Aurelia Butler

Germany is pushing the European Commission to postpone tariffs on electric vehicle sales between the UK and the EU after industry warned that the measure would backfire.In a boost for Rishi Sunak’s government, Berlin now supports the UK’s calls for a three-year delay to the duties, two people familiar with the situation said.At present, Britain’s post-Brexit trade deal with the EU is set to impose 10 per cent levies on EVs shipped across the Channel from January if they have batteries made outside Europe.The German shift followed debate within the country’s three-party coalition, with chancellor Olaf Scholz taking the final decision. Brussels has refused to date to delay the tariffs, but, as the EU’s biggest member, Berlin has considerable influence with commission president Ursula von der Leyen, a former German defence minister.The commission said: “These rules of origin aim to support the EU’s strategic objective to develop a strong and resilient battery value chain in the EU.”Britain has maintained for months that hasty introduction of the tariffs will heap excessive costs on the region’s industry as it seeks to compete with Chinese EV manufacturers — arguments that big European carmakers have also backed. The UK is a key market for EU producers. ACEA, the European Automobile Manufacturers’ Association, has said EU carmakers will lose €4.3bn and cut production by almost 500,000 electric vehicles over the next three years if tariffs kick in. Von der Leyen will meet Sunak, Britain’s prime minister, to discuss the issue on the sidelines of the G20 summit in India this weekend. The two sides have already improved relations from the post-Brexit low point under Boris Johnson’s administration, with this week’s agreement for the UK to rejoin the Horizon research programme, but the commission is not united on whether to delay the duties.“The EU side can see it makes no sense to hobble the European car sector when Chinese EV imports are rising,” a UK official said, expressing hope that the EU “will agree to swerve before the cliff edge” but adding: “ultimately it is up to them”.The official described talks between Kemi Badenoch, UK trade secretary, and EU trade commissioner Valdis Dombrovskis as “productive”. But Dombrovskis is pushing for a deal against opposition from colleagues, three people familiar with his thinking said. Thierry Breton, the French internal market commissioner, and Maroš Šefčovič, who oversees both relations with the UK and the battery industry, are holding out against a deal.The two commissioners maintain that a postponement — which Brussels can decide upon — would reduce the incentive for battery makers to open plants in Europe.The Brexit trade deal’s “rules of origin” stipulate that, to avoid the duties due to begin in January, at least 60 per cent of their value of EVs’ batteries and 45 per cent of their overall parts must be sourced from the EU and the UK.But Chinese imports, which already pay the tariff, accounted for almost a third of new EV sales in the UK in 2022 and are growing fast. Sigrid de Vries, head of ACEA, called on the EU not to be “rigid” about rules when battery investment had been delayed by “reasons that were beyond everyone’s control” such as the pandemic. She added that the rules of origin would make it harder for EVs to be “affordable for people and small businesses to buy”.

Ford, which is investing €2bn to turn its Cologne factory in Germany into an EV plant and is reliant on exports to the UK market, is also among those opposing the plan.Martin Sander, the group’s European boss, said it was currently “almost impossible to hit the target to qualify for the rules of origin” — although he told the FT that “in the long run, the concept makes sense.”Sander said imposing the rules at present would drive up prices and “disadvantage customers, and does absolutely not support the overall ambition to bring the [electric vehicle] adoption up”. The German government and the European Commission have yet to respond to requests for comment. More

(Reuters) – Wall Street’s main indexes were set to open lower on Thursday as weaker-than-expected jobless claims data added to concerns about sticky inflation, while investors awaited comments from key Federal Reserve officials later in the day. Denting sentiment further, Apple (NASDAQ:AAPL) dropped 3.5% in premarket trading amid news that China has widened curbs on the use of iPhones by state employees, requiring staff at some central government agencies to stop using their mobile phones at work. Bloomberg on Thursday reported that China planned to broaden the iPhone ban to state firms and agencies.Shares of Apple suppliers including Skyworks Solutions (NASDAQ:SWKS), Qualcomm (NASDAQ:QCOM) and Qorvo (NASDAQ:QRVO) also slid between 2% and 3.1%. Stoking worries about interest rates staying elevated for longer, a Labor Department report showed the number of Americans filing for unemployment claims stood at 216,000 for the week ended Sept. 2, compared with estimates of 234,000 claims.”The number came in a little bit better than expected, so we see a little bit of a negative reaction to the futures,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “If you’re invested in stocks you want the economy to slow but not collapse, so any strength in the economy is going to lead people to believe that the Fed is going to possibly raise interest rate in September.”Traders’ bets on the Fed leaving interest rates unchanged in September stood at 91%, while their odds for a pause in the November meeting were at 51.6%, down from nearly 59% a week ago, according to the CME Group’s (NASDAQ:CME) FedWatch Tool. Wall Street’s three major stock indexes closed lower on Wednesday with the Nasdaq’s 1% loss leading declines after stronger-than-expected services sector data fueled concerns that persistent inflation could lead to interest rates staying higher for longer.Further denting sentiment, data showed China’s exports and imports fell in August, with sagging overseas demand and weak consumer spending hitting businesses in the world’s second-largest economy.Shares of U.S.-listed Chinese firms including PDD Holdings, JD (NASDAQ:JD).com, Baidu (NASDAQ:BIDU) and Alibaba (NYSE:BABA) fell between 3.2% and 4.2%. Investors await comments from at least six Fed speakers, including policy voting members Philadelphia Fed President Patrick Harker, Vice Chair and New York Fed President John Williams, due to speak later in the day.At 8:46 a.m. ET, Dow e-minis were down 85 points, or 0.25%, S&P 500 e-minis were down 32.5 points, or 0.73%, and Nasdaq 100 e-minis were down 191.5 points, or 1.24%.Automation software firm UiPath added 1.4% premarket on an upbeat annual revenue forecast after it topped estimates for second-quarter results.WestRock (NYSE:WRK) jumped 6.0% after European rival Smurfit Kappa disclosed it was in merger talks with the paper and packaging firm. More

“We have significant investments in Gabon and so far the coup has been very peaceful, the thinking has been very mature, normal life is going on … the assets are safe and everything is operating, which probably means it is a good coup,” Sanjeev Gupta, executive director of financial services at the AFC, said at the Reuters IMPACT climate conference in London. The Lagos-based AFC is a pan-African multilateral development institution, with nine members, mostly from western African states. It is 42.5%-owned by Nigeria’s central bank, 47.6% by other African financial institutions and 9.8% by industrial and corporate shareholders, according to its website.In West and Central Africa’s eighth coup in three years, army officers led by General Brice Oligui Nguema seized power on Aug. 30, minutes after an announcement that President Ali Bongo had won an election they annulled and said was not credible.Nguema was sworn in as interim president and cheered by jubilant supporters on Monday in a televised ceremony designed to cast the military as liberators of an oppressed society.Unlike Niger, Gabon has not seen an outpouring of anti-French, pro-Russian sentiment, and the generals in charge in Libreville have appeared open to dialogue with international organisations.Gupta said the AFC’s staff remained on the ground in Gabon and had reported that financial systems and other public services were operating smoothly. More

NEW YORK (Reuters) -Wealthy clients going to a Morgan Stanley financial adviser to discuss their investments may have a different sort of experience in the future: having a chatbot listen to their conversation.After testing it with 1,000 financial advisers for some months, the bank will roll out a generative artificial intelligence bot this month, developed with the makers of ChatGPT, OpenAI. Bankers can use the virtual assistant to quickly find research or forms instead of sifting through hundreds of thousands of documents.The bank is also developing technology which eventually, with clients’ permission, could create a meeting summary of the conversation, draft a follow-up email suggesting next steps, update the bank’s sales database, schedule a follow-up appointment, and learn how to help advisers manage clients’ finances on areas such as taxes, retirement savings and inheritances. The details of the program have not yet been reported. “The impact (of AI) will be very significant,” potentially comparable to the advent of the internet, said Sal Cucchiara, Morgan Stanley’s chief information officer of wealth and investment management, who is among the executives driving the bank’s push into AI. Cucchiara, tasked with constantly scanning Silicon Valley for potential tech vendors, met OpenAI executives in 2022, before fast-growing app ChatGPT got mainstream usage. “It quickly became clear we needed to partner with them, they were far ahead of everybody else,” he said. Andy Saperstein, Morgan Stanley’s co-president and head of wealth management, then flew to California to discuss a partnership with OpenAI CEO Sam Altman and Boris Power, a technical staff member at the company. They signed a deal last summer in which Morgan Stanley has preferred access in product development for wealth management. Executives from the two companies celebrated over a dinner hosted by Saperstein, a candidate to become the bank’s next CEO. OpenAI declined to comment.While the bot will give insights and administrative support to financial advisers, investment advice will remain the purview of humans.”The adviser is still at the center,” said Cucchiara. For now, employees view the technology as a helpful tool and aren’t worried that they’ll be replaced by bots, he said.WEALTH RACEThe AI initiative is part of Morgan Stanley’s strategy to drive its wealth division, where net revenue surged 16% to a record in the second quarter and new client assets grew $90 billion. CEO James Gorman, who has spearheaded a series of major deals that funneled more money into the wealth business, aims to reach $10 trillion in assets under management.Morgan Stanley is not alone in its AI efforts. While banks already use AI to crunch numbers, detect fraud and analyze customer transactions, Wall Street giants are developing more sophisticated uses of generative AI that is capable of generating text, images and other data. JPMorgan Chase (NYSE:JPM) named Teresa Heitsenrether its chief data and analytics officer in June to lead AI adoption across the largest U.S. lender. Rival Bank of America’s virtual assistant, Erica, has had more than a billion interactions with clients since it was introduced in 2018.Elsewhere, Moody’s (NYSE:MCO) Analytics is also working with OpenAI and Microsoft (NASDAQ:MSFT) to develop a research assistant that can be used by clients, said Nick Reed, its chief product officer. Large banks are the most advanced among financial firms in their adoption of AI, but asset managers, traders and insurers are also deploying it, said Michael Abbott, global banking lead at consulting firm Accenture (NYSE:ACN). “We’re beginning to see customer services led by artificial intelligence spread among the largest banks,” said Abbott, who is working on hundreds of case studies with lenders looking to use AI. More

LONDON (Reuters) – World stocks slid for a third straight day on Thursday with Europe facing its worst run in five years, as new signs of sustained inflationary pressures and rising energy prices boosted the case for higher-for-longer interest rates.The U.S. dollar was loitering close to its highest point since March against major peers, and touched a fresh 10-month top versus the Japanese yen, the traditional global funding currency where interest rates remain ultra-low.Blistering-hot Institute for Supply Management (ISM) figures on Wednesday, at their strongest level since February, bolstered bets that the Federal Reserve could lift interest rates again before the end of the year.Long-term Treasury yields hovered at a two-week high of nearly 4.28% and close to last month’s post-financial crisis highs. In contrast, German industrial numbers on Thursday were weak, showing the growing divide in fortunes. German bund yields shuffled down to 2.63%, although they too were near two-week highs following talk from a number of ECB policymakers in recent days about raising rates again next week. “The U.S. ISM services number was just amazing really. I felt like ringing them up and asking them to check it,” Robert Alster, chief investment officer at Close Brothers Asset Management, said.”The strength of the U.S. economy is just incredible – so this whole elongated theory (about rates staying higher for longer) has been given legs,” he added, saying that the German data had pointed to a “serious slowdown” there. Brent crude also stayed above $90 a barrel amid tightening supply, adding to inflation worries.MSCI’s broadest index of world stocks was down for a third day although Europe’s STOXX 600 index was down for a seventh in a row which if it finishes that way would mark its longest slide since February 2018. With a number of Fed policymakers speaking later, U.S. S&P 500 stock futures pointed to another 0.4% drop when New York resumes while Asia-Pacific shares had also spent a third day in reverse.Hong Kong’s Hang Seng and an index of mainland Chinese blue chips each dropped around 1.3%. Australia’s benchmark lost 1.2% while Japan’s Nikkei fell 0.75%, which snapped an eight-session winning streak.DOLLAR HIGHSWall Street stocks had also sold off on Wednesday after U.S. data showed the services sector unexpectedly picked up steam in August, suggesting stubborn inflationary forces.Traders are still fairly certain that the Federal Reserve will forego a rate increase this month, they put the risk of one by year-end at closer to a coin toss. A rate cut is now not expected until June.”The data doesn’t flip the script, but it shows the war against inflation hasn’t been won,” said Kyle Rodda, senior financial markets analyst at Capital.com in Melbourne.”It all goes back to the discussion of where that magical neutral rate happens to be,” he said. “While the markets are still feeling around for where that rate may be, it’s going to weigh on equities and support the U.S. dollar.”The dollar index – which measures the currency against six developed-market peers, including the yen and euro – ticked up 0.07% to 104.93. It jumped to the highest since March 15 on Wednesday at 105.03.The dollar earlier reached its strongest level since Nov. 4 versus the yen at 147.875. The currency pair tends to move in step with long-term Treasury yields, which stood at 4.29% on Thursday after pushing to their highest since Aug. 23 at 4.306% in the previous session.”If we get another cycle high in Treasury yields you fear (we) could see another spike in the dollar,” Societe Generale (OTC:SCGLY) strategist Kit Juckes said. “I look at it and think just don’t get in the way.” The euro, meanwhile, dropped 0.1% to $1.0716, following its dip to a three-month trough of $1.0703 on Wednesday.Elsewhere, the People’s Bank of China continued its bid to shore up the yuan by again setting strong official midpoints for the currency.Despite those efforts, the yuan continues to hover on the weaker side of the closely watched 7.3 per dollar level in offshore trading, last changing hands at 7.3332. It sank to the lowest since early November at 7.3490 in the middle of last month, undercut by a rapidly deteriorating property sector and the risk of spillover into broader markets.China trade data released on Thursday, while not as dire as economists predicted, still showed a nearly 9% slide in exports and a more than 7% drop for imports.The Australian dollar, which often trades as a proxy for China, its top trading partner, eased 0.26% to $0.6366, keeping it close to this week’s 10-month low.Brent crude futures fell 24 cents to $90.36 a barrel, after a nine-session winning streak. U.S. West Texas Intermediate crude (WTI) futures fell 29 cents to $87.25 after a seven-session gain. [O/R] More