Aurelia Butler

The proposed ban, which would prohibit the sale of menthol cigarettes and all flavored cigars, will not take effect for at least two years, according to the WSJ report. The FDA did not immediately respond to Reuters request for comment. The agency could publish final rules as early as 2023 and the ban could be set to take effect in 2024, the newspaper report said. For decades, menthol cigarettes have been in the crosshairs of anti-smoking groups who have argued that they contribute to disproportionate health burdens on Black communities and play a role in luring young people into smoking. The proposal, which comes a year after the agency announced the plan, is likely to face stiff opposition from the tobacco industry. The WSJ report said at least one tobacco company has indicated that it might sue, which could further delay the ban. Menthol cigarettes, banned in many states including California and Massachusetts, account for more than a third of the industry’s overall market share in the United States, even as overall smoking rates have been declining in the country. More

US economic growth unexpectedly contracted in the first quarter amid growing trade imbalances, rising inflation and supply chain disruptions.The US commerce department reported that gross domestic product dropped 1.4 per cent on an annualised basis in the first quarter, down dramatically from the 6.9 per cent rise recorded in the fourth quarter of 2021.That marks the first contraction of the economy since mid-2020, when Covid-19 lockdowns had curtailed activity. The data translates to a 0.4 per cent fall compared with the previous quarter, based on a measure used by other major economies. The data comes as fears mount that inflation and aggressive tightening by the Federal Reserve will trigger an economic recession. A widely used indicator of recession — the inversion of the yield curve — briefly flashed red earlier this month. US growth is being threatened by the highest inflation in 40 years as the Russian invasion of Ukraine has driven up commodity prices, and current lockdowns in Beijing herald further supply chain issues. The Fed has indicated that it will respond to inflation forcefully, with markets pricing in a half percentage point rate rise at its next meeting in May. Investors in the futures market now expect the central bank to lift its key interest rate to 2.7 per cent by the end of the year, up from between 0.25 and 0.5 per cent today. But the full effects of inflation and tighter monetary policy have not yet translated into GDP.The headline figure belied ongoing strength in American household incomes. Personal consumption grew by 2.7 per cent in the first quarter, up from 2.5 per cent at the end of last year. That was nevertheless weaker than the forecast 3.5 per cent. The strength in consumer spending was offset by the growing trade deficit, which hit a record high in March as import volumes and prices surged. The robust import demand, and change in the trade deficit, detracted from GDP, because it is a gauge of production. A revision to how retail sales are calculated — announced by the census bureau on Monday — also curtailed growth in the first quarter, and is expected to bolster GDP in the second quarter. More

Travel chaos had been expected from May 1, the day after the end of a notice period for air traffic controllers who chose to quit rather than accept new working regulations that they said threatened safety.”We have managed to reach an agreement,” a union representative told a parliamentary commission. “We must realise that this is not the end of the battle.”Under the terms of the agreement, the air traffic controllers have had their notice period extended to July 10, while the Polish Air Navigation Services Agency (PANSA) will start an organisational audit and restructuring. The parties will continue to discuss regulations over pay and working practices.The Polish government had passed a decree that would have drastically cut the number of flights at Warsaw’s two airports from May 1. “I hope the effects of this decree will be withdrawn tomorrow,” said Infrastructure Minister Andrzej Adamczyk. He said PANSA had agreed to the controllers’ pay returning to pre-pandemic levels. Controllers’ salaries had been cut due to fewer flights flown during the pandemic.Airlines that would potentially have been affected by the reduction in flights include LOT Polish Airlines, Wizz Air and Lufthansa, which all operate out of Chopin airport, and Ryanair, which flies out of Modlin.The dispute also was related to proposed changes to working practices, including an increase in the maximum number of hours that air traffic controllers could work in a shift. More

Britain is to delay for a fourth time full post-Brexit border checks on imports from the EU after ministers concluded they would drive up costs and exacerbate the cost of living crisis.The move was broadly welcomed by the food industry but veterinary and farming groups warned that the continued suspension of checks at the border on animal and agrifood products risked causing “significant damage” to UK farming industries. Port operators were also critical, saying the £100mn they had spent in preparation for the checks “now looks like wasted time, effort and money”.In a letter to MPs, Jacob Rees-Mogg, Brexit opportunities minister, said the government was dropping border checks that were due to be implemented in July until at least the end of 2023, but with a final date subject to industry consultation.Since the end of the Brexit transition period, British companies have faced costly paperwork and checks when exporting to the EU, but Rees-Mogg’s decision means their counterparts on the continent will still be spared such bureaucracy when selling into the UK market.James Russell, senior vice-president of the British Veterinary Association, said the government’s move “flies in the face” of ministers’ commitment to preserve high levels of animal and human health in the UK at a time when diseases such as African swine fever had already had a catastrophic impact in parts of Europe. “We urge the government to abandon these plans and close off the threat of causing significant damage to our food and farming industries,” he said. Tim Morris, chief executive of the UK Major Ports Group, said port operators feared the facilities they had built “will be highly bespoke white elephants”. “Government needs to engage urgently with ports to agree how the substantial investments made in good faith can be recovered,” he said. “We will of course be working closely with the government on its new vision of a slimmer and smaller regime of border checks.”Rees-Mogg told MPs that one of the “key benefits” of leaving the EU was the ability of Britain to manage its own border arrangements to the benefit of its citizens.The government said the delay in imposing full checks on EU imports would save at least £1bn in border costs.Rees-Mogg told MPs that the government’s approach was “proportionate to risk” and that imposing new administrative burdens on imports would “compound” cost of living pressures.Without the delay, from July 1 so-called sanitary and phytosanitary checks would have required imports of EU animals and agrifood products to be checked by vets and other health officials on arrival in the UK.Instead, those checks will continue to be carried out “at destination”, away from the border. EU imports will also not be required to have accompanying “safety and security declarations”, or health certificates, which are required on UK goods arriving in the EU.Checks were first delayed in June 2020 after the Covid-19 pandemic started to bite, followed by further deadline extensions in March 2021 and September 2021. Trade groups broadly welcomed the move, but also expressed frustration over the continued moving of goalposts, which one insider said had cost time and money.“The irony of all this is the government has delayed the checks to address the cost of living crisis, having cost business a fortune with their repeated delays and inability to deliver border controls,” said one industry executive.Dominic Goudie, head of international trade at the Food and Drink Federation, which represents leading manufacturers in the sector, welcomed the clarity that the decision had given the industry and urged the government to use the time to streamline border processes.

“It’s critical that real changes are made to the way sanitary and phytosanitary certification is completed, rewarding trusted and high standard traders and making groupage far easier,” he added.William Bain, head of trade policy at the British Chambers of Commerce, said it was “sensible” to postpone food checks, which research had shown had damaged UK exports to the EU, particularly from smaller businesses. However, the BCC reiterated its call for a veterinary agreement with the EU to significantly reduce food-related border checks. Rees-Mogg said: “Today’s decision will allow British businesses to focus on their recovery from the pandemic, navigate global supply chain issues and ensure that new costs are not passed on to consumers.“It’s vital that we have the right import controls regime in place, so we’ll now be working with industry to review these remaining controls so that they best suit the UK’s own interests.”A European Commission spokesman said: “This is a UK decision regarding its own border and therefore we have no comment to make.”Additional reporting by Andy Bounds in Brussels More

TOKYO (Reuters) – The Bank of Japan on Thursday strengthened its commitment to keep interest rates ultra-low by vowing to buy unlimited amounts of bonds daily to defend its yield target, triggering a fresh sell-off in the yen and sending government bonds rallying.Reinforcing its resolve to support a fragile economy even as sharp rises in raw material costs push up inflation, the BOJ maintained its ultra-loose monetary policy and a pledge to keep interest rates at “present or lower levels.”It also said it would buy unlimited amounts of 10-year government bonds to defend an implicit 0.25% cap around its zero yield target every market day, instead of on an ad-hoc basis.The BOJ’s commitment to its zero-rate programme puts it at odds with other major economies that are shifting toward tighter monetary policy to combat surging prices, although inflation in Japan is expected to creep up towards the central bank’s 2% target.”The key announcement is the commitment to conducting fixed-rate operations every day,” said Bart Wakabayashi, co-branch manager at State Street (NYSE:STT) Bank in Tokyo.”I think they are trying to make the point here that we’re ready to act at any second. They’ve quadrupled down on their commitment to this.”The BOJ’s strengthened commitment to keep policy accommodative drove the yen well below the psychological threshold of 130 to the dollar for the first time since 2002.Yields on the benchmark 10-year Japanese government bonds slipped to a more than three-week low of 0.215%.”We want to prevent Japan’s long-term interest rates from rising in line with overseas bond yield increases,” BOJ Governor Haruhiko Kuroda told a news conference after the policy decision.Kuroda said there was no change to his view that a weak yen benefits Japan’s economy, a sign further falls in the currency likely won’t prompt the BOJ to tweak its ultra-easy policy.But he warned that excess market volatility could hurt the economy by making it difficult for firms to set business plans.An official of Japan’s finance ministry, which decides whether to conduct currency intervention, told reporters Tokyo will take “appropriate” action as needed and warned that recent sharp yen moves were “extremely worrying”.As widely expected, the BOJ left unchanged its -0.1% target for short-term interest rates and a pledge to guide the 10-year bond yield around 0%.RISING INFLATIONARY PRESSUREIn fresh quarterly forecasts, the central bank projected core consumer inflation to hit 1.9% in the current fiscal year before moderating to 1.1% in fiscal 2023 and 2024 – a sign it sees current cost-push price rises as transitory.In a nod to rising inflationary pressure, however, the BOJ said wage and price increases were expected to broaden as the economy continues to recover.”The rise in underlying inflation is likely to further push up medium- and long-term inflation expectations,” the central bank said in its quarterly outlook report.But Kuroda said he did not expect conditions to fall in place for the BOJ to seek an exit from its loose policy in the foreseeable future.BOJ officials see developments in long-term price expectations as crucial to judging whether inflation becomes embedded and warrants withdrawing monetary stimulus.Core consumer inflation, which hit 0.8% in March, is set to accelerate to around 2% from April, though the rise will be driven largely by rising fuel costs and the dissipating effect of past cellphone fee cuts – rather than from higher wages, or underlying demand.Some analysts say the markets could challenge the BOJ’s easy policy commitment.”There’s no sign at all that prices are stably going to rise to 2% so everyone is wondering whether it’s really good to keep going as it is,” said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.”Markets could attack (the BOJ’s unlimited bond buying),” he said. More

FRANKFURT/LONDON (Reuters) -The European Central bank backed on Thursday European Union proposals to toughen scrutiny of foreign lenders in the bloc, which has become a thorny issue since Brexit.Lenders from the United States, Switzerland and Britain, now outside the EU, fear the proposals will force them to set up a costly branch or subsidiary in the bloc if they want to keep providing some wholesale services to EU customers.[L8N2UY4OJ]The EU’s executive European Commission said its proposals are aimed at clarifying when foreign banks should set up a base in the bloc for core banking services such as deposit accounts.The ECB said the scope of what constitute core banking services needed further detailing by setting out a clear list.Currently, national regulators in the EU have wiggle room on when a foreign bank should set up a branch, and the commission wants a more harmonised approach.Data on such cross-border activity is hard to come by given the patchwork of rules and the ECB, which regulates big lenders in the bloc, said it was important to establish a comprehensive view.”These regulatory differences create an unlevel playing field and prevent the ECB from having a clear overview of the activities of third-country banks in the EU,” ECB supervisor Frank Elderson said in a blog.”The Commission proposes to address these differences, strengthening the single market and minimising supervisory blind spots, thus rendering supervision more effective,” Elderson said.The ECB said that reporting requirements on a foreign bank’s head office should be extended to cover services provided to EU customers to increase transparency for regulators.The EU proposals also set out when an existing foreign bank branch should become a subsidiary, a more costly undertaking. The ECB said this should not be an ‘automatic’ procedure but based on an assessment by supervisors once a size threshold is reached.But assets held at the branch along with those booked elsewhere should be part of the size threshold, the ECB said.The European Parliament and EU states have the final say on the EU proposals with deliberations ongoing. More

Investing.com — U.S. first-quarter GDP growth is due, and is expected to show a sharp Covid-driven slowdown. Earnings season continues at fever pitch, with last night’s update from Facebook (NASDAQ:FB) owner Meta Platforms ensuring a positive start to the day. Economic bellwether Caterpillar (NYSE:CAT) also reported strong results, but the main event comes later in the day with Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN). The Bank of Japan pushed the yen to a 20-year low as it once again refused to act in the face of rising inflation. Sweden’s central bank started a long cycle of rate hikes however. The standoff between Europe and Russia over gas deliveries deepened, as Italy’s Eni buckled to Kremlin pressure to pay in rubles. Here’s what you need to know in financial markets on Thursday, 28th April.1. Omicron set to weigh on U.S. GDPThe U.S. is expected to report a sharp slowdown in economic growth in the first quarter, the result of a resurgence of Covid-19 in its new Omicron strain that kept more of the economy locked down for longer than had been expected at the start of the year.The figures, due at 8:30 AM ET (1230 GMT), are expected to show growth slowing to an annualized rate of 1.1% from 6.9% in the fourth quarter. If the past is any guide, the figures are likely to be revised upward in subsequent readings, as the traditional data collection methods haven’t adapted completely to changes in working practices during the pandemic.At the same time, the Labor Department will release the week’s jobless claims numbers. There has been little sign of the tightness in the labor market easing in recent weeks, amid widespread evidence that firms are struggling to hire new workers.2. BoJ drives yen to 20-year lowThe Bank of Japan drove the yen to a 20-year low, doubling down on its efforts to keep long-term government bond yields capped well below the rate of inflation.The BoJ pledged after its routine policy meeting to continue buying unlimited amounts of 10-year government bonds to defend its implicit 0.25% yield cap, signalling its resolve to focus on supporting a fragile economy. The dollar surged 1.3% to break through the 130 yen level for the first time since April 2002.That also took the dollar index, which tracks the greenback against a basket of advanced economy currencies, to within half a percent of a 20-year high. The dollar also continues to gain against emerging currencies: it rose 0.8% against the offshore Chinese yuan to an 18-month high.It wasn’t all one-way traffic though. The Swedish krona rose across the board as the Riksbank raised its repo rate by 0.25% and flagged a series of rises to come over the next two years. The euro remained under pressure after data suggesting that core inflation remained strong in April.3. Meta set to lift stocks at opening. Apple and Amazon earnings the highlight of a busy dayFacebook owner Meta Platforms (NASDAQ:FB) put the pep back into U.S. stocks with a quarterly report that showed a surprisingly strong increase in users, taken as a sign that its Instagram Reels feature is reasonably capable of competing with the likes of TikTok. Annual revenue growth of 6.6% was still the slowest in its history as a listed company, however. Meta stock was up 16.7% in premarket.Also performing well in premarket was Qualcomm (NASDAQ:QCOM) stock, up 7.6% after a strong quarterly report for the chipmaker, while Ford Motor (NYSE:F) was up 2.2%.By 6:15 AM ET, Dow Jones futures were up 283 points, or 0.8%, while S&P 500 futures were up 1.4% and Nasdaq 100 futures were up 2.0%.Apple and Amazon round off the earnings season for Big Tech after the bell, with Apple needing to reassure the market that its iPhone production in China won’t be too badly affected by the spate of Covid-19 lockdowns. For Amazon, the focus will be on whether its Cloud business can defend its lead over Microsoft (NASDAQ:MSFT), and whether its retail business can cope with surging delivery costs.4. Bellwether Caterpillar beats expectations, inflation theme runs through consumer giants’ updatesThe earnings storm continues with unabated intensity, with a broad cross-section of companies across the economy reporting.Caterpillar, widely seen as a bellwether for the economy in general, delivered quarterly earnings some 10% above expectations at $2.88 billion, while pharma giant Merck (NYSE:MRK) upgraded its full-year forecast after a strong start to 2022.Consumer giants Altria (NYSE:MO) and McDonald’s (NYSE:MCD) will give important outlooks before the bell, while overnight, Unilever (NYSE:UL) and Danish brewer Carlsberg (OTC:CABGY) both warned that input cost inflation is set to get worse before it gets better. Miner Glencore (OTC:GLNCY) rose after cutting its output forecasts for important battery metals copper and cobalt.Samsung (KS:005930) meanwhile reported its strongest March quarter since 2018.5. EU gas companies buckle under Russian pressure The face-off between Europe and Russia over energy deliveries intensified, as the European Commission warned EU companies not to comply with Russian demands to pay for their gas in rubles.Italian oil and gas giant Eni is reportedly one of around 10 European buyers of Gazprom’s gas that have applied to open ruble accounts at Gazprombank to satisfy Russia’s demand that they pay in Russian currency rather than in euros or dollars. The EU Commission warned that this would breach existing sanctions on Russia.Benchmark European Natural Gas Futures eased 4.6% to 102.5 euros a megawatt-hour. Analysts have interpreted the spat over gas deliveries as a warning shot to its bigger European customers, Italy and Germany, in what the Kremlin is increasingly styling as an existential war against NATO, rather than a limited operation to ‘liberate’ Russian speakers in eastern Ukraine. More

STOCKHOLM (Reuters) -Sweden’s central bank hiked its key interest rate by 25 basis points to 0.25% on Thursday and flagged further increases ahead, joining a growing group of central banks tightening policy to curb surging inflation.The Riksbank has been caught by surprise by price rises, which have climbed higher and proved more persistent than it forecast.As recently as February, Swedish policy-makers had expected price pressures to be short-lived and that rate hikes would not be needed until 2024.Now the Riksbank sees two or three more rate hikes this year and more to come in 2023.”Prices are rising now across the board … furniture, cars, coffee, bread,” Governor Stefan Ingves told reporters. “When it comes to monetary policy in the coming years, it’s all about getting the pace of inflation down to somewhere near 2%.”The policy shift brought the Riksbank roughly in line with market forecasts, but with inflation risks on the upside, rate-setters could be forced to move even more forcefully.”In practice we expect policy-makers to tighten faster than they currently project,” David Oxley, Senior European Economist at Capital Economics said.The benchmark rate has not been in positive territory since 2014.PERFECT STORMRussia’s invasion of Ukraine, which Moscow calls a “special military operation”, has added upward pressure to prices, already on the rise due to the lingering effects of the pandemic, with inflation hitting its highest level in decades. Inflation ran at 6.1% in March, far above the Riksbank’s 2% target.Some central banks, like the U.S. Federal Reserve and the Bank of England, have started hiking rates. Others, like the European Central Bank, are expected to follow suit.But there are reasons to be cautious.The war in Ukraine is clouding growth prospects, inflation is squeezing household spending power and higher mortgage costs are likely to hit consumption. There is little central banks can do about energy prices.It is also unclear whether there has been a permanent shift in inflation- and rates – to much higher levels. Even with the forecast hikes, the real interest rate – borrowing costs minus inflation – should end up around 0%, Ingves said.”It’s not that we are putting on the brakes … rather that we are easing up on the gas pedal,” he said.The Riksbank’s balance sheet will also shrink this year.The Swedish crown strengthened sharply after the Riksbank’s announcement. More