Aurelia Butler

STOCKHOLM (Reuters) -Automaker Volvo Cars and battery manufacturer Northvolt will build their joint battery plant in Gothenburg, western Sweden, the two companies said on Friday.The new 50-gigawatt-hour (GWh) plant will create up to 3,000 jobs and make battery cells specifically developed for use in pure electric Volvo and Polestar cars, the Sweden-based companies said. Operations will begin in 2025.The two companies said last year they would form a joint venture to develop batteries, including setting up a gigafactory for production and an research and development centre, a total investment of about 30 billion crowns ($3.3 billion).Northvolt and Volvo said former Tesla (NASDAQ:TSLA) executive Adrian Clarke had been appointed to lead the production company. “He comes with a long experience from Tesla as well as around how to build these type of factories,” Northvolt CEO Peter Carlsson, who also previously worked for Tesla, told Reuters.Volvo Cars head of engineering and operations, Javier Varela, said access to fossil-free energy, skills and infrastructure had been factors for choosing Gothenburg, Volvo’s hometown.Competition for talent is fierce, with most battery engineers based in Asia. Tesla and Asian companies such as LG and Samsung (KS:005930) SDI are also setting up factories in Europe.Northvolt’s gigafactory in the Swedish town of Skelleftea assembled its first battery cell at the end of December, making it the first European company to design and manufacture a battery in Europe.Carlsson said it was running as planned, although he said global supply-chain problems, semiconductor shortages and the COVID-19 had made it more of a challenge. “It has not been the easiest of times,” he said.Volvo Cars, majority owned by China’s Geely Holding, aims to sell 50% pure electric cars by the middle of this decade and fully electric cars only by 2030.Northvolt, whose biggest shareholder is Volkswagen (DE:VOWG_p), has so far receive more than $30 billion worth of contracts from customers such as BMW, Fluence, Scania, Volkswagen, Volvo Cars and Polestar. ($1 = 9.0703 Swedish crowns) More

LONDON (Reuters) -Investment banks brought forward their calls on European Central Bank interest rate hikes after a hawkish turn from the ECB that opened the door to the possibility of increased borrowing costs this year.With euro zone inflation at a record high in January, ECB President Christine Lagarde declined to repeat her past comment that a 2022 rate hike was very unlikely at a news conference following the bank’s policy meeting on Thursday.Sources told Reuters after the meeting that a decision to dial back stimulus now looked likely in March, starting with a faster-than-expected wind-down of the bank’s bond purchases, which according to ECB guidance need to end before rate hikes.The updated calls brought banks somewhat more in line with market pricing. Adding to a sharp repricing on Thursday, money markets moved on Friday to price in a first, 10 basis-point (bps) rate rise by June 2022 and 50 bps worth of hikes by December.Goldman Sachs (NYSE:GS) analysts said on Friday that they expected the ECB to raise interest rates by 25 bps each in September and December, putting the bank’s policy rate at 0% by the end of the year.Policymakers would decide in March to end the asset purchase programme by June and raise its deposit rate by 25 bps each in September and December, they forecast.”Following large upside inflation surprises and yesterday’s hawkish policy pivot, we now look for a substantially earlier ECB exit,” strategists at the U.S. investment bank said in a note, where they also revised their inflation forecasts higher. Deutsche Bank (DE:DBKGn), BNP Paribas (OTC:BNPQY), BofA and Commerzbank (DE:CBKG) also amended their forecasts late on Thursday to expect lift-off to start in September with two, 25 basis-point hikes by the end of the year, and expecting bond purchases to end in the second or third quarter. Others, such as JPMorgan (NYSE:JPM) and Danske Bank, were slightly more cautious, expecting only one 25 bps rate hike in December.ING and Citi economists also said they saw room for one rate hike this year.Banks, however, diverged on how far the ECB could hike rates after a move this year.After two hikes this year, Goldman Sachs expected a pause until June 2023, followed by hikes every six months until a terminal rate at 1.25% in June 2025. BNP Paribas expected a further two hikes in 2023, with potential for further policy tightening thereafter. Deutsche Bank expected rates at 1% before end-2024. Commerzbank expected rate hikes to pause next year and only resume in the second half of 2024. More

WASHINGTON (Reuters) – U.S. job growth likely slowed sharply in January as COVID-19 infections lashed the nation, disrupting activity at high-contact business, a temporary setback to the labor market recovery that was already reversing at the end of the month. There is even a strong possibility that the economy lost jobs last month as lower-paid hourly workers in industries like healthcare as well as leisure and hospitality, who typically do not have paid sick leave, bore the brunt of the winter wave, driven by the Omicron variant of the coronavirus. The Labor Department will publish its closely watched employment report on Friday. Economists and White House officials have urged against reading too much into the report, which will also contain annual revisions to the establishments data and new population controls for the household survey. Federal Reserve officials, who are expected to start raising interest rates next month, are likely to brush aside the report. “The hiccup in the labor market and lost jobs is temporary. It is the inflation danger that is paramount in the minds of Fed officials,” said Christopher Rupkey, chief economist at FWDBONDS in New York. “We don’t care how weak the monthly employment report is for January, no central banker worth his or her salt will believe the economy is faltering.”The survey of establishments is likely to show that nonfarm payrolls increased by 150,000 jobs last month after rising by 199,000 in December, according to a Reuters poll of economists.Part of the slowdown will reflect ongoing challenges finding workers, with 10.9 million job openings at the end of December.Estimates range from a decrease of 400,000 to a gain of 385,000. A decline in payrolls would be the first since December 2020. According to the Census Bureau’s Household Pulse Survey published in mid-January, 8.8 million people reported not being at work because of coronavirus-related reasons between Dec. 29 and Jan. 10. Its survey of small businesses also showed an increase in establishments reporting large negative impacts from the pandemic between Jan. 10 and Jan. 16. The government surveyed businesses in mid-January for the payrolls portion of the employment report, when Omicron infections were peaking. Workers who are out sick or in quarantine and do not get paid during the payrolls survey period are counted as unemployed in the establishment survey even if they still have a job with their companies.According to the latest government data, paid sick leave was available to 79% of civilian workers in March 2021.The labor market, and indeed the economy’s troubles at the start of the year are mostly behind. The government reported on Thursday that first-time applications for unemployment benefits dropped for a second straight week last week, retreating further from a three-month high touched in mid-January.The United States is reporting an average of 385,875 new COVID-19 infections a day, sharply down from the more than 700,000 in mid-January, according to a Reuters analysis of official data.”As the medical situation changes, so will the employment impact,” said Brad McMillan, chief investment officer at Commonwealth Financial Network in Waltham, Massachusetts. “The January jobs report will be another great example of how not reacting to immediate news, but instead looking at the underlying data, can make you a better investor.”NOISY REPORT Adding to the uncertainty surrounding the payrolls number, actual employment in January typically falls after the holiday season hiring. The model used by the government to strip out seasonal fluctuations from the data accounts for this by adding about 3 million jobs to produce the seasonally adjusted figure.The government estimated last August that the economy created 166,000 fewer jobs in the 12 months through March 2021 than previously reported. This could impact the January figure.”If fewer than usual layoffs occur in some industries this year, perhaps reflecting that the level of employment is already lower than desired given worker shortages, adjusted figures would show a large increase,” said Veronica Clark, an economist at Citigroup (NYSE:C) in New York. A weak payrolls number was flagged this week by the ADP National Employment report, which showed private payrolls declined in January for the first time in a year.White House officials have been frantically trying to prepare the nation for a disappointing payrolls number, with several officials offering a preview of the report.The survey of households, from which the unemployment rate is derived, could offer a better view of the labor market. It counts people who have a job as employed regardless of whether they got paid during the survey week if they were temporarily absent from their jobs because of illness, bad weather, vacation, labor-management disputes, or personal reasons. The unemployment rate is forecast unchanged at 3.9%, underscoring tightening labor market conditions. New population assumptions will, however, cause a break in the series. January’s jobless rate and other ratios from the household survey are not directly comparable to December.With Omicron’s surge keeping workers at home, the pool of labor likely remained small. The workforce is 2.2 million jobs below its pre-pandemic level.The loss of low-paying hourly jobs likely boosted wage growth. Average hourly earnings are forecast rising 0.5%, which would raise the annual increase to 5.2% from 4.7% in December. Economists also expected an increase in overtime pay as workers covered for their absent colleagues. More

Investing.com — Amazon (NASDAQ:AMZN) and Snap (NYSE:SNAP) put a trampoline under technology stocks, but U.S. markets are still set to open under pressure later. Markets bet on ECB rate hikes already by the end of the year, pushing the euro 2 cents higher against the dollar and Eurozone bond yields to multiyear highs. U.S. jobs data for January are due at 8:30 AM ET and Omicron suggests that the figures will be messy. And oil prices surge to new highs as Texas braces for a big freeze. Here’s what you need to know in financial markets on Friday, 4th February. 1. Amazon’s too-good-to-be-true Q4Amazon stock rebounded sharply after reporting a quarter that was flattered by a one-off gain on its stake in electric van maker Rivian (NASDAQ:RIVN). The $11.8 billion paper gain on Rivian, which went public in the fourth quarter, meant that net profit nearly doubled from a year ago. Rivian stock has fallen 40% since the end of the year, meaning that much of those gains will be reversed in the current quarter, absent a recovery in the EV-maker’s performance.Amazon Web Services continued to churn out cash, with an operating profit of over $5 billion, while the strength of its advertising business – broken out for the first time – also impressed. However, the company lost over $1.8 billion on its core e-commerce operations due to rising labor and transportation costs – something it aims to address with a 16% hike in its Prime subscription fee.Amazon’s results may only partly allay fears that its pandemic-driven boom is fading: it sees operating income at between $3 billion and $6 billion in the current quarter, down from $8.9 billion a year ago.2 Payrolls data dueThe U.S. releases its official labor market report for January at 8:30 AM ET (1330 GMT), two days after payrolls processor ADP indicated that private-sector employment actually fell by over 300,000 through the middle of last month.ADP’s figures were heavily affected by the wave of Omicron-variant Covid-19, which hit the service sector disproportionately hard.  Consensus forecasts, which predate the ADP’s release, are for a gain of 150,000 nonfarm jobs last month, down from 199,000 in December. Given the hit to employment will once again hit (relatively low-paid) service sector work, the risk is that the Omicron wave also translates into an upside surprise on average hourly earnings, which are expected to rise 0.5% on the month.  3. Stocks set to open mostly lower, but Snap snaps backAmazon – and, to a lesser degree, Snap and Pinterest (NYSE:PINS) – are supporting NASDAQ futures in the overnight session, but U.S. stocks are set for a mixed opening later.By 6:15 AM ET (1115 GMT), Dow Jones futures were down 178 points, or 0.5%, while S&P 500 futures were down 0.1%. Only NASDAQ 100 futures were up, rising 0.7%, and even that represents only a modest bounced after Thursday’s 3.7% drop in the NASDAQ Composite.Snap stock was up more than 45% in premarket trading after it defied the general pessimism about long-duration tech stocks, posting its first-ever quarterly profit and seemingly putting problems with Apple’s new privacy settings behind it.Other stocks likely to be in focus later include Ford Motor (NYSE:F), whose earnings fell short of expectations, and Clorox (NYSE:CLX), whose quarterly numbers were the latest to show some mean reversion after pandemic-era distortions.4. Bonds tumble, euro rises as hawks are seen over Frankfurt Another factor weighing on global markets overnight has been the sharp repricing of euro interest rate risk, in response to ECB President Christine Lagarde’s press conference on Thursday. Money markets now imply 40 basis points of rate hikes from Frankfurt by year-end.German benchmark 5-Year notes traded with a positive yield for the first time in nearly four years, while 10-Year yields touched a three-year high of 0.2%, while the euro has surged nearly 2 cents to $1.1466.While the ECB’s statement had repeated that it doesn’t expect to raise interest this year, Lagarde pointedly avoided repeating that guidance in her press conference, acknowledging that inflation had risen further and was lasting longer than the bank had forecast, and appearing to set the stage for a shift in guidance at the bank’s meeting in March. 5. Oil hits new highs ahead of Texas freezeOil prices roared above $90 a barrel on precautionary buying ahead of extreme winter weather that has been forecast for Texas.Winter storms in Texas last year badly hit the state’s energy complex, freezing gas field well-heads and taking down power stations and transmission lines. So far, market operator ERCoT hasn’t reported any major disruptions, but it will need to bring some 10 gigawatts of largely gas-fired power online in the course of the morning to meet the expected demand surge.U.S. crude futures meanwhile, were up 1.7% at $91.78 a barrel, while Brent crude futures were up 1.6% at $92.54, both having hit fresh eight-year highs earlier. More

Good morning and happy Friday. How well did you keep up with the news this week? Take our quiz.Stocks on Wall Street slid by the most in almost a year yesterday after a disappointing earnings report from Facebook parent Meta reverberated through the market.The S&P 500 index fell 2.4 per cent, its biggest drop since February 2021, driven largely by falls in tech stocks that dominate the blue-chip US index. The slide ended a four-day rally and took the S&P’s declines this year to 6.1 per cent.Investors were shaken by Wednesday’s results from Meta, sending the company’s shares down 26.4 per cent and wiping more than $230bn off its valuation, an unprecedented single-day loss for a listed company.It was the social media group’s worst day on the stock market since going public in 2012 and one of the biggest one-day declines in a company’s market value on record.“Fingers have been hovering over the sell trigger for the tech sector,” said Gregory Perdon, co-chief investment officer at Arbuthnot Latham. “So when you get an announcement like [Meta’s], investors see the beginning of the end.”However, stock markets have risen today in Asia and Europe and futures trading points a higher open on Wall Street today.The turnround in sentiment was helped by results from Amazon. Strength in Amazon’s cloud computing division offset weaker than expected sales in the fourth quarter and the decision to increase the price of its Prime subscription service which the online retailer put down to “wages and transportation costs”.The results triggered a rally in Amazon shares which rose 15 per cent in after-hours trading. If those share price gains hold in regular trading today, it would be the company’s biggest one-day share price rise since October 2009. On another manic day of trading in the technology sector yesterday, Amazon shares closed down 7.8 per cent. Opinion: While Mark Zuckerberg may dream of distant metaverses, this week Meta has been humbled by a more mundane technology — TikTok’s algorithm, writes Richard Waters. Thank you to all those readers who voted in yesterday’s poll. More than a third of you are considering moving jobs. Here’s the rest of today’s news — Gordon Five more stories in the news1. US says Russia plotting to fabricate pretext for Ukraine invasion The US yesterday accused Russia of circulating a “propaganda video” with graphic images of a mock explosion to fabricate the pretext for an invasion of Ukraine. Recep Tayyip Erdogan, meanwhile, signed a deal to deepen Turkey’s defence co-operation with Ukraine as Russia’s troop build-up continues. Go deeper: The Ukraine security crisis has given Nato a fresh sense of purpose, reinvigorating support for its founding principle: a defensive collective to deter a Russian attack. Commentary: America is in Europe to stay — thanks to Putin, writes Edward Luce. Read more from Ed in Swamp Notes, a newsletter on the biggest themes driving US politics. 2. Biden’s nominee for top Fed watchdog defends views on climate risks Sarah Bloom Raskin attempted to deflect criticism from Republican members of a Senate banking committee on her views about climate-related financial risks. She had previously expressed support for rules that require big banks with exposure to fossil fuel-intensive industries to hold more capital.3. Bored Ape start-up in investment talks with Andreessen Horowitz Yuga Labs, the start-up behind Bored Ape Yacht Club, is discussing new financing with Silicon Valley venture capital firm Andreessen Horowitz that would value it at between $4bn and $5bn. The non-fungible token collection counts celebrities such as Gwyneth Paltrow and Snoop Dogg as owners. 4. Isis leader dies during US raid Joe Biden said Abu Ibrahim al-Hashimi al-Qurayshi was killed by an explosion as the US president gave details of a special forces night-time raid on the Isis leader’s hide-out in north-western Syria. Isis founder Abu Bakr al-Baghdadi was killed in similar circumstances in 2019.5. IMF defends Argentina debt restructuring deal Kristalina Georgieva, managing director of the IMF, yesterday defended its outline deal with Argentina to restructure $44.5bn of debt from a record 2018 bailout, despite mounting criticism over the plan to rescue the country’s struggling economy.Opinion: Argentina’s IMF deal offers a warning on emerging market debt, writes Gillian Tett. Coronavirus digestFour prominent aides to Boris Johnson resigned yesterday after weeks of allegations about lockdown parties at the heart of British government. More departures were expected today, said people close to the prime minister.The Bank of England said the upcoming squeeze on household incomes would be the worst for three decades and predicted UK inflation would rise to 7.5 per cent.The most virulent known HIV variant has been discovered in the Netherlands, but researchers said it provided a valuable insight into the way viruses such as the one behind Covid-19 can evolve.Opinion: Covid entrepreneurs can lead a new wave of creative destruction, John Thornhill writes.The days aheadUS employment The Biden administration is bracing for a bleak January jobs report, with growth expected to have slowed and the unemployment rate to have steadied at 3.9 per cent after several months of rapid declines as a wave of Omicron cases sidelined workers and shuttered businesses.Pharmaceutical company earnings Drugmaker Bristol-Myers Squibb is scheduled to report fourth-quarter results and is expected to post a higher profit than last year on increased sales of its cancer drugs Revlimid and Opdivo. Regeneron Pharmaceuticals’ investors will look for commentary on its Covid-19 monoclonal antibody treatment when it releases results. Last month the FDA rescinded its authorisation.Beijing Winter Olympics Vladimir Putin and Xi Jinping presented a united front in talks just hours before the opening ceremony of the Beijing Winter Olympics. In a joint statement they highlighted Sino-Russian opposition to any further expansion of Nato, or new blocs in the Asia-Pacific region.

Anna Cezikova of the Czech Republic at a luge training session in Beijing © Mark Schiefelbein/AP

What else we’re reading and listening to Why real inflation is so hard to measure While the current average level of UK inflation is 5.4 per cent, a poverty campaigner pointed out that baked beans in her local supermarket had gone up from 22p to 32p in a year. When it comes to inflation, we need to fill the gaps in our knowledge, writes Tim Harford.Venture capital’s new race for Europe The continent has been slow to develop tech unicorns. But tech ecosystems are like start-ups: winners advance exponentially, with each step forward making the next easier. Can Silicon Valley’s creativity and cash spark a winning streak?

Europe is home to three of the world’s top five computer science programmes, and the continent’s governments have invested heavily in coding literacy © Bill Butcher

‘After the Tories ditch Johnson, they need to reset their values’ Boris Johnson’s premiership has been largely spent sabotaging his own “oven-ready” Brexit agreement and mismanaging Covid-19. It’s time to write his political obituary, says Simon Kuper.Japan’s Olympic recycling success The Tokyo Summer Games marked the first time that all 5,000 gold, silver and bronze medals were made from recycled materials, the result of an unprecedented urban mining project underpinning what Japan hailed as a uniquely sustainable Games.Is the Orban era coming to an end? In the latest episode of the Rachman Review, Gideon Rachman talks to Hungary’s opposition leader Peter Marki-Zay about his chances of overcoming Viktor Orban and his Fidesz party’s powerful political machine in April’s elections.CinemaDanny Leigh reviews six new film releases, including Pedro Almodóvar’s Parallel Mothers and The Eyes of Tammy Faye, with Jessica Chastain in a starring role.

Jessica Chastain and Andrew Garfield in ‘The Eyes of Tammy Faye’ © Daniel McFadden More