Aurelia Butler

(Reuters) – A look at the day ahead in Asian markets.The court-ordered liquidation of debt-laden China Evergrande (HK:3333) was expected and hardly rattled Asian investors aside from its bond holders and property developers, meaning Japan’s employment data Tuesday and the midweek U.S. Federal Reserve policy statement could be better attention grabbers. China’s blue-chip CSI300 Index and the Shanghai Composite Index took the Evergrande news in stride, both dropping 0.9% on Monday. But the liquidation of the developer with more than $300 billion in liabilities cannot be great for sentiment, which had been showing signs of recovery since the markets bottomed last week after Beijing took steps to stabilize its markets. Even with promises of official government support, long-suffering local investors look to be taking the reprieve as a window for escape – leaving a market which is traditionally largely driven by retail money precariously adrift.Hong Kong’s Hang Seng Index rose 0.8% and for it to extend the bounce from its lows investors may want to gauge whether the Hong Kong judge’s ruling on Evergrande is supported by Chinese courts. “This is the correct market-based solution, but it will be a true test case for whether China has the stomach to see it carried out fully.  Stay tuned,” said Win Thin, global head of markets strategy at Brown Brothers Harriman in a client note.China’s steps to stimulate its economy continue to support other Asian stock markets, with Japan’s Nikkei 225 and South Korea’s Kospi both ending higher on Monday. Japan’s December unemployment rate comes out in early trading Tuesday, which may help set the tone for markets obsessed with whether growth is strong enough for the Bank of Japan to abandon its zero-interest rate policy. The jobless rate was unchanged at 2.5% in November. China manufacturing PMIs on Wednesday could be more important for global markets.The yen, and the yuan, looked pretty steady against the dollar on Monday. U.S. stocks and Treasuries were also sturdy, after a quiet start bracing for information overload from the Fed policy statement on Wednesday that could give a stronger signal about when officials expect to start lowering interest rates.There are also three U.S. employment reads, culminating in the all-important U.S. payrolls report for January on Friday. Here are key developments that could provide more direction to markets on Tuesday: — Australia retail sales – December– Japan unemployment – December– U.S. JOLTS job openings – December– U.S. FOMC starts two-day meeting More

Nigeria, which is the current chair of the political and economic bloc, was commenting for the first time on the three junta-led countries’ Sunday announcement that they were immediately quitting the nearly 50-year-old regional alliance.The Nigerian foreign ministry in a statement said those seeking to leave ECOWAS were not acting in good faith.”Instead, unelected leaders engage in a public posturing to deny their people the sovereign right to make fundamental choices over their freedom of movement, freedom to trade and freedom to choose their own leaders,” it said.ECOWAS has so far declined to comment on the move, which could further weaken the bloc as it struggles to contain a democratic retreat in the West Africa region.Mali and Niger’s foreign ministries earlier informed the ECOWAS Commission of their decision in written notices dated on Monday, which were seen by Reuters.Nigeria said it remained willing to engage with the three nations.Their exit decision, announced in a simultaneous joint statement on national television channels, is a blow to the bloc’s regional integration efforts after it suspended the three following coups. More

WASHINGTON (Reuters) -Amazon and robot vacuum maker iRobot (NASDAQ:IRBT) said Monday they would end their plans to merge in the face of opposition from EU and U.S. antitrust regulators.iRobot announced a significant restructuring plan to reduce costs and said it would cut about 31% of its workforce, or 350 jobs. The company also said founder Colin Angle has stepped down as its CEO of the Roomba robot vacuum manufacturer.Angle said given the current challenges, he and the board “mutually decided that iRobot will be better served by a new leader with turnaround experience.”Amazon (NASDAQ:AMZN) said its proposed $1.4 billion acquisition of iRobot had no path to regulatory approval in the European Union.EU antitrust chief Margrethe Vestager said Monday its in-depth investigation preliminarily showed “the acquisition of iRobot would have enabled Amazon to foreclose iRobot’s rivals by restricting or degrading access to Amazon stores.”Reuters reported earlier this month the deal would be blocked by European Commission antitrust regulators and that its main concerns were that Amazon could thwart iRobot rivals on its online marketplace, especially in France, Germany, Italy, and Spain.Amazon could have delisted rival robot vacuum cleaners, reduce visibility of rivals or raised costs of iRobot’s rivals to advertise and sell their robot vacuum cleaners on Amazon’s marketplace, Vestager added.Separately, the Federal Trade Commission was poised to reject Amazon’s deal before the companies announced they were abandoning it, a source told Reuters.The FTC staff met with Amazon last week to inform them they planned to recommend the commission vote to sue to block the acquisition, the source added, saying the commission was set to hold a final meeting on Monday with Amazon before the commission could have voted to approve a legal challenge to the merger. Amazon announced the deal in August 2022. The world’s largest online retailer, which already owns Alexa and Ring, was pushing to expand its stable of smart home devices as well as expanding the e-commerce giant’s virtual healthcare.”We’re disappointed that Amazon’s acquisition of iRobot could not proceed,” said David Zapolsky, Amazon’s general counsel. “We’re believers in the future of consumer robotics in the home and have always been fans of iRobot’s products,” he added in a statement.Bedford, Massachusetts-based iRobot said it expects to report full-year 2023 revenue of $891 million, a 25% reduction and a loss of between $265 and $285 million. Under the terms of the merger agreement, Amazon will pay iRobot a $94 million termination fee.Amazon has had a mixed record with competition regulators in recent years, completing a deal for healthcare provider One Medical and MGM’s movie library.But it faces a lengthy court battle in a Seattle federal court with the FTC over accusations the company uses illegal strategies to boost profits at its online retail empire, including an algorithm that allegedly pushed up prices by more than $1 billion.iRobot shares fell 7.2% in afternoon trading Monday. Since first reports the deal might be blocked by EU regulators two weeks ago, iRobot shares have fallen by half. Amazon shares rose nearly 1%.Critics opposed the deal, saying it would strengthen Amazon’s already powerful position in smart home devices. More

NEW YORK (Reuters) – The U.S. Treasury on Monday said it expects to borrow $760 billion in the first quarter, $55 billion below the October estimate primarily due to forecasts for increased net fiscal flows and higher cash balance.The first-quarter financing estimate assumes a cash balance of $750 billion at the end of March, the Treasury said in a statement.The benchmark U.S. 10-year Treasury yield dropped to a more than a one-week low of 4.059% after the announcement. It was last down 9.2 basis points (bps) at 4.068%.”The market moved on this information which just shows you how sensitive it is to refinancing estimates,” said Gennadiy Goldberg, head of U.S. rates strategy at TD Securities in New York.”But historically these estimates don’t mean very much except for potentially, marginally less bill supply in the short term.”The Treasury also announced it expects to borrow $202 billion in the second quarter, as it projects a cash balance of $750 billion at the end of June.It also said in the fourth quarter of 2023, the Treasury borrowed $776 billion in net marketable debt, in line with estimates released in October. It ended the fourth quarter with a cash balance of $769 billion.The Treasury explained that the end-December cash balance was $19 billion higher than the October forecast due to other sources of financing such as the lower-than-estimated discount on marketable borrowing.”The Treasury has already built sufficient cash balance,” TD’s Goldberg said.”Now it’s a question of: to what extent the Treasury will be or will not be increasing auction sizes. I think the market is thinking, reading this report, that the Treasury can slow down the pace of auction size increases but I don’t know if that’s the right takeaway at this point.”The Treasury will announce its refunding news, which will outline the upcoming auction sizes for bill, notes and bonds, on Wednesday at 8:30 a.m. ET (1330 GMT). It will likely announce a final quarter of nominal coupon auction size increases as the government’s financing needs remain high.TD projects funding requirements to rise gradually to $1.85 trillion this year and $1.9 trillion next year, as it anticipates fiscal deficits increasing in the coming years.Thomas Simons, U.S. economist at Jefferies, wrote in a research note that he expects Treasury to announce a $121-billion package, higher than previous auctions. He anticipates $54 billion in three-year notes, $42 billion in 10-year debt and $25 billion in 30-year bonds. The auctions, he said, will take place on Tuesday, Wednesday and Thursday next week. More

By Brendan Pierson(Reuters) – Bayer (OTC:BAYRY) was ordered on Friday to pay $2.25 billion to a Pennsylvania man who said he developed cancer from exposure to the company’s Roundup weedkiller, the man’s attorneys said.A jury in the Philadelphia Court of Common Pleas found that John McKivison’s non-Hodgkins lymphoma was the result of using Roundup for yard work at his house for a period of several years. The verdict includes $250 million in compensatory damages and $2 billion in punitive damages.”The jury’s punitive damages award sends a clear message that this multi-national corporation needs top to bottom change,” Tom Kline and Jason Itkin, McKivison’s attorneys, said in a joint statement.Bayer in a statement said it disagreed “with the jury’s adverse verdict that conflicts with the overwhelming weight of scientific evidence and worldwide regulatory and scientific assessments, and believe that we have strong arguments on appeal to get this verdict overturned and the unconstitutionally excessive damage award eliminated or reduced.”Bayer added that some previous damages awards had been reduced by more than 90 percent.The verdict comes after five other recent wins late last year by plaintiffs suing Bayer over Roundup, though the company won the most recent such trial in December, as well as a string of earlier trials. In all, it has won 10 of the last 16 Roundup trials.Around 165,000 claims have been made in the U.S. against the company for personal injuries allegedly caused by Roundup, which Bayer acquired as part of its $63 billion purchase of U.S. agrochemical company Monsanto (NYSE:MON) in 2018. Most plaintiffs, like McKivison, allege that the product caused them to develop non-Hodgkins lymphoma.Bayer has said that decades of studies have shown Roundup and its active ingredient, glyphosate, are safe for human use.Roundup is among the most widely used weedkillers in the United States, though the company phased out its sales for home use last year.In 2020, Bayer settled most of the then-pending Roundup cases for up to $9.6 billion but failed to get a settlement covering future cases. More than 50,000 claims remain pending.Last year’s string of losses produced verdicts against the company totaling more than $2 billion. Bayer is appealing those verdicts, which include large punitive damages awards that are likely to be reduced because they exceed U.S. Supreme Court guidance.The losses had led some investors to question Bayer’s legal strategy in defending the Roundup cases. The company said in November that it would continue fighting the cases in court and had “no appetite to write humongous checks” to settle them.The company had even considered a plan to break off its crop science business, in part due to concerns about Roundup liability, though it said earlier this month that it was putting those plans aside for now and focusing on internal reorganization.More Roundup trials are expected later this year. More

PARIS (Reuters) -Renault on Monday ditched plans to list its electric vehicle business Ampere because of sluggish stock market conditions.In September, Luca de Meo, CEO of both the Renault (EPA:RENA) Group and Ampere, said the IPO could be worth up to 10 billion euros.EV demand in Europe has weakened and the region’s carmakers face stiff competition from Chinese rivals.The IPO sought to extract more value from the business by giving Ampere more visibility and separating it from the combustion engine business, called Horse.Renault emphasised it had enough cash to do without the IPO.”Today, we took a pragmatic decision. We are all focused on executing our strategy and building our track record to create value for all our stakeholders,” said de Meo.In a statement the Renault Group said it would continue to fund the development of Ampere until it reaches break-even in 2025.”Renault Group strategic plan, Renaulution, is self-funded and the results which will be released for 2023 confirm the group’s ability to generate sustainable cash flow to finance its future (including Ampere development),” the statement added.”Considering both current equity market conditions and stronger cash generation, Renault Group has decided to cancel the Ampere IPO process.”In 2022, the company announced its intention to proceed with an IPO for Ampere in the first half of 2024 but said in late 2023 that it would not go ahead if the valuation was too low.In December, Renault’s longstanding alliance partners Nissan (OTC:NSANY) and Mitsubishi confirmed plans to invest in Ampere.Renault reiterated on Monday that these companies were interested in investing in Ampere even if the company did not proceed with an IPO.Chip maker Qualcomm (NASDAQ:QCOM) was also expected to invest in Ampere but its investment hinged on the IPO taking place. “We’ll have to discuss with them if they want to participate in some other shape or form, or if we keep it the way it is,” Renault’s CFO Thierry Pieton told journalists on a conference call. Reuters reported in November that weaker EV demand, increased competition from China and market volatility were complicating Renault’s plans to list Ampere.The listing would have been a bright spot for the stock market after a poor 2023 due to rising interest rates. Last year’s IPO market had the lowest levels of activity since 2016, but bankers had hoped for a potential revival if borrowing rates started to fall. ($1 = 0.9249 euros) More