Aurelia Butler

(Reuters) – A look at the day ahead in Asian markets.Asian markets could be in for a choppy ride on Tuesday, with investors unsure whether to interpret Monday’s steep fall in U.S. Treasury yields and the dollar as an encouraging sign for risky assets or a warning that growth is evaporating.Given that Asian shares on Monday posted their biggest rise this year, before the weak ISM U.S. manufacturing report triggered the slide in yields, investors may err on the side of caution and pare back risk exposure, not add to it.If so, it will suggest the ‘bad news is bad news’ narrative is taking hold – easing financial conditions on their own are not enough to lift asset prices; instead, the deteriorating macro conditions driving down yields and the dollar are what’s important for asset prices.By some measures, a shift in the U.S. economic outlook is already underway. The Atlanta Fed on Monday slashed its GDPNow model forecast for second quarter growth to 1.8% from 2.7%. Two weeks ago it was 3.5%, and three weeks ago it was over 4.00%. The sugar high of rate cut expectations can only last so long. And in truth, rate cut expectations have not shifted all that much lately because inflation remains stickier than policymakers would like.The U.S. growth engine is particularly important for Asia right now because China’s post-lockdown recovery is so fragile, and uncertainty persists around Japan’s policy normalization, rising bond yields and record weak currency.That’s the backdrop to Asian markets on Tuesday which also sees the release of manufacturing PMI data from Malaysia and Thailand, South Korean inflation, and the official results from India’s general election. Indian markets’ initial reaction on Monday to the weekend’s exit polls showing a decisive mandate and third term for Prime Minister Narendra Modi was overwhelmingly positive – shares hit lifetime highs, the rupee gained and bond yields dropped. The broader Nifty index closed 3.25% higher at 23,263.90 points after touching a record high 23,338.70 earlier in the day, while the BSE index closed up 3.39% at 76,468.78 points, just off its lifetime peak of 76,738.89 also touched earlier.India’s boom helped drive the continent’s stocks higher. The MSCI Asia Pacific ex-Japan index snapped a four-day losing streak, surging more than 2% for its best day since November.Surprisingly strong factory activity from China, and to a lesser extent South Korea and Taiwan, also helped. China’s ‘unofficial’ Caixin/S&P Global manufacturing PMI report showed the fastest pace of growth since June 2022, contrasting with an official survey on Friday that showed a surprise fall in activity.The Caixin survey is believed to be skewed more toward smaller, export-oriented firms, which may help explain why Asian stocks took off so much on Monday. Some of that optimism, however, may cool on Tuesday.Here are key developments that could provide more direction to markets on Tuesday:- South Korea inflation (May)- India election results- Australia current account (Q1) More

New regulations require debt collectors, mortgage and payday lenders, credit reporting companies and other nonbank financial services companies, many of which are not otherwise registered or licensed, to inform the Consumer Financial Protection Bureau (CFPB) of actions taken against them at the federal, state and local level, the agency said.”Too many American families and businesses have been harmed by repeat offenders in a rinse repeat cycle of illegal activity where bad actors see fines and penalties as just the cost of doing business,” CFPB Director Rohit Chopra told reporters.”The registry is going to help the CFPB and other law enforcement agencies monitor and track repeat offenders in order to better hold them accountable if they break the law.”CFPB officials say the new registry, first proposed in late 2022, continues an agency push to fight corporate recidivism following the creation that year of a Repeat Offender Unit within its supervision program.The database will be partly available to the public online and should also be used by state attorneys general and other regulators as well as investors and creditors performing due diligence, according to the agency statement.Agency officials said on Monday that they modified their original proposal in light of some industry feedback. For example, companies that already have enforcement actions recorded in a nationwide licensing system for nonbank mortgage lenders will be able to use a simplified filing process.However, trade organizations also objected to provisions that appear to remain in the new regulation, including a requirement for senior executives to attest in writing that a given company is in compliance with existing court orders and enforcement actions.The Electronic Transactions Association, members of which include Amazon.com (NASDAQ:AMZN), Apple (NASDAQ:AAPL) and JPMorgan Chase (NYSE:JPM), last year urged the CFPB to allow appeals and de-listing, but bureau officials said on Monday they had not instituted such procedures.The first corporate registrations are expected in January of 2025. More

Maersk now expects its underlying earnings before interest, tax, depreciation and amortisation in the range of $7 billion to $9 billion, up from its previous forecast of $4 billion to $6 billion.The company, viewed as a barometer of world trade, said it now sees signs of further port congestions, especially in Asia and the Middle East, and additional increase in container freight rates.The rise in container freight prices and further port congestions are expected to contribute to a stronger financial performance in the second half of 2024, Maersk said.Maersk had raised its full-year profit guidance last month when it reported first-quarter earnings, citing strong demand and higher freight rates as ships sailed longer to avoid conflict in the Red Sea.The company earlier on Monday said that it was facing significant terminal congestion in Mediterranean and Asian ports, causing substantial delays in its vessel schedule. Maersk also said it expects to have a free cash flow of at least $1 billion in 2024. It upgraded its earnings before interest and tax (EBIT) to a range between $1 billion and $3 billion, from its previous forecast of a loss of $2 billion to $0 billion. More

MOSCOW (Reuters) – The Bank of Russia is likely to keep its benchmark interest rate at 16% on Friday but tighten its rhetoric, a Reuters poll showed on Monday, although a quarter of economists leaned towards a hike as the bank grapples with stubborn inflation.The bank has become more hawkish in recent weeks, repeating several times that rates will need to stay high for a long time to bring inflation down to its 4% target. A disinflationary trend in Russia ended in April, the bank said last week. Eighteen of 24 analysts and economists polled by Reuters in late May and early June predicted that the Bank of Russia would keep its key rate at 16% on June 7, while the other six forecast a hike to 17%.”I expect the rate to remain at 16% and the rhetoric to tighten,” said Irina Lebedeva of Uralsib. “An increase at the July meeting seems more likely.” Mikhail Vasilyev, chief analyst at Sovcombank, said a hike was slightly more likely than a hold.”Inflation has stopped slowing, so the Bank of Russia will likely add monetary tightness to cool the increased demand in the economy,” he said. “Borrowers should be prepared for money in the economy to remain expensive for a long time and probably, that it will get even more expensive.” The consensus forecast showed that analysts no longer anticipate any monetary easing this year, expecting rates to end the year at 16%, up from 13.5% in last month’s poll. A cut in the second half of 2024 seems unlikely given that households’ inflation expectations increased in May after four months of decline and pro-inflationary risks of labour shortages and higher lending remain, said Anton Pustovoitov of First Asset Management. Analysts’ year-end inflation forecast rose to 5.6% from 5.4% in early May, still higher than the central bank’s target figure. Annual inflation stood at 7.4% in 2023, down from 11.9% in 2022.The poll showed that economists now expect Russia’s gross domestic product to grow 3% this year, marginally higher than last month’s poll and above the economy ministry’s 2.8% forecast. The ministry’s stress scenarios envisage GDP and real income growth almost grinding to a halt next year and the rouble weakening to 107 against the dollar as investments and oil prices fall, according to documents seen by Reuters. Analysts expect the rouble, currently trading at about 92 per dollar, to weaken to 97 over the next year, a slight improvement on the previous poll’s prediction. (Reporting and polling by Alexander Marrow in London and Elena Fabrichnaya in Moscow; Editing by Hugh Lawson) More

This article is an onsite version of our Disrupted Times newsletter. Subscribers can sign up here to get the newsletter delivered three times a week. Explore all of our newsletters hereToday’s top storiesClaudia Sheinbaum, a close ally of President Andrés Manuel López Obrador, is set to become Mexico’s first female leader after a landslide election victory. The scale of her win unnerved investors who sold the peso in response. The campaign has been the deadliest in recent history.Japan’s top carmakers, including Toyota, the world’s largest, were hit by a testing scandal that has forced the suspension of some vehicle shipments. Arch-Brexiter Nigel Farage said he would stand as a candidate for Reform UK at the July general election, despite ruling himself out of the race less than a fortnight ago. He will also replace Richard Tice as leader.For up-to-the-minute news updates, visit our live blogGood evening.The stalling of a gas pipeline deal from Russia to China has underlined how the war in Ukraine has left Moscow increasingly dependent on economic support from Beijing and cast further doubt on the fortunes of Gazprom, Russia’s once-mighty supplier of gas to Europe.As the Financial Times reveals today, the pipeline deal has hit a snag over what Russia sees as China’s unreasonable demands on price and supply levels. Approval is desperately needed by Gazprom, which recently announced its biggest loss in decades as gas sales to Europe plummeted, leaving its business model in tatters. The Russian state-run monopoly has been one of the war’s biggest corporate casualties and with Europe having greater success than expected in diversifying away from Russian energy, it faces an uncertain future.Geopolitical tensions are also reshaping investment strategies in China. As western multinationals and politicians try to break their dependence on the country and limit its role in supplying critical products, Chinese manufacturers are building their presence overseas in countries such as Vietnam and Mexico that offer alternative supply chain routes into the US. The process is likely to gather speed after US President Joe Biden announced fresh tariffs on $18bn-worth of Chinese goods. (If you’re a Premium subscriber and want to read more on the retaliation game between China, the US and the EU, try today’s Trade Secrets newsletter).Tensions are also affecting stock markets: Chinese fashion group Shein is planning a blockbuster initial public offering in the UK rather than the US after facing opposition from lawmakers in WashingtonAs our Europe Express newsletter (for Premium subscribers) reports today, China is also under pressure from the EU and Japan, which are teaming up to stop Chinese suppliers further undercutting their clean energy companies. The EU, burnt by its near-total loss of solar manufacturing industry to Chinese competitors, is keen to avoid other sectors such as wind and hydrogen facing the same fate.Europe and the US meanwhile are still concerned about China’s support for Russia’s war and specifically its supply of dual-use technology, the latest flashpoint being an attempt by a Chinese trade body to buy drone-jamming equipment for Russian buyers.US deputy Treasury secretary Wally Adeyemo said on Friday that the US and Europe “must make the choice stark” for China. “Chinese firms can either do business in our economies or they can equip Russia’s war machine with dual-use goods,” he added. “They cannot do both.”Need to know: UK and European economyNew data revealed that a small group of the UK’s wealthiest estates were able to shelter £1.8bn of assets from inheritance tax in 2020-21, reigniting a debate over which types of businesses should receive lucrative relief from the levy. Campaigning in the UK’s general election continued apace with the ruling Conservatives focusing on issues around gender and the opposition Labour party on defence ahead of a televised leaders’ debate tomorrow. Columnist Stephen Bush says both parties’ policy pledges are increasingly “detached from reality”.Turkish inflation hit 75.5 per cent as consumer spending remained undeterred by interest rate rises, but the government said it believed price rises had now peaked.Europe’s gas price hit its highest level this year following an outage at a processing plant in Norway, highlighting the country’s pivotal supply role now that the continent has largely weaned itself off Russian imports. How will the European parliamentary elections change the EU? Join FT reporters in France, Italy and Germany for a subscriber-exclusive webinar on June 12. Register here for access.Need to know: global economyMinneapolis Fed president Neel Kashkari told the FT’s Economics Show podcast that US borrowing costs should stay on hold for an “extended” period to make sure inflation was defeated.The Opec+ cartel agreed to extend deep cuts in oil production as it battles to shore up prices amid weak global demand and increased supply from other parts of the world. Indian markets hit record highs after exit polls forecast a landslide election victory for Prime Minister Narendra Modi, who has promised to continue his infrastructure-led economic drive and market-friendly reforms.The African National Congress began coalition talks after it lost its majority in South Africa’s general election. Depending on which way the ANC jumps, the country could claw its way back on to a recovery path, says the FT editorial board — or go the way of Venezuela. For more on the importance of this year’s elections, tune into chief economics commentator Martin Wolf’s new podcast series.Need to know: businessShares in GSK tumbled after a US court ruling left the UK drugmaker exposed to jury trials over its allegedly carcinogenic heartburn treatment. Zantac, first approved in 1983, was the first pharmaceutical “blockbuster”, generating more than $1bn in revenue. Nvidia, the world’s most valuable chipmaker, unveiled “Rubin”, the next generation of its artificial intelligence processor. The company’s market capitalisation has gained $350bn in wildly volatile trading since it reported first-quarter earnings just over a week ago.Investors are getting excited again about Europe’s tech start-ups. New technology, however, doesn’t always equate with progress: a new book details how Silicon Valley wizardry is helping to launder dirty cash.London-based digital bank Monzo reported its first annual profit since launching almost a decade ago, thanks to higher interest rates and growth in transaction fees and subscriptions. Despite this, Monzo and its fellow fintech upstarts have failed to unseat the UK’s established banks. A Big Read explains.The world of workDo employers really need to show they care about the environment if they want to hold on to younger staff? The evidence increasingly suggests they might, and not just in places such as London, writes columnist Pilita Clark.Companies face an uphill struggle equipping their staff to keep pace with rapid technological change. Read how they are overcoming the challenge in our Special Report: Upskilling.Online working has opened a new area in which to feel insecure about our appearance: video calls. Emma Jacobs reports on how professional make-up artists are helping executives keep up appearances.Employers are increasingly offering “night nannies” as a staff perk. But does the seemingly generous offer increase pressure on new parents to return to work too soon?Some good newsUK researchers have shown that a new type of liquid biopsy test can predict the recurrence of breast cancer in high-risk patients, months or even years before they relapse.Recommended newslettersWorking it — Discover the big ideas shaping today’s workplaces with a weekly newsletter from Work & Careers editor Isabel Berwick. Sign up hereOne Must-Read — Remarkable journalism you won’t want to miss. Sign up hereThanks for reading Disrupted Times. If this newsletter has been forwarded to you, please sign up here to receive future issues. And please share your feedback with us at [email protected]. Thank you More

(Reuters) -European shares rose for the third straight session on Monday, led by bond-proxy sectors, as investors looked to a near certain interest rate cut from the European Central Bank (ECB) later this week.The pan-European STOXX 600 ended 0.3% higher on the first session of June, with Spanish and Italian stocks leading gains with 0.7% and 0.5% rises, respectively.The sentiment was upbeat as global factory activity offered signs of recovery, while softer manufacturing data on the heels of a weak U.S. inflation print on Friday continued to spur hopes of interest rate cuts this year by the Federal Reserve.All eyes are now on the ECB’s interest rate decision on Thursday, where the central bank is expected to cut borrowing costs by 25 basis points (bps) from record-high levels, according to a Reuters poll.”Falling inflation and 18 months of weak economic activity make the case for the ECB to start cutting rates. But we don’t think it will cut far and fast,” BlackRock (NYSE:BLK) Investment Institute said in a note.”This is not your typical rate cutting cycle. Central banks are set to keep rates above pre-pandemic levels due to persistent inflationary pressures – and last week’s euro area inflation data again showed stalling inflation progress.”Market participants anticipate rate cuts owing to the encouraging signs of easing inflation in the region. However, the May inflation reading ticking higher has cast doubts on the number of rate cuts this year. Euro-zone bond yields fell after data showed factory activity remained weak in the bloc and shrunk in the U.S. in May. That helped rate-sensitive real estate, telecoms and utilities, often considered as bond proxies, to lead sectoral gains.Energy stocks were in a weak spot, slipping 0.7%, tracking a dip in oil prices. [O/R]Among other stocks, British drugmaker GSK tumbled 9.2% after a Delaware judge allowed more than 70,000 lawsuits over discontinued heartburn drug Zantac to go forward. The stock weighed on the healthcare sector, sending it 0.3% lower. Atos shed 18% as the distressed IT consulting firm gave itself until Wednesday to choose between two revised restructuring proposals that would dilute its current shareholders to almost nothing and massively cut its debt burden. More