Aurelia Butler

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Beijing is expected to resist growing market pressure for much stronger stimulus to spur China’s economic recovery at its flagship annual political event this week, analysts have said, as President Xi Jinping focuses on turning the country into an advanced manufacturing superpower. Thousands of delegates will descend on Beijing for the opening session of the National People’s Congress, China’s rubber-stamp parliament. Xi’s number two official, premier Li Qiang, is expected on Tuesday to deliver a “work report” outlining targets for economic growth and military spending as well as policy priorities.The NPC will be scrutinised for signs of how the Communist party, which will celebrate the 75th anniversary of the People’s Republic of China this year, plans to deal with multiple geopolitical, demographic and economic challenges.These include a real estate crisis, deflationary pressure and flagging investor confidence — with record low foreign direct investment in 2023 and stock market falls this year — as well as growing European and US resistance to China’s exports, especially of electric vehicles.But in a break with precedent, Li will not hold a customary press conference as China’s premier has at the conclusion of the session every year since 1993, NPC spokesperson Lou Qinjian said on Monday. The press conference, though carefully staged, was one of the few opportunities for foreign and domestic media to engage China’s leadership. “The only [popular] channel to dialogue with the top leadership is now closed,” said a government adviser. “Pulling back on this practice for the first time in more than 20 years, at a time when there are great deal of questions about the prospects for China’s economy, and plans in the government for addressing concerns, does not exactly inspire confidence,” said David Bandurski, director of the China Media Project.Analysts will be closely watching Xi Jinping’s meetings with different gatherings of NPC delegates, including the representatives of the provinces and the military More

1. Futures mixedU.S. stock futures hovered around both sides of the flatline on Monday, with a white-hot rally in equities showing some signs of cooling prior to more cues on Federal Reserve monetary policy and fresh developments in the American presidential election.By 03:24 ET (08:24 GMT), the Dow futures contract had shed 60 points or 0.2%, S&P 500 futures had dipped by 3 points or 0.1%, and Nasdaq 100 futures had added 22 points or 0.1%.The main averages ended the previous trading week higher after weak economic data and comments from Federal Reserve officials supported hopes for an interest rate cut by the U.S. central bank later this year. A gauge of manufacturing activity in the world’s largest economy remained in contraction territory for the 16th consecutive month, while consumer surveys from the University of Michigan slipped by more than anticipated.Elsewhere, Fed Governor Christopher Waller said that the size of bank’s balance sheet did not influence its ongoing battle to corral inflation, feeding expectations for a potential future rate reduction.2. Jobs report, retail earnings ahead this weekFriday’s monthly jobs report is set to headline this week’s economic calendar, as investors try to assess the timing of the first Fed interest rate cut.Markets are currently betting that the central bank could start to ratchet borrowing costs down from more than two decade highs in June. But signs of continued strength in the labor market could make it harder for traders to shrug off concerns that inflation may be reignited if the Fed begins easing too soon.Economists are expecting the economy to have added 190,000 jobs in February after January’s blowout 353,000 gain, which was the largest in a year. The unemployment rate is projected to hold steady at 3.7%, while wage growth is seen moderating.On the earnings front, an ebbing flow of corporate results will include big-box retailers like Target (NYSE:TGT), Costco (NASDAQ:COST) and Kroger (NYSE:KR). The returns could help to flesh out the picture of U.S. consumer demand, which has been dented recently by high inflation and elevated interest rates.3. Investor group increases Macy’s takeover offerAn investor group consisting of Arkhouse Management and Brigade Capital hiked its offer to take department store chain Macy’s private, just months after the firm rejected an earlier offer.The group is now offering $24 in cash per Macy’s share, up from its earlier offer of $21 per share, it said in a press release late on Sunday. The offer is a 33% premium to Macy’s close on Friday, and values the chain at about $6.6 billion.Arkhouse said that the group was open to further increasing the takeover price. Macy’s said in a statement on Sunday that its board will review the new proposal.The increased offer is the second after a previous bid was rejected in November. It also comes after Macy’s announced a major restructuring drive that will see the firm slash costs, reduce inventory, and shutter 150 stores over the next three years.4. Super Micro Computer to join S&P 500Shares in Super Micro Computer spiked in premarket U.S. trading on Monday after S&P Dow Jones Indices announced that the seller of artificial intelligence-optimized servers is slated to join the benchmark S&P 500 later this month. Following the statement on Friday, Super Micro’s stock price jumped in after hours trading. Around $10 billion worth of shares in the firm exchanged hands, greater than tech giants Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN).A provider of cutting-edge servers powered by AI chips designed by Nvidia (NASDAQ:NVDA), Super Micro has been a major beneficiary of surging enthusiasm around the possible applications of the nascent technology. Its stock price has soared by more than 217% so far this year, pushing its market capitalization above $50 billion.Along with Super Micro, athletic apparel firm Deckers Outdoor (NYSE:DECK) will also be added to the S&P 500. The two companies will replace home appliance group Whirlpool (NYSE:WHR) and Utah-based lender Zions Bancorporation (NASDAQ:ZION), respectively, on the index.5. Oil prices subduedCrude prices were largely muted in European trade on Monday, as support from a move by oil group OPEC+ to maintain its current pace of production cuts until the second quarter was tempered by calls from top U.S. officials for an immediate Israel-Hamas ceasefire.Oil markets were sitting on strong gains over the past two weeks, bolstered by expectations of tighter supplies this year, while optimism over an eventual decline in U.S. interest rates also aided sentiment.Weighing on some of the momentum was a call from U.S. Vice President Kamala Harris on Sunday for Hamas to immediately accept a six-week ceasefire. She also urged Israel to offer more aid to Gaza. Her comments were some of the strongest yet made by a senior U.S. official on the ongoing war, and potentially signaled diplomatic intervention by the country in the conflict.Brent oil futures expiring in May rose 0.1% to $83.67 a barrel, while West Texas Intermediate crude futures for May climbed by 0.1% to $79.17 per barrel by 03:16 ET. More

SINGAPORE (Reuters) – Singapore will raise the salary criteria for foreign executives and professionals that companies can hire starting next year, the government announced on Monday.From January next year, foreigners must earn S$5,600 ($4,170) or more a month – up from the current S$5,000 – to qualify for the so-called employment passes typically granted to high-paid professionals.Those in the financial sector will have the qualifying salary hiked to S$6,200 from S$5,500.The manpower ministry said the move is meant to “ensure that EP (employment pass) holders are of high quality, and to maintain a level playing field for locals”.The Southeast Asian financial hub has long been a popular location for foreign firms to base their regional headquarters, while foreign labour has been a thorny issue with the local population worried about competition for employment opportunities.As of June last year, Singapore had 197,300 foreigners on employment passes out of a total foreign workforce of about 1.5 million. The country has a population of 5.9 million.Since the pandemic hit in 2020, the salary floor for hiring foreigners have been raised three times with the previous adjustment – from S$4,500 to S$5,000 – taking effect just in September last year.($1 = 1.3426 Singapore dollars) More

The weekend report, citing sources with knowledge of the matter, highlights growing market bets that the Bank of Japan will soon exit its ultra-easy policy settings.However, it wasn’t clear from the Kyodo report if the government would officially declare an end to deflation. In the last few years the government has maintained that Japan was no longer in deflation, but it has stopped short of declaring a complete victory over falling prices.A formal declaration would draw a line under nearly two decades of falling prices and economic stagnation that followed the collapse of its “bubble era” boom that stretched from 1986 to 1991. Last week, the Tokyo Nikkei benchmark soared past the record high set during heady days of the bubble economy over three decades ago.Chief Cabinet Secretary Yoshimasa Hayashi told a news conference that Japan has not reached the stage yet where it can call a complete end of deflation, shrugging off the Kyodo report.With inflation having exceeded the BOJ’s 2% target for well over a year, many market players expect the central bank to exit negative interest rates in coming months in what would be a landmark move away from years of ultra-loose monetary policy.A Reuters poll of economists forecast the BOJ will end its negative interest rate policy, in place since 2016, by next month.”It may suggest that the government and the BOJ may be coordinating with each other to let the markets factor in the prospects for declaring an end to deflation in future and terminating negative interest rates,” said Atsushi Takeda, chief economist at Itochu Economic Research Institute, referring to the planned government announcement.Prime Minister Fumio Kishida or cabinet ministers may make the announcement at a government panel meeting, news conference or in a monthly economic report rather than at a formal venue like the cabinet meeting, Kyodo reported.The government will make a decision after determining whether annual labour-management wage talks due March 13 will turn out strong enough to offset price hikes and also consider the outlook on price trends, Kyodo reported. The government acknowledged that Japan’s economy was in gradual deflation for the first time in 2001, with the nation struggling for much of the period since then to break a vicious cycle of lower corporate profits, tepid wages and weak private consumption.The government would scrutinise a broad range of indicators, such as consumer prices, unit labour costs, output gap and GDP deflator, Kyodo said, citing the sources. More

That’s one side of the Atlantic. On the other, is an ECB meeting and UK budget. Asia’s not missing out, China’s annual parliament meeting takes place against a backdrop of pain in the world’s No.2 economy. Here’s your week ahead in global markets from Ira Iosebashvili in New York, Jamie McGeever in Orlando, Kevin Buckland in Tokyo, Li Gu in Shanghai, and Dhara Ranasinghe and William Schomberg in London.1/ DOUBLE TROUBLEU.S. earnings season is winding down but investors don’t have much down time with a Congressional testimony from Fed Chairman Jerome Powell on Wednesday and Thursday, and February U.S. jobs data on Friday. Excitement over AI’s business potential has helped drive stocks to fresh record highs, even as a robust economy dampens rate cut bets. Signs of continued jobs market strength or a hawkish message from the Fed could make it harder for investors to shrug off concerns about how higher-for-longer interest rates could impact markets and the economy. Among those effects is a rise in Treasury yields – potentially disruptive for stocks if it continues. Ten-year yields are up 40 bps this year Economists polled by Reuters expect the U.S. economy created 188,000 new jobs, after a blowout 353,000 jobs in January. 2/ HELLO, SUPER TUESDAYIt may be too early to properly price and position for November’s U.S. Presidential election, but ‘Super Tuesday’ will shine a light on the political divisions and challenges facing America. And the debt ceiling issue is back as well. U.S. Congress on Thursday approved a short-term stopgap measure to avert a partial federal government shutdown but only by a week.The Treasury market absorbed $169 billion of debt issuance last week with relative ease. But polarized politics over the government’s finances are a reminder that the national debt is $34 trillion and counting, so Treasuries could feel some heat.In an election year, however, aggressive fiscal consolidation is unlikely. Muddling through with temporary spending measures is more likely.     Super Tuesday is the day in the U.S. presidential primary cycle when the most states vote, with Biden and Donald Trump expected to secure the Democratic and Republican nominations.3/ ROOM WHERE IT HAPPENSHopes are high for fresh China stimulus when the National People’s Congress begins its annual session on Tuesday, aimed at reviving a crumbling property sector, and invigorating moribund consumers given the worst deflation since the global financial crisis.There’s a lot more at stake than meeting what will likely be another 5% economic growth target this year. Chinese stocks have recovered from five-year lows hit in early February, snapping a six-month losing run with their best monthly performance since late 2022. The main drivers have been state-led stock buying and tighter regulations on short selling. But it’s hard to forget that the slide to five-year lows were driven by dashed hopes for steps from Beijing. That puts the market spotlight firmly on what comes out in the days ahead. 4/ TOO EARLY?The ECB meets on Thursday and the focus is on whether policy makers will repeat that it’s too early to discuss rate cuts or open the door to a move.Rates have been on hold since September and the ECB has pushed back on rate cut talk, insisting that even if the next move is a reduction, that will be later than traders anticipate.Wage pressures after all, remain high even if they are easing. So, having priced 150 bps worth of rate cuts at the start of 2024, markets now expect roughly 90 bps with a first move fully priced for June. Pricing also suggests the ECB could cut before the Fed does – not surprising perhaps given a relatively weak euro zone economy. The ECB typically moves after the Fed. 5/ HUNT HEMMED IN British finance minister Jeremy Hunt must find a way to cut taxes in Wednesday’s budget to help Prime Minister Rishi Sunak’s bleak election prospects without causing another upset in the bond markets.Memories of former premier Liz Truss’s “mini-budget” crisis are still fresh and the fiscal outlook has shown no improvement since then, leaving Hunt with little room for manoeuvre when he stands up in parliament on March 6.But media speculation has focused on possible income tax cuts or another reduction in social security rates, and investors are expecting Hunt to use most if not all of the fiscal “headroom” he has. More