Economy

The People’s Bank of China (PBOC) said it will focus on supporting domestic demand expansion and stabilising economic growth and prices while avoiding “flood-like” stimulus, according to the report.However, it said that the external environment remains “severe and complex”, adding that the basics of domestic economic recovery are “not solid”. The report also said the property sector requires time to transition while the pressure of balancing local government fiscal revenue and expenditure persists. China will closely watch the trend and changes in inflation and keep the prices of energy and food stable, said the report.The report has not changed substantially from the previous one, with markets anticipating a government reshuffle, especially of the economic team, and the announcement of economic targets and policies for 2023 during an annual parliamentary meeting kicking off on March 5.The world’s second-largest economy is stabilising and improving but still faces many challenges, Premier Li Keqiang said at a cabinet meeting on Wednesday, after the country’s economic growth slowed to one of the worst levels in half a decade due to stringent COVID-19 lockdowns and curbs in 2022.The PBOC will keep liquidity reasonably ample and maintain effective credit growth, according to the report. The central bank also pledged to start improving social expectations and boosting confidence, mainly focusing on stabilising economic growth, employment and prices.As the problematic property sector has showed a tentative recovery, the PBOC said it will satisfy reasonable financing demand in the sector but insist on not using real estate as a short-term means to stimulate the economy. Late on Friday, the PBOC and banking and insurance regulator issued a notice to encourage commercial banks to issue loans for the purchase of housing by rental housing groups.(This story has been refiled to fix a typo in the second bullet point) More

“Business demand for equipment financing continues unabated despite uncertain and conflicting economic signals — inflationary pressures, rising interest rates, a hot labor market and easing supply chain disruptions,” said ELFA Chief Executive Ralph Petta.Companies had signed up for new loans, leases and lines of credit worth $8.8 billion last month, compared with $8.3 billion a year earlier.New business volume, however, was down 32% month-on-month after the typical end-of-quarter, end-of-year spike in new business activity.ELFA, which reports economic activity for the $1 trillion equipment finance sector, said credit approvals were 75.1%, down from 76.6% in December.Washington-based ELFA’s leasing and finance index measures the volume of commercial equipment financed in the United States.The index is based on a survey of 25 members, including Bank of America Corp (NYSE:BAC) and financing affiliates or units of Caterpillar Inc (NYSE:CAT), Dell Technologies (NYSE:DELL) Inc, Siemens AG (OTC:SIEGY), Canon Inc and Volvo AB (OTC:VLVLY).The Equipment Leasing & Finance Foundation, ELFA’s non-profit affiliate, said its confidence index in February stood at 51.8, an increase from 48.5 in January. A reading above 50 indicates a positive business outlook. More

Some European companies might be interested in investing in the United States rather than Europe, but their decisions would be based on more than just the new U.S. subsidies, she told the Wall Street Journal in an interview published Friday. The U.S. subsidies are likely to draw in interest from industries like wind turbines, electric vehicle batteries, mining and refining of raw materials, Vestager said.The EU official said that these subsidies could also pause the acceleration of green industries in Europe, which has prompted EU leaders to assess what they can do to prevent any loss of investment, including individual governments offering financial incentives.EU was “caught off-guard” by the Biden administration’s decision earlier this month to limit federal funding for electric-vehicle chargers to those that are made in the United States, Vestager said, adding that she planned to raise the issue with her U.S. counterparts.Earlier this month, leaders of the European Union expressed concern that local content requirements of much of the $369 billion of subsidies in the IRA will encourage companies to abandon Europe for the United States. More

BENGALURU (Reuters) – Finance leaders of the world’s top economies sought on Friday to bridge differences over how to deal with Russia following its year-old invasion of Ukraine as the West stepped up sanctions against Moscow.U.S. Treasury Secretary Janet Yellen accused Russian officials at the two-day Group of Twenty (G20) meeting in the Indian city of Bengaluru of being “complicit” in war atrocities.But, underlining the split with those nations which have not joined efforts to isolate the Russian economy, meeting host India avoided mention of the year-long war in inaugural remarks and said the global economy faced a range of other challenges.”I would urge that your discussions should focus on the most vulnerable citizens of the world,” Prime Minister Narendra Modi said, adding that stability, confidence and growth had to be brought back to the world economy.Modi cited the aftermath of the COVID pandemic, rising debt levels, disruptions to supply chains and threats to food and energy security as key concerns for the talks.India does not want the bloc to discuss sanctions on Russia and is also pressing to avoid using the word “war” in any G20 communique to describe the conflict, G20 officials told Reuters.But French Finance Minister Bruno Le Maire said there was no way the grouping could step back from a joint statement agreed at a G20 summit in Bali, Indonesia last November, which noted that “most members strongly condemned the war in Ukraine”.”Either we have the same language or we do not sign on the final communique,” Le Maire told reporters.Such stand-offs have become increasingly common in the G20, a forum created over 20 years ago in response to past economic crises but which has been recently hobbled by differences between Western nations and others including China and Russia.Speaking on the first anniversary of the Russian invasion, Yellen urged G20 economies to “redouble their efforts to support Ukraine and restrict Russia’s capacity to wage war”.”I urge the Russian officials here at the G20 to understand that their continued work for the Kremlin makes them complicit in Putin’s atrocities,” Yellen told reporters. Russian Finance Minister Anton Siluanov and central bank governor Elvira Nabiullina did not attend the G20 meeting in India, and Moscow was represented by deputies. Russia calls its actions in Ukraine a “special military operation”.Leaders of the wealthy G7 democracies are due to announce new sanctions against those aiding Russia’s war effort after a virtual meeting with Ukrainian President Volodymyr Zelenskiy later on Friday. Ahead of that, Washington released details of new measures it was taking that not only targeted Russia but also “third-country actors” across Europe, Asia and the Middle East that are supporting Russia’s war effort.”We will sanction additional actors tied to Russia’s defence and technology industry, including those responsible for backfilling Russian stocks of sanctioned items or enabling Russian sanctions evasion,” it said.Britain also issued more sanctions against Russia, including export bans on every item it has used on the battlefield and import bans of iron and steel goods.The G20 bloc includes the G7 countries, as well as Russia, China, India, Brazil and Saudi Arabia, among others. British Finance Minister Jeremy Hunt told reporters that focusing G20 discussions on Ukraine did not mean neglecting other issues.”In the end, unless we resolve the global security threats, there can be no progress on these other areas,” he said.Both China and India have seen trade with Russia surge in the wake of sanctions, with New Delhi vastly increasing its purchases of cheaper Russian oil. The meeting comes amid signs that the global outlook has improved from the last G20 summit in October, when a number of economies were teetering on the brink of recession amid energy and food price spikes caused by the war.The G20 meeting is also expected to hold talks on debt relief for distressed countries, with pressure building on China, the world’s largest bilateral creditor, and other nations to take a large haircut in loans.In a video address to the meeting, Liu Kun, China’s finance minister, reiterated Beijing’s position that the World Bank and other multilateral development banks participate in debt relief by taking haircuts alongside bilateral creditors. More

Investing.com — The U.S. updates on personal spending and income for January, along with the Federal Reserve’s favorite inflation measure – the price index for Personal Consumer Expenditures. A bunch of Fed speakers get to give their two cents’ worth in the hours that follow. China publishes its proposals to bring peace to Ukraine, but its proposals are likely to be unacceptable to Kyiv. The U.S. announces more military aid for the beleaguered country. Warner Bros. Discovery disappoints with its quarterly earnings, but Beyond Meat jumps after narrowing its losses. The German economy shrunk by more than thought in the fourth quarter, ending what was, for some German companies, a disastrous 2022. Here’s what you need to know in financial markets on Friday, 24th February.1. PCE prices and a hatful of Fed speakers The spotlight is on inflation again at 08:30 ET (13:30 GMT), as the U.S. releases price data for personal consumer expenditures in January. The PCE deflator – the Federal Reserve’s preferred inflation measure – is in sharp focus after GDP numbers on Thursday included an upward revision to PCE prices, indicating that inflation had been stronger than thought in the fourth quarter.At the same time, there will be figures on personal income and spending, while new home sales data for January and the Michigan Consumer Sentiment survey will follow at 10:00 ET.The numbers will be followed by a barrage of speeches from Fed officials. Governor Philip Jefferson and Cleveland Fed President Loretta Mester will open the ball at 10:15 ET, Governor Chris Waller and Boston Fed Governor Susan Collins appear on the same panel at 13:30 ET,2. China’s peace plan seen stillborn on anniversary of Russian invasionOn the first anniversary of Russia’s invasion of Ukraine, China presented a 12-point plan aimed at ending the war. The plan seemed destined to be rejected by Kyiv and its western backers, given that it proposed a ceasefire that would effectively cement Russia’s annexation of four Ukrainian regions last year, as well as demanding an end to “unilateral” sanctions (i.e., western sanctions on Russia).The U.S. administration marked the anniversary by approving another $2 billion in military aid to Ukraine, including drones and anti-drone defenses, electronic warfare detection equipment and ammunition for its artillery and rocket systems.The U.K. and U.S. also announced new sanctions against hundreds more Russian officials and entities, including measures that will sharply increase the cost of aluminum smelted in Russia. Aluminum futures fell 1.0% in London to a seven-week low.3. Stocks set to open lower, but all eyes on PCE; WBD slumps, BYND jumpsU.S. stock markets are set to open in a state of suspended animation, with all eyes on the PCE data and its implications for further Fed action. An upside surprise to forecasts of a 0.1% gain (and 0.4% for core prices) may push investors’ expectations of the Fed’s peak rate higher, with negative effects on stock valuations.Earnings season continues on its merry way in the meantime. Stocks in focus on Friday are likely to include Warner Bros. Discovery (NASDAQ:WBD) after it missed forecasts for revenue and subscriber growth in the fourth quarter and warned that advertising sales remain weak. WBD stock fell 5% in premarket. Booking (NASDAQ:BKNG) stock is also down after giving a muted forecast for the current year, despite beating expectations for the last quarter.Going the other way in premarket is Beyond Meat (NASDAQ:BYND), up 12.6% after narrowing its loss in the last quarter.By 06:30 ET, Dow Jones futures were down 140 points or 0.4%, while S&P 500 futures were down 0.5% and Nasdaq 100 futures were down 0.8%.4. Europe struggles with war impactThe German economy shrunk by 0.4% – twice as much as first estimated – in the final quarter of last year, providing a reality check to those who think that the Eurozone is out of the woods.The war in Ukraine is leaving particularly deep scars in the country’s industrial heartland: BASF (ETR:BASFN), Europe’s largest chemicals company, said it will close an ammonia plant and end production of some organic chemicals in Germany after it lost €4.8B last year.The figures not only reflect a massive rise in input cost, but also billions of euros of write-offs of its Russian investments, which included the two Nord Stream pipelines.Consumer confidence, however, continued to improve both in Germany and in the U.K. as the sense of panic over retail energy costs subsided.5. Oil still adrift; rig count, CFTC data dueCrude oil prices are poised to end the week down only fractionally, as reports of lower output in Russia continue to be balanced by rising inventories in the U.S.By 07:25 ET, U.S. crude prices were up 0.7% at $75.91 a barrel, while Brent was up 0.7% at $82.81 a barrel.Natural gas futures were up 2.26% at $2.48 per mmBtu after the excitement of a winter storm that brought heavy snow as far as southern California. Baker Hughes rig count – in decline since November – and the CFTC’s net speculative positioning data round off the week later. More

The core personal consumption expenditure (PCE) index is expected to have risen 0.4% on a monthly basis in January from 0.3% in December. Annual core PCE, however, is seen easing to 4.3% last month from 4.4%. The data is expected at 8:30 a.m. ET.The three major U.S. indexes are set for weekly losses despite a modest rebound in the previous session, with the blue-chip Dow set for post losses for February.After a strong January, equity markets have retreated this month as a slew of economic data fed into worries that the central bank might have to keep interest rates higher for longer on sticky inflation and a resilient labor market.Market participants expect the Fed fund rates to peak at 5.35% by July and stay near those levels till year-end.Megacap stocks like Tesla (NASDAQ:TSLA) Inc, Amazon.com Inc (NASDAQ:AMZN) and Nvidia (NASDAQ:NVDA) Corp slid around 1% each in premarket trading as yield on the benchmark U.S. 10-year Treasury note edged up. [US/]At 6:40 a.m. ET, Dow e-minis were down 164 points, or 0.49%, S&P 500 e-minis were down 24 points, or 0.6%, and Nasdaq 100 e-minis were down 111.5 points, or 0.91%.Separately, January home sales data and the University of Michigan’s final reading of consumer sentiment for February are also due later in the day. A string of Fed policymakers including Cleveland Fed President Loretta Mester and Boston Fed President Susan Collins are also slated to speak.Boeing (NYSE:BA) Co slid 3% after the Federal Aviation Administration said the planemaker temporarily halted deliveries of its 787 Dreamliner jets.Warner Bros Discovery (NASDAQ:WBD) Inc fell 4.9% after reporting a greater than expected quarterly loss due to one-off charges related to Warner Bros-Discovery merger. More

BENGALURU (Reuters) – The U.S. nominee to lead the World Bank, ex-MasterCard CEO Ajay Banga, gained traction with leading members on Friday, a sign that he will likely have a smooth ride to confirmation by the bank’s executive board.The finance ministers of France and Germany gave positive reviews to Banga, nominated on Thursday by U.S. President Joe Biden as a surprise choice to lead the institution’s transformation to fight climate change and other global challenges.German Finance Minister Christian Lindner said on the sidelines of a G20 finance leaders in India that Banga’s nomination was a “very remarkable” proposal because his private sector experience would be potentially helpful in mobilizing private investment in the fight against climate change and for development projects.Lindner said that Germany would follow the nomination with “great attention” and expressed “sympathy” for the proposal.The comments mark a turnabout from Tuesday, when German international development minister Svenja Schulze said the next World Bank chief should be a woman.”I think he is a good candidate. I need to meet him to know a little bit more about him,” French Finance Minister Bruno Le Maire told Reuters.Asked whether Europe would try to nominate its own choice, Le Maire said: “You know, we have this (U.S.) candidate, so I think it’s wise to meet him, get to know more about him.”The G20 ministers meeting is being held on the outskirts of the Indian tech hub city of Bengaluru.India’s finance ministry has not commented on the nomination of Banga, an Indian-born U.S. citizen, which played prominently in Indian media on Friday. But the government was expected to support Banga, India’s new executive director at the International Monetary Fund, told Reuters in Washington.Krishnamurthy Subramanian, the former top economic adviser to the Indian government, called the nomination “an elegant solution”. ENSURING U.S. LEADERThe United States, the lender’s dominant shareholder, has chosen every World Bank president since the instititution’s founding at the end of World War Two.U.S. Treasury Secretary Janet Yellen said she did not know whether there would be other nominees for the job, but said Washington moved quickly with a well qualified candidate to ensure that tradition would continue.”… we’ve tried to find a nominee who was really well qualified and brings a unique set of skills to the job that we think will be attractive,” she said.Other countries have until March 29 to nominate an alternative candidate and the World Bank board intends to announce a choice by early May.But with the United States and European countries supporting Banga, along with some key emerging markets, a challenger would have almost no chance of succeeding and would be a largely symbolic effort to protest what is seen by many countries and stakeholders as a non-transparent selection process stacked for too long in Washington’s favour.Yellen told reporters that Banga has “the right leadership and management skills, experience in emerging markets, and financial expertise” to lead the bank and reform it to boost lending on climate change, while maintaining its core anti-poverty mission. More

“The Russian Federation’s actions unacceptably run counter to the FATF core principles aiming to promote security, safety, and the integrity of the global financial system”, the Paris-based group said in a statement.Ukraine over the past year made repeated calls to the group to exclude Russia altogether.But while Russia has now been suspended, it remains a member.”The Russian Federation remains accountable for its obligation to implement the FATF Standards. The Russian Federation must continue to meet its financial obligations,” the FATF said.It added that it would review the situation at each of its plenary meetings.The FATF is an inter-governmental organisation that underpins the fight against money laundering and terrorism financing by setting global standards and checking if countries respect them. More