Aurelia Butler

Goodbye, July.Asian stocks could be in for a bumpy start to the week if they expect to outdo robust gains enjoyed the week prior, under the power of potential stimulus in China, Japan’s biggest-ever minimum wage hike and the flickering optimism that the global economy might avoid recession.Chinese stocks face the challenge of topping last week’s 4.5% gain in the CSI 300, the index’s biggest weekly jump since November. The week also saw the Hang Seng and the Nikkei 225 gaining 4.4% and 1.4%, respectively, while MSCI’s index of Asia Pacific shares outside of Japan advanced 2.5%.Markets were rocked at the tail-end of the week when the Bank of Japan took its first step away from its decades-long monetary stimulus policy, allowing interest rates more freedom to move in harmony with inflation and economic growth.The move coincided with a decision to implement Japan’s biggest minimum wage hike in history in an effort to jolt the world’s third largest economy out of the doldrums.Market participants are also scrutinizing the other side of the Sea of Japan for signs of life in the Chinese economy.On July 24, Beijing pledged to adjust its policies to jump-start the nation’s lackluster post-COVID recovery, a move which helped solidify the yuan’s near two-week high against the dollar, sent the CSI 300 leaping nearly 3% and the HSI surging 4.1%. In the coming week in the United States, second-quarter earnings season gallops along, and a spate of high profile results in the coming days are expected to shed additional light on the global demand picture, particularly as it relates to China.Megacaps Apple Inc (NASDAQ:AAPL) and Amazon.com (NASDAQ:AMZN), along with chipmaker Western Digital Corp (NASDAQ:WDC), construction and mining equipment manufacturer Caterpillar Inc (NYSE:CAT), globally ubiquitous coffee chain Starbucks Corp (NASDAQ:SBUX), and wireless tech firm Qualcomm (NASDAQ:QCOM) Inc are all on deck.Earnings from Marriott International (NASDAQ:MAR), MGM Resorts (NYSE:MGM) International and Host Hotels & Resorts (NASDAQ:HST) will help illuminate the state of global travel and tourism demand. Potentially market-moving U.S. indicators next week include manufacturing and services PMI. Beyond that, job openings, private payrolls, jobless claims and planned layoffs will set the stage for the closely watched July employment report on Friday. Here are key developments that could provide more direction to markets on Monday:- China’s Caixin manufacturing PMI expected- Japan to unveil consumer confidence, housing starts and unemployment data for June- Australia due to release July manufacturing PMI, June building approvals- South Korea on deck with July import/export growth report More

Good morning. On a visit to Beijing, France’s finance minister Bruno Le Maire has said new French automotive subsidies are “paving the way” for Europe’s car industry to withstand the threat of an influx of cheaper Chinese electric vehicle imports.Under a package of measures outlined in May to support green industries, the French government will only pay subsidies for new electric vehicles based on the emissions of their producers. That will hit manufacturers from China, where the industry relies on electricity largely powered by coal.European manufacturers are alarmed by Chinese advances in EVs, with the country taking the lead in battery production and its carmakers outselling western rivals in China’s domestic market. But Le Maire said he was “not concerned” about the threat to Europe’s carmakers from Chinese electric vehicle imports.“I think with our new legislative decisions, we pave the way in Europe for a less naive approach, taking into account the level of emissions of the industry,” he said. Read the full story.Related: The head of Europe’s largest car parts supplier Bosch has urged European governments to spend more time improving the competitiveness of the EU instead of focusing on the risks companies face doing business in China.Here’s what else I’m keeping tabs on today:Economic data: The EU publishes second-quarter growth and monthly inflation figures. The eurozone is expected to return to slight growth in the second quarter, while inflation among its members is set to keep falling in July. Results: First-quarter earnings reports are due from Mizuho Financial Group, Panasonic and Sumitomo Mitsui Financial Group. Five more top stories1. Two skyscrapers in Moscow’s premier business district have been damaged by drone strikes that sparked a fireball and left charred holes in the side of the buildings. Sunday’s attack marks at least the fifth time that unmanned aerial vehicles have reached Moscow since May. There was no immediate claim of responsibility from Ukraine. 2. Blackstone’s $68bn flagship property fund has gone from being one of the world’s biggest buyers of property to a large seller, as it raises liquidity to meet redemptions and invest billions in data centres to feed the artificial intelligence boom. Here are more details from an FT analysis of Blackstone’s securities filings. 3. French mining group Eramet has blamed a lack of EU funding for critical minerals for having pushed it into a deepening partnership with China’s Tsingshan, the world’s largest stainless steel producer, which was behind the nickel market blow-up last year. Here’s what the company told the FT about its partnership with the controversial Chinese group.4. A fundraising vehicle for Donald Trump’s presidential campaign spent more than $40mn on legal costs in the first half of the year, campaign finance filings are expected to show on Monday. News of the hefty legal bill comes as Trump’s team braces for more criminal charges against the former president.5. McKinsey chief Bob Sternfels has signalled he plans to run for a second term as managing partner as he rebuilds the consultancy after years of reputational crises and as the firm battles mounting economic and geopolitical challenges. Big US consultancies have come under huge pressure in China amid Beijing’s national security raids, but Sternfels said he remained committed to operating in the country.The Big Read

Workers adjust threads on one stage of the armouring process for undersea cables at Nexans © Nexans

The planned NeuConnect electricity cable will enable the UK and Germany to trade electricity directly for the first time, helping the two G7 economies phase out fossil fuels. But problems acquiring cables have delayed the £2.4bn project — and others like it — as the demand for the infrastructure outstrips supply. The shortages raise the question: will there be enough cables for the clean energy transition? We’re also reading . . . War in Ukraine: A new mobilisation law reveals that Vladimir Putin is preparing for an even bigger war in Ukraine. Working from home: From return to office demands to productivity levels, a lot of what we think we know about remote work is wrong, writes Pilita Clark. AI: The fact that giants such as Microsoft and Alphabet are dominating another wave of tech innovation points to deep dysfunction in the system, writes Ruchir Sharma.Chart of the day

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Many countries depend on India, the world’s largest rice exporter, for shipments of the staple. But amid rising food prices in India, prime minister Narendra Modi’s government recently banned exports of several rice varieties, sending shocks around the globe. Take a break from the newsLast week, a respected former US intelligence official told a congressional committee that, in effect, aliens exist. In this captivating essay, the FT’s Henry Mance looks at the evidence and asks: is it now OK to think seriously about aliens? More

Tinubu on June 9 suspended Godwin Emefiele, who was then detained by state security agents for allegedly misappropriating funds and a “criminal breach of trust.” Emefiele last week appeared in court to deny illegally possessing a firearm and ammunition.In a letter dated July 28, Tinubu appointed the chief executive of Nigeria’s Financial Reporting Council as special investigator of the Central Bank of Nigeria (CBN) and other government-owned entities.The letter said the investigator should make weekly reports to the president. “You are to investigate the CBN and related entities using a suitably experienced, competent and capable team and work with relevant security and anti-corruption agencies to deliver on this assignment,” Tinubu said.The investigator was to “provide a comprehensive report on public wealth currently in the hands of corrupt individuals and establishments.”A presidency source confirmed the authenticity of the letter.Tinubu’s spokesperson Dele Alake did not immediately comment.Tinubu has embarked on the country’s boldest reforms in decades, including removing a popular but costly fuel subsidy and lifting restrictions on foreign exchange trading, a gamble which he hopes will boost growth. More

Hello and welcome to the working week.There are few certainties in life, but there is little doubt that the Bank of England’s monetary policy committee will meet this Thursday and the expectation in the markets is that members will raise rates to a 15-year high. The question of by how much rests on a knife-edge however, with investors split almost equally on whether a 0.25 or a 0.5 percentage point increase is most likely. June’s sharp drop in UK inflation to 7.9 per cent (albeit still at a significantly higher rate than the country’s peers) has given succour to those backing the lower rate increase. Market pricing suggests that UK rates will now peak below 6 per cent. One thing everyone can agree on is that the battle to tame inflation around the world is far from over.The markets will also be watching the US employment update on Friday for signs of a cooling in the world’s largest economy. The US jobs market has remained tight despite the Fed’s monetary policy tightening measures. Last month’s data showed that total nonfarm payroll employment increased by 209,000 in June, while the unemployment rate was 3.6 per cent.Falling inflation in France has led to hopes that the ECB will halt its run of rate rises. This Monday will provide another data point for that debate as the EU second-quarter growth and monthly inflation figures for the bloc are published.The earnings season rush has yet to cool. Once again Big Tech is a big theme, this time with results from Apple and Amazon, both on Thursday. Like the rest of Big Tech, there’s a lot of focus on whether slowing growth can be reversed (or, in Apple’s case, an actual revenue contraction) with better profit margins being the bright spot — in Amazon’s case, helped by big job cuts earlier this year. Investors will be taking a keen interest in the performance of Amazon Web Services, where growth slowed to 16 per cent in the first quarter, from 29 per cent in all of 2022. Amazon said on its last earnings call that growth has slowed to only 11 per cent in April, and analysts are expecting 10 per cent AWS growth for the quarter as a whole.Apple is battling weaker consumer demand and tough comparisons with a strong quarter last year, expected to leave iPhone and iPad sales down, possibly by double digits. But steady services growth has contributed to improvements in Apple’s gross margin that mean earnings per share is likely to be pretty flat year on year, despite falling revenue, and Apple’s stock being close to its all-time high.Back to the certainties: it is a fairly safe bet that Monday will bring news of another British by-election. It is the closing date for the recall petition of Rutherglen and Hamilton West MP Margaret Ferrier, suspended from parliament for 30 days for speaking in the Commons while awaiting Covid test results during the 2020 lockdown. If more than 10 per cent of registered voters in the constituency sign the petition, a by-election will follow.What do you think? Email me at [email protected] or, if you are reading this from your inbox, hit reply.One more thing . . . This Sunday marks the 78th anniversary of the second world war atomic bombing in Hiroshima. It is a sombre reminder of the importance of assessing the legacy of J Robert Oppenheimer — not least by going to see Christopher Nolan’s powerful biopic — but also, as FT columnist Janan Ganesh notes, that of the US president at the time, Harry Truman.Key economic and company reportsHere is a more complete list of what to expect in terms of company reports and economic data this week.MondayEU: preliminary Q2 GDP and July inflation figuresResults: Bank of Ireland H1, Heineken H1, Mizuho Financial Group Q1, Panasonic Q1, Pearson H1, Spectris H1, Sumitomo Mitsui Financial Group Q1TuesdayGermany: July unemployment rateUK: Nationwide July House Price Index and British Retail Consortium July Shop Price IndexResults: AIG Q2, AMD Q2, BP Q2, Caterpillar Q2, DHL Group H1, Diageo FY, Electronic Arts Q1, Fresnillo H1, Greggs H1, HSBC H1, Man Group H1, Marriott International Q2, Metro Bank H1, Mitsui & Co Q1, Mitsubishi UFJ Financial Group Q1, Molson Coors Q2, Nomura Q1, Pfizer Q2, Pinterest Q2, Robert Walters H1, Smurfit Kappa H1, Starbucks Q3, Toyota Q1, Travis Perkins H1, Uber Q2, Weir Group H1WednesdayChinook Therapeutics special meeting of shareholders to vote on the proposed acquisition of the company by Novartis.Results: Albemarle Q2, BAE Systems H1, Bunge Q2, CVS Health Q2, DuPont Q2, Ferrari Q2, Ferrexpo H1, Haleon H1, Hugo Boss Q2, Kraft Heinz Q2, MGM Resorts Q2, PayPal Q2, Prudential Financial Q2, Qualcomm Q3, Taylor Wimpey H1, Virgin Money Q3 trading update, Yum Brands Q2ThursdayTurkey: July consumer price index (CPI) inflation rate dataUK: Bank of England’s monetary policy committee rate-setting meetingResults: Adecco Q2, Adidas H1, Amazon.com Q2, Anheuser-Busch InBev Q2, Airbnb Q2, Apple Q3, AXA H1, Cheniere Q2, ConocoPhillips Q2, DBS Q2, Expedia Q2, Hasbro Q2, ING Q2, Kellogg Q2, London Stock Exchange H1, Lufthansa Q2, MetLife Q2, Mitsubishi Q1, Next Q2 trading statement, Nintendo Q1, Pets at Home Q1 trading update, Rolls-Royce H1, Serco H1, Smith & Nephew Q2, Veolia H1, Warner Bros Discovery Q2, Wizz Air Q1FridayUS: July employment reportResults: AP Møller-Maersk Q2, Capita H1, Commerzbank Q2, Crédit Agricole H1, Dufry H1, Nippon Steel Q1, Royal London H1, Swiss Re H1, WPP H1World eventsFinally, here is a rundown of other events and milestones this week. MondayUK: closing date for the recall petition in the Rutherglen and Hamilton West constituency of Margaret Ferrier MP, who was excluded from the House of Commons for breaching Covid lockdown rules in September 2020US: alleged Russian intelligence officer Vadim Konoschenok is due to appear in a New York courtroom on charges of smuggling US-made electronics and ammunition to Russia to aid its war effort against UkraineTuesdayChina: Army Day, marking the founding of the Chinese People’s Liberation ArmyUK: reforms of the alcohol duty system come into effect, taxing all alcoholic drinks based on their alcohol by volume (ABV) and increasing draught beer tax relief. This will mean that the duty charged on a typical pint in pubs is in effect frozen and is lower than beer bought in the supermarketWednesdayEarth Overshoot Day, the date when humans begin living beyond their ecological means and move into the ecological equivalent of deficit spending, according to environmental research body Global Footprint NetworkPortugal: Pope begins a six-day visit of the predominantly Catholic countryUK: service of remembrance marking the 50th anniversary of the Summerland Fire Disaster, which killed 50 people at a holiday complex on the Isle of Man, the third worst loss of life from fire on land in the British Isles since the second world warThursdayUK: a two-day strike by GMB union members begins at Amazon’s Rugeley fulfilment centre in Staffordshire in a dispute over pay. Another two-day strike is planned at the ecommerce company’s Coventry warehouse tomorrow by up to 1,000 staff, which the GMB says will be the biggest day of industrial disruption in the tech company’s historyFridayUK: the annual Edinburgh International Festival and the neighbouring Fringe Festival begin in the Scottish capital, running until August 27SaturdayFrance: Open Water Swimming World Cup contest begins on the River Seine as a foretaste of sporting events to be run in next summer’s Paris OlympicsUK: National Eisteddfod of Wales begins, running until August 12. In England, the five-day flat horseracing event Glorious Goodwood concludes with the Stewards’ Cup DaySundayJapan/US: 78th anniversary of the atomic bomb being dropped on Hiroshima at the end of the second world war More

FRANKFURT (Reuters) – Latest data about economic output in France, Germany and Spain is “quite encouraging” and confirms the European Central Bank’s expectations, ECB President Christine Lagarde said in an interview published on Sunday. “The second quarter GDP figures for France, Germany and Spain are quite encouraging,” Lagarde told French daily Le Figaro. “They support our scenario of GDP growth of 0.9% in the euro area this year.” More