maddow did not attribute Nunes’ alleged refusal to any source, and that while she might have known about a similar accusation in a Politico article “a court does not weigh competing, plausible theories of actual malice on a motion to dismiss.”

The judge also said other statements made by Maddow were not defamatory. Maddow is not a defendant.

NBCUniversal, which is owned by Comcast Corp, and its lawyers did not immediately respond to requests for comment. Nunes’ lawyers did not immediately respond to similar requests.

The U.S. Treasury Department sanctioned Derkach in September 2020 for trying to interfere in that year’s U.S. presidential election, after he was linked to the dissemination of information to hurt then-Democratic candidate and eventual victor Joe Biden.

Nunes left Congress last December to become chief executive of the social media venture Trump Media & Technology Group.

He has sued several news organizations in recent years.

In April, federal appeals courts in New York and Washington, D.C. refused to revive defamation cases by Nunes against CNN, which is part of Warner Bros Discovery Inc, and the Washington Post.

The case is Nunes v NBCUniversal Media Inc, U.S. District Court, Southern District of New York, No. 22-01633.

(Reporting by Jonathan Stempel in New York; Editing by Shri Navaratnam)

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By Mike Scarcella

(Reuters) – A U.S. judge in California on Monday allowed litigation against Alphabet Inc’s Google to proceed as a consumer class action of 21 million individuals who accuse the company of violating U.S. anti-competition laws in how it runs its Google Play app store.

U.S. District Judge James Donato said in a 27-page order that the plaintiffs had established the legal elements of “commonality” and other factors to form a class action that alleges anticompetitive business practices.

The class members are Google Play Store individual consumers in 12 states, including Ohio, Michigan and Georgia, in addition to American Samoa, Guam, Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands.

The case is among an array of pending antitrust actions against Google, and state prosecutors in more than three dozen other states lodged similar claims against Google last year. The plaintiffs’ lawyers in the newly certified class action are jointly working with those state enforcers.

Nationwide, plaintiffs have identified aggregate damages of $4.7 billion.

Google has defended its Play Store business practices, denying the claims in the case before Donato and others.

A spokesperson for Google said on Monday: “We’re evaluating the ruling, and after that, we’ll assess our options.”

Lawyers for the company at U.S. law firm Morgan, Lewis & Bockius on Monday did not immediately respond to a message seeking comment.

In arguing against class-action certification, attorneys for Google said the plaintiffs failed to show how they were harmed, an argument that Donato rejected.

A lead attorney for the class at plaintiffs’ firm Bartlit Beck declined to comment.

The class attorneys allege among other things that Google prohibited app developers from steering customers to competitors and used “misleading warnings to deter customers from downloading apps outside the Google Play Store.”

They claimed that “but for Google’s anticompetitive conduct, plaintiffs and class members would have paid lower prices for apps and in-app purchases and would have benefited from expanded choice.”

A trial is scheduled to begin in June 2023.

(Reporting by Mike Scarcella in Silver Spring, Md.; Editing by Leigh Jones and Matthew Lewis)

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By Karen Brettell

NEW YORK (Reuters) – The dollar clawed back earlier losses on Monday as a hawkish Federal Reserve official laid out the case for further rate hikes, while the Australian dollar sank on concerns about unrest over COVID-19 restrictions in China.

The greenback rebounded in early U.S. trading and added to gains after St. Louis Fed President James Bullard said the U.S. central bank needs to raise interest rates quite a bit further and then hold them there throughout next year and into 2024 to gain control of inflation and bring it back toward the Fed’s 2% goal.

Comments from Fed Chair Jerome Powell on Wednesday will be watched for any new signals on further tightening with key U.S. jobs data for November also due on Friday. The U.S. central bank is expected to hike rates by an additional 50 basis points when it meets on Dec. 13-14.

“The markets have hit a bit of a plateau about what they’re expecting. They know that the Fed’s going to raise rates, and that’s behind everything, but they’re not sure how much or when,” said Joseph Trevisani, senior analyst at FXStreet.com.

The dollar index has fallen to 106.65 from a 20-year high of 114.78 on Sept. 28 on expectations that its rally may have been over stretched and as the Fed looks to slow its pace of rate increases.

Some of the recent decline is also likely due to investors and traders booking profits before year-end, said Trevisani, noting many trading firms curtail activity in December.

The greenback was also likely supported after the dollar index reached the 200-day moving average at 105.369.

The index also posted an outside day, reaching both a higher high and a lower low than the previous session, which could bode well for further gains, Tom Fitzpatrick, chief technical strategist at Citigroup, said in a note.

It is the first bullish outside day on the dollar index since the high reached on Sept. 28 and is the first time it has tested the 200-day moving average since June 2021, he said.

The dollar had dipped earlier on Monday despite other safe-haven currencies the Japanese yen and the Swiss franc gaining on concerns about China.

Hundreds of demonstrators and police clashed in Shanghai on Sunday night as protests over China’s stringent COVID restrictions flared for a third day and spread to several cities in the wake of a deadly fire in the country’s far west.

The greenback was last down 0.23% to 138.82 Japanese yen. The euro dipped 0.62% to $1.0403.

The risk sensitive Aussie dollar, which is strongly tied to Chinese growth, was the worst performing major currency, falling 1.61% to $0.6649. The currency was also dented by data showing Australian retail sales suffered their first fall of 2022 in October as rising prices and higher interest rates finally seemed to have an impact on spending.

The offshore yuan weakened against the dollar to 7.2468.

Bitcoin fell after major cryptocurrency lender BlockFi filed for Chapter 11 bankruptcy protection along with eight affiliates, the latest crypto casualty to follow the spectacular collapse of the FTX exchange earlier this month.

The cryptocurrency was last down 1.18% at $16,231.

(Editing by Chizu Nomiyama and Chris Reese)

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