Economy

BANGKOK (Reuters) -Thailand has received a green light to borrow to finance its controversial 500 billion baht ($14.29 billion) digital handout scheme, a senior official said on Monday, in a boost to a government eager to stimulate a sluggish economy.The Office of the Council of State, an independent panel that provides legal guidance to governments, had found no reason that would prohibit the government from borrowing to fund the plan, deputy finance minister Julapun Amornvivat told reporters. The programme to give away 10,000 baht (around $285) to 50 million Thais to spend in their local communities was the signature election policy of the ruling Pheu Thai party.The announcement came as Prime Minister Srettha Thavisin, who is also finance minister, urged the central bank on Monday to consider cutting interest rates to help the economy with inflation at very low rates.The government wants to spur growth in Southeast Asia’s second biggest economy, largely though stimulus and consumer spending, with Thailand trailing regional peers with growth forecast at about 2.4% last year, short of the 2022 figure. The “digital wallet” plan has come under fire from economists and some former central bank governors who say it could be fiscally irresponsible and fuel inflation. The government last year sought the Office of the Council of State’s advice on the legality of a borrowing bill for the programme.The office said borrowing for the digital wallet programme “can be done” under the power of the cabinet and the digital wallet committee, Julapun said.However, it said the programme should only be launched in an economic crisis, and the government must seek wider opinions, he said.The government has insisted it would be managed carefully and would boost the economy, which Julapun said was in crisis. The government would cascade its borrowing to fund the handout, he said, adding the government would stick to its plan to roll out the scheme in May.The borrowing would be staggered and would not affect market liquidity, which remains ample, Julapun said.He also said the central bank’s rate increases were “a bit too fast, too aggressive”, affecting the economy.Premier Srettha said on Monday he would speak to the central bank governor to urge him to reconsider the bank’s policy stance as inflation was very low.”On raising interest rates, I have a clear stance that I don’t agree with,” Srettha said, adding “there might be a need to consider reducing interest rates”, he said. The central bank left its policy rate unchanged at a decade high of 2.50% in November after raising it by 200 basis points since August 2022 to curb inflation. It will next review policy on Feb. 7.Headline inflation came in at -0.83% in December, making it the eighth straight month that it was outside the central bank’s target of 1% to 3%. ($1 = 35.0500 baht) More

U.S. banking giants kick off the reporting season and crypto markets look set for more volatility. Here’s a look at the week ahead in global markets from Rae Wee in Singapore, Ira Iosebashvili and Lananh Nguyen in New York, and Naomi Rovnick and Tom Wilson in London. 1/ INFLATION: CHEER VS FEARU.S. stocks and bonds soared in late 2023 in anticipation of Federal Reserve rate cuts this year. Inflation data on Jan. 11 could show whether those expectations are warranted.Gradually cooling inflation has increased bets that the central bank could begin lowering borrowing costs as early as March. Signs that inflation remained subdued in December would likely support that view – though a sharper-than-expected decline could also stoke fears that recent Fed rate increases are starting to weaken the economy.Conversely, a report showing that consumer prices are rising again could spark concerns markets may have underestimated how long it could take for the Fed to defeat inflation. Economists polled by Reuters expect the report to show a monthly 0.2% gain in consumer prices versus a 0.1% rise in November. 2/ TROUBLED WATERS Markets have been looking to oil prices for signs the Israel-Hamas dispute will push global inflation higher, but with expectations of heavy supply, oil does not tell the whole story. As transport groups re-route vessels away from the Red Sea, retailers face the biggest shipping upheaval since COVID-19 stymied the freight industry in 2020. The result could be Western retailers waiting longer for goods to arrive from China, with shortages pushing up prices, trade analysts say. The British Retail Consortium has said rising costs could reverse a trend of moderating grocery price inflation. Markets, more focused on relatively moderate oil prices, have so far shown limited concern about Red Sea shipping. But investors would be wise to monitor freight costs for signs that the battle against inflation is not over.3/ INFLATION INVASION    Policymakers across Australia, China and Japan face critical inflation readings likely to provide a sense of whether they will have more, rather than less work in 2024.The Reserve Bank of Australia, which is expected to join a rate-cut bandwagon later this year could find some relief if there is a slowdown in November’s inflation.In contrast, a pick up in consumer prices in Tokyo, a leading indicator of nationwide inflation trends, could cheer those betting on a Bank of Japan (BOJ) policy pivot. Such expectations sent a battered yen surging 5% versus the dollar in December. Achieving its 2% inflation target “sustainably” is the pre-condition for BOJ officials to ending negative interest rates.      In China, figures on Friday will give further clarity on whether deflationary pressures continue to mount in the world’s second largest economy. 4/ BANKING ON THE FEDU.S. banking giants kick off earnings with JPMorgan Chase (NYSE:JPM), Bank of America and Citigroup due to report fourth quarter and full-year results on Jan. 12.Top lenders brought in more income from interest payments in 2023 as the Fed raised rates, helping banks to offset a protracted slump in dealmaking revenue in Wall Street divisions.Consumers are also in focus with household finances having remained largely healthy since the pandemic, but some customers, particularly those on lower incomes, are starting to fall behind on payments in greater numbers. Commercial real estate will continue to be a drag meanwhile. Banks have set aside money to cover souring office loans last year. As many employees continue to work remotely or in hybrid arrangements, office owners who borrowed money to finance their buildings are likely to face further strains.5/ CYRPTO’S ETF HOPES Bitcoin kicked off the new year as it finished 2023 – with sharp gains after investors bet on possible approval by U.S. regulators of exchange-traded spot bitcoin funds. The biggest crypto token topped $45,000 for the first time since April 2022 on bets that such applications will get the nod from the Securities and Exchange Commission soon. Market players say the SEC’s decision may be imminent and could usher in a new wave of capital to crypto. Such hopes helped propel bitcoin in 2023 to yearly gains of more than 155%. Yet ever-volatile bitcoin has already trimmed its 2024 gains. Doubts linger, some analysts say, over how much demand will exist for any bitcoin ETF – and whether approval is already priced in. (Graphics by Vineet Sachdev, Pasit Kongkunakornkul, Sumanta Sen, Kripa Jayaram and Riddhima Talwani; Compiled by Karin Strohecker and Dhara Ranasinghe; Editing by Barbara Lewis) More

It also emphasised the need to ensure transparency and comparability in agreements with creditors outside the Official Creditor Committee (OCC), according to a statement dated Friday.Japan, along with France and India, co-chair the committee of 15 creditor nations. Battling its worst financial crisis since independence in 1948, the South Asian island nation is trying to restructure deals with creditors after soaring inflation, currency depreciation and low foreign reserves sent its economy into free fall, forcing it to default on foreign debt in May 2022. Sri Lanka and its creditors said in November they reached an agreement in principle on debt restructuring that would cover approximately $5.9 billion of outstanding public debt and consisted of a mix of long-term maturity extension and reduction in interest rates.China, Sri Lanka’s largest bilateral creditor, has struck its own deal with the island nation, but has not joined OCC as a formal member.Sri Lanka’s total external debt is estimated at $36.4 billion, which includes $10.81 billion of bilateral debt, according to data released by its finance ministry in September.Sri Lanka needs to secure debt restructuring agreements with both bilateral creditors and bondholders, possibly by March, to complete the second review of a $2.9 billion bailout from the International Monetary Fund. More

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UK councils have called on the government and companies to help pay for millions of pounds of upgrades to equipment for their most vulnerable residents ahead of the telecoms industry’s transition to a digital telephone system.Local government officials said the migration away from analogue products had not been well communicated, and that the high costs for social care users and social housing were hitting other services at a time of severe budget pressures.The public switched telephone network will be turned off by the end of 2025, with landline calls to be routed over the internet. The shift will also affect devices such as personal, lift and burglar alarms, door entry systems and CCTV. The PSTN switch-off, an industry-led initiative, comes as local government budgets contend with straitened finances. Three councils in England declared de facto bankruptcy last year and almost 20 per cent have said they are at risk, according to the Local Government Association. Theo Blackwell, chief digital officer for London in the Mayor of London’s office, said local authorities would feel the “biggest impact” from the transition “because they have the biggest range of systems” and that the UK government’s consideration of how it would affect councils had been “woefully inadequate”.Greater London Authority Economics, a research arm of the GLA, has estimated that upgrading telecare services for 63,000 adult social care users living at home across the capital’s 32 boroughs will cost £31mn. In a paper in August 2023, the Department of Health and Social Care estimated that 1.8mn people used telecare services in the UK, some of whom are self-funded. Such services include personal alarms for the elderly, which could help in the event of a fall.In addition to paying for telecare, councils are also facing upgrade costs for people in supported accommodation and for social housing. Blackwell estimated that, altogether, local authorities in London could be hit with a bill of between £45mn and £70mn for these upgrades, adding that money spent on the switch-off would “take away resource from adult social care services and other council services”.The UK government’s consideration of how the transition would affect councils had been ‘woefully inadequate’, says Theo Blackwell, chief digital officer for London in the Mayor of London’s office More

ZYNRELEF® is a non-opioid extended-release solution combining bupivacaine and meloxicam, which has demonstrated effectiveness in reducing postoperative pain in Phase 3 studies. The partnership with CrossLink, a leading orthopedic device distributor in the United States, aims to broaden the accessibility of this analgesic for patients undergoing orthopedic surgeries.Under the agreement, CrossLink will receive a fixed compensation per vial of ZYNRELEF® sold, contingent on sales growth over a predetermined baseline. The collaboration is expected to kick off with CrossLink spearheading the promotion of ZYNRELEF® for orthopedic applications across the U.S.Craig Collard, CEO of Heron, expressed optimism about the partnership’s potential to increase ZYNRELEF® adoption in surgical procedures and enhance patient care. Thomas Fleetwood, CEO of CrossLink, also conveyed enthusiasm for the collaboration, citing the significant impact of ZYNRELEF® on post-operative pain management and the opportunity to make it more widely available.ZYNRELEF® was first approved by the FDA in May 2021 for use in specific types of surgeries and has since expanded its indications. However, its safety and efficacy in highly vascular surgeries remain unestablished. Notably, Heron has withdrawn ZYNRELEF®’s marketing authorization in the U.K. and E.U. as it has no plans for a commercial launch in these regions.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

The company’s Screening revenue, which includes services like the Cologuard test, is estimated to be between $486.0 million and $487.0 million, marking a 21% increase. Precision Oncology revenue is expected to be between $159.5 million and $160.5 million, up by 12%. Excluding COVID-19 testing, the growth rates would be slightly higher.For the full year of 2023, Exact Sciences projects total revenue to be between $2.498 billion and $2.500 billion, a 20% increase from the previous year. The company also anticipates $2.83 billion in revenue for 2024.In addition to financial updates, the company announced that Jeff Elliott plans to resign as Chief Financial Officer in 2024 for personal reasons. Elliott will remain in his role until a successor is named and will then serve as a special advisor to the CEO. A national executive search firm has been engaged to find the next CFO.Exact Sciences submitted the final module of its next-generation Cologuard test for FDA approval, furthering its commitment to cancer prevention and early detection.The company’s financial results for Q4 and the full year are preliminary and unaudited, and final results will be shared during the February 2024 earnings call. This press release contains forward-looking statements, and actual results may differ materially from these preliminary estimates.Exact Sciences emphasizes its dedication to providing cancer screening and diagnostic tests that offer clarity for early action. The company’s product portfolio, including Cologuard and Oncotype DX tests, is part of its broader mission to innovate in cancer diagnostics.The information in this article is based on a press release statement. Exact Sciences will continue to focus on impacting lives with its cancer diagnostics as it transitions to new financial leadership.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

LONDON (Reuters) -U.S. manufacturers are still struggling to emerge from the prolonged slump that began in the middle of 2022 as the pandemic-driven surge in merchandise buying subsided and consumers reverted to spending on services.Merchandise inventories have begun to normalise but companies making expensive business equipment and consumer durables are being hit by the high borrowing costs resulting from the biggest increases to interest rates for four decades.U.S. manufacturers reported a decline in business activity for a 14th month in a row in December, the longest business cycle slowdown since the recessions in 2001 and early Nineties.The Institute for Supply Management’s (ISM) purchasing managers index increased marginally to 47.4 (17th percentile for all months since 1980) from 46.7 (14th percentile) in October.But the index has been below the 50-point threshold that divides expansion from contraction since November 2022.The number of months below the threshold has had more in common with a cycle-ending recession (generally 11 months or more) than a mid-cycle slowdown (typically 10 months or fewer).Chartbook: U.S. manufacturing activityThe slowdown appears to be prolonged but unusually shallow. Manufacturing output has been essentially flat for about a year, according to separate data compiled by the Federal Reserve.Flat-lining manufacturing is confirmed by data on sales of diesel and other distillate fuel oils used by manufacturers and freight hauliers, which have also been flat or marginally lower for a year.Distillate fuel oil consumption was level or slightly lower throughout the first 10 months of 2023 whether biofuels are included or not.However, in a sign the trough has passed and renewed growth is imminent, the ISM production sub-index has been above 50 points in three of the most recent four months.The new orders sub-index remains in negative territory but has been edging up towards 50 as excess inventory liquidation is completed and customers start confirming new business.MANUFACTURERS LEAD DISINFLATIONThe industrial recession has been significantly longer and deeper in Europe and China.In the eurozone, the manufacturing purchasing managers index (PMI) has been below 50 points for 18 months running and finished the year at only 44.4 (8th percentile for all months since 2006) in December.In China, the official manufacturing purchasing index has been below 50 points for 16 of the past 22 months and finished the year at 49.0 (5th percentile for all months since 2011).The global industrial recession has depressed cross-border merchandise trade and taken much of the heat out of freight rates (until recent attacks on shipping in the Red Sea).But it has also stifled growth in oil, gas and electricity consumption, relieving some of the pressure on stretched energy systems.Downward pressure on prices for merchandise, freight and energy have driven most of the deceleration in inflation across major economies over the past year.Higher interest rates have had a differential effect, with a greater and more immediate impact on the merchandise side of the economy than with services.If the industrial slowdown persists, decelerating inflation should eventually create space for the U.S. central bank and its counterparts to start cutting interest rates over the course of 2024.The major sources of uncertainty are what happens if lower rates cause merchandise spending to recover and tighten supply chains again, and what happens if the much stickier service sector inflation persists.There is not much spare capacity in the energy system to facilitate faster growth (diesel inventories are low across all major consuming economies and the United States in particular).Increases to labour market turnover and pay have decelerated but unemployment remains unusually low, suggesting there is not much slack if hiring picks up.The challenge for major central banks is how far and how fast to cut interest rates without rekindling inflation.Interest rate traders expect the Fed to cut rates by a quarter of a point at its March 19-20 meeting and then reduce them by five more quarter-points by the end of the year.Such aggressive easing will only be possible if economic growth and goods sector growth are sluggish.The dour outlook for manufacturing explains why oil prices have continued to slide even as traders bet on earlier, more aggressive rate cuts and Saudi Arabia and its OPEC+ allies try to support them by trimming output.Related columns:- U.S. manufacturing slowdown long but shallow (December 5, 2023)- U.S. manufacturing has plateaued after post-pandemic rebound (November 13, 2023)- Prolonged U.S. manufacturing slowdown barely dents energy use (September 5, 2023)John Kemp is a Reuters market analyst. The views expressed are his own. Follow his analysis on X https://twitter.com/JKempEnergy More