Aurelia Butler

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U.S. stock futures edged higher Monday, at the start of a holiday-shortened week which culminates with Friday’s widely-watched nonfarm payrolls report. By 04:20 ET (08:20 GMT), the Dow futures contract was 50 points, or 0.1%, higher, S&P 500 futures climbed 11 points, or 0.2%, and Nasdaq 100 futures rose by 62 points, or 0.3%.Wall Street is coming off a mixed quarter, with the S&P 500 and Nasdaq Composite adding 3.9% and 8.3%, respectively, boosted by continued excitement surrounding artificial intelligence, while the Dow Jones Industrial Average lost 1.7%. The Nasdaq notched its third positive quarter in a row for the first time since a five-quarter streak ending in 2021.Investors will be focusing their attention on Friday’s nonfarm payrolls report as they look for fresh indications on when the Federal Reserve might start to cut interest rates.Additionally, Fed Chair Jerome Powell is to make an appearance at the European Central Bank’s annual forum in Sintra, Portugal on Tuesday, while Wednesday’s minutes of the Fed’s June meeting will be parsed for the central bank’s view of the economic outlook and the factors influencing the monetary policy outlook.The European Union is set to charge Meta Platforms (NASDAQ:META) with breaking the bloc’s digital rules, according to a report by the Financial Times, released Monday.The newspaper reported that the regulators will say that they are worried about Meta’s “pay or consent” model, noting that this choice provides a false alternative, with the financial barrier forcing them to consent to their personal data being tracked for advertising purposes.The EU’s Digital Markets Act was designed to rein in the power of the ‘Big Tech’ firms and ensure a level playing field for smaller rivals, and saw the region’s regulators last week charging Apple (NASDAQ:AAPL) with breaching the bloc’s tech rules.Boeing (NYSE:BA) announced Monday that it would buy Spirit AeroSystems (NYSE:SPR) in a $4.7 billion all-stock deal, with the planemaker finally agreeing a deal for the key supplier after months of talks complicated by Spirit’s interactions with Boeing’s main rival Airbus.Boeing’s move to take back control of Spirit stems from a desire to resolve the quality problems that have plagued the key supplier in recent years.The total deal value will be about $8.3 billion including debt, and followed Boeing’s decision to buy back its former subsidiary, which had branched out into supplying Airbus (EPA:AIR) and others since becoming independent almost two decades ago.Airbus said it would receive $559 million in compensation from Spirit, and would take over core activities at four of the supplier’s plants in the United States, Northern Ireland, France and Morocco.Spirit said it also planned to sell businesses and operations in Scotland and Malaysia that support Airbus programs. It also plans to sell operations in Belfast, Northern Ireland that do not support Airbus programs.France’s far-right National Rally party and its allies reached 33% of the national popular vote in the first round of parliamentary elections, the interior ministry said, after Sunday’s vote.The leftwing New Popular Front came in second with 28%, while President Emmanuel Macron’s centrist bloc reached 20%.This result has seen the euro bounce, with the single currency touching a two-week high, while the CAC 40, the French benchmark equity index, traded higher, rebounding after losses of around 6% since French President Emmanuel Macron dissolved parliament.At 04:20 ET (08:20 GMT), EUR/USD traded 0.4% higher at 1.0758, while the CAC 40 rose 1.9%.Investors have been concerned that the far-right, as well as the left-wing alliance, have pledged big spending increases at a time when France’s high budget deficit has prompted the EU to recommend disciplinary steps.However, this result was better than feared, but also suggests more volatility this week ahead of next Sunday’s runoff with the final outcome likely to depend on alliance-building.The Chinese economy showed signs of growth in June, helping crude prices rise Monday on hope that the world’s largest importer can benefit from the solid momentum in the global economy.China’s Caixin/S&P Global manufacturing purchasing managers’ index (PMI), a private survey, rose to 51.8 in June from 51.7 in May earlier Monday, growing at the fastest clip in more than three years, above the break-even line of 50.0 that separates growth from contraction.This positive result has boosted sentiment after official PMI data released on Sunday showed China’s manufacturing activity fell for a second month in June and services activity slid to a five-month low.By 08:20 ET, the U.S. crude futures (WTI) traded 0.9% higher at $82.27 a barrel, while the Brent contract climbed 0.8% to $85.70 per barrel.Both contracts gained around 6% in June, after the Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, extended most of its deep oil output cuts well into 2025.   More

Revisions to the draft bill underwent the second round of review by China’s top legislature, the National People’s Congress (NPC) standing committee, and are open for public feedback until July 27th, according to a post on the NPC website.The bill aims to establish a comprehensive cross-agency mechanism for risk detection and mitigation within the financial system, as the country grapples with a prolonged real estate crisis and vulnerabilities in smaller banks.The top legislature usually passes bills after three rounds of reviews.The latest revisions stipulate that financial regulators and local governments should fulfill the responsibilities of preventing, defusing and handling financial risks, and should prevent and investigate illegal financial activities.Establishment of a financial institution and engagement in financial business activities must be approved by government financial departments, it said.The draft also removed provisions about responsibilities of the Financial Stability and Development Committee (FSDC), under the State Council. It said a central financial work leading body, which it did not identify, would be responsible for decision-making, top-level design, supervision of implementation of financial stability and development policies.The FSDC was dissolved and its functions transferred to the new Central Financial Commission (CFC) in March 2023 as part of a broader reorganisation of government and party institutions.China’s financial system faces multiple challenges as the country’s economic recovery loses steam amid a sluggish property market and increasing financial stress on already heavily indebted local governments. The long-awaited bill underwent its first review in December 2022 and said a financial stability fund would be set up to tackle major systemic risks.The latest revisions also follow the “spirit” of a key gathering Central Financial Work Conference in October, which said China will comprehensively strengthen financial supervision and resolve financial risks, according to the NPC post. More

England, currently joint favourite with France, along with hosts Germany, are through to the quarter finals of the Euros. But the excitement is not just on the football pitch, or the polling booths. The coming week also brings the market’s favourite data point – U.S. monthly employment figures.Here is your look at what matters for markets in the coming week from Lewis Krauskopf in New York, Rae Wee in Singapore, Yoruk Bahceli in Amsterdam and Andres Gonzalez and Naomi Rovnick in London.1/JOBS DAY    Investors assessing when the Federal Reserve could start to  cut interest rates will get a critical economic datapoint with the monthly U.S. jobs report released on July 5.    Economists are forecasting an increase of 180,000 jobs for the month of June. For May, non-farm payrolls increased by 272,000, far more than expected, underscoring the resilience of the labour market.    The Federal Reserve held rates steady this month and pushed out the start of rate cuts to perhaps as late as December, as officials look for more convincing signs that inflation is moderating to the central bank’s target, or evidence that the employment market is worsening.    The latest consumer price index report showed U.S. consumer prices were unexpectedly unchanged in May. 2/FRENCH VOTEMarine Le Pen’s far-right National Rally (RN) party scored historic gains to win the first round of France’s parliamentary election on Sunday, exit polls showed, but the final result will depend on days of horsetrading before next week’s run-off.Investors are unlikely to get much more clarity before the results of the second round vote on July 7. But a 577-constituency race where candidates just need 12.5% of the vote to make it to the second round, also featuring three-way races, means uncertainty may prevail. Market jitters over fears of a spending surge have stabilised, helped by a signals from Marine Le Pen’s far-right National Rally (RN), leading the polls, that it would be fiscally responsible. Yet they are far from recovery. The closely-watched risk premium French bonds pay over Germany’s is still over 25 basis points higher than before the election announcement. French bank stocks are sitting on double-digit losses.Another worry for markets has been the left-wing alliance polling second, which many in the market now see as a bigger threat than the RN. 3/A MIXED M&A BAGGlobal M&A volumes in the first half of 2024 have seen an uptick of 20% compared with 2023, and deals exceeding $5 billion have surged by 53%, according to data provided by Dealogic. But for some dealmakers the glass is only half full. Despite the recovery, deal volumes as of June 24 remain 15% below the last decade’s average, largely impacted by the slowest Q2 in the Asia-Pacific region since 2009.The number of deals announced in Q2, 2024 is the lowest of the past 16 years, even worse than in Q2, 2020, when COVID-19 forced a worldwide pause in M&A activity.The remainder of the year looks bleak, with upcoming elections in France, Britain, and particularly in the U.S. causing corporate boards and private equity funds to reconsider their decisions.Some investment bankers are wondering whether they should focus on 2025 instead, a year they finally hope will deliver the goods.4/BRITISH BLUES Polls predict a landslide British election win for the opposition Labour Party on July 4, boosting UK stocks and government bonds, as trade-weighted sterling has bounced back to levels not seen since 2016’s Brexit vote. Traders see a return to stability after heavy political turbulence during the Conservatives’ 14-year rule and have speculated Labour leader Keir Starmer will rebuild trade links with Europe. But Britain has vast fiscal challenges that neither Labour nor the Conservatives have clarified how they would solve, the Institute for Fiscal Studies think-tank said. Economic growth is tepid, public debt-to-GDP has hit a 63-year high and taxation as a share of national income is approaching its highest since 1949. If voters expect better public services without tax hikes and investors want government borrowing to stabilise, Starmer could find it tough to keep both sets of stakeholders on side. 5/STAND-OFFInflation readings across countries in emerging Asia scatter the data calendar, though with consumer prices seemingly coming to heel for most economies it begs the question of how much longer policymakers will need to keep rates higher for.Yet their hands are tied, with a foot-dragging Federal Reserve and a towering dollar leaving little to no room for any imminent rate cuts in Asia.It’s that or running the risk of their currencies getting hammered further.In Thailand, that dissonance has sparked a months-long spat between the central bank and government.The latter insists an urgent rate cut would revive Southeast Asia’s second-largest economy, while the Bank of Thailand (BOT) has said rates remain appropriate.BOT Governor Sethaput Suthiwartnarueput speaks to the media on Thursday, and will likely reiterate the central bank’s stance. 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LONDON (Reuters) -The winners of Britain’s election on Thursday – which looks set to end 14 years in power for the Conservative Party – will take on some of the biggest challenges faced by any new government since the end of World War Two.The economy has struggled to grow, health and other services are under severe strain and there is little room in the public finances to fix them. The government is also lagging behind its targets for immigration and house-building.Opinion polls give a large lead to Keir Starmer’s opposition Labour Party over Prime Minister Rishi Sunak’s Conservatives. The graphics below highlight some of the main tasks ahead for the next government. A web-based version of the story is available here.ECONOMYBritain, like many other rich nations, has managed only sluggish economic growth for most of the period after the global financial crisis of 2008-09.Growth in Britain since 2010 – when the Conservatives took power – has been stronger than in Germany, France or Italy. But the lead is marginal.Taking account of changing population numbers – which have risen sharply in Britain due to high immigration – growth since 2010 has been weaker than in Germany and lags far behind the United States. Living standards are on course to suffer their first fall over the course of a parliament since the 1950s.Sunak says the economy is turning a corner after COVID and the energy price surge. Starmer says Labour would deliver the strongest sustained growth among the Group of Seven nations.Since the COVID pandemic, Britain’s economy has been the second weakest in the G7.POVERTYPoverty has continued to diminish but the pace of the improvement has slowed since 2010.Absolute poverty – measuring people on incomes below 60% of the median – fell five times faster in the 13 years to the 2009/10 financial year than it has since then, the Institute for Fiscal Studies, a think tank, says. Other gauges of hardship have worsened recently, showing the impact of high inflation on poorer households more clearly.In 2019/20, 4% of working-age adults were unable to heat their homes adequately. Three years later, that share had risen to 11%, according to the IFS.IMMIGRATIONSuccessive Conservative governments missed their targets to lower net migration, even after Britain left the European Union and scrapped freedom of movement for workers from the bloc.More workers from EU countries are now leaving Britain than arriving, but the number of people coming from other countries – especially India and Nigeria – has increased sharply. Net migration fell to 685,000 in 2023 from a record 764,000 in 2022 but is almost four times its level in 2019 when former Conservative leader Boris Johnson promised, before an election that year, to bring it down. INACTIVITYOne of the reasons immigration has risen so much is a shortage of workers.Employers have struggled to fill vacancies since the pandemic as the number of people classed as having long-term sickness hit record highs and the number of students also grew.Britain is the only country in the G7 where the inactivity rate – measuring working-age people who are neither employed nor seeking a job – is higher than before the coronavirus pandemic. The Conservatives plan to tighten rules on long-term sickness welfare benefits. Labour says it will address the problem by investing more in Britain’s health service.HEALTHThe health service is struggling. The number of people waiting for non-urgent treatment, which was already growing between 2010 and early 2020, surged after COVID struck and then hit almost 8 million in late 2023 in England alone, almost doubling from four years earlier. The backlog has fallen slightly in recent months but the National Health Service is far behind a target to start treating almost all non-urgent patients within 18 weeks. It is also missing its target for treating emergency patients promptly. Since 2010, health spending adjusted for inflation has grown more slowly than the average increases seen since the 1950s at a time when the population is growing and ageing. HOME-BUILDINGAnother promise that the Conservatives look set to miss is to increase construction of new homes after running into opposition to their plans to make it easier to build.In the 12 months to the end of March 2023, just over 234,000 new homes were built in England and the figure has been persistently below the 300,000 target set for the mid-2020s.Housing in Britain offers the worst value for money of any comparable economy, the Resolution Foundation think-tank says. PRODUCTIVITY AND INVESTMENTKey to the next government’s chances of addressing many of Britain’s most pressing challenges will be its ability to speed up economic growth which would put more money in the pockets of households and in the public coffers. To do that, an improvement in weak productivity will be needed. London and southeast England are the only regions in the UK where output per hour is above the national average, although the capital saw its lead narrow after the pandemic, possibly reflecting the impact of increased home-working. More private-sector investment is needed but companies have been wary about investing since 2016, the year of the Brexit referendum which triggered years of political instability. 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

SEOUL (Reuters) – South Korea’s factory activity growth quickened in June to the fastest in 26 months, as new orders jumped on improving global demand, a private-sector survey showed on Monday.The purchasing managers index (PMI) for manufacturers in Asia’s fourth-largest economy, compiled by S&P Global, rose to 52.0 in June, from 51.6 in May, on a seasonally adjusted basis. It was the highest reading since April 2022, staying above the 50-mark, which separates expansion from contraction, for a second consecutive month. “Another strong month of data provides further evidence that global industrial activity and trade are picking up,” said Joe Hayes, principal economist at S&P Global Market Intelligence.”Viewed as a bellwether for exports due to its integration in supply chains for key intermediate goods like batteries and semiconductors, South Korean manufacturing output and orders often provide leading signals for trends more broadly.” New orders expanded at the quickest rate since February 2022 on stronger demand both at home and abroad, with those from overseas increasing the most in five months, sub-indexes showed.Asian countries including China, Vietnam and Japan, as well as other regions such as North America and Europe were cited in the survey as markets that yielded sales growth. South Korea’s exports, which have been growing since October led by demand for computer chips and from the United States, are recovering towards record-high levels, the finance minister said last week. Output rose for a third straight month in June but at a slower rate than the month before. Stocks of finished goods were depleted by the most in nearly three years and backlogs of work rose by the most in almost two years, suggesting that factory capacity was somewhat stretched amid growing demand. Meanwhile, inflation in input prices accelerated to the fastest in eight months, with companies attributing the rise to unfavourable exchange rate movements and a rise in raw material prices, namely for metals. Manufacturers’ optimism for the year ahead dropped to the weakest in six months, as concerns grew that domestic market conditions could hinder factory output despite positive sales forecasts. More

The downward revision is likely to lead to a cut to the Bank of Japan’s growth forecasts in fresh quarterly projections due later this month, and could affect the timing of its next interest rate hike, analysts say.Japan’s real GDP shrank an annualised 2.9% in January-March, down from an earlier estimate of a 1.8% contraction, the revised data showed.The real GDP for the October-December period was also revised down to an annualised 0.1% growth versus the previous 0.4% increase, while that for the July-September period was revised down to an annualised 4.0% decline from the previous 3.7% drop.The government said the revisions to GDP figures for January-March reflected corrections made in construction orders data. More