Economy

Signa Prime, which co-owns the Selfridges department store in London, requires 500 million euros to meet obligations this year alone and will need another 1.5 billion euros of cash in the first half of 2024, the report said. Some of the investors have turned down the request, while others are still in the early stages of assessing it, according to Bloomberg News. Austria-based Signa did not immediately respond to a Reuters request for comment. Thailand’s largest department store owner, Central Group, on Tuesday took control of Selfridges department stores after the real estate company brought it in a deal worth $5 billion in 2021. The funding request comes as Signa faces a property crisis in Europe exacerbated by a sharp rise in rates and building costs. Benko this month handed over control of Signa to restructuring expert Arndt Geiwitz. ($1 = 0.9222 euros) More

(Reuters) -Cisco Systems cut its full-year revenue and profit forecasts on Wednesday in a sign that demand for its networking equipment was slowing, sending the company’s shares down nearly 11% after market.The company has in recent years grappled with supply chain issues and a post-pandemic slowdown in demand, which has hastened its push into software offerings like cybersecurity.To accelerate its diversification and capitalize on the boom in artificial intelligence, Cisco (NASDAQ:CSCO) in September agreed to buy cybersecurity firm Splunk (NASDAQ:SPLK) for about $28 billion.Cisco said it saw “a slowdown of new product orders in the first quarter … and believes the primary reason is that customers are currently focused on installing and implementing products in their environments”.The company estimates one to two quarters of shipped product orders are still waiting to be implemented by customers. CFO Scott Herren added that the company sees “a return to order growth in the second half of the year”.For the full year, Cisco expects revenue between $53.8 billion and $55.0 billion, and adjusted per-share earnings in the range of $3.87 to $3.93.The company had previously forecast annual revenue of $57.0 billion to $58.2 billion, and adjusted per-share earnings of $4.01 to $4.08.Cisco’s results were in contrast to rivals Juniper Networks (NYSE:JNPR) and Arista Networks (NYSE:ANET), both of which posted upbeat results last month on strong enterprise spending.For the second quarter, Cisco expects revenue between $12.6 billion and $12.8 billion, missing analysts’ estimates of $14.19 billion, according to LSEG data.While the macro challenges still exist, most of the supply chain constraints “are now behind us,” company executives said on a post-earnings call, adding that both shipment lead times and backlog have largely returned to normal levels.Excluding items, Cisco earned $1.11 per share in the first quarter, beating estimates of $1.03. Revenue also topped estimates. More

WASHINGTON (Reuters) -Democratic and Republican leaders in the U.S. Senate said on Wednesday they could possibly vote later in the day on legislation that would keep the government funded and prevent a partial shutdown.”No drama, no delay, no government shutdown. That’s our goal and we hope to have an agreement very soon,” Senate Majority Leader Chuck Schumer, a Democrat, said on the Senate floor.Leaders from both parties have said they support a stopgap spending bill that passed the Republican-controlled House of Representatives by a wide bipartisan margin on Tuesday. Current funding is due to expire at midnight on Friday (0500 GMT on Saturday), and both chambers of Congress need to pass spending legislation and send it to Democratic President Joe Biden to sign into law before then to avoid disruption.Senator John Thune, the chamber’s No. 2 Republican, said a vote on the House bill later in the day was possible. “Right now we’re not seeing anything out there that would suggest that we couldn’t process this fairly quickly,” he said.But the chamber’s arcane rules can make quick action difficult. A source familiar with the situation said Senate Democrats were negotiating a deal that would clear the way for a Wednesday vote on the spending bill, as well as an alternative by Republican Senator Rand Paul that would cut spending from current levels.The House bill would extend government funding at current levels through mid-January, giving lawmakers more time to work on the detailed spending bills that fund everything from the military to scientific research.More significantly, it would avoid a partial shutdown that would disrupt a wide array of government services and furlough hundreds of thousands of federal workers.Tuesday’s vote was a victory for House Speaker Mike Johnson, who faced down opposition from some of his fellow Republicans who had pushed for deep spending cuts. Johnson was a little-known Louisiana lawmaker until he was elected speaker on Oct. 25 following weeks of Republican infighting.The legislation would extend funding for military construction, veterans benefits, transportation, housing, urban development, agriculture, the Food and Drug Administration and energy and water programs through Jan. 19. Funding for all other federal operations – including defense – would expire on Feb. 2. More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.A bout of consolidation across Asian markets on Thursday is likely after the previous day’s stellar gains, as investors adjust to what appears to be a decisive moment in the global interest rate and inflation cycle.There is a growing consensus forming that major central banks’ interest rate-raising cycle is over, a conviction strengthened by a series of inflation reports and other indicators from major economies.Figures on Wednesday showed that U.S. producer prices fell at their fastest pace since April 2020, and UK consumer inflation undershot all forecasts. Oil prices fell again on Wednesday, and are now down more than 10% year-on-year.Investors are increasingly pricing in more rate cuts next year, bond yields and the dollar are coming under downward pressure, and stocks and risk assets are buoyant. All in, financial conditions in most countries are loosening.Some of that reversed on Wednesday – Treasury yields and the dollar rebounded a bit from the previous day’s slump – which may keep a lid on Asian markets on Thursday, even though Wall Street held onto its gains and closed higher.Investors could be forgiven for taking a breather on Thursday after such as huge rally on Wednesday that saw the MSCI Asia ex-Japan, MSCI Emerging Market index and Japan’s Nikkei 225 all post their biggest gains in a year, of 2.5% or more.But they also have other major economic and corporate news to digest, which will inject an extra dose of caution into the trading session.The economic calendar sees the release of Japanese trade data, machinery orders and the closely-watched ‘tertiary activity index’, as well as Australian unemployment and Chinese house prices.Japan’s GDP figures on Wednesday were much weaker than expected, leading economists at Barclays and elsewhere to cut their 2023 and 2024 growth forecasts. But financial conditions in Japan are the loosest since 1990, according to Goldman Sachs, which is partly why the Bank of Japan has stepped up its hawkish rhetoric and may end its negative interest rate policy early next year. Laying that ground at a time when the economy is shrinking, however, is not ideal.China’s house price data will be closely watched for signs that the property sector is beginning to stabilize. There are signs of stabilization elsewhere in Chinese markets – the yuan is its strongest in three months against the dollar, and foreigners are increasing their holdings of China’s onshore yuan bonds.On the policy front, the Philippine central bank is expected to keep its key interest rate unchanged at 6.50% on Thursday, although there’s an outside chance it might hike to 6.75%.On the corporate front, China’s Alibaba (NYSE:BABA) and Lenovo release their latest earnings reports.Here are key developments that could provide more direction to markets on Thursday:- Japan trade (October)- China house prices (October)- Philippines interest rate decision (By Jamie McGeever) More

TOKYO (Reuters) -The Bank of Japan has stepped up its drum beat of hawkish comments over the past week, in a series of communications that insiders say is priming markets for an end to negative interest rates, which could happen in the first few months of next year.The distinct change in BOJ commentary is a part of Governor Kazuo Ueda’s plan to dismantle the controversial monetary stimulus of his dovish predecessor Haruhiko Kuroda, which has been blamed for a host of issues including the yen’s sharp declines.The hawkish tilt follows the BOJ’s decision last month to relax its cap on long-term rates by tweaking its yield curve control (YCC) policy and contrasts with the rhetoric of Ueda shortly after he took the helm this year, which seemed to call for a continuation of Kuroda-era stimulus.Ueda last week said Japan was making progress in sustainably hitting the BOJ’s 2% inflation target, and that it won’t necessarily wait until real wages turn positive in phasing out stimulus. Three sources familiar with the bank’s thinking say the shift to a less dovish tone was intentional.”The governor’s comments on inflation have been gradually changing over the past few months, which give a very good steer on the BOJ’s policy direction,” one of the sources said.”The BOJ is probably in a phase now where it’s looking for the appropriate timing to raise interest rates,” another source said, a view echoed by a third source.Ueda’s efforts to move Japan away from the extremely accommodative monetary settings of the part decade are complicated by risks that doing so too quickly could hurt a fragile economic recovery and trigger massive market upheaval.However, with inflation continuing to overshoot the BOJ’s 2% target, the economic justification for a shift is gradually building.Having watered down YCC at its last policy meeting, the BOJ’s next goal is to pull short-term rates out of negative territory early next year, sources have told Reuters.REASONS FOR CHANGEThe BOJ has said next year’s spring wage talks between business and unions will be key to the timing of an exit. Many big firms typically settle pay around mid-March, which heightens the chance of a policy change in April.But the BOJ does not necessarily need to wait for wage talks to conclude to tweak policy, as long as sustained achievement of its price goal can be foreseen, the sources say.The bank’s nine-member board is also tilting more hawkish with some calling for the need to start phasing out massive stimulus and communicate the chance of a future exit from ultra-low rates, a summary of opinions at their October meeting showed.”It’s natural to think the BOJ is starting to lay the groundwork for normalising policy,” said Mari Iwashita, chief market economist at Daiwa Securities and a veteran BOJ watcher.More imminently, other data points for policy deliberations could come from the bank’s “tankan” business sentiment survey due on Dec. 13, a gathering of BOJ regional branch managers in early January, and comments from business and union executives on next year’s pay goals.That leaves open the chance of an policy change in January, when the BOJ next reviews its quarterly price forecasts.”It’s really a matter of conviction and certainty. In the end, it’s a judgment call,” one of the sources said.Nearly 60% of economists polled by think tank Japan Center for Economic Research after the October policy tweak expect the BOJ to tighten policy in April, followed by 12% projecting a January move. Most expect an end to both YCC and negative rates.LONG ROADThe BOJ’s latest price projections released in October show inflation is expected to remain stubbornly above the bank’s target in the fiscal year ending March 2024, casting doubt on its view that recent cost-driven price rises are temporary.Its current projection for “core-core” inflation, which strips away fresh food and fuel, is at 3.8%, up a hefty two percentage points from the January estimate.”It’s an awfully big upgrade and shows how the BOJ had made estimates that were way too low,” said former BOJ top economist Hideo Hayakawa, who expects negative rates to end in April.There are plenty of risks that could hamper an early exit, such as a U.S. recession. Ueda must also avoid drawing heat from reflationist-minded lawmakers.But the BOJ cannot afford to wait too long. Even if it ends negative rates, nominal short-term borrowing costs will remain well below levels that neither stimulate nor cool the economy – estimated by analysts to stand somewhere near 2%.”Ueda’s role is to get rid of the unconventional policies of his predecessor, and revert to a policy targeting short-term rates,” said former BOJ board member Takahide Kiuchi. “That’s a mission he needs to accomplish during his five-year term.” More

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This statement comes as financial markets have been speculating about a potential end to the Fed’s rate hikes after a year-long decrease in both headline and core inflation. Despite these market expectations, Daly, along with Fed Chair Jerome Powell, stressed the importance of carefully examining broader financial conditions before reaching any definitive conclusions about the future path of monetary policy.Daly acknowledged the recent “very encouraging” inflation data but maintained a cautious stance towards future rate adjustments. She highlighted concerns over a ‘stop-start’ pattern which could emerge from an insufficient understanding of the disinflationary process. While she downplayed worries about a severe economic downturn following a sharp fall in yields, she also made it clear that rate cuts are not imminent. Her comments come at a time when market sentiment appears to diverge from the Fed’s perspective, with traders pricing in zero chance of a Federal Reserve hike.The Federal Reserve has been on a campaign to tame inflation through a series of aggressive rate increases over the past year. The central bank’s actions have been closely watched by investors and economists alike, as they balance the need to curb inflation with the risk of triggering an economic slowdown. Daly’s recent remarks underscore the delicate act of managing monetary policy amid shifting economic indicators and market expectations.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

HAVANA (Reuters) – Cuba wants to tap its fast-growing overseas population for fresh investment to lift its economy, a top foreign ministry official told Reuters this week, as the communist-run nation looks to overcome its worst downturn in decades.Food, fuel and medicine shortages have pushed a record number of Cubans to leave their Caribbean island home in the past two years, sapping the nation of resources necessary to jump-start an economy already shackled by the pandemic and stiffened U.S. sanctions.This migration wave includes many young people and “is having the greatest impact in history in terms of demographics, because of its composition,” said Ernesto Soberon, director of Consular Affairs for the Cuban Foreign Ministry.Soberon told Reuters in a wide-ranging interview in Havana on Monday that the exodus represents a loss but also an opportunity as the government seeks to revive the ailing economy.Cuban expats have already invested in bed-and-breakfasts, eateries and other activities on the island, but Cuba would like to see more capital flow, he said.”Today Cubans abroad have no limits on how they can participate in the economic life of their country,” he said, referring to restrictions once placed upon them by the government. Over 400 Cuban citizens living in more than 40 countries arrive on the island this week to discuss Cuba’s evolving economy and other issues with the government – the first such conversations between Cuba and its ballooning diaspora in nearly two decades.The conference is expected to attract Cubans living off island but with favorable views of their home country, including businesspeople, economists, and members of foreign resident associations. The landscape has changed dramatically since the last time the two groups formally met in 2004, under former leader Fidel Castro. Around 2.5 million Cubans and their descendents now live off the island, Soberon said.Cuba in 2021 lifted a ban on private enterprise, considered a scourge under Castro. And the island’s government, which once limited the travel of its citizens, now allows most to come and go freely, though it still restricts dissidents, athletes and some others.Some things, however, have not changed, said Soberon, who said the Cold War-era U.S. embargo has only stiffened over the years, with sanctions complicating the financial transfers needed to start and run a business.”You can’t just go back and forth with a bag full of cash,” he said.The administration of U.S President Joe Biden has shown tepid support for small business on the island but says Cuba must improve its human rights record before it grants concessions. It stopped short recently of announcing expected new measures to ease the flow of capital. In addition, some Cuban Americans have little appetite for working with Cuba’s government.Soberon said the conference on Nov. 18 and 19 would review mechanisms already in place, like remittances, that have already begun to serve as seed capital for small businesses for Cubans on the island.”That will ultimately raise their standard of living so that they want to spend their lives here in Cuba and not abroad,” he said. More