NEW YORK (Reuters) – Citadel CEO Ken Griffin said on Thursday that he has not supported Donald Trump for president in the upcoming U.S. presidential election.”I have not supported Donald Trump,” the republican billionaire told journalists at an event in New York. “I’m so torn on this one… I know who I’m going to vote for, but it’s not with a smile on my face.” More
LONDON (Reuters) – Britain’s decade-long economic downward spiral could be reversed with a fresh appetite for risk that might help boost annual investment by a required 100 billion pounds ($131 billion) over the next decade, a leading think tank said on Friday.In an analysis of banking and finance regulation since 2014, New Financial said a culture of risk-aversion in regulation and financial services since the 2007-2009 credit crisis had spilled into the wider economy and stifled investment. In 80% of the metrics it had examined – after tracking activity across equity and bond markets, bank lending, private capital, pensions and investments and the wider economy – growth in activity had been lower than in the United States, it added. “The UK economy needs more and not less risk in the system,” it said. “The paradox is that in seeking to reduce risk, regulators have created bigger and longer term risks elsewhere. Enabling investors and market participants to take a little more risk could help create a virtuous circle of investment and growth.”New Financial did not lay the blame for a poor relative performance of the banking, finance and capital markets only at the feet of the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) market regulators.It noted that the FCA’s budget had increased by just 5% in real terms over the past decade and that average pay at the FCA and PRA had fallen in real terms by a quarter as staff attempted to do a “near impossible” job that included post-Brexit reform.It also urged the new Labour government, which will publish its first budget on Oct. 30, to speed up plans to cut regulatory duplication, allow watchdogs to take risks without fearing occasional failure, reset the metrics by which they report on growth objectives and to beware of political interference.The FCA said it welcomed the feedback and recognised the need for a discussion on shifting risk appetite.”To support competitiveness, since July, we have overhauled stock market rules, proposed new disclosure requirements, we’re reviewing commercial insurance regulation and we’re working with the government to spark innovation in the financial advice market,” a spokesperson said.($1 = 0.7652 pound) More
MONTREAL/CHICAGO (Reuters) -Air Canada pilots have voted to ratify a new four-year labor deal with the country’s largest carrier, the union said on Thursday, eliminating the risk of work stoppages despite concerns by some members about pay for entry level aviators.The agreement received 67% votes in favor, said the Air Line Pilots Association (ALPA), which represents the workers. The deal, which runs retroactively from Sept. 30, 2023 until Sept. 29, 2027, would give pilots a general four-year cumulative rate increase of about 42%, generating approximately C$1.9 billion in additional value, according to an executive summary of the deal seen by Reuters. “We look forward to working under these improved pay rates and working conditions,” said Charlene Hudy, chair of the Air Canada ALPA Master Executive Council in a statement.But the contract does not increase wages at the same rate across all categories. According to a copy of the draft deal seen by Reuters, a newly hired Air Canada first officer who flies a 737 MAX jet would have just a C$3.36 increase in 2024 versus 2023. Over the course of the deal, however, his or her wages would rise by 62%.Still, newly hired first officers for MAX aircraft at U.S. carrier United Airlines would make 82% more in Canadian dollars than their counterparts at Air Canada, according to copies of the two agreements.Pilots were demanding wages that would narrow that pay gap with their American counterparts over the course of the negotiations during the last 15 months.Air Canada averted a strike in September by reaching a last-minute deal with the union, which represents more than 5,200 of its pilots. But the tentative agreement was widely criticized by pilots on social media and even within the union local.One committee member in the local quit his post, citing a “fundamental disagreement” with the direction taken by the union in presenting the agreement to members, according to a resignation letter seen by Reuters.In a post on social media platform X, Air Canada said it welcomed the vote.While Air Canada has resolved its dispute with pilots, the airline is expected to begin negotiations with its flight attendants early next year, the union representing cabin crew said this fall. Flight attendants in the U.S. and Canada are pressing for fundamental changes in the way the airline industry has been treating and compensating them. In particular, they want to end the practice of “free work” in new contracts and be paid for their time during boarding and deboarding, and waiting around the airport before and between flights. More
TOKYO (Reuters) -Japan’s improving economic conditions and receding U.S. recession worries are likely to bring prospects of a December or January interest rate hike back into view, even as a new government complicates the politics around monetary policy.A significantly dovish shift in rhetoric from Bank of Japan Governor Kazuo Ueda and surprising opposition to further rate hikes by new Prime Minister Shigeru Ishiba have cast doubts over when the central bank would next tighten policy.Despite the recent change in mood around policy, however, sources and analysts see a growing economic case for the central bank to take Japan’s rates further away from historic lows and for the BOJ to step up its hawkish signalling.While the BOJ is expected to keep interest rates steady at its Oct. 30-31 meeting, it will roughly maintain its forecast for inflation to stay around its 2% target through March 2027, say three sources familiar with its thinking.Former BOJ official Nobuyasu Atago, who is currently chief economist at Rakuten Securities Economic Research Institute, said the central bank is unlikely to want to wait until March to raise rates again.”Recent developments surrounding the U.S. economy, including receding risks of a severe downturn, will work in favour of further BOJ rate hikes. From that perspective, the chance of a near-term rate increase is heightening,” Atago said.”I don’t think the Ishiba administration would push back against the BOJ’s efforts to raise interest rates.”With inflationary pressure from import costs subsiding, Ueda has said the central bank can “afford” to spend time scrutinising risks, such as unstable markets and U.S. economic uncertainties, in timing the next rate hike.But that does not necessarily mean the BOJ will stand pat for a prolonged period, especially if conditions for a rate hike fall into place, the sources say.Many BOJ policymakers see the economy on track for a moderate recovery with higher wages underpinning consumption and helping sustain broad-based price rises, the sources say, meeting the prerequisite of further rate hikes.”It’s true the BOJ is in no rush” with few signs inflation is firing up, one of the sources said. “But that doesn’t mean it will unnecessarily delay the next rate hike.””What the BOJ is likely trying to do is to give itself a bit of wiggle room on when to change policy,” another source said on Ueda’s comment.The BOJ ended negative interest rates in March and raised short-term borrowing costs to 0.25% in July, taking a landmark shift away from the decade-long radical monetary stimulus of the previous governor.NAVIGATING UNCERTAINTIESUncertainty over Ishiba’s stance on monetary policy and the risk of renewed market volatility from the U.S. Federal Reserve’s fresh rate-cut cycle have heightened challenges for the BOJ to nudge rates up again.From a macroeconomic perspective, however, the BOJ has few reasons to pause.Base salaries rose at the fastest pace in nearly 32 years in August, reflecting this spring’s labour-management pay negotiations that led firms to deliver bumper pay hikes.Growing prospects of sustained wage increases are prodding more service-sector firms to hike prices, a BOJ report showed, heightening the chance of a broad-based rise in inflation.While slowing U.S. and Chinese demand cloud the outlook, the headwinds have yet to hit manufacturers, with a quarterly central bank survey showing the business mood holding up and companies retaining robust spending plans.Even the external risks Ueda highlighted in his recent dovish commentary, such as the U.S. outlook and market volatility, appear to be diminishing.Brisk U.S. job growth suggests resilience in the world’s largest economy, alleviating one concern Ueda cited as reason to go slow in raising rates.Markets have also restored some calm with the Nikkei average recouping most of August’s rout. The yen is stable around 149 to the dollar, off a three-decade trough near 162 hit in early July but comfortably below the 140 mark which, if breached, would hit exports.The BOJ’s quarterly outlook report, due after its Oct. 30-31 meeting, will offer clues on how worried the bank remains about markets and overseas risks. Key would be whether such risks are mentioned in the report’s portion on future policy guidance, the sources said.After the October meeting, the BOJ next meets for a rate review on Dec. 18-19 followed by one on Jan. 23-24.The outcome of a general election slated for Oct. 27 will also be crucial for the next rate hike timing.Japan’s new economy minister, Ryosei Akazawa, on Tuesday backed the BOJ’s rate decision, brushing aside views the new administration would push back against efforts to normalise monetary policy.The likelihood of a December or January rate hike could heighten if premier Ishiba, who was previously seen as a policy hawk, strengthens his grip within his ruling party with a solid election victory, some analysts say.”In a way, uncertainties always exit,” a third source said. “From here on, the timing (of a rate hike) will pretty much be a judgment call.” More
(Reuters) – A look at the day ahead in Asian markets. Investors in Asia enter the final trading day of the week with sentiment dented a bit by surprisingly sticky U.S. inflation the day before, and with a sense of caution ahead of keenly-awaited news on China’s stimulus plans from Beijing the following day.Wall Street only posted mild losses on Thursday, the downside perhaps cushioned by soft weekly jobless claims figures that would suggest the Fed remains on track to cut interest rates a further 50 basis points this year.Asia will struggle to get much of a steer from Treasuries or the dollar either – the greenback ended flat on Thursday, and yields were mixed across the curve in narrow ranges. Traders have scaled back their expectations of Fed rate cuts since last week’s stellar U.S. employment report, but are not quite at the point of pricing in a pause in the cycle. Yet that’s what Atlanta Fed president Raphael Bostic floated on Thursday. Could incoming data really lead to a skip soon?The highlight in Asia’s calendar on Friday is the Bank of Korea’s interest rate decision. Economists expect the BOK to deliver its first interest rate cut since the pandemic, kicking off the easing cycle with a 25 basis point cut to 3.25%.All but three of the 37 economists in a Reuters poll expect that from the BOK, and the rest said they expect no change. Analysts generally expect the BOK to move more slowly than its regional peers in the coming months.Inflation eased rapidly to 1.6% in September from 2% in August, the lowest since early 2021 and below the BOK’s 2% target, but household debt and property prices are high.Indian trade data, industrial output figures from Malaysia and New Zealand’s manufacturing purchasing managers index for September make up the rest of the region’s calendar on Friday. New Zealand’s manufacturing activity has been shrinking every month since March last year, the PMIs show, although the pace of contraction has slowed sharply the last two months. This release comes days after the country’s central bank cut interest rates by half a percentage point and signaled that further easing will follow. Looking ahead to Saturday, all eyes will be on Beijing, where China’s finance ministry will detail plans on fiscal stimulus to boost the economy. It is unclear whether this means fresh fiscal steps to revive growth will be taken, or that the package of measures announced recently will be explained in greater detail.Hope, if not expectation, is building that it’s the former. If it’s the latter, investors are likely to be disappointed and there’s a good chance that the stunning rally in Chinese stocks over the last two weeks reverses on Monday, perhaps significantly.Here are key developments that could provide more direction to markets on Friday:- South Korea interest rate decision- India trade (September)- New Zealand manufacturing PMI (September) More
This article is an on-site version of our FirstFT newsletter. Subscribers can sign up to our Asia, Europe/Africa or Americas edition to receive the newsletter every weekday. Explore all of our newsletters hereIn today’s newsletter:Iran warns of potential change in its nuclear doctrineLai’s Taiwan National Day speechSouth Korea’s Han Kang wins the Nobel literature prizeGood morning. A senior adviser to Iran’s supreme leader has warned Tehran could change its nuclear doctrine if Israel targets the Islamic republic’s atomic facilities.As Iran and the wider Middle East brace for the Israeli response to last week’s Iranian missile attack on Israel, Brigadier General Rasoul Sanaei-Rad told Iranian news agency Fars: “Striking nuclear sites could certainly have an impact on the calculations during and after the war.”Iran fired a barrage of missiles at Israel in retaliation for the assassination of Hizbollah leader Hassan Nasrallah and other militant leaders. Afterward, prominent right-wing Israelis called on Prime Minister Benjamin Netanyahu’s government to target Iran’s nuclear programme.But western diplomats have warned that would be the most extreme retaliation. The US has urged Netanyahu against targeting Iran’s nuclear sites or its oil infrastructure.Here’s what to know about Iran’s nuclear programme — long viewed by Israel as its most serious strategic threat.Middle East news: Israeli forces fired a tank shell at the UN peacekeepers’ headquarters in southern Lebanon yesterday, the UN said, injuring two international troops.And here’s what else I’m keeping tabs on today and over the weekend:Economic data: Malaysia reports August manufacturing sales and the industrial production index. The US publishes September PPI inflation rate data for September.Monetary policy: South Korea announces its interest rate decision.Chinese economy: A press briefing on Saturday with China’s finance minister has fuelled investor expectations that the government will announce more stimulus measures.How well did you keep up with the news this week? Take our quiz.Five more top stories1. Taiwan’s President Lai Ching-te has urged Beijing to co-operate with Taipei and the international community to maintain peace in his first National Day speech yesterday. Lai asserted that China had “no right to represent Taiwan” but said he was willing to work with Beijing to protect peace and prosperity for people on both sides of the Taiwan Strait.2. South Korean writer Han Kang has won the 2024 Nobel Prize for literature. Han — the first Asian woman and South Korean writer to win the award — was recognised for her “intense, poetic prose that confronts historical traumas and exposes the fragility of human life”, the Nobel committee said. 3. Seven & i Holdings plans to split its convenience store operations from non-core businesses as the Japanese retail conglomerate faces an unsolicited $47bn buyout proposal from Alimentation Couche-Tard. The 7-Eleven owner said it would separate 31 subsidiary businesses — including supermarkets such as Ito-Yokado — and put them in a new holding company. Here’s more on the reorganisation.4. US inflation fell to 2.4 per cent in September but still exceeded economists’ expectations, cementing the belief that the Federal Reserve will cut interest rates by a quarter point at its next meeting in November.Hurricane Milton: Rescue operations were under way in Florida yesterday as officials sought to assess the damage inflicted by the storm, which triggered widespread flooding and left millions without power.5. Exclusive HSBC’s new chief executive plans to target the lender’s expensive layer of senior bankers in a cost-cutting move aimed at saving as much as $300mn. Georges Elhedery is drawing up plans to merge HSBC’s commercial banking unit with its global banking and markets unit. Here’s what else we know.The Big Read© FT montage/Getty Images/Yoruk IsikRussia has created a “shadow fleet” of more than 400 vessels moving about 4mn barrels of oil a day, circumventing western sanctions to create billions of dollars a year in additional revenue for its war in Ukraine. The FT’s latest investigation shows how complex arrangements involving a British accountant, a London-listed broker and Dubai-based companies helped one of Russia’s biggest oil producers buy ships while hiding its involvement.We’re also reading . . . Activist battle: A seemingly misfired email has embroiled Pfizer chief executive Albert Bourla and his company in a high-stakes activist campaign.Trump biopic: The Apprentice has been hit with legal threats that scared off Hollywood studios. Screenwriter Gabriel Sherman reveals the wild inside story of his new film.80-hour weeks: Wall Street’s moves to cap weekly hours for entry-level bankers are butting against the reality of a competitive industry.Chart of the dayA scramble for Chinese equities united the global investment industry last month, just as attitudes towards European and Japanese stock markets became heavily bifurcated along geographical lines. Despite strong domestic enthusiasm, foreign exchange traded fund investors turned their backs on European and Japanese stock markets in September. Take a break from the newsBefore he was Japan’s prime minister, Shigeru Ishiba was a Dragon Ball cosplayer. In 2018, he donned a purple cape and a hooded pink bodysuit at an event in his native Tottori, dressed as Majin Buu from the popular Japanese anime series. Ishiba is a serious politician, and his wardrobe decision is only weird if you (incorrectly) believe his anime fandom is niche, writes Leo Lewis. © María HerguetaAdditional contributions from Gordon Smith and Tee Zhuo More
President Luiz Inacio Lula da Silva has pledged to send an income tax reform to Congress, including a proposal to extend an income tax exemption to those earning up to 5,000 reais ($895.8) a month. The current upper limit for the exemption is 2,824 reais per month.Haddad told journalists on Thursday that the reform must be “neutral,” meaning measures aimed at increasing government tax revenues would have to compensate the effects of proposed exemptions.Local newspaper Folha de S. Paulo first reported on Wednesday that the government was mulling the creation of a minimum tax on individual millionaires, which would be set between 12% and 15% of income.Under the rules being discussed, according to the report , millionaires who currently do not pay the minimum percentage would have to contribute further until they reach the target. Asked about the report, Haddad said that “it’s one of the scenarios” under consideration. The reform would be the government’s latest change on taxes after Congress approved last year a major overhaul on consumption levies, although lawmakers still need to green light bills with regulations needed to implement the measures.($1 = 5.5819 reais) More
The Consumer Price Index came in at 2.4% in September, slightly above expectations of 2.3% but down from 2.5% in August. Month-on-month, the index climbed 0.2%, just above expectations for 0.1%. The latest reading raises questions about the Federal Reserve’s next move.Evercore ISI said in a note that September’s CPI print was “slightly firmer than expected” but “compositionally mixed.” They said the report showed a continued acceleration in core services excluding housing but also a cooling in housing services inflation, particularly rents. Evercore ISI emphasized that while inflation hasn’t been fully tamed, the data may not jeopardize anticipated rate cuts in November and December. “The Fed is anyway beyond the phase when inflation readings were determining the rate path,” said the analysts, indicating a baseline expectation of a 25 basis point cut per meeting through Q1 2025.Morgan Stanley echoed the sentiment of stability, calling the CPI report a “mild acceleration” but pointing out that shelter costs, particularly owners’ equivalent rent (OER), came down meaningfully. Despite a slight uptick in core goods prices, the analysts maintained their forecast for a 25 basis point cut in November. “Nothing in the report changes our call,” they said.William Blair took a more cautious tone, acknowledging that September showed “slightly less progress on inflation than hoped for.” The firm noted that while the trend of inflation continues to decelerate, external factors such as the spike in oil prices and seasonal adjustments could introduce volatility in the coming months.UBS warned of possible “volatility” ahead, with core CPI inflation projected to bounce between 3.3% and 3.4% over the next few months. The analysts forecast a moderate strengthening in the October CPI, but they believe inflation will ease after December.Bank of America described the report as showing “some stickiness on inflation” but remained optimistic about a potential 25 basis point cut in November, citing deceleration in rent prices. ”We are not yet worried about reacceleration risks,” said the bank. More
