Aurelia Butler

Brian Nelson, Treasury undersecretary for terrorism and financial intelligence, held briefings last week in Switzerland, Austria, Germany and Italy to promote more effective policing of sanctions imposed over Russia’s invasion of Ukraine, the Treasury said in a statement. Nelson shared details on some of the most critical military goods that Russia is trying to acquire, including optical devices, electronics and manufacturing equipment, the Treasury said.He urged allies to stay alert for “red flags” such as large cash payments, routing payments through third countries not involved in transaction and multiple tenders or shipments of identical products from different providers for the same end user. Other warnings signs include frequent or last-minute changes of end-users or payees, or redirection of goods to third countries that have limited or no restrictions on re-exports to Russia, the department said.In the coming week, the Treasury Department said Elizabeth Rosenberg, assistant secretary for terrorist financing and financial crimes, will travel to Kazakhstan and Uzbekistan to strengthen sanctions enforcement and efforts to combat money laundering and the financing of terrorism. More

Hello and welcome to the working week.It’s over. A once in several decades combination of Abrahamic religious festivals, I mean. Corporate and political life on the other hand has been cranking up for a busy new season, as illustrated by this week’s diary.In the US, rumours are swirling that Joe Biden will announce his bid for the 2024 presidential contest. What he will definitely be doing is hosting his South Korean counterpart Yoon Suk Yeol at the White House.EU foreign ministers will gather in Luxembourg on Monday for a video conference with their Ukraine counterpart Dmytro Kuleba before discussing an action plan to respond further to the Russian aggression and other global conflicts — tragically, an expanding list. Finance ministers and central bank governors will arrive in Stockholm on Friday for an informal meeting that will include discussion on helping finance Ukraine’s reconstruction.The British government will be doing its bit for the City of London’s diplomatic business mission on Tuesday when foreign secretary James Cleverly speaks at the annual Easter Banquet at Mansion House, the Lord Mayor of London’s official residence. Can it really only be 12 months since this was being delivered by then foreign secretary, now also ex-prime minister, Liz Truss?Then there is the story of UK industrial unrest, driven by pay and cost of living concerns. This week will see further walkouts by teachers and civil servants among others in what has now become a spring of discontent.As regular readers know, the Week Ahead exists to look forward on your behalf, but sometimes it’s important to reflect. With that in mind, thank you David Hindley for guiding this newsletter ship in my absence these past two weeks. Thank you also to those who wrote in to empathise and encourage about the Moules family’s exam revision purdah. Email me at [email protected] you are looking for something new this week, let me recommend the FT’s newest newsletter, One Must-Read, providing a single remarkable piece of journalism to your inbox every weekday. If you haven’t already, sign up here.Economic dataThis week’s schedule has a lot of important data. Headline acts are the first estimate first-quarter GDP numbers for the US, South Korea and the eurozone. There will also be provisional consumer price index (CPI) and harmonised index of consumer prices (HICP) inflation reports from various EU countries, plus Germany’s Ifo and GfK business climate reports. The main event in Japan is the rate-setting meeting, which concludes on Friday. The newly appointed Bank of Japan governor Kazuo Ueda has stressed that for the time being he will stick to the decade-long ultra-loose monetary policy inherited from his predecessor. But the markets are wary that this position might shift, especially after March’s core CPI was higher than expected at 3.8 per cent, its highest year-on-year level since 1981.CompaniesEarnings season is in full swing. We have more banks this week, with a particular focus on the UK’s high street lenders, as well as earnings calls from both Credit Suisse and UBS. It is also a big week for Big Tech with quarterly results from Amazon.com, Alphabet, Meta and Microsoft. The latter will also have an eye on the UK, where on Wednesday the Competition and Markets Authority is due to finally rule on whether to block the technology company’s $69bn takeover of games maker Activision Blizzard, although this is likely to prove a damp squib as the CMA is expected to support it.It will also be a big week for consumer goods company results, at a time when both the cost of living and obesity concerns are high on the agenda. What will Nestlé have to say when it reports numbers on Tuesday after its dressing down by institutional investors last week? If people think the Swiss multinational is bad, what about McDonald’s, Coca-Cola, Domino’s Pizza, Mondelēz and Hershey, all of whom will also be reporting results?Key economic and company reportsHere is a more complete list of what to expect in terms of company reports and economic data this week.MondayGermany, Ifo Business Climate IndexUK, Rightmove house price indexResults: The Coca-Cola Company Q1, Credit Suisse Q1, First Republic Bank Q1, Philips Q1, Vivendi Q1 revenuesTuesdaySouth Korea, flash Q1 GDP figuresUK, March public sector borrowing figures and HMRC tax receiptsUS, April Conference Board consumer confidence surveyResults: ABB Q1, Alphabet Q1, Associated British Foods H1, Akzo Nobel Q1, Brown & Brown Q1, Card Factory FY, Carrefour Q1 sales, Corning Q1, General Electric Q1, General Motors Q1, Halliburton Q1, Kering Q1, Kimberly-Clark Q1, McDonald’s Q1, Microsoft Q3, Moody’s Q1, Nestlé quarterly sales, Nidec Q4, Northern Trust Q1, Novartis Q1, PepsiCo Q1, Randstad Q1, Santander Q1, Travis Perkins Q1 trading update, UBS Q1, United Parcel Service Q1, Verizon Communications Q1, Visa Q2, Whirlpool Q1, Whitbread FYWednesdayGermany, GfK consumer climate surveyUK, Q4 productivity figuresUK, British Retail Consortium shop price indexUK, the Competition and Markets Authority due to publish a final report on Microsoft’s $69bn takeover of ‘Call of Duty’ maker Activision BlizzardResults: Boeing Q1, Bunzl Q1 trading statement, Danone Q1 sales, Deutsche Börse Q1, eBay Q1, GSK Q1, Heathrow Q1, Hilton Worldwide Holdings Q1, Man Group Q1 trading statement, Meta Q1, Michelin Q1 sales, Persimmon Homes trading update, Reckitt Benckiser Q1 trading statement, Roche Q1 sales, SEB Q1, Schroders Q1 update, SK Hynix Q1, Standard Chartered Q1, Svenska Handelsbanken H1ThursdayIreland, flash Q1 GDP figuresItaly, preliminary March consumer price index (CPI) inflation rate dataSweden, flash Q1 GDP figuresUK, Q4 trade dataUS, flash Q1 GDP figuresResults: Aker BP Q1, Amazon.com Q1, American Airlines Q1, AstraZeneca Q1, Barclays Q1, Carlsberg Q1 trading statement, Caterpillar Q1, Comcast Q1, Deutsche Bank Q1, Domino’s Pizza Q1, Eli Lilly Q1, Finnair Q1, Hasbro Q1, Hershey Q1, Howdens trading update, HSS Hire FY, Intel Q1, Merck Q1, Mondelēz International Q1, Northrop Grumman Q1, Sainsbury’s FY, Samsung Q1, St James’s Place Q1 new business, Southwest Airlines Q1, STMicroelectronics Q1, Taylor Wimpey trading update and AGM, Unilever Q1 trading statement, Willis Towers Watson Q1, WPP Q1 trading updateFridayEurozone, France, Germany, Italy, Spain: flash Q1 GDP dataFrance, Germany, Poland: April consumer price index (CPI) inflation figuresGermany, monthly unemployment and retail sales figuresJapan, monetary policy interest rate decisionJapan, March industrial production dataJapan, March jobless rateMexico, Q1 GDP figuresUK, Q1 individual and company insolvency figuresResults: Aon Q1, Chevron Q1, Colgate-Palmolive Q1, Electrolux Q1, EDF Q1 sales update, Eni Q1, ExxonMobil Q1, NatWest Q1, Pearson Q1 trading update, Smurfit Kappa Q1 trading update, Sony FYWorld eventsFinally, here is a rundown of other events and milestones. MondayLuxembourg, Foreign Affairs Council meeting where EU ministers discuss Russian aggression against Ukraine, following a videoconference with Ukraine’s foreign minister Dmytro KulebaPakistan, Eid ul-Fitr (End of Ramadan) continues. Financial markets closedUK, Extinction Rebellion protesters conclude a four-day programme of action in London’s Parliament Square, dubbed The Big One, with the delivery of a demand called Choose Your FutureUK, more than 1,300 Unite Scotland members on North Sea oil rigs begin a 48-hour strike in a dispute over payUS, CinemaCon, the largest global gathering of movie house owners, with three days of presentations and previews of upcoming releases attended by actors, producers and directors, opens in Las VegasTuesday70th anniversary of Cambridge university scientists James Watson and Francis Crick describing in Nature magazine their discovery of the structure of DNAAustralia, New Zealand: Anzac Day national holidayIsrael, start of Yom HaZikaron (Memorial day), commemorating fallen soldiers. Financial markets closedItaly, Liberation Day. Financial markets closedUK, foreign secretary James Cleverly speaks at the City of London’s annual Easter Banquet with guests from countries the Lord Mayor will be visiting during his term in officeWednesdayIsrael, start of Independence Day, this year commemorating the 75th anniversary of the Declaration of Independence in 1948US, president Joe Biden hosts his South Korean counterpart Yoon Suk Yeol for a state visit to WashingtonThursdayNetherlands, Koningsdag or King’s Day national holidayUK, teachers in the National Education Union in England and Wales are set to stage another walkout in their dispute over pay.FridayHungary, Pope Francis begins a three-day visit to BudapestStockholm, EU finance ministers and central bank governors gather for an informal meeting, including discussions on financial support for Ukraine’s reconstruction and European financial marketsUK, strike by 133,000 civil and public servants in a long-running dispute with the government over pay, pensions, redundancy terms and job securityUS, 20th anniversary of the launch of the Apple iTunes StoreSaturdayFrance, demonstration planned against French interior minister Gérald Darmanin in Paris in solidarity with undocumented migrantsSweden, EU finance ministers and heads of central banks meet in Stockholm as part of the Swedish presidency of the Council of the EUSundayParaguay, general electionUK, Royal College of Nursing members in England begin a 48-hour strike over pay More

WASHINGTON (Reuters) -Republican U.S. House of Representatives Speaker Kevin McCarthy said on Sunday the House would vote on his spending and debt bill this week, and invited President Joe Biden to discuss the debt ceiling with him.McCarthy floated a plan last week that would pair $4.5 trillion in spending cuts with a $1.5 trillion increase in the $31.4 trillion U.S. debt limit.Biden and the Democratic-controlled Senate are likely to reject the proposal, but McCarthy has called it a basis for negotiations between the two parties in the coming weeks. Failure to raise the debt ceiling would lead to a U.S. default on its financial obligations, shaking the global economy.Financial markets have already shown signs of worry about the standoff, with the cost of insuring exposure to U.S. debt at its highest in a decade and financial analysts raising concerns about the rising risk of default.Republicans hold a narrow majority in the House but McCarthy said he was confident of securing enough votes to pass his bill in the chamber.”I cannot imagine someone in our conference that would want to go along with Biden’s reckless spending,” McCarthy told Fox News in an interview on Sunday.”Like every other household in America – if Washington wants to spend more, it needs to save more somewhere else,” McCarthy added in a tweet on Sunday. “This isn’t controversial – it’s common sense. I invite the President to get serious and join Republicans at the table.”Democratic Senators Amy Klobuchar and Dick Durbin on Sunday also urged negotiations between Biden and McCarthy but said McCarthy’s proposal was more appropriate for budget debates than for the debt ceiling.”The conversation should be underway, but it should be on the budget resolution, and on the appropriations process and entitlement reform, if that’s part of the agenda. That should all be separate from the question of the debt ceiling. Don’t default, avoid default,” Durbin told NBC News. More

LISBON (Reuters) – Brazil hopes the Mercosur trade deal with the European Union (EU) will be concluded this year, a government official said on Sunday, ending years of delay and opening the way to increased trade between the two regions. The EU and the Mercosur bloc of Argentina, Brazil, Paraguay and Uruguay completed negotiations in 2019 but the deal has been on hold due to concerns, particularly in France, about Amazon (NASDAQ:AMZN) deforestation and Brazil’s commitment to climate change action.Brazil’s President Luiz Inacio Lula da Silva has promised to overhaul his country’s climate policy.While Germany has pushed for a swift conclusion, France has said it is waiting to see progress in Brazil.Speaking in Lisbon, Marcio Elias Rosa, a top secretary at Brazil’s development and industry ministry, said negotiations with the EU were ongoing and countries were discussing the “socio-environmental requirements” imposed by the bloc.”The signs are very positive,” Elias Rosa said. “Details are missing but I believe we will close the deal and the agreement will be good.”Elias Rosa said all Mercosur nations were working with the same purpose of concluding the deal but they needed to agree on some of the requirements.”Brazil already complies with the socio-environmental requirements related to labour legislation,” Elias Rosa said. “It is necessary others also agree but we are very close to that.”I would say we will close (the deal) this year.”Portugal, as well as neighbouring Spain, which will assume the presidency of the EU Council during the second half of 2023, are “important allies” in discussions with the bloc, Elias Rosa said.Together with other government officials, Elias Rosa is in Portugal as part of a five-day visit by Lula, his first to Europe since being elected president. More

The writer is chair of Rockefeller InternationalToday commentators overwhelmingly agree that a weakening US dollar cannot possibly lose its status as the world’s dominant currency because there is “no alternative” on the visible horizon. Perhaps, but don’t tell that to the many countries racing to find an alternative, and such complacency will only accelerate their search. The prime example right now is gold, up 20 per cent in six months. Surging demand is not led by the usual suspects — investors large and small, seeking a hedge against inflation and low real interest rates. Instead, the heavy buyers are central banks, which are sharply reducing their dollar holdings and seeking a safe alternative. Central banks are buying more tons of gold now than at any time since data begins in 1950 and currently account for a record 33 per cent of monthly global demand for gold. This buying boom has helped push the price of gold to near-record levels and more than 50 per cent higher than what models based on real interest rates would suggest. Clearly, something new is driving gold prices. Look closer at the central bank buyers, and nine of the top 10 are in the developing world, including Russia, India and China. Not coincidentally, these three countries are in talks with Brazil and South Africa about creating a new currency to challenge the dollar. Their immediate goal: to trade with one another directly, in their own coin. “Every night I ask myself why all countries have to base their trade on the dollar,” Brazilian president Luiz Inácio Lula da Silva said recently on a visit to China, arguing that an alternative would help “balance world geopolitics”. Thus the oldest and most traditional of assets, gold, is now a vehicle of central bank revolt against the dollar. Often in the past both the dollar and gold have been seen as havens, but now gold is seen as much safer. During the short banking crisis in March, gold kept rising while the dollar drifted down. The difference in the movement of the two has never been so large. And why are emerging nations rebelling now, when global trade has been based on the dollar since the end of the second world war? Because the US and its allies have increasingly turned to financial sanctions as a weapon. Astonishingly, 30 per cent of all countries now face sanctions from the US, the EU, Japan and the UK — up from 10 per cent in the early 90s. Until recently, most of the targets were small. Then this group launched an all-out sanctions attack on Russia for its invasion of Ukraine, cutting off Russian banks from the dollar-based global payment system. Suddenly, it was clear that any nation could be a target. Too confident in the indomitable dollar, the US saw sanctions as a cost-free way to fight Russia without risking troops. But it is paying the price in lost currency allegiances. Nations cutting deals to trade without the dollar now include old US allies such as the Philippines and Thailand. The number of countries with central banks looking at ways to launch their own digital currency has tripled since 2020 to more than 110, representing 95 per cent of the world’s gross domestic product. Many are testing these digital currencies for use in bilateral trade — another open challenge to the dollar. Though some doubt a dominant dollar matters for the US economy, high demand for the currency in general tends to lower the cost of borrowing abroad, a privilege America sorely needs today. Among the top 20 developed economies, it now has the second highest fiscal and current account deficits after the UK and the second highest foreign liabilities (as reflected in its net international investment position) after Portugal. The risk for America is that its overconfidence grows, fed by the “no alternative” story. That narrative rests on global trust in US institutions and rule of law, but this is exactly what weaponising the dollar has done so much to undermine. It rests also on trust in the country’s ability to pay its debts, but that is also slipping, as its reliance on foreign funding keeps growing. The last line of defence for the dollar is the state of China, which is the only economy sufficiently large and centralised to challenge US currency supremacy — but even more deeply indebted and institutionally dysfunctional. When a giant comes to rely on the weakness of rivals, it’s time to look hard in the mirror. When it faces challenges from a “barbaric relic” such as gold and new contenders like digital currency, it should be looking for ways to strengthen trust in its finances, not taking its financial superpower status for granted.   More

The steady stream of European leaders visiting Beijing recently comes with a risk. Europe’s eagerness must make it look increasingly in China’s eyes like a demandeur — the party in diplomatic relations that cannot wait for the other to propose something, but has to come asking. But what exactly is Europe asking for?It is clear enough where China’s interests lie. Politically, it wants to split a west brought closer together by Vladimir Putin’s assault on Ukraine. Economically, it wants to prevent any EU moves to restrict its market access. In a mix of both, it wants to increase Europe’s economic dependence on China. It makes sense for Beijing to nurture Europeans’ desire to mark their distance from Washington, their resentment of being strong-armed by US foreign policy choices, and their commercial interests. Hence the much-noted Chinese charm offensive at Davos in January.It is harder to describe Europe’s goals. It of course wants Xi Jinping to persuade Putin to relent from his obsession with wiping Ukraine off the map. But that is merely a hope, not a policy goal, if European leaders cannot credibly commit to restricting economic outreach while Beijing acts against their strategic interests. And their revolving-door visits undermine that credibility.European Commission president Ursula von der Leyen’s speech before her own trip was a step in the right direction. She maintained the EU’s analysis that China is all at once a systemic rival, an economic competitor and a strategic partner. But she went much further in threatening to block China’s economic opportunities with Europe if Beijing stays on its current course. She will now have an uphill battle to make EU capitals rally behind this more combative approach.Meanwhile in the US, Treasury secretary Janet Yellen has just given a speech that substantially aligns Washington with Brussels. She forswore “decoupling” from China as “disastrous”. Instead the US will subordinate economic policy to national security and human rights, but narrowly, while welcoming economic competition and seeking collaboration on global challenges such as climate change and debt crises. She might as well have used the Brussels triptych of rival, competitor and partner. Together, the two speeches suggest a welcome effort at a common transatlantic approach.The problem is that, unlike the US, there are too many signs that Europe is unwilling to condition its economic ambitions to the nature of Beijing’s systemic threats. French president Emmanuel Macron’s remarks about Europe not being a “vassal” to the US is one such sign. Carving out an independent path is all good and well, but acting differently from the US just for the sake of it is merely contrarianism. It is natural, for example, to resent that Washington in effect decides what chip manufacturing equipment Dutch company ASML can export to China — but resentment is no substitute for a foreign investment and export control policy of one’s own. Von der Leyen promised one in her speech, but corporate Europe will hardly allow such constraints without a fight.Many European business leaders still salivate at the size of the Chinese market, and most political leaders’ visits to Beijing are transparently sales pitches. Here we come to the crux of why the EU struggles to wield a credible geoeconomic policy. In Europe’s political economy, strategic objectives are still no match for the alignment between the mercantile interests of big corporations in core EU states and the entrenched trade-deepening instincts of the European Commission and many of Europe’s smaller economies. Beijing has good reason to sit back and wait.But something is changing. “Access to China” for EU corporations increasingly means expanding production in China itself, not exporting Europe-made goods and services there. Before the pandemic, EU carmakers shipped about half a million cars to China — but they built 10 times as many European-branded cars there. Some will even consider it easier to build electric vehicles there to ship back to Europe than to expand production at home.The gains from such trade will mainly benefit corporate shareholders in the EU and not the workers, small companies and countries currently tied in to Germany’s car supply chain. Eventually politicians will wake up to the fact that the benefits are not broadly dispersed. Only then are we likely to see economic considerations firmly conditioned on geostrategic interests in EU-China policy. Until then, Beijing hardly needs to take it seriously. It is time for Europe to learn that what is good for VW is not necessarily good for [email protected] More