BERLIN (Reuters) – Volkswagen said on Tuesday it would sell its carsharing service WeShare to Miles Mobility, under a deal that sees the Berlin-based competitor order more than 10,000 electric cars from the Audi, Seat/Cupra and VW brands.
Volkswagen said it would not disclose the selling price as per the agreement.
(Reporting by Jan Schwarz, Writing by Rachel More)
By Maytaal Angel and Marcelo Teixeira
LONDON/NEW YORK (Reuters) – Brazilian coffee farmers are defaulting on contracts for a second straight year, according to traders and lawyers representing the industry, failing to deliver on pre-agreed sales and exposing trade houses to losses.
The defaults, though less widespread than last year, have scrambled the coffee market, leaving traders reluctant to agree to forward sales for next year’s crop or the one after.
Defaults started to pick up last year after a series of price shocks caused by severe frosts that ruined the harvest.
This year’s harvest was smaller than expected. Some analysts cut their initial estimates by nearly 4 million bags as trees have taken longer to recover from 2021’s frosts and drought. Coffee prices in August and September traded between $2.17 and $2.21 per pound, over 70% higher than two years ago.
The surge in prices gave Brazilian farmers an opening to default on contracts so they could sell beans on the spot market, earning a higher price that outweighs any liability for a default.
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Several major exporters such as Sucafina, Olam, Louis Dreyfus and COFCO, as well as co-ops including No. 1 exporter Cooxupe, are legally battling farmers for compensation over contract defaults, according to court documents seen by Reuters.
Sucafina, Olam, Dreyfus and COFCO did not respond to requests for comment. Cooxupe declined to comment.
“We’ve been told to have less exposure with (Brazilian farmers). It’s going to be one or two years until traders forget” and start buying forward again, said a trader at a large international commodities trading company, asking not to be named.
WIDER IMPACT OF DEFAULTS
Forward selling by farmers and exporters from top exporter Brazil is an important feature of the market. Advance sales help reduce market fluctuations because they allow farmers to sell throughout the year, not just during harvest.
Lawyer Cristiano Zauli from Cristiano Zauli Advogados law firm, who assists traders in cases against Brazilian farmers, said he had filed around 50 lawsuits this year against about 100 last year, seeking compensation from coffee producers who have failed to deliver.
He said he had obtained court orders to seize coffee at farms, similar to last year when harsh frosts damaged around 15% of Brazil’s coffee crop and pushed prices to multi-year highs.
Traders said this year’s wave of defaults caused the ICE futures price to spike in late September ahead of the front month contract expiry, and could do so again ahead of the December contract expiry on Dec. 19.
Traders who buy coffee a year or two in advance usually hedge purchases by taking short futures positions. When futures rise, they take a loss on that position, but can offset it with a similar rally in physical coffee prices.
However, when farmers default, traders do not have the physical coffee to sell to offset the futures market. Instead, traders cover short positions by buying more futures, magnifying wild swings in the market.
That’s what happened in September, when Arabica coffee futures rose from around 2.16 cents per pound to 2.32 cents late in the month, a 7% increase.
A lawyer working for one of the five largest coffee exporters in Brazil said the defaults concerned less than 10% of Brazil’s total forward contracts. That would still be a significant amount since Brazil produces about 35% of the world’s coffee.
(Reporting by Marcelo Teixeira; Editing by Bernadette Baum)
(Reuters) – Phillips 66 reported a jump in quarterly profit on Tuesday, as the refiner benefited from surging fuel demand and tight energy supplies.
The Houston, Texas-based company reported earnings of $5.4 billion, or $11.16 per share, for the three months ended Sept. 30, up from $402 million, or 91 cents per share, a year earlier.
(Reporting by Arunima Kumar in Bengaluru; Editing by Vinay Dwivedi)
JOHANNESBURG (Reuters) – One of South Africa’s largest grocery retailers Pick n Pay is expanding a pilot of adding cryptocurrency as a payment option to more stores after the successful completion of the first phase, it said on Tuesday.
The announcement came weeks after the Financial Sector Conduct Authority formally declared crypto assets as a financial product in South Africa, enabling them to be regulated and clearing the way for cryptocurrency to be a mainstream method of payment.
“Increasingly cryptocurrency is being used by those under-served by traditional banking systems, or by those wanting to pay and exchange money in a cheaper and really convenient way. Many companies are responding to this by accepting Bitcoin,” Pick n Pay said in a statement.
The retailer ran the first phase of the pilot in 10 Western Cape province stores over the past five months with pre-selected testers. It has now extended it to a further 29 stores for testing with customers, with the intention to roll it out to all stores in the coming months, Pick n Pay said.
Pick n Pay has partnered with Electrum and CryptoConvert on its latest pilot. Electrum’s payment platform connects Cryptoconvert and Pick n Pay, letting customers pay with the Bitcoin Lightning technology at the till point, the company added.
“Crypto payments are still in their infancy in South Africa, but we are already seeing adoption in parts of our society that haven’t previously had access to traditional financial systems,” said Carel van Wyk, Founder of CryptoConvert, which allows merchants to accept crypto payments.
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(Reporting by Nqobile Dludla, editing by Ed Osmond)
By Lefteris Papadimas
ATHENS (Reuters) – Greece plans to raise up to 8 billion euros ($7.91 billion) from debt markets in 2023 by issuing new short- and long-term issues, two government sources told Reuters on Tuesday.
The country emerged from a decade-long debt crisis in 2018 and since then has relied solely on bond markets to cover its borrowing needs.
It expects to achieve a primary surplus again in 2023, three years since the COVID-19 pandemic which hampered its fiscal progress, and regain investment grade status despite the energy crisis engulfing Europe.
Athens issued a 10- and a 5-year government bond this year and reopened several others maturities through auctions to inject liquidity at selected points of the yield curve. It has raised about 8 billion euros so far this year.
It also plans to repay ahead of schedule 2.7 billion euros of bilateral Greek Loan Facility (GLF) loans due in 2023, owed to euro zone countries under the first bailout.
“Our borrowing needs for next year are limited, especially after the early repayment of GLF loans. We will borrow 7-8 billion euros from the bond markets,” a finance ministry official told Reuters.
A second government official confirmed the country’s borrowing plan for 2023.
Greece also plans to issue its first green bond in 2023, an issue which was initially scheduled for this year.
“We didn’t want to go ahead with such a sensitive issue in such a volatile market. We will do it next year,” the first official said.
Greece posted a budget gap of 15.1% of gross domestic product in 2009, when its crisis broke out and forced it to sign up to three international bailouts that kept it afloat. Since then, its finances have improved.
However, borrowing costs on the benchmark 10-year bond have nearly tripled since the start of the year, reflecting a broader rise in yields as the European Central Bank increases interest rates to tame record high inflation. The yield stood at 4.57% on Tuesday.
Greece, still the euro zone’s most indebted country, has a cash buffer of about 38 billion euros, enough to cover its borrowing needs for at least two years without tapping international bond markets.
(Reporting by Lefteris Papadimas; Editing by Alison Williams)
By Hongji Kim and Ju-min Park
SEOUL (Reuters) – A temporary morgue for some of the people killed in South Korea’s Halloween party crush is now a huge lost-and-found, where hundreds of items such as a “Happy Halloween” backpack and a Minnie Mouse hairband await their owners.
The Wonhyoro sports centre was quiet on Tuesday, three days after the crush in the popular Itaewon district during Halloween festivities, as a few people sifted through more than 800 recovered lost items.
Five kilometres from the scene of the disaster, the modern sports facility was used in the initial hours to keep the bodies of some of the 156 people crushed to death when a chaotic surge of crowd poured into a narrow alley late on Saturday.
On Tuesday, its floor was laid with 256 pairs of shoes, 258 pieces of clothing, 124 bags and 156 electronic items, and other personal belongings, including stuffed animal key chains and festive Halloween masks.
Mobile phones and identification cards were kept separately at a police station.
One survivor of the crush walked through the items looking for her bag, her left leg in a cast from her injury that night. She couldn’t find what she was looking for.
The woman, who declined to give her name, said she and her friend were about to head home when the crowd swelled dangerously and ended up in a large crowd pushing forward into a narrow, sloped alleyway. She got jammed in place near the bottom of the hill.
“I was smothered at the far bottom (of the alley), but I survived because my upper torso wasn’t pressed under,” she said. She said her friend was also rescued.
South Korea is in a week-long period of national mourning and top officials pledged on Tuesday to answer questions about how the tragedy unfolded and how the government could prevent similar disasters. [L1N31X03Y]
The death toll is 156 with 151 injured, 29 of whom were in serious condition. At least 26 citizens from 14 countries were among the dead.
A police officer told Reuters the gym opened for owners and family members on Monday to claim their lost items, but few have come so far.
(Reporting by Ju-min Park; Editing by Jack Kim and Gerry Doyle)
BEIJING (Reuters) – China’s property market continued its slump in October, with private data showing home prices and sales falling, suggesting lacklustre sentiment and a bleak outlook amid strict COVID curbs, which hit consumer confidence.
China’s property sector, once a pillar of growth, has slowed sharply in the past year as a result of a government clampdown on excessive borrowing by developers, and a COVID-19-induced economic slump.
Prices in 100 cities dropped for the fourth straight month in October, falling 0.01% month-on-month after a decline of 0.02% in September, according to a survey on Tuesday by China Index Academy (CIA), one of the country’s largest independent real estate research firms.
Property sales by floor area in 100 cities fell about 20% year-on-year in October, according to a separate statement by the academy.
Analyst Chen Wenjing at the research firm said property recovery depends on COVID containment measures and the strength of policies.
Any rebound in the real estate market is expected to be delayed if the country sticks with strict COVID restrictions to quell the repeated coronavirus outbreaks, Chen said. Such curbs are expected to stay in place for some time after the Communist Party Congress in October.
Despite more than 230 stimulus policies introduced by 160 local governments in September and October, including subsidies, easing of purchase restrictions and decreasing down payment requirements, the property slump has widened from small cities with a net outflow of population to major cities.
Last month, new home prices in Shanghai and Shenzhen fell 0.05% and 0.32% in monthly terms, respectively.
Home sales by floor area in Shanghai and Guangzhou fell 35% and 26% in annual terms, respectively.
“Wait-and-see sentiment in homebuyers currently remains strong, with COVID flare-ups in many areas further dragging down the pace of market recovery and the previous policies have yet to take effect significantly,” Chen said.
(This story has been corrected to state that the Communist Party Congress was held in October, not this month)
(Reporting by Liangping Gao and Ryan Woo; Editing by Gerry Doyle)
KARACHI, Pakistan (Reuters) – Pakistan’s consumer inflation accelerated in October to 26.6% from a year earlier, the statistics bureau said on Tuesday, with prices showing a rise of 4.7% from the previous month.
In September, the consumer price index rose 23.2% on year, slowing from a decades-high 27.3% in August.
The rise in consumer prices in October from last month was boosted mainly by electricity and food prices, the bureau said in a statement. The higher CPI from October last year was due to the rising costs of food and fuel.
Persistently high inflation has put severe strain on the South Asian country’s economy, which is also reeling from falling foreign exchange reserves, a depreciating and unstable currency, as well as a widening current account deficit.
Foreign exchange reserves with the central bank stand at $7.4 billion, barely enough to cover a month’s imports.
Devastating floods in August, that killed more than 1,700 people, have added to the country’s woes with massive damage to standing crops and inundation of agricultural lands.
In September, the central bank, while keeping the main policy rate unchanged at 15%, projected inflation after the floods to be on the higher side of a prior estimate of 18%-20% in FY2022-23.
(Reporting by Gibran Peshimam, Editing by Louise Heavens and Jacqueline Wong)
By Donny Kwok and Twinnie Siu
HONG KONG (Reuters) – Hong Kong’s retail sales nudged up in September helped by improved tourism from eased pandemic restrictions, government data showed on Tuesday, but an official warned that tightened financial conditions will pose a challenge for the outlook.
Retail sales in September rose 0.2% from a year earlier in value terms to stand at HK$28.1 billion ($3.6 billion). That compared with HK$28.5 billion in August, when retail sales slid 0.2% from a year earlier.
Strict COVID-19 restrictions have weighed on Hong Kong’s economy since early 2020, grinding tourism to a halt and battering sales at bars, restaurants and shops.
The city scrapped a hotel quarantine requirement for all incoming visitors in September, after closely following China’s “zero-COVID” policy over the past two years.
The government said the stable domestic epidemic situation, improved labour market conditions and the government’s Consumption Voucher Scheme will continue to support demand.
“However, tightened financial conditions will increasingly offset the positive effects,” a government spokesman said.
Rising interest rates and a pessimistic economic outlook have put pressure on asset prices, dragging down private home prices in the city.
For the first nine months, the total retail sales value decreased 1.3% compared with the same period last year, the data showed.
In volume terms, retail sales in September fell 1.5% from a year earlier. That compared with a revised 3.0% drop in August. For the first nine months of the year, the volume decreased 4.2% from a year earlier.
The Chinese special administrative region has experienced a surged in travel after it ended mandatory hotel quarantine for international arrivals.
Tourist arrivals in September soared 568.5% from a year earlier to 66,037. That compared with a 451.4% jump in August.
Hong Kong’s economy contracted by 4.5% in the third quarter from a year earlier, shrinking for the third consecutive quarter as trade performance remained weak.
However, the city’s seasonally adjusted unemployment rate eased to 3.9% in the July-September quarter, improving for the fifth consecutive period.
In September, sales of jewellery, watches, clocks and valuable gifts, which before the pandemic relied heavily on tourists from the mainland, rose 8.4% from a year earlier, following a 3.9% expansion in August, the data showed.
Sales of clothing, footwear and accessories in September fell 7.2% on year after an 8.8% drop in August.
Online retail sales in September jumped 27.5% year-on-year in value terms, compared with a revised 21.6% growth in August. It was up 22.4% for the first nine months of 2022.
($1 = 7.8491 Hong Kong dollars)
(Editing by Jacqueline Wong)
(Reuters) – Serial entrepreneur Oleg Tinkov has renounced his Russian citizenship, saying he does not want to be associated with “fascism” or people who collaborate with “killers”.
In an Instagram post published on Tuesday, the 54-year-old founder of Tinkoff Bank wrote: “I decided to renounce my Russian citizenship after Russia invasion of independent Ukraine. I am against this war, and the killing of peaceful people.”
Tinkov, whose upstart digital credit card company, TCS Group Holding, grew to become one of Russia’s largest financial institutions, has been an outspoken critic of the invasion and President Vladimir Putin.
He was forced to sell his 35% stake in TCS, Tinkoff Bank’s parent, to Russian metals magnate Vladimir Potanin in April, following a string of anti-war comments.
Tinkov said an original Instagram post published on Monday, with a picture of a certificate renouncing his citizenship as of Oct. 26, had “mysteriously disappeared”.
Tinkov also said on Tuesday he was suing to force the bank to stop using his name.
“My name should not be associated with fascism,” Tinkov said. “I hate when my brand/name is associated with the bank that collaborates with killers and blood.”
The bank, for its part, said it had full legal rights to the use of the Tinkoff brand, the TASS news agency reported.
The tycoon, who has likened himself to British billionaire Richard Branson and was worth almost $10 billion at his peak, launched electronics, frozen food and beer brands before setting up Tinkoff Bank in the mid-2000s.
Before he sold his stake, Britain imposed sanctions on Tinkov, saying he was “receiving benefits from the Russian government” through his stake in a systemically important company.
Tinkov is believed to live in London, where he underwent years of treatment for leukaemia. He says he now has no business interests in Russia.
Tinkoff previously held U.S. citizenship, but renounced that around the time Tinkoff Bank went public in 2013 in what Washington said was an attempt to avoid tax liabilities.
Tinkov reached a $500 million settlement with the Justice Department last year.
(Reporting by Reuters; Editing by Kevin Liffey)
LONDON (Reuters) – Central banks bought a record 399 tonnes of gold worth around $20 billion in the third quarter of 2022, helping to lift global demand for the metal, the World Gold Council (WGC) said on Tuesday.
Demand for gold was also strong from jewellers and buyers of gold bars and coins, the WGC said in its latest quarterly report, but exchange traded funds (ETFs) storing bullion for investors shrank.
Gold is typically seen as a safe asset for times of uncertainty or turmoil, but many financial investors sold shares in gold-backed ETFs as interest rates rose and pushed up returns on other assets.
Offloading of bullion by ETFs helped push gold prices down 8% in the third quarter, but this price fall helped stimulate demand for jewellery, the WGC said.
In total, the world’s gold demand amounted to 1,181 tonnes in July-September, up 28% from 922 in the same period in 2021, the WGC said.
Demand in the year to September had recovered to pre-pandemic levels, it said.
Buying by central banks in the third quarter far exceeded the previous quarterly record in data stretching back to 2000 and took their purchases for the year to September to 673 tonnes, more than the total purchases in any full year since 1967, according to the WGC.
Among large buyers were the central banks of Turkey, Uzbekistan, Qatar and India, but the WGC said a substantial amount of gold was also bought by central banks that did not publicly report their purchases.
It did not give any details on which countries these could be, but banks that do not regularly publish information about their gold stockpiles include those of China and Russia.
Purchases of gold bars and coins also surged in Turkey to 46.8 tonnes in the quarter, up more than 300% year-on-year, as people bought gold to shield themselves from rampant inflation.
“Looking ahead, we anticipate central bank buying and retail investment to remain strong,” said WGC analyst Louise Street.
“We also expect to see jewellery demand continue to perform strongly in some regions such as India and Southeast Asia,” she said.
Following are numbers and comparisons.
GOLD DEMAND (tonnes)*
Q3 2022 Q3 2021 % change
SUPPLY
Mine production 949.4 927.7 2%
Net producer hedging -10.0 -12.4 -19%
Recycled gold 275.8 292.8 -6%
Total supply 1,215.2 1,208.2 1%
DEMAND
Jewellery fabrication 581.7 515.1 13%
Technology 76.7 83.4 -8%
– of which electronics 62.8 69.0 -9%
– other Industrial 11.3 11.6 -2%
– dentistry 2.5 2.8 -11%
Investment 123.8 232.8 -47%
– Of which bar and coin 351.1 258.9 36%
– – Of which bars 220.4 177.5 24%
– – official Coins 100.2 57.5 74%
– – medals/imitation coins 30.6 23.9 28%
– ETFs & similar products -227.3 -26.0 773%
Central banks & other inst. 399.3 90.6 341%
GOLD DEMAND 1,181.5 921.9 28%
OTC and other 33.8 286.3 -88%
TOTAL DEMAND 1,215.2 1,208.2 1%
* Source: World Gold Council, Gold Demand Trends Q3 2022
(Reporting by Peter Hobson; Editing by Mark Potter)
A look at the day ahead in U.S. and global markets from Mike Dolan.
Global stocks just won’t lie down, doggedly clinging to hopes that central banks will ease off the policy brakes or that China might ease COVID curbs, just as energy firms reap massive windfall profits.
Entering the penultimate month of a dire 2022, world equity indices don’t want to give up the ghost yet on the near 10% rebound since Oct. 13. Everything from central bank speculation, big rotations of equity sectors and talk of yearend seasonal flows in a U.S. election year are all cited.
And after a downbeat start to the week, stocks jumped back yet again on Tuesday – even on some pretty thin reasoning.
Underperforming Hong Kong and China stocks surged late in the day, with the former closing up more than 5%, after social media chatter that China was planning some reopening from strict COVID curbs in March. The reports were dismissed by officials.
The spark was also enough to see China’s yuan bounce off a near 15-year low against the dollar.
The optimism comes as the U.S. Federal Reserve starts its two-day policy meeting amid hopes it may signal a downshift in the pace of rate hikes next month.
The Reserve Bank of Australia underscored those hopes on Tuesday by gearing down its tightening to just a quarter point hike after a series of half point rises previously – following on from the Bank of Canada’s move to reduce the size of its rate rises last week.
U.S. stock futures were higher, with Treasury yields and the U.S. dollar on the back foot.
European downshifting was far less certain. After Monday’s news that euro zone inflation rose to a record 10.7% in October, European Central Bank chief Christine Lagarde said the ECB must keep raising interest rates to fight off inflation, even if the probability of a euro zone recession has increased.
Energy sector earnings show clear winners from the year’s Ukraine-related price shock.
BP more than doubled its third-quarter profit from a year earlier to $8.15 billion, lifted by strong natural gas trading, as it expanded its share buybacks by $2.5 billion amid rising calls to increase windfall taxes on the sector.
U.S. President Joe Biden on Monday called on major oil companies who are bringing in big profits to stop “war profiteering”, threatening to hit them with higher taxes if they don’t increase production.
Key developments that should provide more direction to U.S. markets later on Tuesday:
* U.S. Federal Reserve kicks off two-day meeting; Bank of Canada Governor Tiff Macklem speaks in parliament
* U.S. Oct manufacturing surveys from ISM and S&P Global; Sept U.S. JOLTS job openings data; Dallas Fed Oct services index
* U.S. Corporate Earnings: AIG, AMD, Marathon, Pfizer, Eli Lilly, Edison, Clorox, Prudential Financial, Molson Coors, Fox etc
(By Mike Dolan, editing by Ed Osmond, [email protected]. Twitter: @reutersMikeD)
By Marianna Parraga
HOUSTON (Reuters) – U.S. exports of liquefied natural gas (LNG) in October remained capped by plant outages, with producers shifting more cargoes to Asian buyers last month, according to Refinitiv Eikon tanker monitoring data, after of a pipeline leak cut supplies from Malaysia.
LNG prices recently have cooled with Europe’s gas storage levels rising to over 90% of target capacity and a slow start to winter.
In Asia, however, a declaration of force majeure on gas supplies by Malaysian state-energy company Petronas has LNG customers in Japan scrambling for alternative cargoes. Malaysia was the second biggest supplier of LNG to Japan in 2021.
A total of 88 tankers carrying 6.27 million tonnes of LNG departed in October from U.S. ports, mostly heading to Europe, the data showed. The share of sales to Asian customers rose to 24% from 19% the previous month, while shipments to Latin America and the Caribbean dropped to a couple cargoes.
The export volume was just below September’s 6.32 million tonnes.
Prices at the Dutch hub this week fell to $27 per million British thermal units as high inventory levels and above-normal temperatures pushed European gas prices to their lowest since June.
“Europe has enough gas stored to survive this winter unless it gets very, very cold,” said analyst Nikoline Bromander from consultancy Rystad Energy in a note to clients last week.
About a dozen ships carrying LNG remained anchored last week off Spain’s Bay of Cadiz in anticipation of a rise in European gas prices as plants that convert the superchilled fuel back to gas were operating at maximum capacity.
U.S. LNG producers this year cranked up exports to Europe following Russia’s invasion of Ukraine, but plant outages and the shutdown of the second-largest U.S. export facility have capped additional volumes.
An explosion in June forced the shutdown of Freeport LNG’s 2.1 billion cubic-feet-per-day Quintana, Texas, processing plant. The company expects to return to partial service in November amid a regulator’s call for additional information before any restart.
The shutdown of the second-largest U.S. LNG export plant has hit many customers, including Japan’s biggest LNG buyer, JERA, which last week said it will book a $751-million loss mostly due to higher purchase costs.
But the No. 3 export plant in the country, the Cove Point LNG facility in Maryland, completed its planned maintenance and returned to service in October, adding 700 million cubic feet per day (MMcfd) to exports. U.S. gas storage levels rose to 3.34 trillion cubic feet last week.
“2.7 Bcfd of natural gas which was usually exported as LNG has instead directed into the local market since June and late September respectively,” Bromander added.
(Reporting by Marianna Parraga; Editing by Marguerita Choy)
HELSINKI (Reuters) -Finland’s Prime Minister Sanna Marin on Tuesday urged Hungary and Turkey to swiftly approve the Swedish and Finnish applications for membership of the NATO defence alliance.
Hungary and Turkey are the only two remaining NATO members to not yet have ratified the applications.
“All eyes are now on Hungary and Turkey. We are waiting for these countries to ratify our applications. I think it would be important that this would happen preferably sooner than later,” Marin told a joint news conference with other Nordic leaders.
Finland and Sweden last week reiterated they would join NATO at the same time, presenting a united front to Turkey.
The Nordic neighbours asked to join the NATO alliance in May in response to Russia’s invasion of Ukraine, but ran into objections from Turkey which has accused the two of harbouring groups it deems terrorists.
(Reporting by Essi Lehto and Anna Ringstrom, editing by Terje Solsvik)
LONDON (Reuters) – British manufacturing last month suffered its biggest contraction since the depths of the first COVID-19 lockdown in May 2020, with optimism draining fast, a survey showed on Tuesday.
The final S&P Global UK Manufacturing Purchasing Managers’ Index (PMI) for October fell to 46.2 from 48.4 in September. While the October figure was revised up from an initial “flash” reading of 45.8, it still marked a 29-month low.
The survey’s gauge of future output fell to its lowest level since April 2020.
Overall, the PMI chimed with other leading indicators of Britain’s economy that point to a worsening slowdown underway – something that is likely to concern Bank of England officials who look set to raise interest rates markedly on Thursday.
Britain’s economy is on the cusp of recession as households and businesses wrestle with rising energy costs, a jump in borrowing costs and volatile financial markets.
Manufacturers in other major European economies are also struggling.
“Business optimism dipped to a two-and-a-half year low, as weak demand, recession fears, inflationary pressures and rising uncertainty hit confidence,” S&P Global said.
The survey’s gauges of input cost inflation and selling prices inched lower in October, but was still high by historic standards.
Manufacturing employment fell for the first time since November 2020, the PMI showed.
(Reporting by Andy Bruce; Editing by Hugh Lawson)
By Bhargav Acharya and Alexander Winning
JOHANNESBURG (Reuters) – South Africa still has space to raise interest rates, its central bank governor said on Tuesday ahead of a rate decision later this month, citing the need to get inflation expectations more anchored around the midpoint of its target range.
The South African Reserve Bank (SARB) has raised its main lending rate at its last six monetary policy meetings in a bid to get inflation under control. Its next decision is due on Nov. 24.
“We have not reached the ‘end’ of our policy rate space,” Governor Lesetja Kganyago said in a lecture at Johannesburg’s University of the Witwatersrand.
“Inflation expectations, for the most part, are proving to be more responsive to current inflation outcomes than we would like, and less anchored around the midpoint of our target.”
South Africa’s headline consumer inflation slowed to 7.5% in September from 7.6% in August, but it is still well above the SARB’s 3%-6% target range.
“At present, our repo rate is at 6.25%, still below long-term levels, but rising to a more sustainable long-term level that is consistent with inflation stabilising at 4.5%,” Kganyago said.
He also used the lecture to make the case that the central bank’s policy objectives should not be broadened in a way that could lead to sharply higher inflation.
The SARB has come under pressure in recent years to expand its mandate beyond price stability to also boost job creation and lift flagging economic growth.
“Employment and growth are both limited by factors that are beyond the reach of the central bank’s toolset,” Kganyago said.
“The best chance we have with monetary policy to get faster, more job-rich growth is to maintain our focus on price stability with flexible inflation targeting − a proven framework.”
(Reporting by Bhargav Acharya and Alexander Winning; Editing by Olivia Kumwenda-Mtambo and Ed Osmond)
TOKYO (Reuters) – Chinese fashion retailer Shein is to open its first permanent premises in Tokyo this month, the company said on Tuesday, aiming to bolster its online brand with a physical presence.
Opening from Nov. 13 on Cat Street in the Harajuku fashion district, it will be the company’s first such physical event space in the world, a Shein spokesperson told Reuters.
Shoppers will be able to browse clothing at the storefront and scan QR codes that will allow them to make purchases online. The space may be modified to host fashion shows and designer events as needed, the spokesperson said.
The Chinese retailer operated pop-up stores in Japan earlier this year, and in October opened a temporary location in the western metropolis of Osaka.
Launched in 2008, Shein produces clothing in China to sell online in the United States – its biggest market – Europe and Asia but it does not sell in its home market
In February, the company had shelved plans for its U.S. market listing, Reuters had reported.
(Reporting by Rocky Swift and Chen Lin. Editing by Rashmi Aich and Jane Merriman)
(This Oct. 31 story has been refiled to fix wording to law and order in paragraph 4.)
ROME (Reuters) – Italy’s new right-wing government signalled on Monday it would crack down on unlicensed rave parties, with organisers risking jail terms of up to six years for staging such events.
The move followed a weekend Halloween party in a disused warehouse close to the northern city of Modena that attracted more than 1,000 people from Italy and abroad, and brought complaints about noise and its impact on traffic in the area.
“We have shown that the state won’t turn a blind eye and fail to act when faced with law-breaking,” Prime Minister Giorgia Meloni told a news conference, saying Italy needed to tighten the rules to bring it into line with European neighbours.
Meloni, whose government came to office in October on a pledge to be tough on law and order, mentioned a bigger rave last year in the town of Viterbo at which two deaths were reported and an area of natural beauty was damaged.
“The impression that the Italian state has given in recent years is one of being lax when it comes to respecting the rules and the law,” she said.
Under proposals agreed by her government, those behind such parties could in future face between three and six years in jail, and would have the equipment used at the raves confiscated.
The new offence would apply to unauthorised gatherings of at least 50 people that pose a risk to public health, safety or order, Interior Minister Matteo Piantedosi told a news conference.
The party in Modena, which had been scheduled to run until Tuesday, ended peacefully on Monday at lunchtime when revellers agreed with police gathered at the site to turn off the music and head for home.
“Happy Halloween to everyone, apart from those from half of Europe who came to cause chaos in Modena in Italy with an illegal rave party,” said Matteo Salvini, leader of the League party on Twitter.
The League is part of Meloni’s coalition, which extends to her hard-right Brothers of Italy party and the mainstream conservative Forza Italia of ex-premier Silvio Berlusconi.
($1 = 1.0118 euros)
(Reporting by Angelo Amante; Writing by Keith Weir; Editing by Alvise Armellini and Alison Williams)
BEIJING (Reuters) – China’s finance ministry encourages administrative bodies to revitalise idle state-owned assets, including by market-based leasing or selling those assets as some were poorly managed, said a notice by the ministry on Tuesday.
The notice came as administrative bodies and local governments are suffering fiscal pain as COVID-19 curbs reduced tax income while protracted weakness in the property sector hit state land sales revenue.
Idle houses, land, cars, office furniture, large equipment and software with inefficient operation at administrative institutions can be revitalised, according to the notice.
China has asked local governments and government bodies to tighten their belts in a bid to free up funds to give priority to ensuring people’s livelihoods as the economy faltered sharply this year.
Helped by a raft of government measures, the economy rebounded at a faster-than-anticipated rate in the third quarter, but softening factory activity in October suggested weaker economic recovery in the fourth quarter as protracted COVID-19 restrictions disrupted production and subdued demand.
(Reporting by Ellen Zhang and Ryan Woo, editing by Ed Osmond)
By Anirudh Saligrama and Shubham Kalia
(Reuters) -One person was killed and about 20 wounded on Halloween night in two separate shooting attacks in the U.S. cities of Kansas City and Chicago, police said.
Between five and seven people were shot and one was killed in a shooting at a home in Kansas City, where about 70-100 teens were partying on Monday night, city police chief Karl Oakman said.
Some individuals unknown to the homeowners started shooting when they were asked to leave, Oakman told reporters.
In Chicago, 14 people, including two children and a teenager, were injured in a drive-by shooting, but there were no immediate reports of deaths, Chicago police said.
Seven of the injured, including the three minors, were either in serious or critical condition.
Two shooters, traveling in a dark SUV, shot at a group which was standing at an intersection, police said. Thirteen were hit by gunfire while one was struck by a vehicle, police said, correcting an earlier statement which said that as many as 14 were shot.
Police did not identify the offenders or have any details of the motive, Chicago police superintendent David Brown told a press briefing.
The bloodshed follows a series of U.S. school shootings that have left dozens dead and wounded this year alone, adding to a long-running U.S. debate over gun control. One of the deadliest took place in May when a gunman killed 19 children and two adults in Uvalde, Texas.
(Reporting by Anirudh Saligrama and Shubham Kalia in Bengaluru; Editing by Lincoln Feast and Nick Macfie)
SHANGHAI (Reuters) – Hong Kong and China stocks jumped on Tuesday after rumours based on an unverified note circulating on social media that China was planning a reopening from strict COVID curbs in March triggered a sharp rebound following last month’s savage selling.
A Chinese foreign ministry spokesman later said he was unaware of the situation.
The Hang Seng Index jumped more than 5%, while the Hang Seng Tech Index gained nearly 8%.
China’s benchmark CSI300 Index rose 3.4%. The Shanghai Composite Index was up 2.6%.
An unverified note trending in social media, and tweeted by influential economist Hao Hong, said a “Reopening Committee” has been formed by Politburo Standing Member Wang Huning, and is reviewing overseas COVID data to assess various reopening scenarios, aiming to relax COVID rules in March, 2023.
“I don’t know where you got this information. I truly don’t know anything about this,” foreign ministry spokesman Zhao Lijian said when asked about such a committee.
The rebound also comes after signs that Chinese bargain hunters piled into battered Hong Kong stocks last month as foreign investors dumped China assets in the aftermath of the Communist Party Congress.
Linus Yip, chief strategist at First Shanghai Group, said the unconfirmed rumour triggered the rally.
“The market has fallen so much, and has a willingness to rebound,” said Yip.
(Reporting by the Shanghai Newsroom; Editing by Tony Munroe and Sam Holmes)
By Wayne Cole
SYDNEY (Reuters) – The head of Australia’s central bank on Tuesday said further increases in interest rates would likely be needed to tame inflation, and it was ready to go faster on hikes or to pause for a time if necessary.
In a speech in Tasmania, Reserve Bank of Australia (RBA) Governor Philip Lowe said the policy making board was aware that rates had risen sharply in a short period of time and this was combining with high inflation to pressure household budgets.
The central bank lifted its cash rate by 25 basis points on Tuesday to a nine-year peak of 2.85%, bringing its tightening to a steep 275 basis points since May.
It downshifted to a 25 basis point increase in October after four outsized hikes of half a point, becoming the first of the major world central banks to slow its pace.
Lowe emphasised that the global outlook was also a reason to be cautious with rate rises given the Russian-Ukrainian war, surging living costs and a more fragmented world economy.
That leaves the RBA walking a narrow path between curbing inflation while not tipping the economy into recession. The RBA had already trimmed its forecasts for domestic growth next year given the deterioration in the global economy and the squeeze on household finances.
“If we are to stay on that narrow path, we need to strike the right balance between doing too much and too little,” said Lowe.
With inflation expected to peak around 8% this quarter, further increases in interest rates would likely be needed, he said, though the board was not on a pre-set path.
“If we need to step up to larger increases again to secure the return of inflation to target, we will do that,” said Lowe. “Similarly, if the situation requires us to hold steady for a while, we will do that.”
Markets assume the RBA will hike by another 25 basis points in December and that rates will peak around 4.0% sometime next year. [AU/INT]
Lowe added that the consequences of not raising rates and allowing the “scourge” of inflation to become entrenched, were too costly to bear.
“If this were to happen, the evil of inflation would be with us for longer and the eventual increase in interest rates needed to bring it down would be greater,” said Lowe.
(Reporting by Wayne Cole; Editing by Edwina Gibbs)
By Sam Nussey
TOKYO (Reuters) -Sony Group Corp hiked its full-year operating profit forecast on Tuesday by 4.5% to 1.16 trillion yen ($7.84 billion) as the boost from foreign exchange fluctuations at units including the music business offset gaming weakness.
Sony trimmed its full-year profit forecast for the games business by 12% to 225 billion yen citing lower software sales from third-party developers and the impact of dollar-denominated costs.
Sony’s shares have fallen by almost a third so far this year as investors fret about the strength of the games business amid competition from Xbox maker Microsoft Corp and after a fading boost from stuck-at-home consumers during the COVID-19 pandemic.
The gaming business recorded a 49% fall in second quarter profit to 42.1 billion yen after booking higher costs from game development and acquisitions. It sold 3.3 million units of its PlayStation 5 (PS5) console in the second quarter, equal to the year ago sales. The group has hiked the price of its console in markets including Europe and Japan as the dollar strengthens.
The conglomerate has said it plans to ramp up production of the PS5, which has been affected by supply chain snarls, and broaden its games portfolio on other platforms.
Sony Chief Financial Officer Hiroki Totoki said the group produced over 6.5 million PS5 units during the quarter ahead of the key year-end shopping season.
The conglomerate aims to sell more than 18 million units this financial year that ends in March 2023. It sold 11.5 million units during the prior year.
While major industry releases have been pushed back to 2023, Sony launched a remake of the PS5 game “The Last of Us” in September with “God of War Ragnarok” due for release in November.
Sony reported overall group operating profit rose 8% to 344 billion yen in the July-September quarter, beating analyst estimates.
Sony’s shares closed up 0.6% ahead of the earnings release in line with the benchmark index.
($1 = 147.8700 yen)
(Reporting by Sam Nussey; Editing by Christian Schmollinger)
(Reuters) – TP ICAP posted a 14% jump in its third-quarter revenue in reported currency on Tuesday, as the world’s biggest inter-dealer broker benefited from stock and foreign exchange market volatility and robust performance in its global broking unit.
Trading platforms are now seeing a rise in client activity after market volatility rose, triggered by Britain’s “mini-budget” and larger global economic uncertainties fuelled by rising inflation rates and Ukraine-Russia conflict.
The British firm said revenues in its Global Broking unit in the three months ended Sept. 30, rose 20% in reported currency, and all asset classes saw high single-digit to double-digit growth.
The London-listed company, which brings together buyers and sellers in the financial, energy and commodity markets, said the European Gas & Power market remained challenging due to price rises and low levels of market activity.
TP ICAP reported a revenue of 508 million pounds ($585.88 million) for the quarter, compared with 447 million pounds last year.
($1 = 0.8671 pounds)
(Reporting by Sinchita Mitra in Bengaluru; Editing by Rashmi Aich and Sherry Jacob-Phillips)
AMSTERDAM (Reuters) -Technology investment firm Prosus NV and its South African parent Naspers on Tuesday rejected as “untrue” a report that they are in talks to sell their large stake in Chinese software and gaming giant Tencent.
In a pre-market statement, Amsterdam-based Prosus said an article in Asian Tech Press citing unnamed sources saying that Naspers was in talks with a group of investors led by state-backed CITIC of China to sell its entire Tencent stake was “speculative and untrue”.
Prosus holds a 28% stake in Tencent worth $70 billion at current prices. It has said it intends to sell the stake down gradually to fund a share repurchase program.
“The Naspers Board and Prosus Board reiterate their continued confidence in Tencent’s long term prospects and continue to believe that the share repurchase programme is in the best interests of Prosus, Naspers and their respective shareholders,” they said in a statement.
Tencent shares rose sharply on Friday, gaining 10% to $226.2 HKD. Naspers shares, which usually follow movements in Tencent, rose 8.7% in Johannesburg. The Amsterdam exchange was not yet open.
(Reporting by Toby Sterling; Editing by Kirsten Donovan and Louise Heavens)
