Aurelia Butler

(Reuters) – Governments worldwide are easing quarantine rules, reviewing coronavirus curbs and dialling back pandemic-era emergency support as they bid to launch their economies back into some version of normality.The moves, motivated by the lower severity of the Omicron variant and the need to keep workers in work and the global recovery on track, have generated a whiff of optimism that has lifted oil and stock prices.Health experts say the variant’s rapid spread may yet herald a turning point in the pandemic.However, they add, much depends on how authorities manage ongoing vaccination rollouts and balance other health measures still needed, while persuading their citizens not to throw caution to the wind.”We are taking a big step and that also means we’re taking a big risk,” Dutch Prime Minister Mark Rutte said last week before stores, hairdressers and gyms reopened in a partial lifting of a lockdown despite record numbers of new cases.That lockdown was already something of a rarity, with most western countries well past that stage and focussed on how to safely open up further. Around half a dozen have cut quarantine times from 10 to five days, citing Omicron’s faster infection cycle as grounds to loosen rules that have led to a wave of worker absences hitting businesses.Britain and Israel have eased requirements for follow-up PCR tests after a lateral flow result as Omicron’s soaring infection rates overload laboratories. Local media say Britain could announce further easing of restrictions later this month.Omicron’s ability to rifle quickly through a population without causing a proportionate rise in hospitalisations and deaths even prompted Spain’s prime minister to suggest it be treated akin to an endemic illness like flu.LIVING WITH THE VIRUSWhile few are using that specific word, policymakers whose priority now is to wean economies off the cheap money fuelling inflation have started to depict the coronavirus as something businesses and households must learn to live with.”What we are seeing is an economy that functions right through these waves of COVID,” U.S. Federal Reserve Chairman Jerome Powell said last week.”If the experts are right and Omicron is going to go through really quickly and peak perhaps within a month and come down after that, I think it is likely you will see lower hiring and perhaps a pause in growth, but it should be short-lived.”Such a scenario would facilitate the Fed’s full-on turn towards normalising policy this year with as many as three interest rate hikes. Other central banks also looking to wind back stimulus share that view.”It (Omicron) is proving very contagious but less deadly, so economies will live with it,” one European Central Bank policymaker told Reuters, adding the bank’s baseline scenario assumed a “continued resolution of the health crisis in 2022”.Similarly the Bank of Japan, while listing Omicron as a risk, is seen sticking to its view that the local economy will pursue a recovery driven by robust exports and massive state spending.If that upbeat outlook materialises, governments would also be able to start winding back the emergency fiscal support which, according to the International Monetary Fund, led to the largest one-year surge in global debt since World War II.In October, the Fund forecast global economic growth of 4.9% this year, while underscoring uncertainty posed by the coronavirus. It postponed the release of its latest outlook to Jan. 25 to factor in latest Omicron developments.KEEP ON VACCINATINGThe rosy economic picture is also predicated on vaccination campaigns at sufficient levels to limit serious illness.That means ramping up access to shots in the developing world as wealthier countries focus on the boosters that widespread evidence, including hard data from Italy and Germany, shows offer significant protection against the risk of hospitalisation, intensive care and death. Dutch COVID-19 hospitalisations, for instance, while off all-time pandemic peaks around 2,000, remain above 900.That is impacting workplace absences and acute care for other conditions, and the government is hoping to quickly increase a booster shot coverage rate of around 50% of adults, relatively low by euro zone standards.Another fly in the ointment for any early return to normal may prove to be China’s resolve to pursue a strict “COVID-zero” strategy likely to lead to shutdowns hitting supply chains and therefore its trade partners.And while the belief that the global recovery can live with Omicron may be expedient, it may yet run up against the hard facts of epidemiology.Lawrence Young, Professor of Molecular Oncology, University of Warwick, said U.S. and Japanese studies showing that more than 30% of cases remain highly infectious after five days suggest moves to relax quarantine rules could backfire.”This is a policy decision …based on the need to get people back to work,” he said. “…Returning people after five days risks highly infectious people returning to work or school.”He and other experts said those risks could be mitigated by strict enforcement of lateral flow testing, mask-wearing and contact-limiting – a tricky health message for authorities perceived to be easing up on some rules.”There’s a big sense that we’re coming out of all of this,” said Young. “But I think it’s an interesting, dangerous period if people are too complacent about it.” More

(Reuters) – For companies and other money market investors looking to increase returns from almost zero, opportunities should arise this year as the Federal Reserve begins unwinding its extraordinary pandemic-era stimulus. But navigating hikes in short-term rates, and the additional possibility of increased issuance of government debt, to the best advantage will take extra effort and careful strategizing.Very short-term investors have turned to the Fed’s reverse repurchase facility in record numbers, wherein the Fed takes cash and lends short-term securities overnight for a 5 basis point return, as cash holdings swell and investment options dwindle.As rates move higher, more supply hits the market and cash holdings shrink, these investors may now be able to put their money to better use. On Friday investors parked $1.60 trillion in the Fed’s reverse repo facility.”With excess cash reduced, money market funds won’t have much use for the reverse repo facility,” said Scott Skyrm, executive vice president in fixed income and repo at Curvature Securities.The Fed is preparing to hike interest rate as soon as March, with three or four increases expected this year, which will lift yields on very short-term bills that remain near historic lows.“The notion of rate hikes is some welcome relief, at least to cash investors who have been plagued with near zero yields for almost two years at this point in time,” said Jerome Schneider, head of short-term portfolio management and funding at PIMCO.The Treasury is also expected to ramp up issuance of Treasury bills, after reducing it due to debt ceiling constraints last year, and this supply is likely to grow if the U.S. central bank also begins reducing its massive balance sheet later this year. If the Fed stops reinvesting in bonds that have matured, the Treasury is expected to increase short-term issuance sold to the public to make up the difference, at least temporarily.DON’T JUMP IN TOO FASTInvestors should be wary of buying too soon though, before rates top out. Many short-dated assets do not reflect expected rate increases until they occur.Jeffrey Weaver, senior portfolio manager and head of the municipal, short-duration fixed income, and money market teams at Allspring Global Investments, thinks a useful strategy is to keep most investments shorter-term until after each hike then deploy money to lock the rate in.“We’re reluctant to make significant purchases beyond March, which is when we expect the first rate hike. We get to take full advantage of the rate hike by staying short,” he said.Alternatively, if it looks like the market is getting ahead of itself, it could be an opportune time to invest in debt that has priced in hikes, such as debt maturing in one or two years. “If the market begins to price in more rate hikes than we expect then we can take advantage of that and buy those longer securities,” Weaver added.PIMCO’s Schneider said that investors may want to be more proactive and adopt strategies that span different short-term assets to generate returns. That may include trading their own strategies across various short-term assets, instead of investing in prime money funds, which potentially face new regulatory restrictions.“We look at this as a period of being much more constructive for cash investors than we saw in 2020 and largely 2021 when yields were near zero, but at the same time the opportunity set is to be active and be dynamic and yet be patient with how they’re thinking about managing liquidity,” he said.This is especially true as surging inflation continues to reduce the real return of fixed-income assets, with yields expected to remain low even if the Fed reduces inflation back to its longer-term goal of around 2%.The Fed’s last tightening cycle from 2015 to 2019 ended with large funding stresses as demand for overnight loans from companies, banks and other borrowers overwhelmed supply when the Fed reduced its balance sheet.A repeat of such a cash crunch this time is seen as less likely since the Fed last year established a permanent backstop to the market in the form of a Standing Repo Facility. However, any uptick in demand for this facility may be a warning signal. An increase in use of the facility “would be a sign to the Fed that they need to slow down or stop reducing the size of the balance sheet,” said Tom Simons, a money market economist at Jefferies.How quickly the Fed’s balance sheet declines, and investors’ reliance on its reverse repo facility diminishes, will likely depend on how the economy withstands monetary tightening. More

Investing.com — U.S. market have a severe attack of the post-holiday weekend grumps as inflation fears push bond yields to their highest in two years. Oil prices are also at seven-year highs after Iranian-backed rebels in Yemen claim responsibility for a drone attack on the United Arab Emirates. OPEC releases its monthly report, while the National Association of Home Builders is likely to chime in on a fresh surge in lumber prices, which are now at an eight-month high. Here’s what you need to know in financial markets on Tuesday, 18th January.1. Bond yields hit two-year highs on inflation fearsInflation fears drove U.S. Treasury bond yields to their highest level in over two years over the weekend, reviving a broad bid for the dollar in foreign exchange markets.By 6:10 AM ET (1110 GMT), the yield on the benchmark 10-Year Treasury bond was at 1.81%, down from 1.86% earlier but still up 30 basis points from the start of the year. The benchmark two-year yield likewise breached the 1% level for the first time since February 2020, when the first wave of Covid-19 panic was gripping world financial markets.The next landmark to be passed is likely be in Europe, where the benchmark 10-Year German bond came close to trading above 0% for the first time since May 2019. The Bund was flat on the day, despite a remarkably strong reading from the ZEW Economic Sentiment index which rose to a six-month high. More granular business surveys from Europe’s largest economies may provide a more reliable guide to activity in the next weeks.2. Oil at 7-year high after Houthi drone strike on UAEOne of the biggest factors stoking inflation fears has been the price of energy. Crude oil hit its highest level in over seven years overnight after Iranian-backed Houthi rebels in Yemen claimed responsibility for a drone strike on the port of Abu Dhabi in the United Arab Emirates.The UAE is one of only two major producers in OPEC (the other being Saudi Arabia) that is actually capable of producing more oil than it did two years ago, so the extension of the Yemeni conflict casts additional doubt over the ability of OPEC and its allies to actually deliver the supply increases they have promised this year. Analysts also suspect Russia will not be able to raise its output by the envisaged 100,000 barrels a day after this month. OPEC’s monthly report is due at 7:30 AM ET, according to newswire reports.By 6:20 AM ET, U.S. crude futures were up 1.7% at $84.70 a barrel, while Brent crude was up 1.2% at $87.46 a barrel. 3. Stocks set to open sharply lower as more bank earnings loomU.S. stocks are set to start the week sharply lower, with technology again underperforming as higher bond yields put fresh strain on elevated valuations in the sector.By 6:20 AM ET, Nasdaq 100 futures were down 1.8%, while S&P 500 futures were down 1.1%. Dow Jones futures were down 292 points, or 0.8%.Goldman Sachs (NYSE:GS), PNC Financial (NYSE:PNC) and Charles Schwab (NYSE:SCHW) all report earnings before the start of trading, under the shadow of poorly-received results from JPMorgan (NYSE:JPM) and Citigroup (NYSE:C) on Friday that showed the sugar rush of stimulus-fueled profits fading.Other stocks likely to be in focus include Alibaba (NYSE:BABA), reported to be the subject of new national security concerns at U.S. regulators, and Activision Blizzard (NASDAQ:ATVI), which has reportedly pushed out a large number of staff tainted by alllegations of a toxic workplace culture.4. BoJ  refuses to panicOne central bank that is still in no hurry to tighten monetary policy is the Bank of Japan. Governor Haruhiko Kuroda played down any suggestion of a near-term rise in interest rates and said the BoJ’s policymaking council hadn’t even discussed the idea at its meeting earlier Tuesday.That ran counter to a report last week that had pushed the yen up by over 1%. The dollar returned above the 115 yen level in response.The BoJ did upgrade its inflation forecasts for the next two years but, at 1.1%, the forecasts remain far below the levels likely to be seen in the U.S. and Europe this year, let alone in emerging markets.In other Japanese news, Toyota said it will miss its annual production forecast for the year ending in March, due to shortages of chips and other components. It has shut facilities in the Chinese city of Tianjin this month due to concerns about transmission of Omicron-variant Covid-19.5. NAHB to report as lumber prices take flight againIt’s a quiet start to the week in the data calendar, with the main focus being on the National Association of Home Builders’ monthly survey. The survey comes as lumber returns to its highest level since last May amid on renewed supply problems.Lumber Futures were one of the most eye-catching elements of the commodities rally last year that first alerted markets to the inflationary dangers of too much stimulus in developed markets. Having risen from around $350 a ton to as much as $1,711 and then falling back to $454, lumber is now trading at over $1,300 a ton only 24% off its 2021 peak.The New York Federal Reserve will separately release the Empire State Manufacturing Index at 8:30 AM ET. More

The imminent rollout of high-speed 5G telecoms services threatens to ground flights across the US, America’s largest airlines warned yesterday, as they urged government agencies to intervene to avoid “chaos” for passengers and “incalculable” disruptions to supply chains.Airlines for America, an industry lobby group, wrote to officials in the Biden administration, including transportation secretary Pete Buttigieg, and warned of the potential for 5G services to interfere with the sensitive equipment that aircraft use to take off and land.The airlines called on the US government to block the rollout of 5G to towers located within two miles of airport runways that the Federal Aviation Authority has identified as being prone to disruption.AT&T and Verizon had planned to launch their 5G services on December 5, but delayed the launch a month to allow time for safety reviews. The two telecoms groups initially rejected a subsequent request from regulators to delay their rollout by another two weeks to January 19, but then agreed to do so.The planned 5G services use frequencies in the C-band radio spectrum, which can be close to those used by altimeters that measure an aircraft’s height from the ground and feed information into navigation instruments and other onboard safety systems.5G services have been introduced in other countries without sparking the same concern among airlines. According to the FAA, the services planned in the US differ in several ways, including operating at frequencies closer to those used by aircraft equipment, and at higher power levels.Thanks for reading FirstFT Americas. Here is the rest of today’s news — Gordon.Five more stories in the news1. International oil prices hit seven-year high Oil prices have breached $87 a barrel and hit a more than seven-year high, threatening to propel global inflation higher. The price for Brent crude, the international oil benchmark, was up 1.3 per cent to $87.63 a barrel, the highest since October 2014. West Texas Intermediate, the US benchmark, which has risen more than 13 per cent since the start of year, reached a high of $85.74 in Asian trading. Related news: US stock markets are set to open lower after yesterday’s public holiday as investors worry about interest rate rises and inflation. The yield on the two-year US government bond rose to its highest level since February 2020.2. Bank of Japan revises inflation projection The BoJ has shifted its view on inflation risk for the first time since 2014, driving the yen lower as a nation that has battled deflation for decades faces the mounting pressure of price rises in food and energy. The central bank revised its inflation projection upward from 0.9 per cent to 1.1 per cent for the fiscal year starting in April.3. BlackRock’s Fink rejects accusations of being ‘woke’ Investors that focus on the interests of wider society rather than pure profits are not “woke”, BlackRock chief executive Larry Fink has said after stinging attacks from US conservatives. The head of the world’s largest asset manager used his annual letter to chief executives to fight back against accusations that BlackRock was using its influence to push a progressive agenda.4. Russia’s sanction-proofing weakens western threats Moscow’s effort to reduce its reliance on the global financial system, which investors have dubbed the “Fortress Russia” strategy, could make western threats of sanctions a less effective deterrent from an attack on Ukraine. The EU’s appetite for Russian gas has also made any restrictions on energy exports potentially self-destructive.5. Texas synagogue hostage-taker was British citizen Malik Faisal Akram, 44, from the northern English city of Blackburn was identified by the FBI as the armed man who took four people hostage at a Texas synagogue on Saturday. Police in Manchester said they had arrested two teenagers in the south of the city and were questioning them in connection with the investigation.Coronavirus digestHumanitarian efforts to assist Tonga after a volcanic eruption are being complicated by the South Pacific nation’s determination to keep Covid-19 at bay.European countries that introduced Covid passes increased uptake for vaccines and improved public health and economic performance, according to a new study.The world’s poorest countries will have to repay an estimated $35bn to lenders in 2022, according to the World Bank, after many rebuffed international relief efforts and turned to the capital markets to fund pandemic responses.Leading Novak Djokovic sponsor Lacoste has said it plans to “review” the events that led to the tennis star’s deportation from Australia. Officials in France said he could be barred from the French Open later this year over his refusal to be vaccinated.Countries with high exposure to the Omicron variant are recording record numbers of child coronavirus hospitalisations, although health experts stress that severe cases in the young are rare.Tempting though it is, we must beware the framing of Covid-19 endemicity as game over, argues science commentator Anjana Ahuja. The day aheadEarnings Goldman Sachs is expected to join other major Wall Street banks — like JPMorgan — in reporting record profits for 2021 fuelled by booming deal activity and lower-than-expected loan losses. Charles Schwab and BNY Mellon are also due to report results before US markets open. Economic data The general business conditions index of the Empire State manufacturing survey, a gauge of business activity in the New York region, is expected to cool slightly. Meanwhile, the National Association of Homebuilders’ housing market index, a gauge of homebuilder confidence, is expected to hold steady as mortgage rates start to tick higher. Washington The Senate will return from a long weekend, with Democratic Senate majority leader Chuck Schumer vowing to press ahead with the consideration of voting rights legislation, despite West Virginia senator Joe Manchin and Arizona senator Kyrsten Sinema’s continued opposition to changing Senate rules to scrap the filibuster.Ukraine diplomacy Germany’s foreign minister Annalena Baerbock arrives in Moscow, a day after visiting Ukraine, for talks with her Russian counterpart Sergei Lavrov. Baerbock is pushing to revive the “Normandy” peace talks format between Germany, France, Russia and Ukraine to ease the crisis.What else we’re readingHorta-Osório’s flying visit On Sunday afternoon, António Horta-Osório was told that the Credit Suisse board he had chaired for just over eight months no longer supported him after serial Covid-19 quarantine breaches. For the Portuguese banker, who was brought in to turn round the scandal-ridden Swiss lender, it was an ignoble end to his short tenure.Opinion The revelations about the former Credit Suisse chair underscore a far too common attitude among the world’s elite that rules are for other people, writes Brooke Masters.How Facebook intends to cash in on the metaverse Pupil movements, body poses and nose scrunching are among the flickers of human expression that Meta wants to harvest in building its metaverse, according to a review of hundreds of applications to the US Patent and Trademark Office by the Financial Times.

Meta patent filing showing a ‘wearable magnetic sensor system’. Sketch gives example of a soldier in sword and armour appearing in a virtual world © Meta patent

Latin America’s currencies signal economic damage Despite a strong global rise in commodity prices in 2021, the currencies of all the main Latin American economies weakened, some dramatically. Economists say the striking divergence — unprecedented in recent years — points to a deep sickness in Latin America’s economies.Westminster’s pandemic was markedly different to everyone else’s The disconnect between the UK government machine and the rest of the country during the lockdowns of 2020 and 2021 lie at the heart of the “Partygate” scandal that has rocked Boris Johnson’s premiership and now leaves his position hanging by a thread, writes Sebastian Payne. Is it really OK to dress down at work? Does that hoodie channel tech-titan-in-waiting or give off the vibe that you are playing Animal Crossing under your desk during seemingly endless Zoom calls, asks deputy fashion editor Carola Long. Dressing more individually is in line with bringing your whole self to work, one recruitment specialist tells Carola.Things to do in TokyoKathy Matsui is one of Asia’s top financial executives, and her groundbreaking work on gender parity helped shape Japanese government policy. She shares her guide to Tokyo, highlighting female leaders in the fields of art, design and food.

Kathy Matsui at teamLab in Tokyo © Yasuyuki Takagi More

TORONTO (Reuters) – Canadian restrictions to tackle COVID-19 will likely come at a cost of slower economic growth at the start of the year than in the United States, but that has not stopped investors from raising bets the Bank of Canada will hike interest rates next week.With hospital capacity stretched, Canadian provincial governments have rolled out restrictions that are tighter than in the United States and many other countries to slow the spread of the Omicron variant of the coronavirus.As a result, economists at some of the large Canadian banks expect little or no GDP growth in Canada in the first quarter compared to estimates of about 4% to 5% before the emergence of the variant. “I see much more risk to the Canadian numbers than the U.S. numbers, simply because we are seeing much more important restrictions in Canada,” said Doug Porter, chief economist at BMO Capital Markets. But economists also say that activity is likely to rebound quickly when restrictions are lifted.Investors seem to be counting on it. Money market data on Monday showed the chances of the Bank of Canada announcing a rate hike on Jan. 26 have increased to nearly 70% after a central bank survey of businesses pointed to higher wage pressures.That would be an earlier move than the Canadian central bank has been signaling and a quicker lift-off than in the United States where the Federal Reserve is not expected to raise rates until March.The BoC will provide for the first time next week its estimate of economic growth in the current quarter.”We think the Bank of Canada will be revising down their Q1 forecast in January as we’ve just done, but in terms of the impact (of shutdowns) on inflation that’s not as clear,” said Josh Nye, senior economist at Royal Bank of Canada.”You maybe have a bit of disinflationary pressure in some of the services sectors that are going to be hit hardest by this, but when you have people not able to go into work, that impacts the supply side of things.”The Canadian healthcare system is expected to be further strained by a surge in cases of the new variant in the coming weeks.When it comes to capacity at hospitals and clinics, only Italy was ranked lower than Canada among G7 countries in the 2021 Global Health Security Index.Ontario, Canada’s most populous province, temporarily moved schools to remote learning and closed indoor dining among other measures, while neighboring Quebec banned private gatherings and imposed a night curfew in the province to fight Omicron. Still, Canada’s economy has the potential to outpace that of the United States for the full year since Canadian activity was held back more by previous waves of the pandemic as well as drought and chip shortages that slowed auto production in 2021.Canada’s economy is expected to have only just climbed back to its pre-pandemic peak in the fourth quarter of last year, two quarters later than in the United States.”There is a lot of room for Canada to play catch-up,” Porter said, forecasting 2022 growth of 4%.”We do suspect that after we get through the messiness of the first quarter in Canada, we will outpace the U.S. through the rest of the year.” More

LONDON (Reuters) -High-flying tech stocks, the darling of the pandemic, are the most shunned counters in the opening weeks of 2022 as investors see a flurry of rate hikes from central banks as the top risk to markets, investor surveys said on Tuesday.A BofA survey conducted from Jan 7-13 among investors with combined assets under management of more than $1.2 trillion showed fund managers had cut their overweight positions to their lowest levels since December 2008.A separate monthly survey conducted by Deutsche Bank (DE:DBKGn) showed an overwhelming majority of respondents believed U.S. technology shares are in bubble territory as investors remained more bearish on hawkish policy moves and higher yields.”Higher-than-expected inflation continued to be the predominant driver of those bearish fears, but its counterpart, a more aggressive Fed, drew much more concern from respondents this month,” Deutsche Bank strategists said in a monthly note.In response to more central bank rate hikes being likely this year, investors have ramped up their positions in equities, particularly in Europe, cyclical banks, commodities and industrials – sectors perceived to benefit from higher rates.The change in positioning has been extreme compared to historical averages. Investors have ramped up bullish bets in banks, commodities and materials, and cut positions in technology, emerging markets and bonds.Investors have become more bullish on European stocks from a global reopening trade perspective and want to increase their exposure as well in the next 12 months, according to BoFA’s survey.The top three crowded trades were long technology stocks, short U.S. Treasuries and short Chinese stocks, according to the U.S. investment bank. More

The world’s second-largest economy, which cooled over the course of last year, faces multiple headwinds in 2022, including persistent property weakness and a fresh challenge from the recent local spread of the highly contagious Omicron variant.”Before the downward pressure on the economy is fundamentally relieved, we should introduce more policies that are conducive to stability, and should not introduce policies that are not conducive to stability,” Liu told a news conference.”We should hurry up, make our operations forward-looking, move ahead of the market curve, and respond to the general concerns of the market in a timely manner.” Liu said the central bank would widen the use of its policy tools to prevent a “collapse” in credit.On Monday, the People’s Bank of China (PBOC) unexpectedly cut borrowing costs on its medium-term loans for the first time since April 2020.Liu said there was still room for the central bank to cut banks’ reserve requirement ratios (RRR), although the scope for this had been reduced by cuts in the past. The average RRR for financial institutions – the proportion of their deposits they must hold as reserves and not lend out – stands at 8.4%, he said.China’s macro leverage ratio fell 7.7 percentage points in 2021 to 272.5%, Liu said, adding that falling debt levels would create more room for monetary policy. He expects the ratio to be basically stable this year.LIQUIDITYThe PBOC would use various policy tools to keep liquidity reasonably ample, and guide financial institutions to expand credit, especially for small firms, tech innovations and green development, Liu said.In 2022, the central bank would keep growth of money supply and total social financing basically in line with nominal economic growth, he said.Sun Guofeng, head of monetary policy department at the PBOC, told the same briefing that the loan prime rate (LPR), the benchmark lending rate, would reflect the changes of market interest rates in a full and timely manner. A cut in the LPR is widely expected on Jan. 20, following the MLF rate cut.The PBOC last cut the RRR by a 50 basis points (bps) on Dec. 15, its second such move last year. That was followed by a 5 bps cut in the one-year loan prime rate (LPR), the benchmark lending rate, on Dec. 20.Authorities would maintain an order in bank deposit markets to prevent poor-quality banks from raising rates to lure customers, as high deposit rates could make it difficult for banks to lower lending rates, Liu, the vice governor, said.Sun said cross-border capital flows could show some volatility due to changes in international financial situations, but the impact from policy adjustments in developed countries, including the United States, would be limited.The yuan exchange rate could deviate from its balanced levels in the short term, but over the medium and long term, market factors and government policy would help correct deviations, said Liu. Zou Lan, head of financial markets at the PBOC, said the central bank would maintain “continuity, consistency and stability” of property financial policies.Property sales and financing were gradually returning to normal, and market expectations are improving, he added.At the end-2021, China’s total property loans rose 7.9% from a year earlier to 52.2 trillion yuan ($8.22 trillion), 0.3 percentage points faster than the end-September, he said. ($1 = 6.3525 Chinese yuan renminbi) More

This, he said, would include payments to offset higher costs to avoid carbon emissions, Habeck said, adding building decarbonised supply chains was the only chance for Germany to keep key industries alive.”There should be no lack of government support. Of course, we don’t want to over-support either. But the companies that now want to make the switch should be supported and compensated for the prices that cannot be realized on the market,” Habeck said.So-called carbon contracts for difference, which essentially compensate firms for higher costs as a result of decarbonised production, are expected to account for a mid-triple digit billion euro amount, Habeck said.Once production – which can include cement, steel and chemicals – has reached a competitive level, a part of the cost will be paid back to the state, Habeck said.”There will be a tipping point at some stage because CO2 prices will rise and certificate trading will go up. Production will become cheaper as a result,” he said. More