Aurelia Butler

Stay informed with free updatesSimply sign up to the More

(Reuters) – A look at the day ahead in Asian markets.Interest rate decisions in New Zealand and Thailand are the main events for Asian markets on Wednesday along with Chinese bank lending figures, as investors brace for a rocky open following Wall Street’s lackluster performance the previous day. U.S. stocks closed in the green on Tuesday but only barely, despite the biggest one-day fall in Treasury yields in over a month, and a notable slide in oil prices.Taken together, a case can be made that investor sentiment is fraying. With many benchmark stock indices and key commodity prices hovering at historic and even record highs, fatigue may be setting in. Once again, however, Japan seems to be bucking the trend with the Nikkei 225 looking to test 40,000 points again and make a push to fresh all-time highs. The yen’s slide back towards 152 per dollar could facilitate that push, but will also probably spark another wave of verbal intervention from Japanese authorities. Actual FX market intervention is a real possibility if 152.00 breaks.On the data front, wholesale inflation figures from Japan could be the catalyst for dollar/yen testing 152.00, but the main indicator will be Chinese bank lending. Investors will be hoping for signs of recovery in March from February, when loan growth from a year earlier slowed to a record low 10.1%. Chinese banks are estimated to have issued 3.56 trillion yuan ($492.11 billion) in net new yuan loans last month, more than double the 1.45 trillion yuan in February, according to a Reuters poll.On the policy front the Reserve Bank of New Zealand and Bank of Thailand are both widely expected to keep key rates unchanged, meaning signals about the future policy path in the coming months will be more important for local asset markets.All 29 economists in a Reuters poll expect the RBNZ to leave its official cash rate on hold at 5.50% for a sixth consecutive meeting. Fifteen of the 29 expect the first cut to come by the end of the third quarter and the other 14 forecast the cash rate to remain unchanged until the fourth quarter or later.Consensus around the BOT staying on hold, meanwhile, is much flakier, with inflation running below target and the economy unexpectedly contracting at the end of last year. Sixteen out of 26 economists polled by Reuters reckon the BOT will keep its benchmark one-day repurchase rate at 2.50% for a third straight meeting, and the other 10 forecast a quarter-point cut to 2.25%.That is a drastic change from a February poll when a strong majority of economists expected rates to stay unchanged this quarter and median forecasts showing the first rate cut in Q1 2025.Here are key developments that could provide more direction to markets on Wednesday:- New Zealand interest rate decision- Thailand interest rate decision- China bank lending (March) (By Jamie McGeever) More

Stay informed with free updatesSimply sign up to the More

Deliveries reached 142 aircraft, confirming a Reuters report on the quarterly total last week and leaving the France-based company ahead of U.S. rival Boeing (NYSE:BA), which delivered 83 commercial airplanes during the same period.Airbus said it had won 170 new orders in the first quarter, with no cancellations.The tally includes an order for 33 wide-body planes from Korean Air but does not yet reflect an order from Japan Airlines announced on the same day in March.Boeing earlier reported 131 gross orders or a net total of 126 after cancellations. New business included an order from an unidentified customer for 10 long-haul 777-9 jets. More

Around 440 jobs will go in Switzerland and up to 240 in the United States over the next two to three years, the Basel-based company said.The job eliminations are separate from a restructuring programme which could lead up to 8,000 of Novartis’s 78,000 global workforce being cut, it said.Rival Swiss drugmaker Roche also announced earlier this year that it was cutting 345 jobs in product development.Novartis currently employs around 12,500 in development which includes handling drug regulations, analytics, and support functions like quality assurance.The staff are also involved in designing the production process for drugs after research work has been completed.Around 3,000 of the roles are currently in Switzerland and 2,000 in the United States, meaning around 14% of the positions in those countries will be affected.Meanwhile, the company said it would add roles over the next two to three years, meaning there will be a net reduction overall of 1-2% at a global level.Novartis said the changes were designed to reshape its capabilities to access local talent such as data scientists and regulation specialists in Britain.It said it still remained committed to development work in both Switzerland and the United States.”We remain committed to development in Switzerland as our innovation hub for complex development, and providing strategic leadership as the global headquarters for development,” a spokesperson said.”The US remains a key development hub with strong representation in our global program teams, responsible for advancing our medicines pipeline.” More

ROME (Reuters) – Italy’s government said on Tuesday fiscal incentives for home renovations had had a “devastating” impact on public finances over the last four years and were to blame for the expected rise in the country’s massive public debt through 2026.The take-up of the incentives had hit 219 billion euros ($238.1 billion), Economy Minister Giancarlo Giorgetti said.Successive administrations of all colours have proved incapable of halting the haemorrhaging, despite growing warnings of the escalating problem.Here is a look at what has gone wrong and why.WHAT WERE THE SCHEMES?The most controversial is undoubtedly the so-called Superbonus, introduced by the-then Prime Minister Giuseppe Conte in 2020, which offered to pay homeowners 110% of the cost of energy saving renovations. Another project promised to cover 90% of the cost of doing up the facade of a building.The government initially predicted the Superbonus would cost 35 billion euros over a 15-year period. After just four years the Treasury says it has already forked out roughly 160 billion euros, an outlay that far outstrips the benefit to the economy.WHY THE MASSIVE OVERSHOOT?The government underestimated the scheme’s appeal, but also made a number of other errors. With such generous handouts, homeowners had no reason to haggle with builders over costs. On the contrary, as payments exceeded what they would spend, higher costs meant more money was left for the homeowners.Asked why they got their forecasts so wrong, officials involved in the budgetary planning have said they had no precedent to draw on as no one outside Italy had ever offered to refund more than the costs of the renovations.WHY DIDN’T THE GOVERNMENT SEE THE THREAT SOONER?In May 2022, the then Prime Minister Mario Draghi criticised the Superbonus, saying it helped triple the cost of renovations. But even if officials knew back then they had a problem, they were unprepared for the unfolding financial tsunami.Besides generous payments, the scheme also allowed to deduct the cost of the building work from their taxes over a 4-10 year period, or use the tax credit as a form of payment when dealing with builders or banks. The buyers could then sell it again, or deduct the sum from their own tax bill.Officials say they did not have a robust monitoring system in place to track trading in such credits, which became the key driver behind the incentives’ ballooning costs by enabling homeowners to commission work without ever having to pay for it.The government says it also lacked resources to fight fraud. Last August Prime Minister Giorgia Meloni said that 12 billion euros worth of irregular contracts had been uncovered, calling it “the biggest scam” the state had ever suffered. Giorgetti indicated on Tuesday that figure had now risen to 16 billion euros.WHY NOT END IT SOONER?Even though Draghi was aware of the risks, his government extended the Superbonus through 2025 under a phase-out arrangement. Meloni, who called it a budget “disaster”, imposed limits to who could access it, but did not outright kill it.The problem is that the programme has become hugely popular with voters and small businesses and none of the political parties would risk pulling the plug, potentially leaving families and builders with worthless credits.When Giorgetti last month sought to curtail the scheme with a decree that blocked the sales of tax credits stemming from the work, one of the coalition parties, Forza Italia, immediately lobbied to soften the measures. “I fear you do not understand the gravity of the situation,” Giorgetti said.DID IT HELP AT ALL?The Superbonus helped Italy perform better than any major European economy since the COVID pandemic.According to Eurostat, construction output in Italy has grown 31% in four years to the end of 2023, while it was down 12% in Spain, down 11% in Germany and was flat in France.However, economists say Italy would have done better if it invested in health or education as most of the money would then have gone directly into salaries, while contractors incur many production costs and therefore generate less added value.They also warn that the construction sector could now see a sharp contraction as the scheme nears its end.($1 = 0.9199 euros) More