By Gwladys Fouche

OSLO (Reuters) -Norwegian Air shares rose on Wednesday after reporting an increase in third-quarter net profit boosted by recovery from the pandemic and a pilot strike at rival SAS, but said it would reduce capacity by a quarter during winter.

Norwegian, which came close to collapse when the pandemic broke out in 2020, posted quarterly revenue of 7.1 billion crowns ($688 million), the highest of any quarter since the final three months of 2019, according to Refinitiv Eikon data.

Net profit for the three-months ending Sept. 30 rose to 910 million crowns ($87.57 million) from a year-ago profit of 169 million, Norwegian said.

Norwegian Air shares were up 8.5% at 0912 GMT, beating a flat Oslo benchmark index, though share are still down 17% over the past year, lagging a benchmark down by 6% over the same period.

The airline will reduce its capacity by a quarter in winter, when demand is usually lower, by not using the planes it is leasing, and will closely follow how cash-strapped consumers behave in the first quarter.

“We have a flexibility with our fleet that means we can reduce our capacity by up to 30%,” Chief Executive Officer Geir Karlsen told Reuters. “We can leave planes on the ground, we can make them fly less.”

Smaller Norway-based rival Flyr on Oct. 4 said it would implement heavy spending cuts to preserve cash during the winter season, reducing the number of flights due to weak demand.

Pilots at main Nordic rival SAS went on a two-week strike in July, boosting Norwegian’s bookings at the height of the region’s summer travel.

While booking levels were so far “good”, said Karlsen, consumers tended to book closer to the time of their departure than they used to in the past, making it harder to anticipate demand.

To cope, Norwegian was putting more cash aside and had 8.2 billion crowns available at the end of the third quarter, up from 7.5 billion at the end of the second.

Cost-wise, Norwegian said it was adversely impacted by the strong US dollar, affecting services it buys such as technical maintenance.

To counter rising fuel costs, Norwegian has started to hedge up to 5% of its 2023 expected costs, and planned to do more, Chief Financial Officer Hans-Joergen Wibstad told the presentation.

($1 = 10.3139 Norwegian crowns)

(Reporting by Gwladys Fouche; Editing by Terje Solsvik and Mike Harrison)

By Julie Gordon and David Ljunggren

OTTAWA (Reuters) -The Bank of Canada announced a smaller-than-expected interest rate hike on Wednesday and said it was getting closer to the point where rate hikes could end, as it forecast the economy could possibly slip into a slight recession.

The central bank increased its policy rate by half a percentage point to 3.75%, coming up short on calls for another 75 basis points move. It has lifted rates by 350 basis points since March, one of its fastest tightening cycles ever.

“This tightening phase will draw to a close. We are getting closer, but we are not there yet,” Governor Tiff Macklem said in prepared remarks ahead of a news conference.

How much higher rates need to go “will depend on how monetary policy is working to slow demand, how supply challenges are resolving and how inflation and inflation expectations are responding,” he said.

Macklem added that the central bank was still far from its goal of low, stable and predictable inflation at 2%, but was trying to balance the risks of under- and over-tightening.

Canada’s economic growth will stall later this year and early next year, the bank said earlier as it updated its quarterly forecasts, which “suggests that a couple of quarters with growth slightly below zero is just as likely as a couple of quarters with small positive growth.”

A technical recession, two consecutive quarters of negative growth, is possible between the fourth quarter of 2022 and the end of the second quarter of 2023, the forecasts show.

That darkening outlook likely guided the decision to challenge market pricing with a smaller move, said analysts, noting that while warnings of future hikes take the edge off the surprise, the Bank of Canada may be getting more cautious.

“We have several indicators suggesting that we’re playing with fire if we think we can follow the (U.S. Federal Reserve) all the way up to 5% or so,” said Jimmy Jean, chief economist at Desjardins Group.

Inflation in Canada has slowed to 6.9% in September from a peak of 8.1% in June, but core measures remain broad-based and persistent. The central bank revised downward its inflation outlook a touch on lower commodity prices and easing supply chain disruptions.

“Inflation is expected to return to the top of the 1%-3% control range by the end of 2023 and to the 2% target by the end of 2024,” it said.

The Canadian dollar was trading 0.3% higher at 1.3560 to the greenback, or 73.75 U.S. cents.

Money markets now see interest rates peaking between 4.0% and 4.25% in the coming months, down from nearly 4.5% before the announcement.

(Additional reporting by Ismail Shakil in Ottawa and Fergal Smith in Toronto; Editing by Nick Zieminski and Jonathan Oatis)

(Reuters) -U.S. auto retail sales are expected to rise in October as supply chain snags ease, making more vehicles available at dealerships amid higher demand, an industry report from consultants J.D. Power and LMC Automotive showed on Wednesday.

An improvement in new vehicle inventories bumped up the sales activity in the United States at a time when consumers are ready to spend more to own a personal vehicle.

Customers have been unaffected by higher vehicle prices and a lack of incentives or discounts from automakers, who have been taking advantage of strong demand and tight inventory.

“Even with a modest increase in inventory, strong demand continues to allow manufacturers to maintain a low level of discounting,” the report said, adding that average transaction price for new vehicles is expected to reach record levels in October.

Retail sales of new vehicles are expected to rise 12.1% to 1,008,200 units in October, compared with a year earlier, the report showed.

“The vehicle market is being supported by improving inventories and product selection for some, but not all, brands,” said Charlie Chesbrough, senior economist at Cox Automotive.

October seasonally adjusted annualized rate for total new vehicle sales is expected to be 15.0 million units, up 1.8 million units from 2021, the J.D. Power-LMC Automotive report showed.

“While production has shown some signs of improvement, it most likely will not be enough to bring forward any material sales events,” said Thomas King, president of the data and analytics division at J.D. Power.

King flagged that per unit pricing and profitability may see a deterioration in the coming months, as rising interest rates pressure affordability.

Total new-vehicle sales in October, including retail and non-retail transactions, are projected to reach 1,157,900 units, a 15.2% increase from October 2021, according to the report.

(Reporting by Priyamvada C in Bengaluru; Editing by Maju Samuel)

By Nathan Gomes and Allison Lampert

(Reuters) -Gulfstream business jet maker General Dynamics Corp on Wednesday reported a third-quarter profit above analysts’ estimates, fueled by strong demand for flying private and for products and services at its Marine Systems division.

The group benefited from demand for private jets in the United States and other regions, despite fears of a slowdown due to broader economic uncertainty.

“Only time will tell about the macroeconomic impact, but we continue to see strong interest in Gulfstream aircraft and services,” General Dynamics Chief Executive Officer Phebe Novakovic told analysts.

She said Gulfstream expects deliveries of 40 or 41 aircraft during the last three months of 2022, having delivered 35 business jets in the past quarter, compared with 31 a year earlier.

Improving margins and a swelling backlog at Gulfstream helped the Virginia-based defense contractor to more than offset the effects of higher costs, supply chain constraints and labor shortages, which have weighed on manufacturing.

Novakovic acknowledged that “supply chain remains a potential challenge going forward,” but did not see labor shortages as a constraint on revenue growth. In the third quarter the company’s Mission Systems unit faced pressure from supply chain disruptions, inflation and labor disruptions.

The company also disclosed an order for its munitions business related to the war in Ukraine.

Net earnings in the quarter ended Oct. 2 were $902 million or $3.26 per share, compared with $860 million or $3.07 per share a year earlier.

Analysts on average had expected net earnings of $3.15 per share, based on Refinitiv data.

Sales at the Marine Systems unit, which manufactures nuclear-powered submarines, rose by 5% to $2.77 billion from $2.64 billion a year earlier, while overall revenue grew 4.3% to $9.98 billion.

The aerospace unit’s sales increased by 13.6% to $2.35 billion from $2.07 billion a year earlier.

(Reporting by Nathan Gomes in Bengaluru and Allison Lampert in Montreal; Editing by Milla Nissi and David Holmes)

By Andrew Chung

(Reuters) – U.S. Supreme Court Justice Samuel Alito on Tuesday denounced the ongoing debate over the institution’s legitimacy amid a backlash over its decision on abortion last June, saying such criticism focuses on “character” rather than the court’s rulings.

Alito, speaking at an event organized by the conservative Heritage Foundation think tank in Washington, also condemned the leak last May of his draft opinion overturning the landmark Roe v. Wade decision that legalized abortion nationwide, saying it made the justices “targets.”

The justice, who authored the ruling formally overturning Roe in June, made the comments amid heavy scrutiny of the court since the abortion decision, as well as others powered by the court’s conservative majority widening gun rights and curbing the government’s power to tackle climate change.

The legitimacy of the court, which has a 6-3 conservative majority, largely depends on its acceptance by the public as an institution whose actions are based on the law, not the justices’ political preferences. Polls show that the court’s public approval has reached record lows.

Alito did not name liberal Justice Elena Kagan, but she has repeatedly expressed concerns in recent weeks, including in September at an event in Chicago when she said the court’s legitimacy could be imperiled if Americans come to view its members as trying to impose personal preferences on society. She echoed those comments in a discussion at the University of Pennsylvania last week.

Everyone is free to strongly criticize the court’s decisions or the reasoning behind them, Alito said. “But to say that the court is exhibiting a lack of integrity is something quite different. That goes to character, not to a disagreement with the result or the reasoning.”

Alito added: “Someone also crosses an important line when they say that the court is acting in a way that is illegitimate. I don’t think anybody in a position of authority should make that claim lightly.”

In blunt terms, Alito also commented on the man who was charged with attempted murder after being arrested near the Maryland home of conservative Justice Brett Kavanaugh in June.

Alito said the leak of his draft opinion made the conservative justices who at the time were thought to back overturning Roe v. Wade “targets for assassination because it gave people a rational reason to think they could prevent that from happening by killing one of us.”

The conservative majority has shown an increasing willingness to take on divisive issues as it steers the court on a rightward path.

The court’s new term, which began on Oct. 3, promises to be just as consequential. Potential rulings in major cases could end affirmative action policies used by colleges and universities to increase campus racial diversity, hobble a federal law called the Voting Rights Act, and make it easier for businesses to refuse service to LGBT people based on free-speech rights.

President Joe Biden’s recent appointee Ketanji Brown Jackson has joined Kagan and Sonia Sotomayor in the court’s liberal bloc.

(Reporting by Andrew Chung; editing by Richard Pullin)

By Kate Abnett

BRUSSELS (Reuters) -The European Commission proposed on Wednesday tougher legal limits on health-damaging dirty air and rules to make pharmaceutical and cosmetic companies pay to clean up wastewater polluted by their products.

The European Union’s executive proposed three laws targeting air and water pollution. Among them is a requirement that, by 2030, EU countries must meet new legally-binding air pollution limits that will be closer to the stricter World Health Organization (WHO) recommendations.

The WHO tightened its air quality guidelines last year, hoping to push countries toward clean energy and prevent deaths caused by dirty air.

“Air pollution is still the largest environmental threat to our health. The impacts are worse for the most vulnerable – children, the elderly, people with certain medical conditions,” EU Environment Commissioner Virginijus Sinkevicius told Reuters.

Air pollution causes 300,000 premature deaths in Europe each year. Sinkevicius said the tougher EU rules could reduce that number by 70% over the next 10 years.

Prolonged exposure to air pollutants, such as particulate matter from industry and nitrogen dioxide from traffic, can cause diabetes, lung disease and cancer.

The tighter limits would include more than halving the current annual EU limit on fine particulate matter by 2030. EU countries and the European Parliament must negotiate and approve the plans.

The Commission said it would review the rules in 2028 with the aim of fully aligning them with the WHO, but its analysis had showed many EU areas would struggle to hit the WHO limits this decade.

Environmental law firm ClientEarth called the proposal a “major missed opportunity” because it introduced financial penalties for polluters that breach the rules, but not for authorities responsible for enforcing them.

“Air quality standards are an empty promise if there are no financial sanctions in place to hold governments accountable if they breach them,” ClientEarth head of clean air Ugo Taddei said.

Europe’s air quality has improved over the last decade, but the EU has still taken more than 10 countries to court for breaching its limits. The European Court of Justice has found countries including France, Poland, Italy and Romania guilty of illegal air pollution.

Another proposal would make companies responsible for some of the cost of cleaning up the pollution their products release into wastewater – a move that would target the pharmaceutical and cosmetics industries.

Brussels also wants to increase the list of controlled pollutants in ground or surface water.

(Reporting by Kate Abnett Additional reporting by Philip BlenkinsopEditing by Josie Kao, Mark Potter and Tomasz Janowski)

By Alexander Marrow

MOSCOW (Reuters) – The rouble reversed early losses to edge up on Wednesday, drifting back towards the 61 mark against the dollar as the finance ministry held OFZ treasury bond auctions and Russia’s benchmark stock index retreated from a more than one-month high.

By 1325 GMT, the rouble was 0.2% stronger against the dollar at 61.36 and had lost 0.1% to trade at 61.51 against the euro. It had shed 1% against the yuan to 8.49.

The rouble has been buttressed in recent sessions by a month-end tax period when exporters convert foreign exchange revenues into roubles to pay domestic tax liabilities. Part of that support ended on Tuesday.

The finance ministry made a stuttering return to the domestic debt market last month, but has now exceeded its fourth-quarter borrowing plan of 150 billion roubles ($2.45 billion) in just two weeks.

The ministry saw demand of 218.7 billion roubles at its first auction on Wednesday, a bond which came with a floating-rate coupon. Prior to last week the ministry had not placed a “floater” since November 2020.

“Many banks have long asked the Ministry of Finance for floaters – with their current risk profile it is the safest asset for them,” said Dmitry Polevoy, head of investment at Locko Invest. “Therefore, the opportunity to buy a sufficient amount of paper at a certain discount to par has attracted investors.”

The market is also looking ahead to Friday, when the central bank is expected to end its rate-cutting cycle by keeping its key interest at 7.5%.

Russian stock indexes pared early gains to edge lower.

The rouble-based MOEX Russian index was 0.7% lower at 2,115.0 points, earlier hitting its highest point since Sept. 23 of 2,144.56 points. The dollar-denominated RTS index eased 0.4% to 1,086.2 points, retreating from a three-week high.

Analysts from Sinara Investment Bank said reinvested dividends from Gazprom were supporting the market and had lifted trading volumes by around 20% in the previous session.

For Russian equities guide see

For Russian treasury bonds see

($1 = 61.2500 roubles)

(Reporting by Alexander Marrow; editing by Barbara Lewis and Tomasz Janowski)

(Reuters) – BlackRock Inc has raised $4.5 billion out of an overall $7.5 billion-target for a new fund to invest in infrastructure assets aimed at climate-focused projects, the world’s largest asset manager said on Tuesday.

BlackRock, which manages around $8 trillion in assets, said public and private pension funds, sovereign wealth funds, insurance companies and family offices had invested in the new fund, which will be called Global Infrastructure Fund IV.

The asset manager said the new fund will invest in five sectors –– energy, low carbon power, transport and logistics, regulated utilities, and digital infrastructure –– to capitalize on the growing trend towards decarbonization and digitalization.

Its previous infrastructure fund raised $5.1 billion in 2020.

Earlier this month, BlackRock Chief Executive Officer Larry Fink defended his firm’s energy investments after facing a backlash from lawmakers critical of its stance on environmental, social and governance (ESG) issues.

BlackRock has faced criticism from many sides in the debate on low-carbon fuels, with environmentalists protesting it does too little to press for change at fossil fuel portfolio companies, and Republican U.S. politicians accusing it of boycotting energy stocks.

The company also recently set up a unit called Transition Capital to invest in opportunities linked to the global shift to a low-carbon economy.

(Reporting by Ann Maria shibu and Lavanya Ahire in Bengaluru; Editing by Savio D’Souza)

By Shashwat Awasthi and Lewis Jackson

(Reuters) -Medibank Private Ltd, Australia’s biggest health insurer, said on Wednesday a cyber hack had compromised data of all of its of its nearly 4 million customers, as it warned of a A$25 million to A$35 million ($16 million to $22.3 million) hit to first-half earnings.

It said on Wednesday that all personal and significant amounts of health claims data of all its customers were compromised in the breach reported this month, a day after it warned the number of customers affected would grow.

Shares in the company fell more than 14%, its biggest one-day slide since listing in 2014.

Medibank, which covers one-sixth of Australians, said the estimated cost did not include further potential remediation or regulatory expenses.

“Our investigation has now established that this criminal has accessed all our private health insurance customers’ personal data and significant amounts of their health claims data,” chief executive David Koczkar said in a statement. “I apologise unreservedly to our customers. This is a terrible crime – this is a crime designed to cause maximum harm to the most vulnerable members of our community.”

The company reiterated that its IT systems had not been encrypted by ransomware to date and that it would continue to monitor for any further suspicious activity.

“Everywhere we have identified a breach, it is now closed,” John Goodall, Medibank’s top technology executive, told an analyst call on Wednesday.

Medibank, which also withdrew its fiscal 2023 policyholder growth forecast, reported an after-tax profit of about A$394 million for fiscal 2022 in August.

The Medibank hack is the latest in a string of similar incidents in the country that has alarmed the government and corporate sector.

The country’s No. 2 telco, Singapore Telecommunciations Ltd-owned Optus, said last month about 10 million customer accounts, equivalent to 40% of the Australian population, had data taken by a hacker demanding payment.

A person claiming to be behind the Optus hack later withdrew the demand over concerns about publicity.

The government has meanwhile said it would introduce fines of up to A$50 million for companies on the receiving end of data breaches.

($1 = 1.5664 Australian dollars)

(Reporting by Shashwat Awasthi and Lewis Jackson. Writing by Alasdair PalEditing by Gerry Doyle, Shinjini Ganguli and Sam Holmes)

By Kevin Buckland and Tomo Uetake

TOKYO (Reuters) – Japanese life insurers plan to buy more super-long government bonds, enticed by the highest yields since 2014.

Nippon Life, Japan Post Insurance and Sumitomo Life are among the insurers that have detailed their investment plans for the rest of the fiscal year-ending April at briefings over the past several days.

A common theme has been an intention to increase holdings of the longest-maturity JGBs, centered on the 30-year securities, which now offer “attractive” yields as well as being a safe haven from a long list of market uncertainties globally.

Many insurers also plan to shift some money from currency-hedged holdings of foreign bonds into yen bonds, with hedging costs soaring.

“There is now an attractiveness to Japanese government bonds,” while “the attractiveness of hedged foreign bonds is waning,” a Japan Post Insurance representative told a briefing on Friday. “We have already been shifting from hedged foreign bonds into JGBs, and we will continue to do so.”

Yields on 30-year JGBs soared as high as 1.685% on Thursday for the first time since September 2014, while the 20-year yield reached the highest since February 2015 at 1.315%. Both fell back as investors scooped up the discounted debt.

Yields came under further downward pressure on Wednesday amid a decline in U.S. yields and as the Bank of Japan bought additional bonds ahead of a two-day policy-setting meeting that begins Thursday.

The 30-year bond last yielded 1.54% with the 20-year at 1.18%.

“Anything above 1.5% and we can consider additional investment” in 30-year JGBs, said a representative from Sumitomo Life at a briefing on Tuesday.

Nippon Life is being more cautious.

“It’s true that it’s the easiest environment to invest for the past several years,” a representative of the company, also known as Nissay, said on Monday. “Because yields are at 1.5%, if the question is whether we can now buy actively, we’re still a long way from that point.”

(Reporting by Tomo Uetake and Tokyo markets team; Writing by Kevin Buckland; Editing by Mike Harrison)

By Huw Jones

LONDON (Reuters) -Forcing banks across the European Union to offer instant payments in euros is a “seismic” shift to make the economy more efficient and reap savings for businesses and customers, the bloc’s financial services chief said on Wednesday.

European Commissioner Mairead McGuinness proposed a draft EU law that will require banks across the 27-country union to offer and receive “instant payment” (IP) services for a fee that is the same or lower than they charge for traditional credit transfers.

Currently, some banks charge far more for an IP transfer, up to 30 euros ($30) in some cases, compared with traditional transfers.

“Moving from ‘next day’ transfers to ’10 seconds’ transfers is seismic and comparable to the move from mail to e-mail,” McGuinness said in a statement, adding that delays in transfers tie up 200 billion euros in transit daily.

Instant payments have been rolled out in many parts of the world, including the EU, but voluntary take-up in the bloc has flatlined, with only two-thirds of banks offering IP which accounts for only about 13% of all credit transactions.

U.S. duo Visa and Mastercard dominate cross-border card payments, and Brussels hopes that IP, combined with reforms such as “open banking”, or fintechs using a customer’s bank data to offer a range of services, will boost competition.

IP is part of helping wider reforms, such as the anticipated digital euro.

“We want to extend euro instant payments internationally at a later stage,” European Commission executive vice president Valdis Dombrovskis told reporters.

“By mandating instant payments, the biggest blockers to open banking payments becoming mainstream are instantly solved,” said Tom Greenwood, CEO of instant payments gateway Volt.

IP allows people to receive and make instant payments 24/7, critical if payday falls on a weekend, and for businesses to manage their cash flows by receiving funds instantly after a sale.

‘ENDANGER SAFETY’

Once in force, the proposed law, which needs approval from EU states and the European Parliament, would require euro area banks to receive euro IPs within six months, and ability to send euro IPs within a year, with banks elsewhere in the EU given 24 months to offer euro IP services.

Payments Europe, which represents card firms, said markets should decide on pricing IP transactions, and the six-month compliance deadline is “too narrow and could endanger the safety and security of transactions”.

“This will increase competition in payment services and provide consumers and merchants an additional, efficient and lower-cost choice in paying for goods and services both in store and online,” said Christel Delberghe, director general of EuroCommerce, which represents the retail and wholesale sector.

Banks will have to screen daily their IP customers against the most updated EU sanctions list, which has expanded since Russia’s invasion of Ukraine.

Currently, non-bank payment firms are excluded as they don’t have direct access to payment systems, but Brussels plans to revise its rules to allow them to compete alongside banks in IP payments, an EU source said.

($1 = 0.9983 euros)

(Reporting by Huw Jones; Editing by David Holmes, William Maclean)