Economy

In conclusion, Boqii’s fiscal year 2024 first half results reflected a challenging economic environment, but the company’s strategic adjustments and focus on high-margin private labels have helped to mitigate some of the impacts. With the pet industry in China poised for growth, Boqii is positioning itself to capitalize on this trend and deliver sustainable returns to shareholders.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

Lopez Obrador’s comments come a day after he spoke with U.S. President Joe Biden, during which both agreed that more enforcement was needed at their shared frontier, as record numbers of migrants disrupt border trade.”What was agreed is that we keep working together,” Lopez Obrador told a regular press conference. “We have a proposal to strengthen our plans, what we’ve been doing,” he added, without going into details.Migrants are heading to the U.S. to escape violence, economic distress and negative impacts of climate change, according the U.N. The number of people crossing the perilous Darien Gap straddling Colombia and Central America has topped half a million this year, double last year’s record figures.The latest tensions over the border flared up after Mexican authorities temporarily stopped expelling migrants due to an end-of-year funding crunch, according to officials.Top U.S. officials, including U.S. Secretary of State Antony Blinken and Homeland Security chief Alejandro Mayorkas, will visit Mexico on Dec. 27 to follow up on the call, Lopez Obrador said, calling current migratory pressures “extraordinary”.”Above all, the number of Venezuelan migrants,” he said, also mentioning Haitians, Cubans and Ecuadorians.Lopez Obrador said Mexico would step up containment efforts on its southern border with Guatemala as his government seeks agreements with other countries to manage the northbound migrant flows, making particular mention of Venezuela.The measures under discussion did not just involve containment, Lopez Obrador said, noting that it was important to continue efforts to promote economic development in the region, and address the root causes of migration.The veteran leftist stressed he would continue to call for talks between the U.S. and Cuba, which has been under an American economic embargo for decades, and that talks on easing U.S. sanctions on Venezuela were “progressing.”He said containment needed to be complemented by political moves to lower regional tensions with Venezuela and Cuba, as well as Guatemala, which has been roiled by efforts to prevent the president-elect taking office in January.”Because one way or another, all of this encourages migration,” he said. More

The core personal consumption expenditures price index rose just 0.1% in November and was up 3.2% from a year ago, both close to expectations.
On a six-month basis, core PCE was up 1.9%, below the Fed’s 12-month target.
Including food and energy costs, so-called headline PCE actually fell 0.1% on the month and was up just 2.6% from a year ago.

A gauge the Federal Reserve uses for inflation rose slightly in November and edged closer to the central bank’s goal.
The core personal consumption expenditures price index, which excludes volatile food and energy prices, increased 0.1% for the month, and was up 3.2% from a year ago, the Commerce Department reported Friday.

Economists surveyed by Dow Jones had been expecting respective rises of 0.1% and 3.3%.
On a six-month basis, core PCE increased 1.9%, indicating that if current trends continue the Fed essentially has reached its goal.
“Adding in the further sharp slowdown in rent inflation still in the pipeline, it’s hard to see any credible reason why the annual inflation rate won’t also return to the 2% target over the coming months,” wrote Andrew Hunter, deputy chief U.S. economist at Capital Economics.
Markets reacted little to the report, with Wall Street set for a mixed open Friday in its last session before the Christmas holiday.
Elsewhere in the report, consumer expenditures in November climbed 0.3% while income rose 0.4%, numbers that were in line with expectations and indicative that spending was continuing apace despite ongoing inflation pressures.

Including food and energy costs, so-called headline PCE actually fell 0.1% on the month and was up just 2.6% from a year ago, after peaking above 7% in mid-2022. That was the first monthly decline since April 2020, according to Fed data.
The 12-month numbers are significant in that both show inflation making continued progress toward the Fed’s 2% target.
“The Federal Open Market Committee is not yet ready to declare victory on inflation, but the outlook is much better than it was just a few months ago,” wrote Gus Faucher, chief economist at PNC Financial Services. “The slowing in core inflation opens the door for fed funds rate cuts in 2024; the timing will depend on core PCE numbers over the next few months.”
The Fed prefers PCE as an inflation measure over the more widely followed CPI as the former focuses more on what consumers actually spend rather than the latter’s measure of what goods and services cost. Though policymakers watch both measures, they are more concerned with core prices as a longer-run inflation gauge.
November’s report reflected a shift in consumer appetite, as prices for services increased 0.2% while goods slumped 0.7%. A 2.7% slide in energy prices and a 0.1% decrease in food helped hold back inflation for the month.
Much of the market’s focus lately has been on the Fed’s inflation view and what that will mean for interest rates.
For each of its last three meetings, the Federal Open Market Committee has held the line, keeping its benchmark overnight borrowing rate targeted between 5.25%-5.5%. At its meeting last week, the committee indicated it is done raising rates and expects to implement cuts totaling 0.75 percentage point in 2024. Markets expect the first rate reduction to happen in March.
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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Worse than expected output data on Friday confirmed the UK’s struggle to escape its spell of economic stagnation, leaving third-quarter gross domestic product for 2023 barely above the levels at the end of last year. But figures for the period leading up to Christmas suggest there are glimmers of light in some parts of the economy — most notably among households that are finally seeing less punishing rates of inflation.The mixed numbers were released a day after chancellor Jeremy Hunt told the Financial Times that 2024 was “when we need to throw off our pessimism and declinism about the UK economy”.How has the UK economy fared in 2023? In a word, poorly. The country’s GDP contracted by 0.1 per cent in the third quarter, according to revised official figures published on Friday, after zero growth in the previous three-month period. Output grew by a tepid 0.3 per cent in the first three months of 2023. On the spending side, the numbers were dragged lower by the UK’s cautious households, who cut their real expenditure by 0.5 per cent in the third quarter even as disposable incomes grew slightly. That pushed up the household saving ratio to 10.1 per cent. Business investment, meanwhile, fell by 3.2 per cent, slightly less than the previous estimate from the Office for National Statistics. You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.The falls were somewhat offset by higher government spending and trade flows. “Clearly, the UK economy has been struggling under the weight of higher costs and higher interest rates, and the decline in business investment, after a better couple of quarters, is particularly disappointing,” said Elizabeth Martins at HSBC.Weak productivity growth suggests the country is unlikely to see robust and sustained growth rates any time soon. Productivity, which is ultimately what matters for rising living standards, has been almost flat since 2007, according to official figures published last month.What about more recent data? Output fell 0.3 per cent month on month in October, suggesting the UK is at risk of a technical recession if there is a contraction across the fourth quarter as a whole. However, some more recent figures tell a more encouraging story.Retail sales jumped more than expected by 1.3 per cent between October and November, the fastest increase since January. While the Black Friday discounts boosted sales growth last month, the expansion was broad-based with higher sales volumes for food, households, online and fuel stores, suggesting some resilience in consumer spending. You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.“The fact that retail sales were strong across the board chimes with many surveys, which suggests that the economy continued to eke out some growth in the final quarter of the year,” said Thomas Pugh, economist at RSM UK.In December, the S&P Purchasing Manager index, a measure of the health of private sector activity, grew more than expected to a six-month high, driven by a strong recovery in the services sector.Is the fall in inflation helping?Yes, this is a key factor for those who anticipate a better economic performance in the coming months. Inflation dropped more than anticipated to 3.9 per cent in November, the lowest level since September 2021. With price growth easing, wages are now rising more than inflation. In the three months to October, real regular wages rose at an annual rate of 1.4 per cent, up from 1.3 per cent in the three months to September. Until June, real wages were falling. If incomes continue to increase, households will eventually start to spend more, argue economists. Many expect incomes will continue to be supported by expanding real wages and Hunt’s cut in the national insurance rate, which takes effect in January.There are some signs of that improved picture playing out in confidence numbers. Rising real wages helped consumer confidence to rise for the second consecutive month to a three-month high in December, according to data from the research company GfK.“Consumer spending will be boosted by a quicker than expected fallback in inflation and the prospect of interest rates being cut sooner and more significantly than had been expected,” said Martin Beck, chief economic adviser to the consultancy EY ITEM Club. What about interest rates? The Bank of England is playing a critical role in this economic story. High borrowing costs, with the official rate at 5.25 per cent, are the main threat to hopes for a recovery of household spending. But with inflation easing more than expected for two consecutive months, markets are pricing that the central bank will start cutting interest rates in the first half of next year, easing pressures on mortgage holders.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Investors now expect that the BoE will lower rates from the current 5.25 per cent to 3.75 per cent by the end of 2024.The prospect of lower official rates has already started playing out in the housing market. Rates on popular mortgage deals have been coming off their 15-year peak since June, easing the squeeze on households who need to remortgage or sign new borrowing deals. Lower mortgage rates contributed to lifting mortgage approvals to a three-month high in October, according to data from the BoE published last month.  Lower pressure on homebuyers also helped house prices regain some of their losses in November, according to data by the mortgage providers Nationwide and Halifax.The ONS reported that house prices fell at the fastest annual pace in more than a decade in October, but the figures are based on transactions that might have been agreed several months before and are unlikely to reflect the latest improvement.  “With falling inflation and easier financial conditions, we are hoping for a happier economic new year,” said Martins. More

(Reuters) – Russia’s economic growth is set to slow in 2024, hampered in particular by double-digit interest rates throughout the year as the Bank of Russia seeks to subdue stubbornly high inflation, a Reuters poll showed on Friday. Russia’s gross domestic product is expected to outperform early expectations and grow 3.1% this year, the average prediction of 15 analysts and economists polled by Reuters showed, rebounding from a 2.1% contraction in 2022.But in 2024, growth, which has been boosted this year by soaring government spending, particularly on increased military production, is expected to slow to 1.1%. High interest rates are weighing on growth prospects. The Bank of Russia raised its key interest rate to 16% last week and though it said the rate hiking cycle was near completion, borrowing costs are set to remain elevated for several quarters. “The rate is now, of course, prohibitive,” said German Gref, CEO of dominant lender Sberbank, planning for rates still above 10% at the end of next year. “It has sharply reduced not only corporate lending, but even consumer lending.” The poll showed analysts expect rates at 12% by end-2024. “We believe the opportunity to lower the key rate will only open up in the middle of next year, when inflation will steadily slow down,” said Mikhail Vasilyev, chief analyst at Sovcombank.Inflation, which the central bank targets at 4%, is seen ending this year 7.6% and slowing to 5.4% by end-2024. Soaring prices for eggs led President Vladimir Putin to issue a rare apology last week, as the country’s poorest struggle with painful price increases. Inflation is one of several economic challenges facing Putin as he seeks re-election in March, although Russia’s success in evading a Western oil price cap is helping ease the burden.The rouble’s weakness has fuelled inflation this year and analysts give the Russian currency slim hopes of strengthening meaningfully in 2024, expecting the rouble to trade at 100 to the dollar a year from now, slightly weaker than in last month’s poll. The rouble traded close to 92 on Friday. “We believe the rouble will strengthening against major currencies in January due to the seasonal decline in demand for foreign currency at the start of the year,” Vasilyev said, then anticipating steady depreciation. (Reporting and polling by Alexander Marrow; Editing by Tomasz Janowski) More

New York-based Bristol has been under pressure to expand its drug pipeline amid declining demand for two of its top drugs, blood cancer treatment Revlimid and blood thinner Eliquis, which face generic competition.”We expect KarXT to enhance our growth through the late 2020s and into the next decade,” CEO Christopher Boerner said in a statement. The drugmaker is also expected to face revenue losses for two of its other top sellers, cancer immunotherapy Opdivo and blood thinner Eliquis, as they lose patent protection later this decade. Eliquis is also among the ten drugs expected to be subject to drug price negotiations by the U.S. Medicare health program in 2026. Under the terms of the deal, Bristol would pay $330 a share in cash for Karuna, which represents a 53.4% premium to its last closing price. Karuna’s shares rose to $317 in premarket trading. Bristol shares fell 3% before the bell as it expects to finance the deal mainly through new debt. Its shares have so far this year lost 30% of their value. The deal is expected to hit the company’s earnings per share by roughly 30 cents in 2024 due to the financing costs. The acquisition comes roughly two months after Bristol’s deal to buy cancer drugmaker Mirati Therapeutics (NASDAQ:MRTX) for as much as $5.8 billion. Analysts have forecast multi-billion dollars in sales of the drug, called KarXT. A decision on its use in adults is due by September next year, and the company is also testing it to treat patients with psychosis tied to Alzheimer’s disease.While there are several drugs for schizophrenia, KarXT belongs to a new class of drug that are likely to cause lesser side effects like weight gain.The deal highlights growing interest in neuroscience treatments, which has seen a spurt in research in recent years. AbbVie (NYSE:ABBV) earlier this month agreed to buy Karuna’s rival Cerevel Therapeutics for $8.7 billion. “Our gut here is that this process was somewhat competitive and the acquisition price seems to reflect this. There shouldn’t be any FTC (antitrust) issues,” said Stifel analyst Paul Matteis in a note to clients. Gordon Dyal & Co and Citi were the financial advisers to Bristol, while Goldman Sachs was the exclusive financial advisor to Karuna. More

LONDON (Reuters) – A long awaited shift in the U.S. Federal Reserve’s monetary policy arrived in December with major developed central banks delivering just one increase and the number of cuts accelerating further in emerging markets.December saw eight of the central banks overseeing the 10 most heavily traded currencies hold rate setting meetings, with only Norway hiking rates by 25 bps. In December, the ECB as well as policy makers in Britain, Japan, Australia, Canada and Switzerland opted to keep benchmarks unchanged at meetings – as did the U.S. Federal Reserve. But the eye-catching dovish pivot at the world’s top central bank took markets by surprise and increased bets that interest rates would come down faster and sooner than previously anticipated. Policy makers in Europe and elsewhere did not echo those expectations, and markets seem at odds with policy makers on the timing.”A slowing global economy, easing inflation pressures, and cooling labour markets would open the door for rate cuts from major central banks next year,” said Dean Turner, chief eurozone and UK Economist at USB Global Wealth Management, adding that keeping rates at current levels would tighten conditions in real terms.”Few, if any, central bankers think this is likely to be needed, so rates are more than likely to be lowered in 2024.”The year-to-date tally for G10 central banks stands at +1,200 bps across 38 hikes, less than half the 2,700 bps of tightening seen in 2022 when 54 moves were recorded, Reuters calculations showed.Meanwhile, in emerging economies – which have been frontrunning both the tightening and the easing cycle – rate cuts gathered steam. Five of the Reuters sample of 18 central banks in developing economies cut interest rates – the highest number in at least three years. Policy makers in the Czech Republic kickstarted their easing cycle, while Brazil, Hungary, Colombia and Chile doubled down on their easing efforts. Across the Reuters markets sample, 13 central banks held rate setting meetings in December. The latest moves take the total annual tally of rate cuts to 945 bps through 18 moves, and compares to 1,765 bps of rate cuts in 2022 across 11 moves. And there was more to come, said analysts. “The Fed’s dovish pivot has boosted EM risk sentiment and provides EM central banks with more space for easing,” said Christian Keller, head of economics research at Barclays. However, both Russia and Turkey who face continued pressure on their currencies and stubbornly high inflation, were still in hiking mode, tightening by 350 bps between them. In total since the start of the year, emerging market central banks have tightened by 5,075 bps – which compares to rate hikes to the tune of 7,425 bps in the full year of 2022. More

In the immediate aftermath of the UN climate summit talks that went through the night, Teresa Ribera, Spain’s deputy prime minister and co-leader of the EU delegation, spoke to select reporters on December 13 about the final throes leading to a global agreement that recognised the role of fossil fuels in climate change.Acknowledging that there were “things we would like to have seen developed in the text”, she nevertheless judged the outcome a “very good deal” for placing emphasis on “accelerating action in this critical decade.”The last 36 hours of negotiations involved the overhaul of a draft text which had “displeased” not only the EU but also the majority of nations as being inadequate after obstruction by Saudi Arabia and Opec nations. “Even if all the words were there, they were not introduced with the verbs, with the implications, that were needed,” Ribera noted. The final text agreeing to transition away from fossil fuels, but not going as far as to “phase out” their use, was negotiated by COP28 president Sultan al-Jaber, who had received Ribera’s vote of confidence as someone who could bring onboard oil and gas-reliant economies.In this edited extract of the question and answer session with FT climate correspondent Attracta Mooney, Ribera talks through the controversial finale when Jaber brought down the gavel without the group of 39 island nations vulnerable to climate change present for the UN closing session.The closing plenary session of COP28, where countries reached a deal to transition away from fossil fuels More