Aurelia Butler

DUBLIN (Reuters) – Financiers and lessors who make the global air travel industry tick gather for an annual meeting in Dublin on Monday, buoyed by strong lease rates and relatively stable oil prices but facing uncertainty over jet shortages and trade tensions.Ireland is home to the worldwide aircraft leasing industry, which controls about half the world’s airline fleet, and the Airline Economics gathering provides an early chance each year to monitor economic and trade risks around the globe.Leasing companies have seen rentals and resale values for jetliners rise as airlines try to meet new demand at the same time as planemakers are struggling to recover from the COVID-19 pandemic.For now, that means good profits for lessors and many airlines, since shortages push up demand and fares. But there are concerns over access to efficient new aircraft as supply chains lack parts and labour. Older second-hand planes have been in strong demand to fill the gap.”The main question for the industry is the speed at which manufacturers will be able to ramp up deliveries. That will determine a lot of other things,” said independent aviation adviser Bertrand Grabowski.He said lease rates had started to plateau with airlines increasingly unwilling to add capacity at any cost.Delegates are split on how long the shortage will last. “Several lessors and observers think the market can return to an excess of capacity after three years or so,” Grabowski said. Others believe the removal of some 4,000 jets left unbuilt during the pandemic will keep airlines short of jets for longer.Airbus is targeting production of 75 A320-family jets a month in 2027, having pushed back the goal repeatedly due to supply woes. Boeing (NYSE:BA) is edging back towards 38 of the competing 737 MAX a month – an interim ceiling imposed by regulators following the blow-out of a door plug on a 737 MAX a year ago.TARIFF TALKMany of the roughly 3,000 delegates heading to the Irish capital will also be weighing up the potential impact of the change of power in the United States, a week before President-elect Donald Trump is sworn in for a second term.Trump has promised to impose sweeping tariffs, which some analysts think could affect supply chains of aerospace and other industries while dampening air cargo demand.The head of the world’s second-largest lessor Avolon, Andy Cronin, said any impact on supply chains would be “unhelpful” at a time when airplane factories are struggling to meet demand. Avolon, a major customer of both Boeing and Airbus, has said the world’s dominant planemakers will continue to face capacity constraints for at least a decade.”Any increased costs or challenges that require reorienting … supply chains will be unhelpful to the recovery of stability in that system,” Cronin told Reuters.The airline industry has seen mixed results in the last year, hampered by the delivery delays, slow engine repairs, security issues in the Middle East and growing labour disputes. In December, airlines body IATA predicted record passenger numbers in 2025, with revenues set to reach more than a trillion dollars. But a recovery of travel from China and by business travellers has been slower than expected.Also under the microscope, Grabowski said, is the impact of a surging U.S. dollar on airlines that have to pay for fuel and planes in dollars but get revenues in fragile local currencies.MSCI’s emerging market currencies index is trading close to six-month lows. In India, the world’s fastest-growing air travel market, the rupee hit a record low on Friday. More

TOKYO (Reuters) -Prospects of sustained wage gains in Japan and the boost to import costs from a weak yen have heightened attention within the central bank to rising inflationary pressures that may lead to an upgrade in its price forecast this month, sources said.Even if the Bank of Japan were to raise its inflation forecast, the upgrade alone won’t lead to an interest rate hike if it is driven by temporary factors such as the rising price of rice and higher import costs, said three sources familiar with the bank’s thinking.The BOJ could hike rates this month if the board is convinced that sustained, broad-based wage hikes will take hold, and keep inflation durably at its 2% target, they said.”Risks to inflation are skewed to the upside due partly to renewed yen falls,” said one of the sources, a view echoed by another source.”Wage momentum also appears to be strong,” a third source said, adding the board may discuss revising up its inflation forecast for the fiscal year beginning in April.The BOJ will likely debate whether to raise interest rates from the current 0.25% at its policy meeting on Jan. 23-24. It will also issue fresh quarterly growth and price forecasts that serve as the basis for setting monetary policy.Under current forecasts, the board expects core consumer inflation to hit 1.9% for both fiscal 2025 and 2026. While the board has yet to discuss details of its forecasts, recent data and surveys have pointed to rising inflationary pressures.The yen is currently hovering at 158 to the dollar, down from around 140 hit in September and near levels hit when the BOJ hiked rates in July last year.Core inflation accelerated in November to 2.7% as the weak yen pushed up import costs, adding to stubbornly high prices of rice.Rising wages are adding to inflationary pressure, backing up the BOJ’s argument that Japan is on track to sustainably achieve its 2% inflation target – a prerequisite for further rate hikes.Wage hikes are spreading to companies of all sizes and sectors, the BOJ said in a quarterly report on Thursday, signaling that conditions for a near-term rate hike were continuing to fall into place.”The need to raise pay is more widely shared among small firms,” Kazushige Kamiyama, the BOJ’s Osaka branch manager, told a news briefing on Thursday. “We can expect solid wage gains this year.”While such optimism heightens the chance of a rate hike at the BOJ’s January meeting, Governor Kazuo Ueda has flagged uncertainty over U.S. President-elect Donald Trump’s policy as a reason to tread cautiously in pushing up borrowing costs.If comments and policies announced after Trump’s inauguration on Jan. 20 trigger volatile market moves, the BOJ could put off hiking rates again, some analysts say.Markets are focusing on BOJ Deputy Governor Ryozo Himino’s speech and news conference on Tuesday, for fresh hints on whether the bank could hike rates this month. More

GS expects two rate cuts in 2025- in June and December, and one additional cut in 2026, bringing the Fed’s terminal rate to 3.5% to 3.75%, from current levels of 4.25% to 4.5%. The investment bank’s shift in expectations came just after stronger-than-expected nonfarm payrolls data for December, which spurred increased bets that the Fed will have little immediate impetus to keep cutting interest rates. The reading also triggered steep losses on Wall Street.The Fed cut rates by 1% through 2024, but warned of a much slower pace of cuts this year. The central bank had effectively slashed its outlook on rate cuts to a projected two from four for 2025, citing concerns over sticky inflation and a strong labor market. GS analysts said that while their baseline forecast for rates remained somewhat more dovish than market pricing, it was hard to have “great conviction in the timing of cuts” due to expectations of robust U.S. economic data, which made cuts reasonable but not critical. The investment bank also said that it was uncertain over how the Fed will navigate increases in trade tariffs under incoming President Donald Trump, who will take office next week. Trump has vowed to impose steep import tariffs on several major U.S. trading partners, especially China. But American importers are expected to pay the tariffs, heralding an increase in domestic goods and services that are reliant on imports. Still, GS analysts said they did not expect Trump’s fiscal and immigration policies to have a perceptible impact on inflation, and that tariffs would likely not raise inflation enough to warrant interest rate hikes or to unsettle Wall Street.  More

LONDON (Reuters) -Zambia’s Securities and Exchange Commission (SEC) has sanctioned Standard Chartered (OTC:SCBFF) for mis-selling a Chinese property company’s bonds to one of the bank’s local wealth clients at the height of the Asian country’s real-estate crisis, according to a source. The source familiar with the matter told Reuters that the UK-headquartered bank, which is currently looking to sell its wealth and retail banking businesses in Zambia, was facing “enforcement action” for two breaches of SEC rules following a months-long investigation.The first was that it had failed to disclose “material information” about the bonds it sold in March 2022. Those bonds, issued by state-backed Chinese developer Sino-Ocean, defaulted just over a year later and are now, like many in the sector, almost worthless. In addition, the SEC found Standard Chartered had also used “exclusionary” contract clauses, which meant the client held all responsibility for the risks, which goes against Zambia’s securities rules.In a statement to Reuters, Standard Chartered said: “We respect the outcome of the Securities Exchange Commission in Zambia, however, in accordance with appropriate local procedures we will respectfully be exercising our right to appeal.” “We are fully aware of this matter, and we are reviewing the necessary details to clarify the situation. It is our priority at the Bank to ensure compliance with regulatory standards across all of our markets.” The SEC, which started its investigation of the case in April, said it was not able to comment on the matter when asked by Reuters. Under Zambia’s Securities Act, Standard Chartered now has 30 days to lodge its appeal.Zambia’s SEC has the power to fine, or publicly or privately “censure or reprimand” lenders, although it can’t formally order them to compensate customers for mis-selling. Reuters wasn’t able to establish what penalty the regulator is planning to impose on Standard Chartered.The lender announced in November it was looking to sell its Zambian wealth and retail banking businesses alongside those in nearby Botswana and Uganda. It has operated in Zambia for nearly 120 years making it the country’s oldest bank. It is currently reducing its overall footprint in Africa, however, having also sold its Tanzania business and subsidiaries in Angola, Cameroon, The Gambia, and Sierra Leone in the last couple of years. More

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(Reuters) – A look at the day ahead in Asian markets. If the reaction in U.S. stocks, bonds and the dollar to Friday’s sizzling U.S. employment report is any guide, Asian markets are in for a bumpy ride on Monday, rocked by another whoosh higher in bond yields and inflation fears.The U.S. economy created over a quarter of a million net new jobs and the unemployment rate fell last month, reflecting a robust labor market. That’s good news. But the bad news for asset markets, especially in emerging and Asian economies, is the impact on borrowing costs and the dollar.Treasury yields surged to the highest in over a year, the dollar hit a two-year peak, and traders are now only predicting one quarter-point rate cut from the Fed this year, in September.The S&P 500 fell to its lowest since November 5, the day of the U.S. presidential election, and it looks like soaring bond yields could crush investors’ appetite for risky assets like stocks.Japanese futures are pointing to a fall of more than 1% at the open in Tokyo on Monday, and it will be a similar story around the continent. Sentiment is already fragile, as the explosive rise in long-term bond yields has tightened financial conditions everywhere. According to Goldman Sachs, aggregate emerging market financial conditions are the tightest since late 2023.Uncertainty over the potential hit to growth in Asia – especially China – from the incoming Trump administration’s ‘America First’ trade policies is another reason to be cautious if not outright bearish.Trade figures from China on Monday are unlikely to lift the gloom. Economists polled by Reuters expect export growth accelerated in December while imports contracted for a third straight month.December’s import figures are likely to garner more attention as they reflect the strength of domestic demand, and can therefore perhaps be seen as an early sign of how successful Beijing’s stimulus efforts have been. The trade figures are the first clutch of top-tier indicators from China this week which include house prices, retail sales, industrial production, investment, unemployment and culminate on Friday with fourth-quarter and full-year GDP.Investors will also assess the People’s Bank of China’s announcement on Friday that it has suspended treasury bond purchases, spurring speculation it is stepping up defense of the yuan. Will this be enough to put a floor under yields and the yuan? The annual Asian Economic Forum opens in Hong Kong, and among the speakers on Monday are Hong Kong Monetary Authority Chief Executive Eddie Yue, China Investment Corp’s CIO Liu Haoling, and European Central Bank board member Philip Lane.Meanwhile, Indian inflation on Monday is expected to show that the annual rate cooled slightly in December to 5.3% from 5.5% in November. Here are key developments that could provide more direction to markets on Monday:- China trade (December)- India CPI inflation (December)- Asia Economic Forum More

(Reuters) -U.S. bank JPMorgan Chase (NYSE:JPM) on Friday asked its employees who are on hybrid work schedules to return to the office five days a week starting in March, an internal memo seen by Reuters showed, prompting hundreds of staff comments, including complaints.Financial companies have been aggressive in enforcing return-to-office demands in the wake of the pandemic which began to impact the U.S. in 2020. Many companies began to call staff back to the office as early as 2021.JPMorgan CEO Jamie Dimon and counterparts at Goldman Sachs and Morgan Stanley (NYSE:MS) have been strong advocates of working from the office, saying it fosters better learning, innovation and culture.More than half of JPMorgan’s employees already come into the office full-time, according to the memo from the bank’s operating committee. It has more than 316,000 staff worldwide.”Now is the right time to solidify our full-time in-office approach,” the executives wrote. “We think it is the best way to run the company.”  A JPMorgan spokesperson confirmed the contents of the memo but declined to comment further.”We know that some of you prefer a hybrid schedule and respectfully understand that not everyone will agree with this decision,” Dimon and other leaders wrote in the memo. “Being together greatly enhances mentoring, learning, brainstorming and getting things done.” Some JPMorgan staffers pushed back against the return-to-office directive by posting comments on the company’s intranet site, according to two sources who saw the posts and declined to be identified discussing personnel matters.The complaints cited increased commuting and childcare costs, as well as concerns about mental health and stress, according to one of the sources.After more than 300 comments were posted within the first hour, the page was locked, the second source said.Essential workers at lenders, including bank branch employees, reported for in-person work throughout the pandemic. JPMorgan called corporate staff back to offices on a rotational basis in mid-2021 after months of pandemic shutdowns, and brought managing directors back to the office full-time in 2023.The largest U.S. lender said that employees will be given at least 30 days’ notice before they are expected to return to offices full-time. The employees were also directed to seek manager approval if they needed more time to prepare.”What is not changing is our support for flexibility in the workplace, which we are committed to providing at every level in a fair way,” the bank said.The memo also included a link to a list of frequently asked questions, giving details about special exceptions for remote work, flexibility for personal reasons and attendance logs. More