Aurelia Butler

The revisions, the first since the start of 2018, are the latest attempt to boost consumer confidence in the world’s largest auto market, where a cut-throat price war and slowing demand have vexed both automakers and authorities.Financial institutions can independently determine the lowest payments they will accept on personal auto loans for gasoline-engine cars and new energy vehicles (NEVs), the central bank said in a statement released jointly with the National Financial Regulatory Administration (NFRA).Prior to the revision, which takes effect immediately, NEVs were subject to a minimum down payment of 15%, and internal combustion vehicles to a 20% down payment limit.”Financial institutions should reasonably determine the down payments, terms, and interest rates of auto loans based on borrowers’ creditability and repayment capabilities,” read the statement.The regulator also said it encouraged financial institutions to reduce or remove penalties incurred for prepaying loans during the process of trading in old cars for new ones.But China’s efforts to boost auto sales by cutting down payments on car loans stand to be frustrated by a price war and consumer caution, analysts said.Last week, the NFRA told Reuters that China will soon roll out a policy to lower down payments on passenger vehicle loans. More

ROME (Reuters) – Italy acknowledged on Wednesday that the European Union was set to invoke its deficit reduction procedure against Rome, but insisted its future spending plans were already sufficient to meet Brussels’ demands.Giorgia Meloni’s government estimates a deficit-to-GDP ratio this year broadly in line with its 4.3% goal set in September, therefore far above the 3% ceiling set by EU rules.During a parliamentary hearing, Economy and Finance Minister Giancarlo Giorgetti acknowledged that this meant the EU was likely to invoke its deficit reduction procedure, but said this was also true of other member countries including France.”It is granted that the European Commission will recommend the Council to open an excessive deficit procedure against us as well as several other countries,” Giorgetti said during a parliamentary hearing. “Us, France and 10 others.”The infringement procedure will oblige Italy to cut its structural deficit — net of one-off factors and business cycle fluctuations — by a minimum 0.5% of GDP per year.Giorgetti however said Rome’s current budget plan announced last September and set to be reviewed on April 9 would already be in line with the EU requirements to cut the fiscal gap over time.”We are not so dumb as to have made a negotiation without knowing what the scenario was that we were going into,” he said.The latest reform of the bloc’s two-decade-old fiscal rules sets a slow but steady pace of deficit and debt reduction from 2025 over four to seven years, with the longer option available if a country undertakes reforms and investments in areas the EU prioritises.Being placed under a deficit reduction procedure would temporarily shield Italy from an EU requirement that it reduce its debt by a minimum of 1 percentage point per year. As things stand, the government envisages reducing the debt-to-GDP ratio by just 0.6 percentage points from 2023-2026.On the other hand, countries under such a procedure may not be eligible for TPI, a scheme created by the European Central Bank (ECB) to buy government bonds from countries that suffer a market attack.Outlining plans to keep strained state finances in check, Giorgetti added it would be appropriate for state-controlled companies to keep their liquidity in a current account with Italy’s Treasury. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Eurozone inflation fell to 2.4 per cent in March, lower than forecast, bolstering expectations that the European Central Bank will cut interest rates by the summer.The slowdown of annual consumer price growth from 2.6 per cent the previous month reflected smaller increases in food and goods prices, which offset steady services prices, according to data released by the EU statistics office Eurostat on Wednesday. Economists polled by Bloomberg had forecast a March reading of 2.5 per cent.The easing of the region’s worst cost of living crisis for a generation will be welcomed by the ECB, which meets next week to discuss how soon to loosen monetary policy. Most analysts expect policymakers to wait until June to begin cutting rates.Many rate-setters worry that rapid wage growth is still pushing up costs in the labour-intensive services sector, in which prices rose at a steady annual pace of 4 per cent for the fifth month in a row.Diego Iscaro, economist at S&P Global Market Intelligence, said March’s fall in headline inflation “may raise expectations for a rate cut later this month”. But he predicted the “stickiness of services prices will make the ECB wait for further evidence of easing wage growth before starting the easing cycle” in June.Some economists had predicted eurozone services inflation would rise in March owing to the earlier timing of Easter, which was expected to push up prices of package holidays and flights. Core inflation, which strips out energy and food prices to give a better picture of underlying price pressures, fell slightly more than economists expected to 2.9 per cent in March, compared with 3.1 per cent in February.Eurozone inflation has fallen rapidly from its peak of 10.6 per cent in October 2022, after the disruption of the coronavirus pandemic and Russia’s invasion of Ukraine triggered the biggest price surge for decades, to leave it tantalisingly close to the ECB’s 2 per cent target. Senior ECB policymakers, however, have signalled they are likely to wait until June before deciding on potential rate cuts to give them more time to assess if wage pressures are moderating enough to keep inflation falling to their target.Separate data released by Eurostat on Wednesday showed the eurozone labour market remained resilient. An unemployment rate of 6.5 per cent in February was unchanged from a slightly upwardly revised figure in January.One worrying sign for rate-setters was that on a month-by-month basis, consumer prices in the single currency bloc rose 0.8 per cent in March, an acceleration from 0.6 per cent the previous month. The month-on-month core inflation rate rose to 1.1 per cent.On an annual basis, eurozone fresh food prices fell for the first time in almost three years, dropping 0.4 per cent in March. Energy prices fell 1.8 per cent, a slower decline than the 3.7 per cent fall in February. Goods prices rose 1.1 per cent, the slowest pace since 2021. More

MUMBAI (Reuters) – Strong economic growth and moderating inflation means India’s central bank will have room to keep interest rates on hold at its review this week and likely until July, economists say.The Reserve Bank of India (RBI) is widely expected to keep rates unchanged on Friday, for the seventh consecutive meeting.All 56 economists in the March 15-22 Reuters poll expected the RBI to hold the repo rate at 6.50% while most expect no change at least until July.The RBI has ample room to remain on hold in the near term, Barclays said in a note.The central bank last changed rates in February 2023, when the policy rate was hiked to 6.5%.”We think the RBI will have to consider the balance of risks between over tightening (given the ‘not-too-hot-nor-too-cold’ state of the economy) and maintaining monetary policy conditions for achieving reasonably good real GDP growth of at least 7.0%,” Barclays economists wrote, referring to the proverbial “Goldilocks” ideal state of stable economic growth.As India heads into a general election this month, the economy is growing faster than expected amid signs prices are trending lower though food inflation remains a risk.Prime Minister Narendra Modi said at an event on Monday that the RBI must give top priority to growth but at the same time focus on trust and stability. Modi’s Hindu nationalist Bharatiya Janata Party is expected to secure a comfortable win for a third straight term at the polls starting on April 19.India’s economy grew a stellar 8.4% in the fourth quarter of 2023, the fastest among major economies while retail prices in February rose at a faster-than-expected pace of 5.09% due to elevated food prices, staying above the RBI’s 4% target.In February, one of six monetary policy committee members voted for a cut in policy rates arguing that real rates in India are too high since inflation is seen easing to an average of 4.5% in 2024-25.”India’s growth is robust when compared to the rest of the world, but not when compared to our potential or to our aspirations,” monetary policy committee’s external member Jayanth Varma told Reuters.But central bank governor Shaktikanta Das has repeatedly said that it is premature to ease policy before inflation returns to the 4% target.Headline inflation in India has remained above the central bank’s target, core inflation has fallen below 4%, which some say may allow the central bank to signal policy easing ahead. The current monetary policy stance is ‘withdrawal of accommodation’, signalling that monetary policy will likely remain tight.”We do not expect any change in the policy rate, but a probable explicit or implicit change in stance cannot be ruled out,” said Parijat Agrawal, head of fixed income at Union Mutual Fund. The RBI’s monetary policy setting is independent but that has not prevented governments in the past from exerting pressure on the central bank for easier lending policies to support growth.”At the margin, the RBI will prefer to stay on the sidelines to prevent any flare up of concerns over its independence,” said Thamashi De Silva, assistant India economist at Capital Economics. More

Tesla (NASDAQ:TSLA) released a weak first-quarter vehicle production and deliveries report on Monday, prompting a sharp selloff, and more of the same is likely going forward.The EV manufacturer revealed deliveries fell 8.5% from the year-ago quarter and approximately 20% from the fourth quarter representing the first year-over-year decline since the second quarter of 2020, when COVID was rampant.Tesla stock fell around 5% on Monday, continuing the recent decline which has seen the company’s shares drop over 30% so far this year.This was “an unmitigated disaster 1Q that is hard to explain away,” said analysts at Wedbush, in a note.“We view this as a seminal moment in the Tesla story for Musk to either turn this around and reverse the black eye 1Q performance. Otherwise, some darker days could clearly be ahead that could disrupt the long-term Tesla narrative,” said Wedbush.Tesla cited production issues with Model 3 Highland and in other areas for its shortfall, said analysts at Bernstein, in a note, “but production was not the issue – demand was.”“We believe units are likely to decline YoY again in Q2 – and could potentially for the year,” Bernstein added.Analysts at Wells Fargo agreed, stating that “given the weak Q1 start, we remain skeptical deliveries can grow in 2024 (or 2025).”U.S. stock futures edged lower Wednesday, continuing to consolidate after a strong start to the year ahead of a flurry of Fed speakers, including Chair Jerome Powell.By 03:45 ET (08:45 GMT), the Dow futures contract was 25 points, or 0.1%, lower, S&P 500 futures dropped 5 points, or 0.1%, and Nasdaq 100 futures fell by 34 points, or 0.2%.The major indices posted a losing session on Tuesday, with the Dow Jones Industrial Average dropping almost 400 points, or 1%, the broad-based S&P 500 index falling 0.7% and the tech-heavy Nasdaq Composite slipping just under 1%.The recent weakness followed sticky inflation data from last week as well as some strong economic data, which had investors concerned the Federal Reserve will delay cutting interest rates into the second half of the year. That said, some consolidation was also probably due after the benchmark S&P 500 index recorded its best first quarter since 2019.There is more economic data to digest Tuesday, including the ADP private payrolls report and the ISM services index, but investors are likely to concentrate their attention on a slew of central bank speakers, including Federal Reserve Chair Jerome Powell.Powell said on Friday that the latest U.S. inflation data is “along the lines of what we would like to see” – comments that were largely in line with his remarks after the Fed’s policy meeting last month which had the markets expecting a rate cut in June. Taiwan was hit with a 7.5 magnitude earthquake earlier Wednesday, the most powerful to strike the island in at least 25 years, killing four people and injuring dozens more.The natural disaster prompted Taiwan Semiconductor Manufacturing (NYSE:TSM) to evacuate some factory areas, potentially heralding production delays at the world’s largest contract chipmaker.TSMC supplies many major companies–including Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), and Qualcomm (NASDAQ:QCOM)–with semiconductors to use in their products, and thus could be seen as a choke point in the global supply chain.Shares of TSMC, which has a more than 60% share of global contract chipmaking and a monopoly over advanced microprocessors, were down 1.4% in early trade.While any supply disruptions caused by this earthquake may be temporary, they can illustrate the importance of the island, which China regards as a province, to the global economy.Intel (NASDAQ:INTC) stock traded sharply lower premarket after the chipmaker late Tuesday disclosed deepening operating losses for its semiconductor manufacturing business.Intel said the foundry unit had $7 billion in operating losses for 2023 on sales of $18.9 billion, a wider loss than the $5.2 billion in 2022 on $27.5 billion in sales.This is the first time that Intel has disclosed revenue totals for its foundry business alone.“Intel Foundry is going to drive considerable earnings growth for Intel over time. 2024 is the trough for foundry operating losses,” CEO Patrick Gelsinger said on a call with investors on Tuesday, expecting to eventually break-even “midway” between this quarter and the end of 2030.Intel stock fell over 4% premarket. Oil prices steadied near five-month highs Wednesday, as traders digested signs of shrinking U.S. inventories and more potential supply disruptions.By 03:45 ET, the U.S. crude futures traded 0.1% lower at $85.09 a barrel, while the Brent contract climbed 0.1% to $88.97 per barrel.Data from the American Petroleum Institute on Tuesday indicated that U.S. crude inventories shrank nearly 2.3 million barrels in the week to March 28 – more than expectations for a draw of 2 million barrels.While the reading comes after an outsized, 9.3 million barrel build in the prior week, it is also the third weekly draw in inventories over the past four weeks.Official data from the Energy Information Administration are due later in the session. The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, will hold an online meeting of its Joint Ministerial Monitoring Committee later in the session, with the producer group widely expected to keep production unchanged. Fears of a broader conflict in the Middle East–after Iran vowed retaliation against Israel for strikes on the Iranian embassy compound in Damascus–presented the possibility of more supply disruptions in this oil-rich region, helping crude surge to levels last seen in late-October.  More