Aurelia Butler

FRANKFURT/BRUSSELS (Reuters) -The European Union and Germany have reached a deal on the future use of combustion engines, officials said on Saturday, an issue that has been closely followed by the auto industry.The agreement will allow some combustion engines beyond 2035 and was quickly condemned by a prominent environmental group. The bloc and its largest economy had been at odds over the planned 2035 phase-out of CO2-emitting cars, but leaders signalled in recent days that they were close to a resolution.Germany had wanted assurances that new combustion engine cars can be sold beyond the deadline if they run on e-fuels – a request supported by parts of Germany’s powerful car industry.”We have found an agreement with Germany on the future use of e-fuels in cars,” Frans Timmermans, head of EU climate policy, said on Twitter. German Transport Minister Volker Wissing said “the way is clear” with the agreement reached late Friday.”Vehicles with internal combustion engines can still be newly registered after 2035 if they fill up exclusively with CO2-neutral fuels,” he said in a post on Twitter.Sweden, which holds the EU’s rotating presidency, said EU diplomats would vote on Monday to formally approve the 2035 phaseout law.That would mean energy ministers could then give the law the final sign-off needed for it to enter into force on Tuesday, at a scheduled meeting in Brussels.Benjamin Stephan of the Greenpeace campaign group said the deal was a setback for climate protection.”This stinky compromise undermines climate protection in transport, and it harms Europe,” he said.It dilutes the needed focus of the auto industry on efficient electromobility, he said. More

Food producers are taking up record volumes of warehouse space in the UK, as the industry looks to prevent shortages such as those of fruit and vegetables that left supermarket shelves bare earlier this year. Although their efforts failed to prevent that breakdown, demand from food manufacturers for shed space increased 58 per cent to a record 4.3mn square feet last year, according to Savills. The property group said it was the biggest take-up since it first started collecting data in 2007.Food businesses have been acquiring warehouses to use as slaughterhouses and indoor farms as well as for storage as worries rise over food supplies. In March many supermarkets were forced to ration vegetables with the shortages caused in large part by cold weather in continental Europe and Africa.Climate change and the Ukraine war, which hit grain imports from eastern Europe, have prompted concerns in many countries about food security. However, Kevin Mofid, logistics property researcher at Savills, said he suspected efforts to use suppliers closer to home had been “much more pronounced” in the UK, where trade with Europe had been complicated by Brexit. About 70 per cent of the UK’s food and animals are delivered from the EU.“Increased paperwork [has created] delays in a time-sensitive supply chain . . . so you have to add an extra step,” Mofid said. The move by food producers is also an example of how some businesses now wish to manufacture more locally after the Covid-19 pandemic hit supply chains, he added. Clive Black, an analyst at Shore Capital, said fast-growing retailers, such as supermarkets Aldi and Lidl, as well as Amazon’s food business, have been eager to acquire more distribution centres.He said growing demand for space could be a “knee-jerk reaction” to recent food security issues, or it could reflect a “realisation that outside of the EU, the UK needs a more solid logistics base”.Savills said recent warehouse deals included a Rochdale facility acquired by pork producer Danish Crown and a distribution centre that US-listed avocado business Mission Produce expects to start using in April. Paul Frowde, managing director of European sales at Mission Produce, which plans to use the facility in Dartford to ripen avocados from South America, said it would help support UK food supplies.“The rather interesting [UK shortages of] peppers and cucumbers have brought [food security] to attention,” he added. The move by food producers bucks the trend for overall demand for warehouse space, which dropped 13 per cent to 48mn square feet last year as falls in consumer spending prompted retailers to cut back on storage. More

NEW YORK (Reuters) – Investors are settling in for a long slog in the U.S. stock market in coming months, braced for more tumult in the banking sector and worries over how the Federal Reserve’s tightening will ripple through the economy.Banking sector concerns drove sharp moves in financial stocks in the United States throughout the week after the collapse of two U.S. lenders and last weekend’s Swiss-government-orchestrated takeover of troubled Credit Suisse by rival UBS. Many worry that other nasty surprises are lurking as the rapid series of interest rate hikes the Fed has delivered over the past year dry up cheap money and widen fissures in the economy.”The market is very nervous at this point and investors are acting first and looking into the nuances later,” said Wei Li, global chief investment strategist at fund giant BlackRock (NYSE:BLK). “It’s understandable because it’s not super clear that this is definitely contained.” In recent days, investors have focused on German giant Deutsche Bank (ETR:DBKGn). The company’s shares have lost around more than a quarter of their value this month, including Friday’s 8.5% fall, and the cost of protecting against a default on its bonds soared, even though few put it in a class with Credit Suisse.”We are not concerned today about counterparty, liquidity issues” with Deutsche, JPMorgan (NYSE:JPM) analysts said in a Friday report. For now, few investors see this year’s events as a repeat of the systemic crisis that swept through markets in 2008, taking down Lehman Brothers and prompting government bailouts of large financial institutions. But investors are guarded, wary that another bank run could erupt if people believe U.S. or European regulators won’t protect depositors. “It’s almost like the prisoner’s dilemma where if everyone agrees that they won’t pull their deposits then everything should be okay, but if just one person decides they are getting out then the snowball keeps growing,” said Tim Murray, capital market strategist in the Multi-Asset Division of T. Rowe Price, who is underweight equities, focusing on money market accounts that offer yields comparable to Treasuries. Uncertainty over the Fed’s intentions is amplifying investors’ hesitation in stocks and sparking huge swings in U.S. government bond prices. The Fed raised rates by 25 basis points on Wednesday but indicated it was on the verge of pausing further increases. Investors piled into the safe haven of U.S. Treasuries, sending yields on the two-year note, which closely reflects Fed policy expectations, to 3.76% this week, the lowest since mid-September.Further banking industry failures could mean sooner rate cuts as weakened financial conditions allow the Fed to ease up on its fight against inflation, said Tony Rodriguez, head of fixed income strategy at Nuveen. Futures contracts suggest the Fed will start cutting rates by year-end. Falling interest rates would make dividend-paying stocks and some riskier assets such as higher-quality below-investment-grade bonds attractive, Rodriguez said. “It makes sense to take risk in those areas to take advantage of the weakness we’re seeing now.” Risk assets have been somewhat resilient despite the concerns in the banking sector, said Jason England, global bonds portfolio manager at Janus Henderson Investors. The S&P 500 is up 3.4% this year, though far off its early February highs, and it rose 1% this week, helped by a rally in tech shares. “If inflation comes down because of disruptions in banks and you create tightening for homeowners, the Fed suddenly has its work done for it,” he said. England expects longer-duration bond yields to start to rise from current levels, making short-term bonds and money market funds more attractive. Investors will likely remain steeled for the potential for another high-profile failure until the Fed or Treasury respond in a way that calms fears of another bank run, said Katie Nixon, chief investment officer, wealth management, at Northern Trust (NASDAQ:NTRS), who is focusing on tech-sector stocks with “fortress balance sheets.””Right now it’s a crisis of confidence and everyone is looking for direction,” she said. More

After a meeting with chiefs of state-run banks in New Delhi on Saturday, the finance ministry said in a statement that lenders have been asked to identify stress points, including “concentration risks and adverse exposures”.Ahead of the meeting, the government had sought details of the bond portfolios of these banks, Reuters reported.Banks should safeguard themselves from any potential financial shock, the finance minister told bankers according to the statement.”All the major financial parameters indicate stable and resilient public sector banks,” the statement added.Indian lenders are capable of enduring any potential contagion effects emanating from the U.S. banking turmoil, S&P Global (NYSE:SPGI) Ratings said this week. “Strong funding profiles, a high savings rate, and government support are among the factors that bolster the financial institutions we rate,” the rating agency said. More