Aurelia Butler

This article is an on-site version of our Moral Money newsletter. Sign up here to get the newsletter sent straight to your inbox.Visit our Moral Money hub for all the latest ESG news, opinion and analysis from around the FT Happy new year to all our readers. Still stuffed with festive chocolate, we’re gearing up for what looks set to be a hugely busy year for anyone tracking environmental and social issues in business and finance. For much of the past few years, the agenda on this front has been driven by voluntary action from companies. Now, regulation and government policy are starting to kick into gear, moving this story into a pivotal new chapter.Here are five key themes that we think you need to be on the lookout for in 2024. Are there other stories that you think deserve close attention? Let us know at [email protected], or just reply to this email. — Simon Mundy1. A scramble for supply chain disclosuresThis will be the year when companies get serious about assessing environmental and social risks in their supply chains.A number of looming regulations over scope 3 emissions — those linked to a company’s suppliers or the use of its products — have sent companies scrambling to respond.From 2025, larger companies operating in the EU will be required to disclose their scope 3 emissions. California recently announced that large companies operating in the biggest US state economy will need to do the same from 2027. The International Sustainability Standards Board, whose standards are set to be used or referenced by regulators around the world, includes a clear requirement for scope 3 disclosures. Authorities in the US and UK are also considering introducing national scope 3 reporting rules.It’s not just carbon emissions that companies will need to track more closely. Last month, EU officials reached an agreement on the bloc’s new Corporate Sustainability Due Diligence Directive, which requires companies to report on global supply chain risks related to human rights and the environment. The full details of the CSDDD are to be agreed this year.Financial companies have been excluded — for now — from the full scope of the CSDDD’s requirements, after an intense lobbying campaign. Various companies have also been pushing to dilute or kill off scope 3 requirements in California and elsewhere. But the trend towards much more rigorous supply chain disclosure requirements seems clear. (Simon Mundy)2. Carbon pricing set to gather momentumEconomists have been saying for decades that an international carbon pricing regime is vital to tackle climate change — and it was eight years ago that Nobel laureate William Nordhaus offered the “climate club” model, in which countries would agree to apply a minimum carbon price and tax imports from nations that didn’t do so.This year, we’ll see whether a global climate club is finally taking shape. The EU has been the first mover here. Since 2005, it has been selling carbon permits to companies in high-emitting sectors such as steelmaking and cement production. In October, it began the first stage of introducing a “carbon border adjustment mechanism”, under which the EU will charge a corresponding levy on imports of those products from countries without an equivalent carbon price.Nordhaus hypothesised that once the climate club was up and running, countries would be incentivised to join by introducing their own carbon pricing systems. That dynamic is starting to play out. Last year, Turkey announced plans to create an emissions trading scheme for heavy industry, similar to the one operating in the EU. The UK, which already has a trading scheme, last month announced plans for a CBAM of its own.The EU’s move has also sparked discussions among US politicians on how to respond. While some have urged retaliatory trade measures against imports from the EU, others — such as former Republican congressman Francis Rooney — argue that a new national carbon fee and CBAM would help both US industry and the federal budget. The bipartisan “Prove It” bill, which will be discussed by legislators this year, would lay the groundwork for such a policy.But the EU’s policy has sparked strong pushback in developing nations such as India, which have relatively carbon-intensive energy systems. Critics say the policy’s impact on these countries will run counter to principles of climate justice.If rich nations’ carbon pricing policies are not accompanied by more ambitious measures on international climate finance, this could become an increasingly serious source of tension. (Simon Mundy)3. ESG backlash evolves into DEI attacks In the US, most state legislatures convene for only a few months of the year, and fresh lawmaking sessions typically begin in January. For the past two years, Republican-led states have attacked environmental, social and governance investing to protect local oil and gas businesses, or simply to spite green-minded Democrats.Some of these ESG attacks are expected to continue. On December 18, Tennessee’s attorney-general sued BlackRock for alleged ESG malfeasance. But there is evidence that Republicans will shift their attacks from environmental “E” concerns to the “S” part of the acronym. This week a Texas law went into effect that bans state universities from maintaining diversity, equity and inclusion (DEI) departments. Among other things, the law halts programmes and activities to promote issues around race, ethnicity or gender identity.It is unclear how powerful the law will be and how it will be enforced. For example, the University of Texas in Dallas renamed its DEI office the “office of campus resources and support”.Other states are making plans for anti-DEI bills. The governor of Utah said on December 20 that he wanted to pass legislation that would stop universities from requiring “diversity statements” as part of the hiring process. Oklahoma’s governor in December issued an order to stop DEI efforts at state agencies.How these DEI attacks will affect companies remains an open question. A handful of asset managers and banks have been boycotted in Republican states owing to ESG allegations. But if these DEI attacks accelerate, companies could soon find themselves in trouble in the “S” category as well as the “E”. (Patrick Temple-West)4. A crunch year for climate financeAt last month’s COP28 climate summit in Dubai, the push for an agreement to move away from fossil fuels dominated the headlines. At this year’s COP29 in Azerbaijan, international climate finance will take centre stage. The burning question here is how to mobilise capital for green investment in the developing world — both to deal with the effects of climate change, and for low-carbon development. There is a colossal amount of work to do. For green energy finance, watch to see what comes from the World Bank and other big multilateral lenders such as the Asian Development Bank, which are working to make more aggressive use of their balance sheets, show a clearer focus on climate-related projects, and do a better job of “crowding in” private-sector investment. Multilateral lenders such as the World Bank and its president Ajay Banga, right, are working show a clearer focus on climate-related projects More

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NEW YORK (Reuters) – Loretta Day was facing a financial emergency.The Delta Air Lines (NYSE:DAL) flight attendant’s daughter was moving apartments and needed quick cash for a deposit – but did not have enough in savings.In the old days, the Atlanta resident might have put it all on credit cards at high interest rates. But this time, Day had an emergency savings plan set up at her workplace by money managers Fidelity Investments.Day transferred $850, her daughter moved into her new apartment – and she immediately started building those emergency savings back up, with $50 from each paycheck, along with some additional matching funds from Delta.“I didn’t have to worry about how I was going to do this,” says Day, who originally started out at the airline as a baggage handler. “When my daughter needed me financially, I was there for her.”The Fidelity initiative, called “Goal Booster,” is part of a wider and growing trend of workplace emergency savings programs – which can be used not only for unexpected expenses like medical bills or car repairs – but potentially for other near-term goals like saving up for a vacation or a down payment on a home.Many of us, left to our own devices, do not have enough savings to cover times of crisis. Almost four in 10 Americans would not be able to come up with $400, according to the Federal Reserve’s Economic Well-Being of U.S. Households report.But when emergency savings are addressed through the workplace – such as through small, regular paycheck deductions, and perhaps boosted with employer contributions – it is more likely that we will be successful.“A few years ago, the idea of offering emergency savings through the workplace was not widespread at all,” says Jason Ewas, a policy manager for the Aspen Institute’s Financial Security Program. “But now there is definitely increased adoption, and momentum is building.”Sometimes these emergency savings programs are tied to a company’s 401(k), so-called ‘in-plan’ accounts, such as that offered by delivery giant UPS. Or sometimes they are ‘out-of-plan’ savings accounts, increasingly offered as part of companies’ employee benefits menus, from providers like SecureSave or Sunny Day Fund.Major employers who have rolled out the Fidelity program include Starbucks (NASDAQ:SBUX), with Whole Foods launching its own soon. Since integrating payroll deductions in September, Fidelity has signed up 10 large employers to roll out that option by the beginning of 2024, with another 20 projected by the end of the year.“We start with a default goal of $1,000, which translates to around $20 a week,” says Emily Kolle, vice president of Fidelity’s Goal Booster program. “Employees can take the number down or take it up, but it’s an easy place to begin, since the idea of saving three to six months’ worth of expenses can seem daunting.”The average account on the platform has about $1,000 in savings, Kolle says.Meanwhile, SecureSave, co-founded by famed personal finance guru Suze Orman, has also made major strides. Currently, it works with 60 employers and 38,000 employees, at organizations like Humana (NYSE:HUM) and the San Antonio Spurs.Around 90% of its companies offer financial incentives to their employees for participating – such as signup bonuses, per-paycheck matches, or milestone awards for reaching certain savings thresholds.WHY IT MAKES SENSEThe advantages of employee emergency savings are multiple: First, that they will not raid their own retirement accounts in times of crisis. As it stands, 2.4% of employees took hardship withdrawals from their 401(k)s in 2022, according to Fidelity – a record high, which could set back your retirement goals by years.Another advantage of having emergency cash on hand is financial and emotional well-being. An employee who is overwhelmed with sudden expenses is stressed-out, distracted, less productive, and more prone to absenteeism – which harms not only the individual and their families, but the company as well.One new factor that could supercharge emergency savings: The federal SECURE 2.0 Act. Beginning this year, it allows for automatic enrollment for in-plan programs (albeit with a cap of $2,500), which makes the process frictionless and could massively boost the number of savers out there. Currently out-of-plan programs are more widely available, since they do not require any link to an employer 401(k).As for Delta’s Loretta Day, she has already been able to replace the money she took out for her daughter, and then some.“I feel proud of myself, because in the event another emergency happens, guess what? I have money,” Day says. More

WASHINGTON (Reuters) – Precisely when the Federal Reserve will start cutting interest rates stands as the big unknown for markets and economists as 2024 kicks off, and fresh details about its pivot in that direction may emerge from Wednesday’s readout of the last policy meeting of 2023. Fed officials at their meeting in mid-December held the policy interest rate steady in the range of 5.25% to 5.5%, but issued projections showing most officials expect it would need to fall over the year by at least three quarters of a percentage point as inflation steadily declined to the Fed’s 2% target.But the year-end projections leave the timing about any initial rate cut in doubt, and Fed Chair Jerome Powell at his press conference following the meeting insisted that was not yet a live topic of discussion. Investors eager to see the Fed move swiftly to bring down borrowing costs now broadly expect a first rate cut in March, market pricing of contracts tied to the Fed policy rate shows. Economists on balance see the Fed holding off until closer to mid-year.Minutes of the Dec. 12-13 meeting, scheduled for release at 2 p.m. EST (1900 GMT), may give insight on just how close officials feel they are to the point where monetary policy needs to be less restrictive in order to keep a hoped-for “soft landing” on track, with inflation continuing to fall without a major blow to the job market.”The directionality for the Fed is clear as falling inflation is pushing it toward a rate cut,” wrote SGH Macro Advisors Chief U.S. Economist Tim Duy, who noted that the combination of slowing inflation and a steady federal funds rate means that monetary policy is in effect becoming more restrictive even as inflation eases and employment growth is expected to slow.Though he said the minutes are “unlikely to directly point” to the March rate cut currently expected by investors, “I suspect they will reveal the Fed becoming increasingly confident that inflation is on a path to price stability.”In fact data issued since the Fed’s meeting, and effectively anticipated by policymakers at their Dec. 12-13 session, took a strong turn in that direction.The headline personal consumption expenditures price index for November fell; excluding volatile food and energy costs the “core” rate of inflation rose less than 1% on an annualized basis. Over the six months from June through November, a time frame Fed officials have pointed to as helpful in shaping their policy debate, core PCE inflation has been slightly below the 2% target – a fact some analysts note may push the Fed towards rate reductions sooner than later.Powell noted at his last press conference that rates would need to fall before inflation returns to the 2% target because otherwise “it’d be too late,” and policy would be more restrictive – and the risks to the job market greater – than necessary.In an analysis of Fed policy scenarios for the year, Deutsche Bank economists said they felt as a baseline the Fed would begin reducing rates in June, but that if inflation data is weaker than expected “a first rate cut as early as March would be reasonable.”Investors in contracts tied to the Fed’s policy rate currently put about an 80% probability on a March cut, according to data from the CME Group’s (NASDAQ:CME) FedWatch tool, with the Fed ultimately cutting the rate 1.5 percentage points by the end of the year – twice what Fed policymakers anticipate.Upcoming jobs and inflation data will shape the eventual outcome, with new job openings data also released Wednesday, a December employment report due Friday, and December consumer inflation data out next week.The Fed next meets on Jan. 30-31. More

Brad Setser is a senior fellow at the Council on Foreign Relations and a former Treasury Department official. Theo Maret is a research analyst at Global Sovereign Advisory and writes a sovereign debt newsletter.When Zambia announced an agreement with bondholders to restructure its three outstanding Eurobonds, many thought the G20’s Common Framework would finally be able to notch its first major success. Whoops.Alas, the deal was rejected several times by the official sector and the way forward is now unclear. Bondholders are irate. At the heart of the intra-creditor skirmish lies the thorny question of what constitutes comparable treatment for different creditors. Comparability has been the longstanding norm linking the treatments of official and commercial claims. But the assessment is now complicated by a fragmented creditor landscape, limited transparency about the stock of official claims and a lack of trust in existing methodologies, which have grown rusty in the absence of regular use prior to the pandemic. Let’s dive in. Comparability 101Any bond restructuring for Zambia must pass two tests: it must meet the IMF program targets, and it must be judged to be comparable with the complicated deal Zambia reached with its official creditors back in late June.IMF targets include indicators derived from the Fund’s debt sustainability analysis — for Zambia, external-debt-to-exports and external-debt-service-to-revenue ratios — as well as the closing of balance-of-payments financing gaps for each year of the IMF program.Comparability of treatment is the idea that the terms of the private bank and bond restructurings should be “comparable” to the terms of the restructuring of official bilateral creditors, ie loans made by other governments and government-backed export credit agencies.To assess comparability, the Paris Club uses three different formulas: nominal debt service relief over the IMF program period, extension of the duration of the claims, and reduction of the debt stock in present-value terms (see this World Bank note for more details). Official creditors then make a judgment based on the three comparisons.The inclusion of China among official creditors has generated pressure to firm up the comparability requirement. China isn’t keen to subsidise private bondholders which it considers have gotten too sweet deals in the past (private creditors notably did not participate in the 2020 G-20 Debt Service Suspension Initiative). At the same time, traditional bilateral lenders aren’t keen to subsidise Chinese lending that is sometimes perceived as . . . reckless.Making sense of what happened in ZambiaZambia’s debt stock is complex, with a mix of official creditors — the largest being the Export-Import Bank of China with over $4bn owed — another $3.85bn in Eurobond claims, and about $3.5bn owed to commercial banks, including large Chinese state banks. There’s also $2.7bn in non-resident holdings of local currency bonds, excluded from the restructuring but counted as external debt by the IMF.Virtually every substantive issue possible in a restructuring is thus on the agenda (zoomable version).© IMFAll the theoretical considerations about IMF targets and comparability became very real for Zambia when the IMF and official creditors — notably China — in November rejected a bond deal that provided a roughly equal NPV haircut to the official sector deal, but differed on other dimensions.The IMF’s objections, luckily, were narrow — Zambia and bondholders agreed to make the adjustments needed in an updated deal. Yet even with the adjustment, the Official Creditor Committee (OCC) did not bless the deal.Bondholders have provided a table showing how their proposed deal scores on the three comparability criteria. The OCC did not push back on the below numbers, so we’ll take them at face value (pun intended). NB, it’s been reported that a third version of the deal was presented by the country to official creditors, and rejected again, but no details have publicly emerged, and we understand it is close to these last public figures (zoomable version).The table shows that bondholders have a strong preference for short-term cash flows, and thus the debate becomes how much additional present-value reduction is needed to compensate for more upfront cash — the 1 percentage point embedded in the base scenario is apparently not enough for the Paris Club and China.This stalemate illustrates the main issue with the current implementation of comparability: it’s ultimately a subjective judgment, making it impossible to know in advance how concessions on one dimension need to balance with greater effort on others. No one knows for sure how to trade NPV for upfront cash: per Zambia’s statement there is not even consensus among members of the Official Creditor Committee on this critical issue, arguably the result of having new players like China at the table. Bondholders understandably aren’t keen on continuing a FAFO “try and see” back-and-forth with the official sector, arguing that the official sector is intervening in their own negotiations with the country.To add additional intrigue, Bloomberg reported that China obtained approval from the authorities in Beijing to sign off on the June deal based on indicative terms for bondholders that were substantially harsher — 10 percentage points of additional present-value reduction — thinking these terms were final. The bondholders weren’t told about this until later. Other bilateral creditors have suggested a roughly 5 percentage points difference in present-value reduction between the official creditors and bondholders would work.What is the price of a haircut?One argument raised by bondholders is that their principal haircut should be taken into account when assessing comparability, in effect adding a fourth substantive indicator.However, the argument only really gains political merit when the face value of the new debt instruments is being reduced below its level at the time the country first got into trouble. Zambia’s restructuring process has been exceptionally slow. Accumulated past due interest (PDI) has added enough to the bondholders’ legal claim that the face value of the new bonds is set to be higher than that of the old ones, even after the proposed haircut.Bondholders are not alone: official creditors have also accumulated past due interest, yet they have not properly disclosed the size of their claims pre- and post-restructuring — it would help if they were more transparent. To be sure, PDI is a contractual right, and bondholders weren’t responsible for the lag between Zambia’s default and the start of real negotiations — they would rather have had performing bonds than a growing legal claim. Proposals to scrap PDI altogether go too far; a better approach would respect contractual claims without allowing the rise in claims to pull up estimates of what the country actually can pay.The classification of Chinese claims comes back to biteZambia faces another complexity. The contemplated bond treatment would apparently not leave enough cash flows within the IMF envelope if other commercial creditors were to take the same deal. As a Paris Club official told Reuters:If bondholders’ debt relief fell short of expectations, that also raised questions about the effort that would be needed from other private creditors like banks and some Chinese institutions.IMF thresholds indeed are a zero-sum game: commercial creditors standing last in line might be required to do “more” than official creditors or bondholders to fill the restructuring envelope.Historically this was not much of a problem, but in Zambia’s case, China concluded that only China Ex-Im was an official creditor: in June 2023 $1.7bn in claims backed by China’s export credit agency — originally counted as official — were reclassified as commercial.In hindsight this policy choice created a bit of a mess: all the Chinese “commercial” claims are owed to state-owned entities, so it isn’t clear if China’s representatives on the OCC are protecting the interest of all Chinese state creditors or simply these of China’s designated official lenders. China’s decision is even backfiring, as its “commercial” banks cannot extract better terms than the Paris Club since comparability is enforced, while bondholders moving first can obtain better terms than Chinese banks without being subject to comparability with other commercial claims.The obvious fix for this procedural nightmare would be for China to put all the claims of entities controlled by the state in the official bucket and empower a single negotiator to represent the interest of all such entities — or even better, transfer all the distressed loans of its policy banks to a bad bank.What’s next?Bottom line, something will have to give. The official creditors should help sort out the immediate mess by clarifying how much present-value reduction is needed in exchange for bondholders getting the lion’s share of available cash upfront. Then, tweaks in the bond deal potentially could help get something close to the last agreement over the finish line.Creditors are taking advantage of the large amount of dollars that the IMF program leaves available in coming years: it allows Zambia to pay about $1bn a year in external debt service in 2024 and 2025, while net reserves are below $2bn and expected to remain under $2.5bn. This high debt servicing in fact corresponds to a surge in official inflows in 2024 and 2025. This should raise questions about future program design: using an increase in preferred debt (from the IMF and multilateral development banks) to allow private creditors to exit generates additional risks to both the Fund and the borrower down the road.But taking a step back, beyond jerry-rigged fixes for Zambia, the time is ripe for a rethink of how best to define comparability. There’s a trade-off between the need for clarity and simplicity — which a unique mathematical formula would provide — and the inherent political aspect of comparability, which has always reflected the specific constraints faced by major bilateral creditors.Right now though, with a broad sense of distrust across the board, there’s a clear need to shift towards the prioritisation of upfront clarity. In Zambia, official creditors agreed to a deal based on the assumption that other creditor groups would accept a significantly higher present-value reduction, and the bondholder deal would not work if other commercial creditors asked for a similar amount of upfront cash.Clarity should start with transparency about the overall scale of the effort needed and the amount of cash available for all creditor groups that are part of the restructuring.The core data needed for the calculations — NPV of claims, interest and amortisation by creditor group during the program, available foreign exchange for external debt service — should be in the actual financing tables of IMF staff reports (the best data currently comes from an outdated investor presentation). This would make it immediately clear if a creditor group was doing a deal that implied an asymmetric effort by other creditors.Some adjustments to the mathematical formulas might then be appropriate, dropping the duration extension (which is redundant) to focus on present-value reduction and the allocation of short-term cash flows. To limit the distorting effect of PDI and incentivise faster deals, the present-value reduction used for comparability could be calculated using either the original face value or the size of the claim at the time of an IMF staff level agreement as the denominator.Apportioning the available cash on the calculated stock, not claims due in the program period, would also makes sense in cases of deep distress. Trades that offer deeper haircuts for more front-loaded cash are in fact often good all around, but they need to be assessed against a clear baseline. Symmetric treatment of the stock inside the perimeter of the restructuring is an obvious choice.Such an approach would create a safe space for quick deals. Any creditor group that agrees to a deal that passes a basic test for maturity extension and does equiproportional (symmetric) NPV debt reduction for an equal share of the available cash flow would not need to wait for other creditor groups to approve the deal. They would of course want a chance to reopen their deal if the issuer and the IMF subsequently agreed to increase the size of the pie (through updates of program parameters, or with state contingent instruments).Of course, this new norm would also place an even bigger premium on the IMF’s ability to rapidly set out parameters ensuring a reasonable balance of effort between debt relief and fiscal adjustment. Squabbles over who gets the biggest slice of the pie are less important than getting the size or the flavour of the pie right: the real debate should be over the level of debt that the issuer can support, with and without state contingent features, not which creditor can score a better deal than others. More

1. Futures inch lowerU.S. stock futures edged down on Wednesday, as investors looked ahead to the release of minutes from the Federal Reserve’s latest policy meeting.By 05:09 ET (10:09 GMT), the Dow futures contract had dipped by 56 points or 0.2%, S&P 500 futures had shed 11 points or 0.2%, and Nasdaq 100 futures had fallen by 76 points or 0.4%.The benchmark S&P 500 and tech-heavy Nasdaq Composite both lost ground in the first day of trading of 2024, weighed down in part by ebbing hopes that the Fed will roll out interest rate cuts early this year. Meanwhile, the 30-stock Dow Jones Industrial Average gained just under 0.1%.In individual stocks, shares in Apple (NASDAQ:AAPL) sunk by around 4% after analysts at Barclays downgraded their rating of the iPhone maker, citing weak hardware demand and concerns over revenue at its services division. Nvidia (NASDAQ:NVDA), Google-parent Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) — who, along with Apple, form part of the so-called Magnificent Seven group of tech firms that helped drive a stellar 2023 for stocks — also declined.”The impressive rally into year[-]end has faded a bit despite the seasonal tailwinds, but we expect the loss of short[-]term momentum to be modest,” analysts at Fairlead Strategies said in a note to clients.2. U.S. Treasury yields climbAlso denting stocks on Tuesday was a rise in U.S. Treasury yields, in a possible sign that markets’ excitement over the prospect of Fed rate cuts early this year may be easing.The yield on the benchmark 10-year note — a key gauge of long-term estimates for borrowing costs — briefly touched an over two-week high, while the yield rate-sensitive 2-year also moved up. Prices typically fall as yields increase.At the end of 2023, the 10-year Treasury yield was under 3.9% following a strong rally to cap off the year that was driven by expectations for early Fed rate cuts and a so-called “soft landing” for the U.S. economy. In this scenario, the Fed’s aggressive rate hiking campaign successfully cools inflation without sparking a meltdown in the broader economy.Bolstered by the jump in Treasury yields, the U.S. dollar index, which tracks the greenback against a basket of its currency pairs, had its best daily performance since March 2023.3. Fed minutes aheadTraders are now turning their attention to the minutes from the Fed’s December gathering, which are due out at 19:00 GMT on Wednesday.How officials see borrowing costs evolving in the coming months could factor into the staying power of recent bets that the U.S. central bank will soon begin to bring down interest rates from a more than two-decade high.In December, the Fed left rates unaltered at a range of 5.25% to 5.50%, but signaled that its unprecedented tightening cycle aimed at corraling elevated inflation may have peaked. New forecasts from policymakers also suggested that they may slash rates by 75 basis points this year, an outlook that was more dovish than prior projections.Speculation over potential rate reductions fueled a late-year surge in stocks, although many officials have since attempted to temper this enthusiasm. The minutes could provide even more insight into the Fed’s thinking.4. Sales of Tesla’s China-made EVs surge in DecemberSales of Tesla’s electric vehicles (EVs) made in China surged by 68.7% on a yearly basis last month, new data from the China Passenger Car Association showed on Wednesday, although the U.S. carmaker still faces intense competition in the country.The December total, which includes exports, brought Tesla’s annual amount of China-made sales up to 947,742 — just over half of the company’s global deliveries.Tesla’s Shanghai plant is its largest production hub, supplying China and other countries like New Zealand and Australia. The group has outlined plans to expand its EV capacity at the factory, but the move has yet to receive regulatory approval from Beijing.The latest CPCA numbers come after China’s BYD (SZ:002594) unseated Tesla as the world’s biggest EV maker earlier this week. BYD, who offers both battery-only and hybrid options, delivered 341,043 passenger cars in December, an increase of 45% year-on-year.5. Oil slipsOil prices retreated Wednesday, ahead of the release of crucial weekly inventories data from the U.S., the world’s largest consumer.By 05:09 ET, the U.S. crude futures traded 0.6% lower at $69.94 a barrel, while the Brent contract dropped 0.5% to $75.53 per barrel.U.S. crude stockpiles from the American Petroleum Institute industry group are due later Wednesday, a day later than usual due to Monday’s New Year’s holiday. Official data will then be published on Thursday.The crude benchmarks had climbed sharply earlier in the week after attacks on vessels in the Red Sea by Houthi rebels raised concerns over potential supply disruptions through this key region. More