Aurelia Butler

Italy has approved measures to limit the shareholder rights of the Chinese chemical group Sinochem in Pirelli, the Milan-listed tyremaker and set out a wider range of sectors that the government judges to be of national security importance.The decision is a rare intervention in an eight-year-old Chinese investment that had, so far, not been considered a strategic national asset. In 2015, a previous Chinese state-owned chemicals group had bought a majority stake in Pirelli, considered a crown jewel of Italian industry, for $7.7bn.Prime minister Giorgia Meloni’s office said in a statement on Friday that the latest measures, passed under the country’s “golden power” foreign investment screening mechanism, were “aimed at creating a network of measures to safeguard Pirelli’s independence and its management”.The FT revealed this month that Pirelli chief executive Marco Tronchetti Provera had lobbied Rome to intervene in the company’s shareholding arrangements, warning of the greater control that the Chinese government was taking in Pirelli’s business and governance decisions.Tronchetti Provera, who has a minority stake in Pirelli, has been fighting with his Chinese partners over day-to-day management for the past few years. He has unsuccessfully tried to persuade them to sell part of their stake. Frictions within the company have also emerged over his pay, which in 2022 was €20.5mn. Rome’s restrictions, which involve limits to accessing and sharing information between Pirelli and Sinochem and a four-fifths majority for some “strategic” board decisions, were aimed at protecting “strategically relevant information and the company’s knowhow”, Meloni’s office said.The decision comes as the Italian government attempts the difficult balance of aligning itself more closely with the EU and US on foreign policy and re-evaluating its relationship with China, while at the same time not antagonising Beijing.

Meloni’s government is also considering an exit from Beijing’s flagship overseas investment project, the Belt and Road Initiative. Italy was the only European nation to join the BRI in 2019.Last month, leaders from the US, EU and Japan united behind the idea of “de-risking” from China, speaking of a need to protect “certain advanced technologies that could be used to threaten our national security”.The scope of what counts as assets of national security importance has been expanded in Italy and the EU since 2019, leading to an increase in applications filed under Italy’s screening mechanism, from 8 in 2014 to 496 in 2021.Meloni’s office said a specific technology that allowed for the geolocation and collection of drivers’ information through a microchip installed on the tyres was critical and of national strategic importance.“The misuse of such technology can cause a variety of risks for customers and national security,” the office said. More

WASHINGTON (Reuters) -U.S. Federal Reserve officials struck a hawkish tone in their first comments since the central bank held the policy interest rate steady at its meeting this week but signaled that rate hikes will likely resume. “Core inflation is not coming down like I thought it would,” Federal Reserve Gov. Christopher Waller said at an economics conference in Norway. “Inflation is just not moving and that’s going to require, probably, some more tightening to try to get that going down.”In earlier prepared remarks he said that changes in U.S. credit conditions since the failure of Silicon Valley Bank in early March were “in line” with financial tightening that was already underway due to Federal Reserve interest rate increases — comments that downplayed the idea a worse-than-anticipated contraction in credit might make further Fed rate increases less necessary. “It is still not clear that recent strains in the banking sector materially intensified the tightening of lending conditions,” beyond what the Fed was trying to do anyway through its interest rate policy, Waller said.The U.S. economy was “still ripping along for the most part,” he said, with the underlying pace of price increases “moving sideways.”Recent declines in headline inflation have been driven largely by food and energy prices, volatile commodities whose price swings can mask underlying inflation trends.Excluding those goods, the personal consumption expenditures price index as of April was increasing at a 4.7% annual pace, more than twice the central bank’s target.In separate comments at a financial officers forum in Maryland, Richmond Federal Reserve president Thomas Barkin said he was “comfortable” with further rate increases given that inflation was not yet on an obvious path back to 2%.Demand in the U.S. was weakening somewhat, he said, but “I am still looking to be convinced of the plausible story that slowing demand returns inflation relatively quickly” to the 2% target, Barkin said. “If coming data doesn’t support that story, I’m comfortable doing more.”The Fed this week ended its run of 10 consecutive rate hikes when policymakers decided to keep the benchmark overnight interest rate in a range of from 5% to 5.25%. But they also issued new projections showing 12 of 18 Fed officials see rates rising at least another half point by the end of the year. Though Fed chair Jerome Powell at a press conference Wednesday said no decision had been made about the upcoming July Fed meeting, investors and other analysts broadly expect the Fed to resume rate increases.Chicago Fed President Austan Goolsbee, one of the more dovish U.S. central bankers, said that he thinks of pausing the Fed’s rate hike campaign as a “reconnaissance mission… before charging up the hill another time. “There are conflicting pieces of evidence coming in on the economy: are we too hot and need more, have we done enough by raising the interest rate five full percentage points over the last year?” Goolsbee told National Public Radio’s “All Things Considered.” The pandemic changed the dynamics of consumer spending, work, and lifestyle, Goolsbee said, and what’s clear is that the Fed cannot be too confident in any one month of data.”We just going to have play it by ear, I guess,” Goolsbee. “For me, the forecast is pretty benign, and the question is, are we on that golden path, or not,” of cooling inflation without starting a big recession.None of the three policymakers spoke directly to their policy preferences for the July meeting. More

(Reuters) -Twitter plans to focus on video, creator and commerce partnerships to revitalize the social media company’s business beyond digital advertising, according to an investor presentation by owner Elon Musk and new Chief Executive Linda Yaccarino that was reviewed by Reuters.Yaccarino, who started as CEO on June 5, told Twitter investors on Thursday that the company is in early conversations with political and entertainment figures, payments services and news and media publishers on potential partnerships, said a source familiar with the matter, who spoke on condition of anonymity to discuss a private investor call.The presentation was Yaccarino’s first time addressing the company’s investors, the source said.After Musk acquired Twitter in October, the social media firm faced months of chaos, including layoffs of thousands of employees, criticism over lax content moderation, and an exodus of many advertisers who did not want their ads appearing next to inappropriate content. Musk’s hiring of Yaccarino, a longtime advertising executive who modernized ad sales at Comcast-owned entertainment and news conglomerate NBCUniversal, was a signal that digital ads remained a priority for Twitter.Some ad-buying firms had recommended their clients pause ad spending on Twitter after Musk’s takeover. Those recommendations have been reversed and none of the major advertising holding companies are currently recommending a pause, according to a slide shown during the presentation.Well-known brands including Warner Bros, Mondelez (NASDAQ:MDLZ), McDonald’s (NYSE:MCD) and Walmart (NYSE:WMT) have resumed advertising on Twitter after initial pauses, the slide said.Yaccarino told investors that ad spending in several advertiser categories is now up at least 40% year-over-year, including health, consumer packaged goods and financial services, the source said. A Twitter executive declined to comment.VIDEO AND COMMERCEUnder Musk, Twitter changed its business name to X Corp., reflecting the billionaire’s vision to create a “super app,” like China’s WeChat, that he has said would include digital payments and other services.Twitter is applying for “money transmitter licenses” in all 50 U.S. states, according to a slide from the presentation. The company has also focused on growing video content on the platform. Vertical video now accounts for more than 10% of time spent on Twitter, another slide said.Former Fox News host Tucker Carlson launched a new show earlier this month on the platform called “Tucker on Twitter.”Twitter envisions that it could sell ads and sponsorships alongside videos from Carlson and other content creators, the source said. Yaccarino has also told colleagues in recent days that Musk has expressed strong support for her ideas and the working relationship was off to a positive start, the source added. More

Deposits at large U.S. banks fell $79.2 billion to $17.203 trillion from a week earlier, on a seasonally adjusted basis, marking the biggest decline since March and the first in four weeks. Commercial bank lending decreased $49.3B to a seasonally adjusted $12.090 trillion during the week.Residential lending increased $31.2B, commercial real estate loans climbed $1.2B, while consumer loans were up $1.3B from the prior week. Commercial and industrial loans were down $13B from a week ago on a seasonally adjusted basis.The first decline in four weeks for lending activity comes as many continue to monitor further signs of tightening credit conditions that would rein in not only economic growth but inflation.  More

NEW YORK/LONDON (Reuters) – A gauge of global stock markets took a breather on Friday after a run to 14-month highs, while the U.S. dollar headed for its biggest weekly slide since January following a heavy week of central bank meetings around the world.The MSCI All-World index edged down 0.06% but remained near its highest level since mid-April 2022. Wall Street’s main equity indexes ended lower but tallied solid weekly gains. Ending an intense week of central bank actions, the Bank of Japan maintained its ultra-easy monetary policy on Friday despite stronger-than-expected inflation. Earlier in the week the Federal Reserve kept rates unchanged, while suggesting more hikes could come later in the year, and the European Central Bank hiked by a quarter-point.”We have had a pretty constructive week,” said Art Hogan, chief market strategist at B Riley Wealth. “The ECB and the UK likely are still in the process of being in the throes of tightening, where the U.S. is certainly knocking on the door of being through with the rate hiking cycle and I think that has been driving some divergences.”On Wall Street, the Dow Jones Industrial Average fell 108.94 points, or 0.32%, to 34,299.12, the S&P 500 lost 16.24 points, or 0.37%, to 4,409.6 and the Nasdaq Composite dropped 93.25 points, or 0.68%, to 13,689.57.The pan-European STOXX 600 index rose 0.5%, while Japan’s Nikkei rose 0.7% for a 10th straight week of gains.In currency markets, the dollar index, which measures the greenback against a basket of currencies, rose 0.18%, with the euro down 0.09% to $1.09.Still, the dollar was set to log its biggest weekly percentage drop since mid-January.Meanwhile, the yen fell to its lowest point against the euro in 15 years after the BOJ’s decision. The Japanese currency also weakened 1.07% versus the greenback at 141.84 per dollar, dropping to a six-month trough.”The yen is suffering from a big negative yield gap versus other G10 currencies,” said Vassili Serebriakov, FX strategist at UBS in New York. U.S. Treasury yields rose, with the benchmark 10-year yield rising after two straight days of declines as comments from Fed officials indicated the central bank was not yet done with its interest rate hikes.Fed Governor Christopher Waller said at an economics conference that core inflation “is not coming down like I thought it would,” which probably would require more tightening.Benchmark 10-year notes were up 4 basis points to 3.77% from 3.73% late on Thursday.Oil prices rose and posted a weekly gain, as higher Chinese demand and OPEC+ supply cuts lifted prices.U.S. crude settled up 1.6% at $71.78 per barrel and Brent settled at $76.61, up 1.2% on the day. More