Aurelia Butler

Click here to listen to the latest news in less than three minutes. Top Stories Today is an audio news digest that gets you up to speed on the day’s headlines.The US is putting pressure on Germany to block Russia’s Nord Stream 2 gas pipeline as part of a package of sanctions that would be implemented in the event of Vladimir Putin invading Ukraine.The demand for Berlin and Brussels to prevent the pipeline from becoming operational is part of a sanctions package Washington is proposing as it tries to stave off the threat of Russian military action in the region. President Joe Biden used a two-hour call with Putin yesterday to warn him of “strong economic and other measures” if Moscow sends troops into Ukraine. The threat to Nord Stream 2, which is built but not yet pumping gas, would be included alongside a package of US-proposed sanctions, which would include measures such as blocking the conversion of roubles into dollars and targeting Russian oligarchs, two officials told the Financial Times. Thanks for reading FirstFT Americas. Here’s the rest of today’s news — GordonFive more stories in the news1. Congressional leaders open way for deal to raise US debt ceiling The Democrat-controlled House of Representatives passed a measure in a vote along party lines last night that would allow the Senate to raise the ceiling by a simple majority vote, bypassing the upper chamber’s 60-vote “filibuster” threshold.2. China to tighten rules for tech companies seeking foreign funding Beijing is preparing a blacklist that is expected to tightly restrict the main channel used by start-ups to attract international capital and list overseas, in a bid to limit the role of foreign shareholders in the country’s next generation of tech companies.3. Economists predict complete ‘taper’ of Fed bond buying by end of March The Federal Reserve will end its bond-buying programme by the end of March and raise US interest rates soon after, according to a poll of leading academic economists for the FT.4. Coffee prices hit 10-year high Coffee prices on futures markets have rallied to a 10-year high, with companies and traders dashing to lock in supplies as they contend with shipping bottlenecks and a late-year rise in demand.5. UAE to shift weekend and create shorter working week The United Arab Emirates government is shifting the national weekend from Friday and Saturday to Saturday and Sunday to synchronise with global markets, instituting a four-and-a-half day working week from January next year. Coronavirus digestA summer surge of Covid-19 cases led Japan’s economy to shrink faster than expected during the third quarter, official data revealed today.The BioNTech/Pfizer vaccine may be less effective against Omicron than earlier strains, according to a South African study. And an offshoot of the Omicron variant could be more difficult to distinguish from other variants through routine PCR tests, a professor at the University of British Columbia warned.Boris Johnson is under pressure after the UK prime minister’s advisers were caught on video laughing about a Downing Street Christmas party last year, when such events were not permitted under Covid-19 regulations. The video emerged as Johnson warned about the transmissibility of the new Omicron variant.Canada is set to require vaccination against Covid-19 for all employees in federally regulated workplaces such as banks and telecommunications premises from early next year.Opinion: As Omicron looms, there is no better time to take stock of the economic lessons of the past two years to help set policy now, writes Chris Giles.The day aheadCrypto hearings Top executives at a number of major cryptocurrency companies will be in Washington to testify before the US House Financial Services Committee. The hearings come as Dawn Stump, a Donald Trump-appointed commissioner on the CFTC, called for more clarity on the policing of cryptocurrency groups in an FT interview.Instagram chief faces questions Adam Mosseri will be grilled by lawmakers on the senate subcommittee on consumer protection, product safety and data security. A number of US states are investigating how Facebook, which recently rebranded its parent company Meta, targets young people on its Instagram app, following revelations by whistleblower Frances Haugen.Economic data Investors will closely monitor the Job Openings and Labor Turnover Survey to see if Americans continued to quit their jobs at a record rate in October. Canada and Brazil are also due to make interest rate announcements.Earnings Investors will be watching for comments on inflation and supply chain snarl-ups when canned food group Campbell Soup and Jack Daniel’s maker Brown-Forman report earnings. Meanwhile, video game retailer GameStop will also report results.Dawn of a new era in Europe The Bundestag elected Olaf Scholz Germany’s new chancellor, officially ending Angela Merkel’s 16 years in the role. Here are five challenges facing the head of Germany’s new government.It is day two of the FT’s Global Boardroom conference. Gideon Rachman will be moderating a discussion on superpower rivalry, with Donald Trump’s former adviser on Russia Fiona Hill. Register for free here.What else we’re reading and listening toBuyout firm Thoma Bravo goes from niche to big league The private equity industry has completed take privates worth more than $1tn this year — and software buyout firm Thoma Bravo has helped set the pace. The rise of the US-based firm from niche investor with barely a few billion dollars in assets a decade ago to nearly $100bn of assets under management this year has bucked most industry conventions.Biden’s big idea for US foreign policy If you could boil down US president Joe Biden’s foreign policy, two things would stand out: competition with China and the return of American values after Donald Trump. But will his emphasis on liberal values push autocracies closer together?Italy’s dilemma as Mario Draghi emerges as a presidential frontrunner The prospect of the former European Central Bank chief stepping aside as Italy’s prime minister to assume the presidency is threatening to plunge the country back into political instability just as the government embarks on ambitious structural reforms and a coronavirus recovery plan.EU has a new weapon in stock market battle Europe is being left in the dust by the US, Chinese and Hong Kong when it comes to equity trading, corporate bond issuance and pretty much every other metric that matters. But homegrown start-ups offer a rare opportunity for the region to make itself more attractive for innovative public companies, writes Brooke Masters.Getting personal on LinkedIn When Jonathan Frostick had a heart attack he posted his thoughts about how he planned to change his life on LinkedIn. That post went viral and people from all over the world contacted Jonathan saying his inspiring words had helped them reassess their work/life balance. Isabel Berwick, host of the Working It podcast, talked to him about what happened next.TravelFT writers and guests reveal their 2021 travel discoveries, including the Ruaha National Park in Tanzania, Drake Bay, Costa Rica and space training at an ultra-chic hotel on France’s Atlantic coast.

Participants in Orbite’s Astronaut Orientation experience take a ‘vomit comet’ flight © Novespace More

Trying to get investments right in this pandemic-tossed world requires careful examination of the policies of the major central banks. The US Federal Reserve led the rescue from the virus crash in March 2020. The Bank of Japan and the European Central Bank have been important sources of support to financial markets and economies. The Bank of China has pursued a tougher policy than the others, while avoiding recession. Chinese shares, as we expected, have been blighted by tighter money and attacks on excesses in sectors such as property. Bond buying and low rates have bid up fixed income securities and pushed people into higher yielding shares, which have looked cheap compared with the poor running returns on bonds.Today’s elevated share values owe much to central bank decisions to slash interest rates with a view to keeping asset markets awash with cash and keep longer term borrowing rates low. It was the Fed’s decision to create at least $3tn to offset the black hole of lockdown that persuaded me to be invested from the summer of 2020 in anticipation of a sharp recovery in share markets on the back of all that cash.

As this year draws to a close, the question is whether they will withdraw the stimulus too quickly for markets, as they seek to contain the inflation genie they have nurtured. So far we have had good returns for investors as the US has kept on running hot.Markets have come to believe that the major central banks are independent and that this is a good thing. The ECB was modelled — partly on the Bundesbank — on the idea of independent experts setting short interest rates with a view to keeping inflation down. The Bank of Japan and the Fed have 2 per cent inflation targets as well. The high noon of the idea of independent central banks providing discipline came in the first couple of decades of this century. The theory says they will be run by wise, impartial people, who understand economies and markets so well that they know when to expand money and credit and when to contract it by shifting interest rates, to keep inflation at around 2 per cent.It is difficult to know why people believe this. After all, economies were badly scarred by the banking boom and bust, where central banks allowed commercial banks to expand credit and inflate asset values, only to stop them too abruptly in 2008 and cause banks to collapse, as well as triggering a big fall in markets and a great recession. The central banks managed to blame commercial banks for the excesses, without properly accepting their part in the boom and bust. It has proved very hard to find these uniquely insightful people who can call it well and avoid major lurches. They are usually appointed by presidents or prime ministers with the help of finance ministers who have a political interest in the policies they follow. This year, several major central banks forecast inflation to be much lower than it turned out to be.It is difficult to identify a fully independent central bank even during this era of fabled independence. Today we can see a trend of governments having more explicit influence. Recep Tayyip Erdogan, Turkey’s president, flexed his power to appoint the central bank governor, seeking an appointee who will keep rates low or cut them, whatever the rate of inflation or the stresses on the currency. The People’s Bank of China makes no secret in all its statements that it sees its task as implementing the ideas and policies of president Xi Jinping and the Communist party. The Fed itself has long had a dual mandate — to keep inflation down and to ensure decent growth. Where there is some tension between the two aims, the Fed has to make a judgment and would usually listen to the views of the administration. Some central banks have been associated with extravagant fiscal policies. In some Latin American countries, they have been unable or unwilling to offset government excesses and ended up assisting or putting up with very high rates of inflation. Argentina and Venezuela are no great advertisements for the work of their central banks.Joe Biden, the US president, has started to remodel the Fed, using his powers to make appointments to the board. He appears to have negotiated a policy platform for the new Fed between Jay Powell, its incumbent chair, and Lael Brainard, its newly appointed vice-chair, who wishes to move it closer to the full Democrat agenda. The new Fed will take its duties towards net zero carbon emissions and social inclusion more seriously and may follow a tougher course against banking activities as regulator. Both the Republican-inclined chair and the Democrat vice-chair want to run the economy as hot as markets will allow, seeking a stronger and longer recovery. Both are worried about inflation, while Biden is encountering rough political criticism for presiding over inflation above 6 per cent.

Markets need to adjust to more political central banks. Mexico is getting a new central bank head from the government’s own ranks. The ECB is the custodian of the EU project, and will always take into account what is required to buttress and advance economic, monetary and political union. What is needed to reassure markets is that any given central bank is working well with its government, and that between them they take a responsible but market-friendly view.The FT fund has benefited once again from US exceptionalism, where the combination of great technology companies and a very accommodating monetary policy have led to substantial gains. As we reach the end of 2021, there are more worries about how fast the Fed will need to withdraw stimulus and how long inflation stays elevated. It does look, however, as if the world economy will continue to be backed by zero rates and plenty of extra money from the Bank of Japan and the ECB. The People’s Bank of China does not want to trigger a recession, but it is helping the government cut the tall poppies of the enterprise world, especially in property. It is time for caution, not panic. The Fed will try to talk its way down from high inflation, and Biden will seek fixes to sort out the numerous supply bottlenecks to help. The Fed has a new political deal to find a way through that allows the Democrats to promote their vision of recovery and social justice.Sir John Redwood is chief global strategist for Charles Stanley. The FT Fund is a dummy portfolio intended to demonstrate how investors can use a wide range of ETFs to gain exposure to global stock markets while keeping down the costs of investing. [email protected]

The ‘Redwood Fund’ — December 7 2021DescriptionWeightL&G Battery Value-Chain UCITS ETF2%WisdomTree Cloud Computing UCITS ETF USD Acc2%L&G Hydrogen Economy UCITS ETF2%Cash Account [GBP]19%iShares Digitalisation UCITS ETF USD (Acc)1%iShares Core MSCI EM IMI UCITS ETF USD Acc2%Invesco EQQQ Nasdaq-100 UCITS ETF Dist2%Lyxor FTSE Actuaries UK Gilts Inflation Linked (DR) UCITS ETF D6%iShares Global Clean Energy2%Legal & General Cyber Security UCITS ETF2%iShares Core MSCI World UCITS ETF GBP Hgd (Dist)21%L&G All Stocks Index-Linked Gilt Index Acc4%Legal & General ROBO GI Robotics and Automation UCITS ETF2%SPDR BofA ML 0-5 Yr EM $ Govt Bd UCITS ETF2%iShares $ TIPS 0-5 UCITS ETF GBP Hedged12%Vanguard FTSE Japan ETF2%Vanguard FTSE 250 UCITS ETF GBP Dist4%X-trackers JPX-Nikkei 400 UCITS ETF 1D1%X-trackers S&P 500 UCITS ETF6%X-trackers MSCI Korea ETF2%X-trackers MSCI Taiwan ETF4%100%Source: Charles Stanley More

KUALA LUMPUR (Reuters) – A Malaysian court on Wednesday upheld former premier Najib Razak’s conviction on corruption charges over a multi-billion dollar scandal at state fund 1Malaysia Development Bhd (1MDB), dealing a blow to his hopes of a political comeback. Najib was appealing a 12-year prison sentence and $50 million fine imposed by Kuala Lumpur High Court last year for criminal breach of trust, abuse of power and money laundering, one of five trials he is facing over corruption allegations.The 1MDB case, which a U.S. attorney-general described as the worst form of kleptocracy, has cast a shadow over Malaysian politics since questions about the fund first emerged years ago.U.S. and Malaysian authorities say $4.5 billion was believed to have been stolen and more than $1 billion made its way into Najib’s personal accounts.Najib has consistently denied wrongdoing and pleaded not guilty at the trial last year though the court found he had illegally received about $10 million from SRC International, a former unit of now-defunct 1MDB.Court of Appeal Judge Abdul Karim Abdul Jalil, who led a three-member panel on the decision, said they agreed unanimously with the high court on Najib’s conviction and sentencing, and dismissed his defence that all his actions regarding SRC were in the national interest.”There is no national interest here, just a national embarrassment,” Abdul Karim said. The judge also said the evidence showed Najib knew or had reason to believe the funds in his accounts were proceeds of illegal activities and had failed to take steps to determine them as such.Wearing a black suit, Najib showed no emotion as the judgment was read out and was seen taking notes occasionally during the hearing. His appeal has been closely watched amid fears that ruling party leaders facing criminal charges could secure leniency after the return of Najib’s party, the United Malays National Organisation (UMNO), to power in August.’I DID NOT KNOW’Najib has been free on bail pending the appeal, and Abdul Karim agreed to his request to be released on bail again and stayed the sentence. At a virtual briefing after the verdict, Najib said he was disappointed with the decision and would appeal at the Federal Court, Malaysia’s top tribunal.”I did not know and I did not ask and I did not order anyone to move the 42 million ringgit ($9.95 million) to my account,” Najib said.Prosecutor V. Sithambaram told reporters Najib’s appeal process at the top court could take up to nine months. Najib faces a total of 42 criminal charges and five trials, including the SRC case, but remains influential and has been eyeing a political comeback, telling Reuters in September he has not ruled out seeking re-election to parliament. He remains a lawmaker despite the conviction but the constitution bars him from contesting elections unless he gets a pardon or a reprieve from the country’s monarch. Adib Zalkapli, director of political risk consultancy BowerGroupAsia, said an acquittal would have given Najib the chance to reclaim the top job.”But with the court’s decision to uphold the guilty verdict, he has to wait a little longer before he could potentially make a credible comeback,” he said.Polls are not due until 2023 but analysts have said they could be called as early as the middle of next year, when a cooperation pact signed between the government and the opposition expires.Asked if he would contest the next election, Najib told the news conference: “We will cross the bridge when we come to it.” ($1 = 4.2200 ringgit) More

By Gergely SzakacsBUDAPEST/BUCHAREST (Reuters) – Matei Susnea has criss-crossed Bucharest’s frosty streets in search of a Christmas tree he can afford, but with prices of everyday items surging, he fears he and his family will have to do without this year.Like millions of others, the 42-year-old Romanian construction worker is feeling the pinch from a rise in inflation that is gathering breadth and pace across Central and Eastern Europe, a consequence of supply-chain frictions, tight labour markets and upward pressure on wages.On average, prices of staple goods in the region are rising at their fastest for at least a decade, up around 7% on a year ago and in some cases far more. In Romania’s capital, Christmas trees are 20% to 30% more expensive.”One hundred lei (almost $23) is too much for me now. Finding a proper tree this year is looking less and less likely,” said father-of-two Susnea. “Prices of everything have risen very fast.”The region’s central banks, which since June have led the way in the European Union in raising interest rates, appear confident that a debilitating price spiral can still be avoided.But, in evidence of what economists and central bankers call second-round inflationary effects, wages are already creeping higher and employers as well as consumers are starting to adjust their behaviour.”The official line is that many factors driving inflation are transitory, but … if inflationary patterns become entrenched, that is going to become a self-fulfilling process and I am afraid we are already in that cycle,” said Sandor Baja, general manager for staffing firm Randstad in Hungary.”I think employers will definitely need to hike wages in the double digits on average next year. That is due to the labour market situation (too).”In the Czech Republic, a fifth of employees are ready to switch jobs if their wages fail to rise in line with prices, a November survey by the STEM/MARK agency found. Meanwhile, more than half of industrial firms will hike prices by over 5% next year, an October business alliance survey showed.BIG-SPENDING BUDGETS?Latest data put inflation at around 7% across the region, and at its highest in two decades in Poland, 13-year-highs in the Czech Republic and Romania and a 14-year-high in Hungary.Central bank projections show inflation on track to average close to 6% in those four countries next year, the region’s highest average since the 2008 financial crisis.Capital Economics analyst James Reilly predicts underlying price pressures will keep East European numbers high through 2023, with food alone adding an extra percentage point in 2022.Further rate hikes will have a dampening effect, he said, but big-spending budgets, especially in Poland and Hungary, could pile the pressure on again.Economists say tax cuts on petrol, gas and electricity announced by the Polish government will lower the peak of inflation at the start of 2022, but a policy of cash handouts to households could lead to higher inflation later in the year.For some Polish shoppers, the change in prices is already marked.”It is most noticeable in one’s daily shopping. Vegetables, fruits, and other everyday produce. As for presents, people usually draw a budget beforehand,” said Warsaw resident Izabela Sarnocinska.”When I go to the shop and buy what I usually buy, instead of 150 zlotys I pay 200 zlotys now.”INFLATION CASCADEIn Hungary – where Prime Minister Viktor Orban, facing a tight contest for re-election next year, has raised the minimum wage by nearly 20% – the central bank has acknowledged that inflation is cascading from energy and fuel prices into processed goods.Food for Life, a charity that provides free meals to over 13,000 poor Hungarians, has been forced to slash the range of goods in its food donations to a dozen items from around 22 in previous years, skipping costlier items because prices “are sky-high”, said its head Attila Szanyi-Karl while packing donations.Meanwhile, a Hungarian construction materials association has flagged price rises of 10% to 20% due to higher energy and transportation costs.At a Budapest market, some say they are now spending about 100,000 forints ($310) a month, roughly two-thirds of the average pension, on food alone.”I did not calculate exactly how much more everything costs,” said 62-year-old Zsoka, who declined to give her surname. “All I know is I can afford much less than before for the same amount of money.”($1 = 322.67 forints)($1 = 4.3907 lei) More

Tesla, which is making Model 3 sedans and Model Y sport-utility vehicles in Shanghai, sold 54,391 China-made vehicles in October, including 40,666 that were exported.Chinese EV makers Nio (NYSE:NIO) Inc 10,878 cars last month, a monthly record high, and Xpeng (NYSE:XPEV) Inc delivered 15,613 vehicles. Volkswagen AG (OTC:VWAGY) said it sold over 14,000 ID. series EVs in China in November.CPCA said passenger car sales in November in China totalled 1.85 million, down 12.5% from a year earlier. More

Equitativa made misleading statements on two occasions in 2018 regarding one of Emirates REIT’s 11 assets, a school in Dubai Investment Park, the DFSA said.”The DFSA also identified concerns around Equitativa’s fund valuation practices,” it said in a statement, adding that the fund manager had agreed to pay the fine.Equitativa said in a statement that the settlement brought all investigations to a close and it could “now turn its full attention to reinvigorating Emirates REIT and accelerating its plans for growth”.”To be clear, none of the findings alleges any financial impropriety on part of Equitativa or its employees,” it said.Equitativa in 2018 failed to provision for money Emirates REIT (EREIT) was owed by the school despite it being in default on rental payments, the regulator said.Equitativa did not reduce the valuation of the asset in the fund’s half-year financial statement, despite the school lacking an operator for the following academic year, the DFSA added.”Rather, the school was presented as 100% occupied with a secure tenant with a 28-year lease in place,” the DFSA said, adding that this meant that “EREIT’s net profit for the six months to 30 June 2018 was overstated”.When, later that year, Equitativa informed its investors that the school was no longer operating, it gave the “misleading impression that a new operator had been secured and would be in place for the following academic year,” the regulator said.Equitativa in 2019 included a full provision for the money owed by the school and an impairment for the asset, both the regulator and the fund manager said.The manager has agreed to address concerns around its valuation practices and will appoint an independent valuation expert for Emirates REIT’s 2022 valuation reports, DFSA said.Emirates REIT this year failed to gain investor support for an offer to exchange $400 million Islamic bonds for new paper, after the coronavirus strained its finances. More

Australia will join the US in a diplomatic boycott of the Beijing Winter Olympics next year, in a move that risks worsening strained relations with China.Scott Morrison, prime minister, said on Tuesday that it should come as no surprise that Australia would not send official representatives to the Games given “a number” of issues between the countries that China had not been willing to discuss.These included concerns over alleged human rights abuses in China’s north-western Xinjiang region and Beijing’s anger over Australian efforts to obtain nuclear-powered submarines.On Monday, Jen Psaki, White House press secretary, said the Biden administration would boycott the Games in February because of the “ongoing genocide and crimes against humanity” in Xinjiang. China called the decision “a serious violation of the principle of political neutrality”.Relations between Canberra and Beijing have worsened dramatically since Australia joined the Aukus security partnership with the UK and the US. Human rights groups, which have criticised China for its policies in Xinjiang and clampdown in Hong Kong, have also urged governments and companies around the world to boycott the Winter Olympics.“Australia is already in the doghouse,” said Jean-Pierre Cabestan, a professor in political science at Hong Kong Baptist University, adding that the diplomatic boycott was part of a “downward spiral” in Australia-China relations.

China is Australia’s biggest trading partner in terms of both imports and exports, accounting for more than A$245bn (US$175bn) worth of trade last year, according to Australian government figures. Australia, meanwhile, is China’s sixth-largest training partner and a crucial supplier of raw materials. Last year, Beijing imposed an unofficial ban on Australian coal after Canberra supported a call for an international inquiry into the origins of coronavirus in Wuhan. Beef, wine, timber, cotton and seafood also faced steep tariffs.But China’s need for Australian imports would limit its response, Cabestan said.“The impact [of worsening relations] on trade has been significant in some sectors but limited in others like iron ore,” he said. “China needs Australia and Australian imports.” On Wednesday, Wang Wenbin, a spokesperson for the Ministry of Foreign Affairs, said: “China is strongly dissatisfied with and resolutely opposes what the Australian side has done, and has made serious representations to the Australian side.” Last month, Human Rights Watch, a US-headquartered campaign group, said the Beijing Games were “tainted by censorship and repression” and called on its international sponsors, including Visa, Coca-Cola and Omega, to use their leverage to address alleged rights abuses in China.This week, New Zealand also said it would not send diplomats to the Beijing Games, but cited worries over the spread of Covid-19 rather than political concerns. The UK parliament also voted in favour of a non-binding motion for a diplomatic boycott of the Games in July.Additional reporting by Emma Zhou in Beijing More

“French growth remains robust. The heads of companies are slightly more cautious regarding the future, but we have caught up with pre-crisis levels since last September and now we’re above it”, Villeroy told RTL radio, giving a preview of the central bank’s quarterly forecasts due Dec. 20.”Let me give you a pretty impressive figure this morning – we’ll publish the full set of our forecasts on Dec. 20 – the 2021 French growth will stand at 6.7% in our forecasts,” Villeroy said.”That figure is much higher than what was expected during the first half of the year and the highest growth figure in more than 50 years.”The euro zone’s second-biggest economy has outperformed most expectations in recent months after the country’s vaccination campaign picked up speed in the second quarter and coronavirus restrictions were eased, allowing most businesses to return to work.But, like many other European countries, France is fighting a renewed spread of the disease fuelled by the Delta variant, and is gearing up to contain the Omicron variant.Prime Minister Jean Castex said on Monday night clubs would be closed ahead of Christmas and social distancing measures tightened, but ruled out a new lockdown because nearly 90% of eligible people have been vaccinated.Villeroy, who is also a member of the ECB’s policy-setting governing council, said French growth faced two main risks for now: labour shortage and shortage of supply.He also said inflation should ease next year in France, with its level likely to be below 2% at the end of 2022. More