Economy

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.Another day, another whoosh higher on Wall Street, but the double whammy of gloomy news from China on Monday is spoiling the party in Asia, and regional markets could struggle again on Tuesday.Data on Monday showed that the world’s second largest economy grew at a frail pace in the second quarter while China’s Evergrande Group, the world’s most indebted property developer, said it lost an eye-watering $81 billion over 2021 and 2022.Chinese stocks fell almost 1% on Monday, their biggest loss in three weeks and dragging the broader MSCI Asia ex-Japan index into the red for the first time in six sessions.No such issues on Wall Street as a near 1% rally in the tech-centric Nasdaq lifted stocks while the U.S. earnings season goes up a gear this week. There was barely any change in the dollar or Treasury yields on Monday as investors brace for U.S. retail sales figures on Tuesday.The shadow over local markets cast by China’s second quarter GDP data on Monday is unlikely to lift completely by Tuesday, and the pressure on policymakers in Beijing to deliver more stimulus to shore up activity will surely increase.Chinese GDP grew 0.8% in April-June from the previous quarter, beating the consensus forecast of 0.5%. But on a year-on-year basis, GDP expanded 6.3%, well below the 7.3% forecast.JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS) and Citigroup (NYSE:C) trimmed China’s growth forecast for 2023 to as low as 5%, with Morgan Stanley also trimming its 2024 GDP forecast by 40 basis point to 4.5%.On the corporate front, Evergrande’s losses were compounded by a rise in total liabilities. There is no quick fix, especially when growth momentum is decelerating. Real estate, once the source of extraordinary growth and investment, is a drag on the overall economy.The Chinese mainland real estate index fell on Monday to its lowest level in nine years. It has lost 50% of its value in the last three years.U.S. Treasury Secretary Janet Yellen on Monday said slower growth in China could spill over to other countries, but she does not expect the U.S. economy to enter recession.Here are key developments that could provide more direction to markets on Tuesday:- G20 finance officials meeting in India- Reserve Bank of Australia minutes of last policy meeting- U.S. retail sales (June) (By Jamie McGeever; Editing by Josie Kao) More

Good morning. Today’s top story is on the latest landmark in the treatment of Alzheimer’s, as Eli Lilly released trial results that showed its new drug significantly slowed memory loss and cognitive decline.The US pharmaceuticals group on Monday reported full findings of its phase 3 clinical study of donanemab at the Alzheimer’s Association International Conference in Amsterdam, showing that the antibody treatment slowed progression by about 35 per cent in the early stages of the disease.The peer-reviewed results follow similar phase 3 findings released last November by US biotech Biogen and Japan’s Eisai for lecanemab, another antibody drug, which received full marketing approval from the US Food and Drug Administration this month under the brand name Leqembi.Eli Lilly announced on Monday that it had submitted donanemab for FDA approval and expected a decision before the end of this year. Submissions are under way to other global regulators. Experts on dementia called Lilly’s donanemab presentation, published in the Journal of the American Medical Association, a landmark in the field.“This is a watershed moment but it is just a start,” said Howard Fillit, chief scientist at the US-based Alzheimer’s Drug Discovery Foundation. “We must continue advancing the drug pipeline to develop the next class centred around the biology of ageing to ultimately stop Alzheimer’s in its tracks.”Here’s what else I’m keeping tabs on today: Economic data: Canada reports June consumer price index inflation rate figures, the US releases retails sales and industrial production figures and the UK publishes Kantar grocery market share figures and price inflation. Results: Second-quarter earnings are due from Bank of America, BNY Mellon, Charles Schwab, Lockheed Martin, Morgan Stanley, PNC Financial Services and Prologis. Meetings: The G20 meeting of finance ministers and central bank governors in Gujarat, India concludes. Meanwhile Japanese prime minister Fumio Kishida is expected to travel to Qatar, the third stop of a Gulf tour that has included visits to Saudi Arabia and the UAE. (Reuters)Five more top stories1. Russia has formally withdrawn from a UN-brokered deal to export Ukrainian grain across the Black Sea, potentially imperilling tens of millions of tonnes of food exports around the world. Russia’s move is the second time that it has withdrawn from the grain deal, yet people involved in the grain talks said Moscow had appeared more set on derailing the deal in the run-up to Monday’s deadline. Read the full story.Related: Moscow-installed authorities in Crimea have halted traffic on the bridge connecting the occupied peninsula to Russia after a Ukrainian attack that caused parts of it to collapse, killing two people.2. China’s outspoken foreign minister Qin Gang has not been seen in public for more than three weeks, missing important diplomatic engagements and prompting growing speculation about his whereabouts. A Chinese foreign ministry spokeswoman said she had “no information” about when Qin may return to his post. Here’s more on Qin’s mysterious absence. More China news: China’s economy lost steam in the second quarter, with gross domestic product expanding 0.8 per cent against the previous three months. Here’s what’s behind China’s slowing growth.China Focus: To help you find our best work on China we have created a special page on FT.com to serve as a hub for the latest news, analysis and opinion on Asia’s biggest economy.3. Exclusive: Millions of US military emails have been misdirected to Mali through a “typo leak” that has exposed highly sensitive information, including diplomatic documents, tax returns, passwords and the travel details of top officers. A common spelling error is behind the misdirected Pentagon messages, which have been collected by a company running Mali’s internet domain. 4. Taiwan’s vice-president and the ruling party candidate for January’s presidential elections is to make two stops in the US on a trip to South America next month, risking further threats from China. Lai Ching-teh plans to stop over in the US on his way to and from the inauguration of Paraguay’s president Santiago Peña on August 15. Read more on Lai’s planned US stopover and Beijing’s reaction.5. Bank analysts are sharply divided over just how bad Goldman Sachs’ second-quarter earnings will be. While it is not uncommon for analysts to disagree, the debate over what Goldman will report on Wednesday is more divided than usual. Here’s why analysts are so uncertain.The Big Read

President Xi Jinping and the Wuhan Greenland Center skyscraper © FT montage/Getty/Dreamstime

As China’s economic growth has failed to pick up post-Covid, calls are growing louder for president Xi Jinping to resort to the playbook of the past by launching a large-scale stimulus package to support the traditional, debt-fuelled growth engines of infrastructure and property. But Xi and his top policymakers are adhering to a stance they call dingli, or “maintaining strategic focus”. The question is, with the engines of growth stalling, will Beijing be able to stay the course?We’re also reading . . . Thailand’s political deadlock: Once a taboo topic, the role of the Thai monarchy is suddenly at the heart of a decades-long struggle between liberal democracy and traditional conservative rule. Talking to Moscow: Ukraine fears being sold out but the US and its allies can use secret talks to convince Putin of their resolve, writes Alec Russell.Why childhood is getting longer: Technology, demography and culture are all pushing society to extend how long people are considered young for, writes Stephen Bush.Chart of the day

You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.

For the number of female CEOs in the US and UK to increase there must be a significant shift in recruitment practices. Data analysed by the Financial Times shows the common route to becoming boss is still overwhelmingly through finance and operational roles — areas dominated by men.Take a break from the newsWho is the all-time greatest Chess player? An eye-catching run of success from Magnus Carlsen, the world No1, has revived the long standing debate. Tell us what you think, and solve this week’s puzzle: White mates the king in three moves.

Additional contributions by Tee Zhuo and Gordon Smith More

The World Bank last month cut its 2024 forecast for global economic growth to 2.4% from 2.7% earlier, citing global monetary tightening. “The fact is that the world economy is in a difficult place. It has outperformed what everybody has thought but it won’t mean there won’t be more challenges,” Banga said on the sidelines of a G20 meeting in the Indian city of Gandhinagar. “Forecast is not equal to destiny. We can change destiny, that’s what we should think of right now,” Banga said. More

Financial markets drew optimism from two reports last week showing that inflation is easing.
There are still troubling undercurrents in the economy, such as rising fuel prices and a clogged housing market that could cause problems ahead.
Citigroup economists are worried that ideal conditions, which have included resilient consumer spending, stronger supply chains and receding prices in key areas, may not last.
“No victory laps. No mission accomplished. Our work is not done,” Jared Bernstein, chair of the White House’s Council of Economic Advisers, told CNBC.

A food shopper searches for vegetables July 1, 2023 at the Hannaford supermarket in South Burlington, Vermont. 
Robert Nickelsberg | Getty Images

Don’t break out the party hats just yet: Despite recent signs that inflation is cooling, the fight to bring down the meteoric price increases of the past three years is far from over.
Financial markets drew optimism from two reports last week showing that the rate of growth in both the prices that consumers shell out at the checkout and those that businesses pay for the goods they use had hit multiyear lows.

But those data points reflected relative rates of change, and didn’t capture the overall surge that led to the highest inflation level in more than 40 years. What’s more, there are still troubling undercurrents in the economy, such as rising fuel prices and a clogged housing market that could cause problems ahead.
“No victory laps. No mission accomplished. Our work is not done,” Jared Bernstein, chair of the White House’s Council of Economic Advisers, said during a CNBC “Squawk Box” interview Monday morning. “But we’re very happy to see some breathing room for American households.”
The consumer price index, a widely followed gauge that tracks dozens of goods and services across multiple sectors, increased just 0.2% in June, taking the annual rate to 3.1%. That latter figure is down precipitously from its 9.1% peak a year ago, which was the highest in nearly 41 years, and is at its lowest since March 2021.

Also last week, the Labor Department reported the producer price index had risen just 0.1% in June and the same amount on an annual basis. The 12-month PPI reading had peaked at an annual rate of 11.6% in March 2022, its highest ever in data going back to November 2010.
Sharp declines in both readings raised hopes that, with inflation getting ever closer to the Federal Reserve’s 2% target, the central bank could ease up on interest rate hikes and the tight monetary policy that has been implemented since the early part of 2022.

A temporary lull?

“Cooling inflation. Slowing but still positive job growth. These are the things that soft landings are made of,” Citigroup economist Andrew Hollenhorst said in a note. “Near-term price inflation may do little to contradict rising Fed official and market hope that a benign outcome is being achieved.”
However, Citi’s economic team is worried that the ideal conditions, which have included resilient consumer spending, stronger supply chains and receding prices in key areas such as energy and vehicles, may not last.
“Tight labor markets, elevated wages, and upside risks to shelter and other services inflation mean we do not share this optimism,” Hollenhorst added. “Absent a tightening of financial conditions, inflation may reaccelerate in early 2024.”
For their part, Fed officials have indicated they see their benchmark rate rising by at least half a percentage point by year-end. Chair Jerome Powell has repeatedly warned about reading too much into a few months of positive inflation data, noting that history shows such moves can be head fakes.

Warning signs abound

There is certainly reason for caution if not outright skepticism about where inflation is headed.
The easiest one to point to is that the CPI may be on a sharp decline when including all items, but the move is less impressive when excluding volatile food and energy prices. Energy has tumbled nearly 17% over the past year and can turn around quickly.
So-called core inflation rose 0.2% in June and was tracking at a 4.8% annual rate, much higher than the Fed would like.
Housing is another focal point.
Central to the Fed’s expectation that inflation will ease is the belief that rental costs will begin to subside after a housing price boom in the early days of the Covid pandemic. Shelter costs, though, rose another 0.4% in June and are now 7.8% higher than a year ago. That’s just off the peak earlier this year and still near the highest since the early 1980s.
When looking at prices through a longer lens, the CPI is still up about 18% from where it was three years ago, the recent easing notwithstanding.
There are other nettlesome points as well.
Health insurance costs have fallen nearly 25% over the past year, due in large part to a nebulous adjustment the Bureau of Labor Statistics applies to the category. The adjustment ends in a few months, meaning that category, though a small contributor to the CPI weighting, could become more of a factor.

Inflation has inflicted much pain

Fed officials have pledged not to be complacent about inflation, repeatedly expressing concern over the impact on lower-income families and workers.
Small businesses also have been hit hard both by rising prices and the higher interest rates the Fed has used in its efforts to restore price stability.
“Inflation has certainly changed the cost structure, in some instances maybe permanently for a lot of small businesses,” said David Cody, co-founder and co-CEO of Newity, which started during Covid as a conduit for Paycheck Protection Program loans and is now focused on providing loans solutions for small businesses.
“Not only do you have headwinds for growth as things slow down, which is what’s happening, but you also have high absolute rates and pricing pressure on inputs,” he added.
Coty said the current environment is highly challenging for small business financing and he doesn’t expect to see any benefits from lower inflation for a while.
“Things have to move quite a bit to change the landscape in a material way for those small businesses considering kind of all the headwinds that have been created in the last couple of years, including the pandemic,” he said.
To be sure, there’s also a good deal of evidence showing inflation heading in the right direction.
The easing in supply chain problems is probably the biggest positive factor. A New York Fed gauge of global supply chain pressures is near its lowest level since 2008.
Also, as consumers eat through excess savings built up from trillions in fiscal and monetary stimulus, demand likely will abate and put downward pressure on some key categories. Those trends could push the Fed to ease its foot off the brake.
“The underlying improvement in both core goods and services inflation won’t stop the Fed from hiking rates later this month but, assuming the trend continues, it should persuade the Fed to hold fire after that and, eventually, to begin cutting rates again in the first half of next year,” wrote Paul Ashworth, chief North America economist for Capital Economics.
The Commerce Department on Tuesday will provide a better look at the impact that inflation is having on spending.
Retail sales are expected to show growth of 0.5% in June, an important figure because it is not adjusted for inflation. If spending for the month does in fact exceed the level of price increases, that in itself could be inflationary.
“With the Fed’s temporary pause in rate hikes, the U.S. economy has proved to be resilient through continued consumer spending, but continuing that trend [at] the current rate could create an elevated new normal level of spending,” said Kavan Choksi, managing director at KC Consulting.
“The reality is that current inflation rates still hold a negative impact on consumers,” he added. “So, even though we are on the right trajectory, we still have a long way to go.” More

The Federal Reserve chair spent the early pandemic bemoaning the loss of a strong job market. It roared back — and now its fate is in his hands.Jerome H. Powell, the chair of the Federal Reserve, spent the early pandemic lamenting something America had lost: a job market so historically strong that it was boosting marginalized groups, extending opportunities to people and communities that had long lived without them.“We’re so eager to get back to the economy, get back to a tight labor market with low unemployment, high labor-force participation, rising wages — all of the virtuous factors that we had as recently as last winter,” Mr. Powell said in an NPR interview in September 2020.The Fed chair has gotten that wish. The labor market has recovered by nearly every major measure, and the employment rate for people in their most active working years has eclipsed its 2019 high, reaching a level last seen in April 2001.Yet one of the biggest risks to that strong rebound has been Mr. Powell’s Fed itself. Economists have spent months predicting that workers will not be able to hang on to all their recent labor market gains because the Fed has been aggressively attacking rapid inflation. The central bank has raised interest rates sharply to cool off the economy and the job market, a campaign that many economists have predicted could push unemployment higher and even plunge America into a recession.But now a tantalizing possibility is emerging: Can America both tame inflation and keep its labor market gains?Data last week showed that price increases are beginning to moderate in earnest, and that trend is expected to continue in the months ahead. The long-awaited cool-down has happened even as unemployment has remained at rock bottom and hiring has remained healthy. The combination is raising the prospect — still not guaranteed — that Mr. Powell’s central bank could pull off a soft landing, in which workers largely keep their jobs and growth chugs along slowly even as inflation returns to normal.“There are meaningful reasons for why inflation is coming down, and why we should expect to see it come down further,” said Julia Pollak, chief economist at ZipRecruiter. “Many economists argue that the last mile of inflation reduction will be the hardest, but that isn’t necessarily the case.”Inflation has plummeted to 3 percent, just a third of its 9.1 percent peak last summer. While an index that strips out volatile products to give a cleaner sense of the underlying trend in inflation remains more elevated at 4.8 percent, it, too, is showing notable signs of coming down — and the reasons for that moderation seem potentially sustainable.Housing costs are slowing in inflation measures, something that economists have expected for months and that they widely predict will continue. New and used car prices are cooling as demand wanes and inventories on dealer lots improve, allowing goods prices to moderate. And even services inflation has cooled somewhat, though some of that owed to a slowdown in airfares that may look less significant in coming months.All of those positive trends could make the road to a soft landing — one Mr. Powell has called “a narrow path” — a bit wider.For the Fed, the nascent cool-down could mean that it isn’t necessary to raise rates so much this year. Central bankers are poised to lift borrowing costs at their July meeting next week, and had forecast another rate increase before the end of the year. But if inflation continues to moderate for the next few months, it could allow them to delay or even nix that move, while indicating that further increases could be warranted if inflation picked back up — a signal economists sometimes call a “tightening bias.”Christopher Waller, one of the Fed’s most inflation-focused members, suggested last week that while he might favor raising interest rates again at the Fed meeting in September if inflation data came in hot, he could change his mind if two upcoming inflation reports demonstrated progress toward slower price increases.“If they look like the last two, the data would suggest maybe stopping,” Mr. Waller said.Interest rates are already elevated — they’ll be in a range of 5.25 to 5.5 percent if raised as expected on July 26, the highest level in 16 years. Holding them steady will continue to weigh on the economy, discouraging home buyers, car shoppers or businesses hoping to expand on borrowed money.Since 2020, the labor market has rebounded by nearly every major measure.Jamie Kelter Davis for The New York TimesSo far, though, the economy has shown a surprising ability to absorb higher interest rates without cracking. Consumer spending has slowed, but it has not plummeted. The rate-sensitive housing market cooled sharply initially as mortgage rates shot up, but it has recently shown signs of bottoming out. And the labor market just keeps chugging.Some economists think that with so much momentum, fully stamping out inflation will prove difficult. Wage growth is hovering around 4.4 percent by one popular measure, well above the 2 to 3 percent that was normal in the years before the pandemic.With pay climbing so swiftly, the logic goes, companies will try to charge more to protect their profits. Consumers who are earning more will have the wherewithal to pay up, keeping inflation hotter than normal.“If the economy doesn’t cool down, companies will need to bake into their business plans bigger wage increases,” said Kokou Agbo-Bloua, a global research leader at Société Générale. “It’s not a question of if unemployment needs to go up — it’s a question of how high unemployment should go for inflation to return to 2 percent.”Yet economists within the Fed itself have raised the possibility that unemployment may not need to rise much at all to lower inflation. There are a lot of job openings across the economy at the moment, and wage and price growth may be able to slow as those decline, a Fed Board economist and Mr. Waller argued in a paper last summer.While unemployment could creep higher, the paper argued, it might not rise much: perhaps one percentage point or less.So far, that prediction is playing out. Job openings have dropped. Immigration and higher labor force participation have improved the supply of workers in the economy. As balance has come back, wage growth has cooled. Unemployment, in the meantime, is hovering at a similar level to where it was when the Fed began to raise interest rates 16 months ago.A big question is whether the Fed will feel the need to raise interest rates further in a world with pay gains that — while slowing — remain notably faster than before the pandemic. It could be that they do not.“Wage growth often follows inflation, so it’s really hard to say that wage growth is going to lead inflation down,” Mary C. Daly, president of the Federal Reserve Bank of San Francisco, said during a CNBC interview last week.Risks to the outlook still loom, of course. The economy could still slow more sharply as the effects of higher interest rates add up, cutting into growth and hiring.Consumer spending has slowed, but it has not plummeted — a signal that the economy is absorbing higher interest rates without cracking.Amir Hamja/The New York TimesInflation could come roaring back because of an escalation of the war in Ukraine or some other unexpected development, prodding central bankers to do more to ensure that price increases come under control quickly. Or price increases could simply prove painfully stubborn.“One data point does not make a trend,” Mr. Waller said last week. “Inflation briefly slowed in the summer of 2021 before getting much worse.”But if price increases do keep slowing — maybe to below 3 percent, some economists speculated — officials might increasingly weigh the cost of getting price increases down against their other big goal: fostering a strong job market.The Fed’s tasks are both price stability and maximum employment, what is called its “dual mandate.” When one goal is really out of whack, it takes precedence, based on the way the Fed approaches policy. But once they are both close to target, pursuing the two is a balancing act.“I think we need to get a 2-handle on core inflation before they’re ready to put the dual mandates beside each other,” said Julia Coronado, an economist at MacroPolicy Perspectives. Forecasters in a Bloomberg survey expect that measure of inflation to fall below 3 percent — what economists call a “2-handle” — in the spring of 2024.The Fed may be able to walk that tightrope to a soft landing, retaining a labor market that has benefited a range of people — from those with disabilities to teenagers to Black and Hispanic adults.Mr. Powell has regularly said that “without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all,” explaining why the Fed might need to harm his prized job market.But at his June news conference, he sounded a bit more hopeful — and since then, there has been evidence to bolster that optimism.“The labor market, I think, has surprised many, if not all, analysts over the last couple of years with its extraordinary resilience,” Mr. Powell said. More

(Reuters) – Americans are increasingly getting shot down when they seek out loans, new data from the New York Fed, released Monday, said. The bank reported that in June, across a number of fronts, credit was the hardest to get in years, with fewer people seeking out loans, at least for now. The report’s findings were compiled as part of the New York Fed’s monthly Survey of Consumer Expectations, with respondents polled every four months about credit access issues. The bank said that the overall rejection rate for credit applicants rose to its highest level since June 2018, and stood at 21.8%, from 17.3% in February. The bank noted the rise in the rejection rate “was broad-based across age groups and highest among those with credit scores below 680.” The survey also found that rejection rates for auto loans hit the highest level for a data series that goes back to 2013 and stood at 14.2%, from 9.1% in February. Rejection rates for credit cards, credit limit increases also gained ground. The rejection rate for mortgages stood at 13.2% in June from 10% in February, while the rejection rate for mortgage refinancing jumped to 20.8% last month, from 16.3% in the prior survey. The survey found that what it called the average probability that a loan will be rejected “sharply” surged to record levels for auto loans, credit cards, credit limit increases and housing related credit. The survey found a modest pullback in those seeking loans, to 40.3% of respondents in June—that’s the lowest level since October 2020–from February’s 40.9%. But it noted that respondents who plan to apply for credit over the next year ticked up a touch to 26.4% of respondents, from February’s 26.1%. The New York Fed data arrives amid a sea change for U.S. lending, as the Fed has pumped up its short-term target interest rate very aggressively since the spring of 2022, as it has sought to cool high levels of inflation. The Fed wants to temper demand and a key part of that process has been to make credit harder to get, and it is widely expected to raise rates again next week. The housing sector has been particularly hard hit by rising rates as mortgage costs have surged from sub 3% levels in the fall of 2020 through most of the following year, to mortgages that are now hovering around the 7% mark. The surge in home lending costs has caused Americans to cut back on borrowing there: The New York Fed reported in May that during the first quarter demand for mortgages fell even as overall household debt levels ticked higher. Meanwhile, bank lending to consumers has remained relatively stable although it is also showing some signs of slowing down. More

LONDON (Reuters) -Insurers are reviewing whether to freeze cover for any ships willing to sail to Ukraine after Russia on Monday quit a U.N.-backed deal that allows the export of grain through a wartime Black Sea safe corridor, industry sources said.The agreement, brokered by Turkey last July, aimed to alleviate a global food crisis by allowing Ukrainian grain blocked by Russia’s February 2022 invasion of its neighbour to be exported safely.”Due to the collapse of the Black Sea corridor deal, most shipowners will now refrain from calling Ukrainian ports,” said Christian Vinther Christensen, chief operating officer with Danish shipping group NORDEN. The last ship left Ukraine under the deal on Sunday. Insurance has been vital to ensure shipments through the corridor and industry sources said Russia’s decision was being evaluated in terms of whether cover in some form could continue. “Some underwriters will look to take advantage with a hefty increase in rates. Others will stop offering cover. The (key) question is whether Russia mines the area which would effectively cease any form of cover being offered,” one insurance industry source said.The Lloyd’s of London insurance market has already placed the Black Sea region on its high risk list.”Annual cover remains in place but voyages to listed areas will be assessed individually as and when seen,” said Neil Roberts, head of marine and aviation at Lloyd’s Market Association (LMA), which represents the interests of all underwriting businesses in Lloyd’s.Additional war risk insurance premiums, which are charged when entering the Black Sea area, need to be renewed every seven days. They already cost thousands of dollars and are expected to go up, while shipowners could prove reluctant to allow their vessels to enter a war zone without Russia’s agreement.”I don’t believe there are many enquiries at the moment as getting an owner to operate on past charter terms without an initiative would be difficult,” another industry source said.”Danger money hire rates would probably be required, aside from the provision for extra insurance costs.”Moscow’s withdrawal from the deal means “the guarantees for the safety of navigation issued by the Russian side will be revoked”, Russia told the U.N. shipping agency the International Maritime Organization on Monday in a letter seen by Reuters.The LMA’s Roberts said the letter “adopts a tone that diverges from previous pronouncements”. “From the insurance angle, quotes for corridor voyages would have expired, so renegotiation of terms should be expected,” he said.”With the withdrawal of the Russian security guarantees, the risk profile would need to be re-assessed. It may also be the case that some charterers will reconsider their options.” More

Today’s top storiesMicrosoft will next week face its first formal EU antitrust investigation in 15 years over claims it is unfairly tying its video conferencing app Teams with its popular Office software. BlackRock will give retail investors in its biggest exchange traded fund the chance to participate in proxy voting in 2024 as the $9.4tn asset manager reacts to criticism from both left and right over their influence on US companies.Officials in Crimea have halted traffic on the bridge connecting the occupied peninsula to Russia after a deadly Ukrainian attack that caused parts of it to collapse earlier today.For up-to-the-minute news updates, visit our live blogGood evening.China’s economy — the second largest in the world — has lost steam in the second quarter, with gross domestic product expanding 0.8 per cent against the 2.2 per cent quarter-on-quarter expansion over the January-March period.The country has also seen an increase in youth unemployment. In May, 20.8 per cent of 16 to 24-year-olds were unemployed, the largest proportion since the data series started in 2018.Jobless Chinese graduates, unenthused by work opportunities, are getting little sympathy from their head of state, who has previously urged them to “roll up their sleeves” and try manual work. But President Xi Jinping, who began an unprecedented third term in office in March, has his own problems. Namely, does his administration need an economic plan B? Property and trade are two indicators that have been flashing red. Demand for China’s exports has fallen this year and, in June, they suffered their biggest year-on-year decline since the pandemic started. With high interest rates in the west weighing on consumer purchases of Chinese-made goods, exports in June fell 8.3 per cent compared with a year earlier, according to the National Bureau of Statistics.Moreover, the property sector is experiencing downturn. According to a sample of 25 cities, prices of existing homes declined by 1.4 per cent in June compared with May, accelerating falls in the previous months. In the wake these setbacks, Xi and his top policymakers are practising something they call dingli, which means, “maintaining strategic focus”. Economists interpret this as continuing to reduce debt, especially in the overleveraged property sector while pursuing a policy of tech self-sufficiency and global leadership.Though top US officials have signalled scope for a more constructive relationship with Beijing, the Biden administration has dimmed hopes of an immediate easing of tariffs against China.Yesterday, US Treasury secretary Janet Yellen stressed that while it would be useful to identify ways to de-escalate tensions over time, it is “premature” to relax trade restrictions.Meanwhile, observers of China’s own foreign policy have been mystified by the three-week absence of Chinese foreign minister, Qin Gang, prompting growing speculation about his whereabouts. In China, disappearances of senior officials, celebrities and businesspeople are commonplace. It often later emerges that they have become embroiled in investigations or other controversies.

You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.

Need to know: UK and Europe economyEU economy chief Paolo Gentiloni warned the bloc would need to step up its response to the US Inflation Reduction Act, as President Joe Biden’s plan to finance the industrial green transition looks to be bigger than expected.The EU hopes to reboot relations with Latin America at a summit with the region’s presidents this week. Delays to trade deals and a rift over the Ukraine war have underlined their political differences after eight years without a top-level meeting. UK Prime Minister Rishi Sunak wants to tighten regulatory controls on universities offering courses with poor employment prospects and high student dropout rates. This aligns with a wider ambition to crack down on “rip-off degree courses”. Need to know: Global economyArgentina’s economy minister Sergio Massa is running for president this October while struggling to address runaway inflation and negotiate with the IMF as the country stands on the brink of default. Russia has pulled out of a UN-brokered deal to export Ukrainian grain across the Black Sea, putting tens of millions of tonnes of the food export at risk. Russia has complained that western sanctions were holding up a parallel agreement around payments, insurance and agricultural shipping. Dmitry Peskov, president Vladimir Putin’s spokesman, said Russia would resume its participation in the deal “as soon as the relevant agreements are fulfilled”.The transatlantic inflation gap looks set to hit its highest level in decades. The gulf between US and UK price pressures is likely to widen to levels not seen since the late 1970s. Need to know: businessMultinationals are racing to decouple China data after Beijing’s move to expand its anti-espionage rules and data regulation.Trade experts say new EU regulations that diverge from UK equivalents mean British companies must to start preparing for “Brexit 2.0”. “As the UK stays static, you’re having to treat the EU and the UK as two completely different markets from a regulatory perspective,” said Fergus McReynolds at industry body Make UK.It’s dangerous to assume UK banks are profiteering, writes FT deputy editor Patrick Jenkins. “Undermining banks’ margins arguably erodes their financial strength, weakens the City and thus the industry’s ability to fuel the economy,” he says.The World of WorkOf all the management techniques, few are as powerful as listening to your staff and asking follow-up questions. People are also more likely to bring looming problems to your attention if they know they are being heard. In a bid to increase the number of female CEOs in the US and UK, companies need to broaden their search beyond traditionally male-dominated jobs like finance and operational roles, or step up efforts to appoint women to these positions. The FT analyses the pipeline of potential future female bosses and the path to greater equality.Toxic workplaces not only cause stress and burnout but can also increase the risks of serious illness. Organisational change consultants could be the answer to a dysfunctional working environment.Working through the summer poses the constant risk of being asked to fill in for absent colleagues and do work that equally absent bosses fail to notice. Don’t be afraid to say no, writes columnist Pilita Clark.Some good newsA new drug developed by Eli Lilly has been shown to slow Alzheimer’s progression. The full findings of the phase 3 clinical study showed that the new drug donanemab significantly slowed memory loss and cognitive decline. Dementia experts have hailed this as a “watershed moment”. More