Aurelia Butler

In Latin America’s largest economy, the IPCA-15 consumer price index gained steam when compared to the 4.61% reading seen at the end of the previous month, but roughly matched the 5.01% forecast by economists polled by Reuters.That is likely to further back the central bank’s stance of cutting its benchmark interest rate at a pace of 50 basis points per meeting, despite government officials having suggested the bank could pick up the pace this year.The central bank delivered its second 50-basis-point cut in a row to 12.75% earlier this month and flagged further cuts of the same magnitude ahead as some of its board members remain cautious given economic activity and labor market resilience.Larger rate cuts would require substantial positive surprises in inflation, the central bank has said, and that is not what the mid-September figures showed.”These inflation data will have given ammunition to Copom’s hawks and support our view that the easing cycle will continue in 50bp steps until the middle of next year,” Capital Economics’ chief emerging markets economist, William Jackson, said.He expects the board to then shift to smaller 25-basis-point steps, taking the key Selic rate to 9.5% by the end of 2024.In the month to mid-September, according to IBGE, consumer prices in Brazil rose 0.35%, up from 0.28% in the previous month and slightly below the 0.38% increase projected in a Reuters poll.That was mainly driven by higher transportation costs as gasoline prices rose, the statistics agency said, while housing and personal expense costs also jumped. Lower food and beverage prices partially offset those increases, IBGE added. More

UBS has long been keen to grow its footprint in China that already includes a mutual fund joint venture and a private fund business, but earlier this year it appeared to scale back expansion plans due to headwinds to China’s economic recovery and geopolitical tensions.The banks will explore cooperation in asset management, wealth management, and investment and corporate banking, according to a UBS statement.The deal includes product development and distribution, client coverage, global market trading, investment and financing, research, asset custody and exchange of expertise.UBS completed an acquisition of its smaller cross-town rival Credit Suisse in June, through which it now holds a 20% stake in ICBC Credit Suisse Asset Management Company, a fund joint venture previously partially owned by Credit Suisse. Looming uncertainties of doing business in China have dampened the appetite of Western business, with an exit ban imposed on a senior executive of Japanese bank Nomura adding to the perceived risks. Earlier this year UBS announced it had shelved plans to set up a new fund unit in China and decided to maintain ownership in the ICBC fund joint venture.In the months since taking over its former rival, UBS also scrapped plans for Credit Suisse to set up a locally incorporated bank in China.UBS has also made significant job cuts in the region, letting go of the majority of Hong Kong-based investment banking staff and the securities research unit at Credit Suisse. More

The world’s largest package delivery company, which earns the largest chunk of its revenue during the fourth quarter that includes the festive season, said it was filling full- and part-time seasonal positions by across shifts in hundreds of locations across the country.Both UPS and rival FedEx Corp (NYSE:FDX) hire thousands of temporary workers each year to move more parcels between the months of October and January.Hiring at UPS comes against the backdrop of a new five-year contract, covering some 340,000 Teamsters-represented workers in the U.S., which would increase wage and benefit costs for the company.Last month, the Atlanta-based firm cut its full-year revenue and profitability targets, citing higher-than-expected labor costs as well as business lost during the tumultuous contract talks with Teamsters union.UPS executives said in August that customers shifted 1 million packages per day to other providers, resulting in about $200 million in lost sales. They estimated that roughly a third of that volume landed with FedEx.Analysts expect holiday sales to grow at a slower pace this year as high inflation eats into household budgets.A report from career consultancy firm Challenger, Gray & Christmas showed that weaker spending and increased labor costs would result in U.S. retailers hiring the lowest number of seasonal workers this year since 2008. More

In a bid to address these concerns, the RBI has outlined an eight-point charter aimed at improving UCBs’ governance standards and focusing on bad loan recovery. A significant part of this recovery strategy involves the top 20 defaulters who account for 60% of total overdue payments. The governor emphasized that loan recovery from these defaulters, many of whom run successful businesses, would considerably improve the sector’s asset quality profile.The protection of depositors’ money was another key point stressed by the RBI governor during Tuesday’s interaction. He referred to it as a “sacred duty” of every bank and highlighted the importance of democratic board discussions, warning against domination by one or two members.The RBI’s charter also calls for improvements in governance standards within UCBs. This includes enhancing board functionality, credit risk management, accounting transparency, liquidity management, and manpower optimization. Additionally, it requires improvements in IT systems and successful change management.While acknowledging that some banks have performed well in these areas, the central bank insists on sector-wide improvements. The governor reminded UCBs that financial sector stability is intrinsically linked to the performance of all banking institutions.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

According to the report, 2022 saw a 2.7% decline in private households’ global financial assets, the most severe drop since the Global Financial Crisis in 2008. The fall resulted in the loss of financial assets worth €6.6 trillion (€1 = $1.0608), with total financial assets amounting to €233 trillion at the end of 2022.There were variations across different asset classes. Securities and insurance/pensions experienced significant setbacks at -7.3% and -4.6% respectively, while bank deposits demonstrated robust growth at +6.0%.The decline was most pronounced in North America (-6.2%) and Western Europe (-4.8%). In contrast, Asia, excluding Japan, reported relatively strong growth rates despite the global downturn. China’s financial assets exhibited robust growth as well at 6.9%, although this was a slowdown compared to the previous year’s rate of +13.3% and the long-term average over the last 20 years (+15.9%). The report suggested repeated lockdowns contributed to this slower pace.The report also shed light on the situation in Australia and Malaysia. Australian households experienced a decline of -1.3% in gross financial assets in 2022; however, securities and bank deposits showed solid growth rates of 4.0% and 8.5% respectively. Malaysian households saw a slight increase in gross financial assets by 1.0% in 2022, with insurance/pension and bank deposits recording modest growth.Ludovic Subran, chief economist of Allianz, highlighted inflation as a significant challenge for savers. Michaela Grimm, co-author of the report, gave a mixed mid-term outlook, expecting average growth of financial assets to hover between 4% and 5% over the next three years amidst a volatile market environment.On the liabilities side, global private debt growth slowed to 5.7% in 2022 from 7.8% in 2021. The global debt-to-GDP ratio fell by more than 2pp to 66.1% in 2022, marking a return to levels seen at the start of the millennium.The report concluded with an expectation of global financial assets returning to growth in 2023, supported primarily by positive developments on the stock markets. However, it warned that savers should brace for another year of real losses on their financial assets given an anticipated global inflation rate of around 6% in 2023.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More