Aurelia Butler

(Reuters) -The International Monetary Fund on Tuesday said it “strongly supports” Brazil’s efforts to improve the country’s fiscal position, while also commending the country’s “ambitious agenda” to have a sustainable, inclusive, and green economy. “Enhancing Brazil’s fiscal framework, broadening the tax base, and tackling spending rigidities would support sustainability and credibility,” the leader of an annual mission to the country, Ana Corbacho, said in a statement after the Fund’s visit. Brazil’s finance ministry in late March unveiled new fiscal rules to balance limits on spending growth under the administration of President Luiz Inacio Lula da Silva, who has vowed to boost social programs and public investment.The new rules limit spending growth to 70% of Brazil’s revenue growth in the prior 12 months.The government’s proposed fiscal framework also targets a zero primary deficit in 2024, followed by a primary surplus equal to 0.5% of GDP in 2025 and 1% of GDP in 2026.IMF “staff recommends a more ambitious fiscal effort that continues beyond 2026 to put debt on a firmly declining path, while protecting social and investment spending,” Corbacho added in the statement. Brazilian lawmaker Claudio Cajado on Monday presented a revised version of the government’s bill to ensure the rules have penalties in case of non-compliance by the government. Corbacho also noted Brazil’s efforts to “steer a sustainable, inclusive, and green economy” by cracking down on illegal deforestation, for example, and “leveraging competitive advantage in renewable energies.” In its first months, the Lula administration has revived an international funding campaign to fight deforestation and has sought financing for green industry and renewable energy in partnership with China. More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever.Japan’s first quarter GDP figures are the highlight for Asian markets on Wednesday, with the world’s third-largest economy expected to have grown at its fastest pace in three quarters thanks to strong services sector spending.A Reuters poll of economists estimates annualized GDP growth of 0.7% in the first three months of 2023, rising sharply from just 0.1% October-December and the fastest since the 4.7% of April-June 2022.Markets would be forgiven for going into the release with a ‘glass half-empty’ attitude. Japan’s economic data have undershot forecasts recently – Citi’s Japanese economic surprises index is now negative and the lowest in four months.If indicators from Japan have been underwhelming, they’ve been alarming from China, the world’s second-largest economy.Another batch of Chinese economic data fell short of expectations on Tuesday, slamming Chinese financial assets and cementing the view that Beijing will have to inject fiscal or policy stimulus into the sputtering economy. Or both.Industrial output and retail sales growth in April undershot forecasts while property investment fell again, fueling concerns about its outlook as both its domestic and export engines of growth remain underpowered.The Chinese yuan slipped to its weakest level this year, nudging 6.98 per dollar and Chinese stocks resumed their recent losing streak, reducing the Shanghai composite’s year-to-date gains to 6.5% and the blue chip index’s YTD gains to 2.75%.April house prices are out on Wednesday.Tech giant Tencent reports Q1 earnings on Wednesday, following Baidu (NASDAQ:BIDU)’s profit- and revenue-beating Q1 results on Tuesday. Perhaps another bright spot on the corporate front will pierce the economic gloom.Meanwhile, Hong Kong’s stock exchange on Monday launched a new Connect scheme linking the financial hub with the mainland, offering offshore investors access to interest rate derivatives to help hedge their Chinese bond exposure. It will also help promote the yuan currency’s global status.The move comes after a sustained period of foreign investors dumping Chinese bonds. Since Russia invaded Ukraine in February last year demand for Chinese debt has evaporated, casting extra doubt over the yuan’s ability to gain reserve currency status.Asian markets on Wednesday won’t be getting any boost from Wall Street after the three main indices closed in the red on Tuesday. The Dow and Russell 2000 are down for the year too.U.S. debt ceiling talks loom large over markets. They hit another brick wall on Tuesday although there are signs that progress is being made and default can be averted. U.S. President Joe Biden will return to Washington on Sunday immediately after the G7 summit to focus on debt ceiling talks, skipping planned visits to Australia and Papua New Guinea.Here are three key developments that could provide more direction to markets on Wednesday:- Japan GDP (Q1)- China house prices (April)- Australia wage growth (Q1) (By Jamie McGeever) More

Good morning. The US Department of Justice has charged a Chinese citizen with stealing trade secrets from Apple, including information about driverless car technology. Weibao Wang, a former software engineer at Apple, has been accused of taking thousands of documents including research and development. The case is one of five lawsuits brought by a new task force focused on protecting critical technology from foreign governments. The DoJ alleged that while the engineer was working on a secret project for Apple, he also started working for a US-based subsidiary of a company headquartered in China, which it said was developing self-driving cars. Law enforcement officers found large volumes of data that had been taken from Apple when they searched his California residence in 2018. He flew to Guangzhou, China, that night despite telling agents he did not plan to travel, prosecutors said. If found guilty, Wang faces up to 10 years in prison for each of the six counts filed against him, as well as fines. Apple declined to comment, and Wang could not be reached for comment.Here’s what else I’m keeping tabs on today:Japan GDP: Preliminary first-quarter gross domestic product figures are set to be released. Liz Truss in Taiwan: The former UK prime minister Liz Truss, a vocal critic of China, will speak at an event organised by the Prospect Foundation.FTX: The company’s US-based leadership team is due to appear in court.Five more top stories

Pedestrians pass a gold display window at a jewellery store during Golden Week in Macau, China last month © Bloomberg

1. China’s industrial output and consumer spending have fallen short of expectations, fuelling doubts over the strength of the country’s rebound after it dismantled its zero-Covid policy. Youth unemployment hit a record while a key measure of investment also lagged estimates, casting a shadow over the outlook for the world’s second-largest economy.2. Russia exported more oil in April than in any month since its full-scale invasion of Ukraine last year, with almost 80 per cent of crude shipments flowing to China and India, according to the International Energy Agency. The EU is now discussing its 11th sanctions package on Russia since its invasion of Ukraine last year.Related read: The EU should crack down on India reselling Russian oil as refined fuels, including diesel, into Europe, the bloc’s chief diplomat said. 3. Ford plans to scale back future investments in China, as the US carmaker’s chief executive warned there was “no guarantee” western carmakers could win against local electric-vehicle rivals. 4. Leaders at some of the biggest US companies have urged Washington to strike a deal to raise the debt ceiling. Read the open letter in which executives from more than 140 companies, including Goldman Sachs, Pfizer and KKR warned against a “potentially devastating scenario”.Explainer: What would the “unthinkable” debt default actually look like? 5. Russia appears to have targeted one of two US Patriot anti-missile defence systems recently obtained by Ukraine during an unprecedented barrage of projectiles against Kyiv yesterday. While Washington was trying to assess the impact, the system’s radars were still working and able to track incoming missiles and intercept them, a US official said.News in-depth

Pita Limjaroenrat, centre in a white shirt, celebrates his Move Forward party’s election win © Jorge Silva/Reuters

For Harvard-educated Pita Limjaroenrat, the victory of his progressive Move Forward party represents potential watershed moment in Thailand. The 42-year-old stands to oust Thailand’s military-backed government, but ascending to prime minister hinges on Pita’s ability to persuade more established opposition groups to co-operate in a coalition — despite Move Forward’s radical reform agenda.We’re also reading and listening to . . . Markets 101: On the final episode of Behind the Money Night School we’re talking markets: from stocks to bonds to commodities with the FT’s Katie Martin and Ethan Wu.Digital native: There’s no such thing as a digital native — and there never will be. Stephen Bush explains why. Tax havens: Many tax havens are rather strange places to live full-time. Putting aside the ethics of decamping to more tax-efficient climes, Rhymer Rigby considers whether living in one is worth it. Graphic of the day

Recep Tayyip Erdoğan defied expectations in Sunday’s presidential election, confounding pollsters by holding together a coalition of Turkish voters that first brought him to power two decades ago. Explore how Erdoğan beat the odds in charts.Take a break from the newsJapanese whisky is made in a manner very similar to Scotch; the malted barley is imported from overseas. So what makes a whisky characteristically “Japanese”? Yamazaki’s chief blender explains, as Japan’s oldest whisky distillery celebrates its 100th year.Additional contributions by Emily Goldberg More

LONDON (Reuters) – Millions of British borrowers repeatedly missed payments on bills in the six months to January amid the steep surge in the cost of living and higher interest rates, a survey from the Financial Conduct Authority regulator showed on Tuesday.British households have faced double-digit inflation since September and the government’s budget forecasters have said the country is heading for a record decline in living standards over the two years to March 2024.The FCA said the number of adults in Britain who missed payments on domestic bills or failed to meet any of their credit commitments in three or more of the six months to January rose to 5.6 million from 4.2 million in May 2022.Sheldon Mills, executive director of consumers and competition at the FCA, said the research highlighted the “real impact” of the rising cost of living.The financial watchdog began collecting the data in May 2022 after Russia’s invasion of Ukraine sent the cost of energy and food soaring. It received 5,286 responses from people it contacted – and who took part in the earlier survey in May 2022 – between Dec.6 and Jan. 16. The latest survey also showed a significant rise in the number of people struggling to keep up with payments who now accounted for one in five adults.With the Bank of England raising interest rates sharply to tame inflation, 29% of respondents who had a mortgage in May 2022 reported an increase in payments in the six months to January, while 34% of tenants reported a rise in their rent. “The convergence of higher living costs and higher interest rates has pushed people’s finances right to the edge and sometimes over,” Karen Noye, mortgage expert at Quilter said.A separate report from the Resolution Foundation, a think tank, last week showed some 1.6 million British households were yet to face an average increase of 2,300 pounds ($2,902.83) in their fixed-rate mortgage bill over this year and next year. Richard Lane, director of external affairs at debt charity StepChange, said demand for advice services was the highest in three years with many people unable to afford “once-in-a-generation” price rises. The FCA, which supervises banks, urged lenders to provide tailored support for struggling consumers. It also said it will introduce its Consumer Duty rule in the coming months, requiring firms to ensure they provide better support for consumers.($1 = 0.7923 pounds) More

(Reuters) – Several days after ending his leadership role at a small New York State bank holding company, Thomas Murphy has also exited the board that oversees the Federal Reserve Bank of New York, the central bank said Tuesday.The regional Fed said Murphy stepped down from one of its New York Fed director slots reserved for bankers. Murphy had been the president and chief executive officer for Arrow Financial (NASDAQ:AROW) Corp until May 12, and served in the same roles at its Glens Falls National Bank and Trust Co subsidiary. Arrow, a bank holding company, also owns Saratoga National Bank and Trust Co.Murphy had been a Class A director on the New York Fed board since January 2021. According to a press release from Arrow Financial Company on Monday, Murphy “terminated his employment”at the company. It did not state a reason and the company did not immediately respond to a request for comment. His departure from Arrow was announced the same day the company received a noncompliance notice from Nasdaq, where its shares are listed, for failing to file its recent quarterly and annual results in a timely fashion.Each of the 12 regional Fed banks are quasi-private institutions that operate under the central bank Board of Governors in Washington, even as they are overseen by nine-person boards made up of a mix of local bankers, community leaders and businesspeople. These boards’ main role is to help select new presidents when vacancies arise. Fed bank presidents have also said their boards provide local economic intelligence and advice on running large institutions. The presence of bankers on regional Fed boards has long been a source of controversy as it places companies regulated by the Fed in an oversight role of their regulator. Some years ago this class of directors was removed from helping to select new leaders.In March, Silicon Valley Bank CEO Greg Becker left the San Francisco Fed’s board as his bank imploded. The bank failure helped kick off a still bubbling banking sector crisis that led the Fed to extend massive liquidity while facing ongoing questions over its regulation of banks. The New York Fed has had its own troubles with bankers on its board in years past. Its board chair in 2009 resigned amid questions about his purchases of stock in Goldman Sachs (NYSE:GS). The chairmanship then went to a union leader. In testimony to be presented at a Senate panel on Wednesday, Peter Conti-Brown, a financial historian and legal scholar at the University of Pennsylvania, called the presence of bankers on Fed boards “nefarious.” “Their presence invites mischief. Either their presence matters, which means they have influence over their own supervisors, whatever that influence may be,” Conti-Brown wrote. “Or their presence doesn’t matter, in which case they give us the appearance of conflicts that invite conspiracies and destabilize confidence in the entire system.”Even non-bankers have created challenges for the boards. In 2019, Anne Pramaggiore, CEO of the utilities unit of Exelon Corp (NASDAQ:EXC), stepped down as the Chicago Fed board of directors chair as her firm was being investigated over lobbying activities. She was convicted earlier this month on a number of charges, including bribery.The setup of the regional Fed board of directors is determined by law and not the central bank. Some Fed critics have called for board overhauls or doing away with them, reckoning that given the Fed’s public mission, all of its parts should be brought fully into government. More