Aurelia Butler

Standard DigitalWeekend Print + Standard Digitalwasnow $85 per monthBilled Quarterly at $199. Complete digital access plus the FT newspaper delivered Monday-Saturday.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts10 monthly gift articles to shareGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionEverything in PrintWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisPlusEverything in Premium DigitalEverything in Standard DigitalGlobal news & analysisExpert opinionSpecial featuresFirstFT newsletterVideos & PodcastsFT App on Android & iOSFT Edit app10 gift articles per monthExclusive FT analysisPremium newslettersFT Digital Edition10 additional gift articles per monthMake and share highlightsFT WorkspaceMarkets data widgetSubscription ManagerWorkflow integrationsOccasional readers go freeVolume discountFT Weekend Print deliveryPlusEverything in Standard DigitalFT Weekend Print deliveryPlusEverything in Premium Digital More

Standard DigitalWeekend Print + Standard Digitalwasnow $85 per monthBilled Quarterly at $199. Complete digital access plus the FT newspaper delivered Monday-Saturday.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts10 monthly gift articles to shareGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionEverything in PrintWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisPlusEverything in Premium DigitalEverything in Standard DigitalGlobal news & analysisExpert opinionSpecial featuresFirstFT newsletterVideos & PodcastsFT App on Android & iOSFT Edit app10 gift articles per monthExclusive FT analysisPremium newslettersFT Digital Edition10 additional gift articles per monthMake and share highlightsFT WorkspaceMarkets data widgetSubscription ManagerWorkflow integrationsOccasional readers go freeVolume discountFT Weekend Print deliveryPlusEverything in Standard DigitalFT Weekend Print deliveryPlusEverything in Premium Digital More

Standard DigitalWeekend Print + Standard Digitalwasnow $75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts10 monthly gift articles to shareGlobal news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print editionEverything in PrintWeekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysisPlusEverything in Premium DigitalEverything in Standard DigitalGlobal news & analysisExpert opinionSpecial featuresFirstFT newsletterVideos & PodcastsFT App on Android & iOSFT Edit app10 gift articles per monthExclusive FT analysisPremium newslettersFT Digital Edition10 additional gift articles per monthMake and share highlightsFT WorkspaceMarkets data widgetSubscription ManagerWorkflow integrationsOccasional readers go freeVolume discountFT Weekend Print deliveryPlusEverything in Standard DigitalFT Weekend Print deliveryPlusEverything in Premium Digital More

TOKYO (Reuters) – The euro slipped on Monday after projections from France’s election pointed to a hung parliament amid an unexpectedly strong showing for a left-wing alliance, spawning fresh uncertainty over the country’s fiscal outlook.The dollar remained on the back foot following surprisingly soft U.S. payrolls data on Friday, which boosted bets for the Federal Reserve to start cutting interest rates as early as September.The yen headed for a third day of gains after rebounding from last week’s nearly 38-year trough to the dollar.Sterling rose to a 3-1/2-week top versus its U.S. peer as the British currency continued to firm following the Labour Party’s landslide election victory last week, which ended 14 years of Conservative rule.The euro was 0.06% lower at $1.0827, and earlier slid as much as 0.4% as investors weighed the consequences of a hung French parliament. That was among several surprises in projected results, including the likely first-place finish for the leftist New Popular Front (NFP) alliance, and last-place showing for Marine Le Pen’s nationalist, eurosceptic National Rally (RN), which had been the frontrunner going into Sunday’s vote.Polling agencies forecast the left would get 184 to 198 seats – well short of the 289 seats needed for an absolute majority. President Emmanuel Macron’s centrist alliance was expected to get 160 to 169 seats, and the RN and its allies 135 to 143 seats.”Markets won’t like a far-left government having a say,” said Chris Weston, head of research at Pepperstone.At the same time, “the fact that centrist Macron has polled better-than-expected, as well as the number of seats the Left have obtained, means passing the NFPs manifesto in full will be a real challenge,” Weston said. “And while uncertainty is high once again, this should contain the fallout.”The dollar index, which measures the U.S. currency against the euro, sterling, yen and three other major rivals, was flat at 104.97, licking its wounds after a 0.9% slump last week, exacerbated by Friday’s softer U.S. jobs market reading.Traders currently set about 76% odds for a rate cut at the Fed’s September meeting, up from 64% a week ago, according to the CME Group’s (NASDAQ:CME) FedWatch Tool.The dollar slipped 0.07% to 160.70 yen, down from as high as 161.96 on Wednesday.Sterling edged back 0.08% to $1.2804, after earlier rising to $1.2820 for the first time since June 12.In cryptocurrencies, bitcoin fell about 2% to $55,188, continuing the weak run from last week as traders fretted over the likely dumping of tokens from defunct Japanese exchange Mt. Gox. More

LONDON/BRUSSELS (Reuters) – Many of France’s allies breathed a sigh of relief that the worst was averted as Marine Le Pen’s far-right failed to win a snap election on Sunday but they noted that a messy coalition from a hung parliament could also pose headaches for Europe.Le Pen’s National Rally (RN) had been favourite to top the polls, raising the risk of France’s first far-right government since World War Two and threatening to upend economic and foreign policy in the euro zone’s second-largest economy.In particular, Ukraine’s allies feared a Le Pen-led government could be soft on Moscow and pare back military aid that Kyiv has relied on since the Russian invasion in 2022, though her party has latterly said Russia was a threat.The National Rally’s defeat signals at least a temporary pushback against a far-right surge in Europe, but could herald a period of instability with a new government in an uneasy “cohabitation” with President Emmanuel Macron. “In Paris enthusiasm, in Moscow disappointment, in Kyiv relief. Enough to be happy in Warsaw,” Polish Prime Minister Donald Tusk said on X. Macron had called the snap poll in an attempt to wrest the initiative back from Le Pen but his own party was left trailing behind an alliance of leftist parties that performed far better than expected to take first place.Several early reactions from overseas rejoiced that the immediate threat of a far-right government had been averted. “The worst has been avoided,” said Nils Schmid, the foreign policy spokesperson for Chancellor Olaf Scholz’s Social Democrats in Germany, where the far-right has also surged in popularity during a cost of living crisis. “The president is politically weakened, even if he retains a central role in view of the unclear majority situation. Forming a government will be complicated,” Schmid told the Funke media group.Spanish Prime Minister Pedro Sanchez’s party congratulated the leftist alliance, called the New Popular Front, for a victory that “stops the far-right from reaching the government”.Nikos Androulakis, the head of Greece’s Socialist PASOK party, said the French people had “raised a wall against the far right, racism and intolerance and guarded the timeless principles of the French Republic: Liberty, Equality and Fraternity.”Colombia’s leftist firebrand President, Gustavo Petro, also congratulated the French for keeping out Le Pen. “There are battles that last just a few days but (which) define humanity’s fate. France has gone through one of these,” he said.An EU official, speaking on condition of anonymity, called it a “huge relief” but added: “what it means for Europe on a day to day basis remains to be seen though.”DEEP DIVISIONSThe election left the French parliament split between three large groups – the left, the centrists, and the far right – with different platforms and no tradition of working together. The left wants to cap prices of essential goods like fuel and food, raise the minimum wage and the salaries of public sector workers, at a time when France’s budget deficit is already at 5.5% of output, higher than EU rules permit. “Bye-bye European deficit limits! (The government) will crash in no time. Poor France. It can console itself with (Kylian) Mbappé,” said Claudio Borghi, senator from Italy’s right-wing League party, referring to the French soccer star.Other hard-right politicians expressed frustration.Andre Ventura, leader of Portugal’s far-right party Chega, called the result a “disaster for the economy, tragedy for immigration and bad for the fight against corruption”.A note by Capital Economics said France may have avoided the “worst possible outcomes” for investors, of an outright majority for either Le Pen or the leftists. A fractious parliament means however it will be difficult for any government to pass the budget cuts that are necessary for France to comply with the EU’s budget rules, it said. “Meanwhile, the chance of France’s government (and the governments of other countries) clashing with the EU over fiscal policy has increased now that the bloc’s budget rules have been re-introduced,” it said. More

The Pacific region is considered strategically crucial to Washington and it has upped its engagement with and boosted efforts to support Pacific Island countries as it aims to curb the growing influence of China in the region. “We recognise the economic and strategic significance of the Pacific region, and we are committed to deepening our engagement and collaboration with our allies and partners to bolster financial connectivity, investment, and integration,” said Treasury Undersecretary Brian Nelson, who is responsible the department’s office of Terrorism and Financial Intelligence and was speaking at the two-day Pacific Banking Forum that the U.S. is co-hosting alongside Australia.Pacific Island countries are facing challenges as major banks end long-term relationships with their Pacific counterparts, limiting the countries access to U.S. dollar denominated bank accounts. The banks are de-risking to meet financial regulations but the trend undermines the financial resilience of Pacific Island countries, according to experts.Nelson told those attending the meeting that the U.S. recognised and is committed to addressing bank de-risking across the Pacific. “There is a lot to be gained by promoting financial integration around the world. But conversely, when correspondent banking relationships dwindle, the consequences can be substantial,” he added.Nelson said data suggests that over the past decade the number of correspondent banking relationships in the Pacific had declined at twice the rate of the global average. The World Bank and Asia Development Bank is working on programmes to try and improving corresponding banking relations. Janet Yellen, U.S. Treasury Secretary said in a virtual address to the meeting that the U.S. focus was on supporting the Pacific region’s economic resilience, including through strengthening access to correspondent banks. “The United States is committed to an Indo-Pacific that is free and open, connected, prosperous, secure, and resilient. A strong and connected Pacific region has benefits for the United States and for the global economy,” she said.(This story has been corrected to fix the spelling of Janet Yellen’s name in paragraph 8) More

TOKYO (Reuters) – Japan’s inflation-adjusted real wages fell in May for a record 26th straight month, highlighting the pain of inflation that is dampening household spending and complicating the central bank’s efforts to normalise monetary policy.Real wages fell 1.4% in May, government data showed on Monday, faster than April’s 1.2% decline, as a weakening yen and higher commodity prices pushed up the cost of imports.But there were some bright spots in the data.Base pay, or regular pay, rose 2.5% year-on-year in May, the best pace since January 1993, around the time when Japan’s asset bubble burst.The rise reflects the hefty increases agreed by labour and management at annual labour negotiations.This year, Japanese firms have offered a 5.1% increase in monthly pay, a level unseen in 33 years.Nominal wages, the average total cash earnings per worker, grew 1.9% to 297,151 yen ($1,850), accelerating from the previous month’s 1.6% and at the highest pace in 11 months.In Japan, seven out of 10 workers are employed by small firms, which are struggling to pass on rising costs to their clients.Wage hikes at firms with 30 or more employees outpaced inflation for the first time in 26 months, the labour ministry said, though when including very small firms with five or more workers, pay hikes still lagged inflation.Overtime pay, a barometer of corporate strength, rebounded 2.3% in the year to May, the first increase in six months, the labour ministry data showed.The Bank of Japan (BOJ) will highlight how pay increases are spreading in a report due later this month, sources have told Reuters, a trend that strengthens the case for a near-term interest rate hike.But data on Friday showed household spending unexpectedly fell in May, while first-quarter economic output figures were unexpectedly and sharply downgraded on Monday, complicating the outlook for any central bank moves.($1 = 160.6700 yen) More

JAKARTA/SINGAPORE (Reuters) – Indonesia’s President-elect Prabowo Subianto wants to give school children free meals, but the plan and his pledge to be ‘daring’ on spending have the country’s debt and currency markets on edge.Prabowo and his team have tried to distance themselves from any suggestions of fiscal profligacy, and to assure market participants the incoming government respects the legal debt limits that cap its budget deficit at 3% of economic output.But for a market just getting accustomed to stability and recognition for fiscal prudence under current Finance Minister Sri Mulyani Indrawati, the mere suggestion of heavy spending has been unsettling. Bond yields have risen and the rupiah has depreciated, though the currency weakness has largely been due to a resilient U.S. dollar.”Our base case remains that this is more of noise at the moment, but we do see increasing fiscal risk and hence the market may start to require more risk premium on Indonesian government bonds,” said Jenny Zeng, chief investment officer for APAC fixed income at Allianz (ETR:ALVG).”Also another risk is because there’s a change of ministers,” Zeng said, referring to uncertainties about who will step into the shoes of the highly acclaimed ex-World Bank managing director Sri Mulyani.A banker at a Chinese lender in Indonesia said the fiscal concerns had prompted it to move around 30% of its portfolio into lower-tenor instruments, including diversifying into rupiah-denominated short-term securities (SRBI) issued by Bank Indonesia.Prabowo won the election in February, but takes office only in October. His free-meal plan, which his team estimates will cost 71 trillion rupiah ($4.35 billion) in 2025, should ordinarily not cause any consternation. Southeast Asia’s biggest country has seen its finances improve under the Jokowi administration and runs a healthy budget surplus. From being rated junk at the start of the century, its bonds are now regarded as investment grade. Some investors even see merit in Indonesia spending more to achieve its 8% economic growth target. Yet there’s unease over how much money Prabowo intends to spend on his programmes, and whether he will cut fuel and other subsidies and investments in order to balance the books.”It appears there will be more uncertainties than certainty. I still stay invested but probably not as overweight as I used to be,” said Clifford Lau, a portfolio manager at William Blair.Foreign portfolio investments have been shrinking, with overseas investors pulling $2.8 billion from rupiah government bonds and its stock market until June this year.The rupiah is at four-year lows against the dollar, with losses of more than 5% this year, although most of that has been in line with the broad decline in emerging market currencies owing to rising U.S. yields and a rising dollar.Investors seeking higher yielding bonds have also been switching to India, whose bonds not only have comparable yields but have also just made it into JP Morgan’s global index. The selling has sent yields on Indonesia’s 10-year bonds up 35 basis points since late May, to 7.05%.IT’S NOT ALL BADSome investors are giving Prabowo the benefit of doubt, pointing to how his administration also plans to increase revenues and improve tax compliance, and cap the fiscal deficit at 2.8% of GDP, even if higher than this year’s 2.3% target.”He’s also talking about the need to increase fiscal revenue … so it’s actually not entirely about increasing expenses,” abrdn’s investment manager for Asia, Jerome Tay, said. Tay is overweight and positive on Indonesian government bonds in the medium term.Those bonds have long been a favourite among emerging market investors for their ‘carry’ or high yield. The spread between Indonesian and U.S. bond yields is currently half the 600 basis points it used to be before the Federal Reserve started raising rates in 2022, nonetheless they are still attractive for fixed income investors.The country is also now less vulnerable, given foreign holdings account for only 14% of outstanding government bonds. They used to own half the bonds a decade ago.Expectations that the Fed will soon begin cutting rates is of some comfort to rupiah and Indonesian bond investors, Rudiyanto, a director at local asset management Panin said.But other risks loom, notably huge debt maturities at around 800 trillion rupiah in 2025, nearly double that this year, although Sri Mulyani has said refinancing will not be a problem, provided the government maintains market confidence.($1 = 16,335.0000 rupiah) More