Economy

Culp will retain his responsibilities as the U.S. conglomerate’s chairman. The company last year announced it would break up into three companies focused on aviation, healthcare and energy.”The Board and I decided it is the right time for me to take on this expanded role,” Culp, who was named chief executive in 2018, said in a statement.GE also named Otis Worldwide (NYSE:OTIS) Corp executive Rahul Ghai as the aviation unit’s chief financial officer in place of Shane Wright, who is set to retire. More

Scores of Western brands have left Russia following a backlash against its military incursion into Ukraine, with McDonald’s (NYSE:MCD), IKEA and Renault (EPA:RENA) among the more high-profile. Others have reported struggles with logistics and supply chains amid Western economic and financial sanctions.One shopper, Lyubov, said Decathlon’s departure was “sad”, but was adamant that Russian consumers would cope. “We are flexible people, we will adapt,” she said. Another customer, Ivan said: “It really is a shame that it’s closed. As a climber, I’ll miss Decathlon, but what can you do? In principle, there are other things we can buy, but still, Decathlon will be missed.”Part of a retail empire owned by the Mulliez family, Decathlon imported most of the products sold in its 60 Russian stores. It announced in March that it was suspending operations as “the supply conditions are no longer met to continue … activity in Russia”.The stores closed in waves, and from Monday, Russian consumers were no longer be able to shop in store or online, the company’s local website said, although some branches stayed open for returns. The company’s repeated use of the word ‘temporary’ suggested that it may try to reopen stores when possible. On an FAQ page, it promised to save accrued loyalty points and let customers know when they could be used.Decathlon declined to offer further comment on Monday.The Mulliez family is also behind DIY retailer Leroy Merlin and food retailer Auchan, both of which remain open in Russia. In March, Decathlon said it would continue to support its 2,500 Russian staff, some of whom have been involved with the company since 2006. More

SCHLOSS ELMAU, Germany (Reuters) -The Group of Seven club of wealthy nations on Monday vowed to stand with Ukraine “for as long as it takes”, promising to tighten the squeeze on Russia’s finances with new sanctions that include a proposal to cap the price of Russian oil.The announcement came after Ukraine’s President Volodymyr Zelenskiy, addressing G7 leaders at their summit in the Bavarian Alps via a video link, asked for weapons and air defences to gain the upper hand in the war against Russia within months.The G7 statement aimed to signal that its members were ready to back Ukraine for the long haul, at a time when soaring inflation and energy shortages – fuelled by Russia’s invasion – have tested the West’s sanctions resolve.”We will continue to provide financial, humanitarian, military and diplomatic support and stand with Ukraine for as long as it takes,” the statement said.After missiles rained down on Kyiv on Sunday, U.S. National Security Advisor Jake Sullivan said the United States was readying a new weapons package for Ukraine that included long-range air defences and ammunition. “At the top of his mind was the set of missile strikes that took place in Kyiv and other cities across Ukraine and his desire to get additional air defence capabilities that could shoot down Russian missiles out of the sky,” Sullivan told reporters about Zelenskiy’s address.The G7 countries said they were ready to provide security commitments in a post-war settlement while stressing, after Ukraine had earlier voiced misgivings, that it was up to Kyiv to decide a future peace deal with Russia. The G7 countries said they had also pledged or were ready to grant up to $29.5 billion for Ukraine. TAKING AIM AT PUTIN’S REVENUESThe announcements came as the White House said Russia had defaulted on its foreign sovereign bonds for the first time in a century – an assertion Moscow rejected.G7 nations, which generate nearly half the world’s economic output, want to crank up pressure on Russia without stoking already soaring inflation that is causing strains at home and savaging the global south.The expanded sanctions would also target Russia’s revenue stream from gold exports, Moscow’s military production and officials installed by Moscow in areas of Ukraine occupied by Russian forces.Imposing the oil price cap aims to hit Russian President Vladimir Putin’s war chest while actually lowering energy prices.”The dual objectives of G7 leaders have been to take direct aim at Putin’s revenues, particularly through energy, but also to minimize the spillovers and the impact on the G7 economies and the rest of the world,” a U.S. official said on the sidelines of the G7 summit.Western sanctions have hit Russia’s economy hard and the new measures are aimed at further depriving the Kremlin of oil revenues. G7 countries would work with others – including India – to limit the revenues that Putin can continue to generate, the U.S. official said.India has refrained from criticising Russia and provided a market for Russian oil, gas and coal as it sought to balance longstanding ties with Moscow and relations with the West.While hosting the Indonesian president at the G7 summit, German Chancellor Olaf Scholz did not rule out boycotting the Group of Twenty summit in Indonesia in November if Putin attended. India’s Prime Minister Narendra Modi is one of the five leaders of guest nations joining the G7 for talks on climate change, energy, health, food security and gender equality on the second day of the summit.MORE SANCTIONSA U.S. official said news that Russia defaulted on its foreign sovereign bonds for the first time since the Bolshevik revolution in 1917 showed how effective Western sanctions have been.The Kremlin, which has the funds to make payments thanks to rich energy revenues, swiftly rejected the U.S. statement, accusing the West of driving it into an artificial default.The United States said it would also implement sanctions on hundreds of individuals and entities adding to the more than 1,000 already sanctioned, target companies in several countries and impose tariffs on hundreds of Russia products.The agencies involved would release details on Tuesday to minimize any flight risk, a second senior administration official said.The Ukraine crisis has detracted attention from another crisis – that of climate change – originally set to dominate the summit. Activists fear Western nations are watering down their climate ambitions as they scramble to find alternatives to Russian gas imports and rely more heavily on coal, a dirtier fossil fuel, instead.Japan is also pushing to remove a target for zero-emission vehicles from a G7 communique expected this week, according to a proposed draft seen by Reuters. More

(Reuters) – Wall Street’s main indexes were set to open higher on Monday and extend gains from the previous week after a slide in commodity prices allayed concerns about an overly aggressive Federal Reserve that is seeking to tame inflation. All three key indexes posted solid gains last week, with the tech-heavy Nasdaq Composite rising 7.5% as investors bet the retreat in oil prices from the three-month highs hit in June could ease inflationary pressures and push the Federal Reserve to moderate its aggressive policy tightening. “I think there is an overwhelming feeling that inflation may be coming down and the Fed may not have to be as aggressive as anticipated moving forward,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.”As early as a week ago, unequivocally, everyone did feel that 75 basis points was guaranteed. I think now those probabilities have come down a little bit and it’s kind of an open story.” The U.S. central bank has rapidly raised interest rates to rein in 40-year-high inflation, stoking fears its actions could tip the world’s largest economy into a recession.After the benchmark S&P 500 index earlier this month recorded a 20% drop from its January closing peak to confirm a bear market, investors have been trying to gauge when the market might hit its bottom. “The rebound in markets is a reminder of the merits of staying invested in line with a long-term plan. But volatility is likely to remain elevated until we see strong evidence that inflation is moderating, recession risks are receding, and geopolitical threats are declining,” Mark Haefele, chief investment officer at UBS Global Wealth Management wrote in a client note. Haefele added that the main driver of the markets in the second half of 2022 will be investor perceptions of whether we are headed for stagflation, reflation, a soft-landing, or a slump.Shares across the board gained in premarket trading on Monday, with tech-focused growth stocks including Tesla (NASDAQ:TSLA) Inc, Netflix Inc (NASDAQ:NFLX), Alphabet (NASDAQ:GOOGL) Inc and Apple Inc (NASDAQ:AAPL) up between 0.5% and 1.5%. At 08:25 a.m. ET, Dow e-minis were up 79 points, or 0.25%, S&P 500 e-minis were up 14.5 points, or 0.37%, and Nasdaq 100 e-minis were up 58.25 points, or 0.48%. Shares of Robinhood (NASDAQ:HOOD) Markets rose 2.4% after media reports said Goldman Sachs (NYSE:GS) upgraded the retail broker’s stock to “neutral” from “sell”.Goldman Sachs, however, cut rating on Coinbase (NASDAQ:COIN) Global Inc to “sell” from “buy”, according to media reports, sending shares of the cryptocurrency exchange lower by 5.7%. More

The temporary workers, who would be offered accommodation and a standard wage, would have to fulfil the same security and reliability checks as other staff such as baggage handlers, which in general take about two weeks, the spokesperson said at a regular government news conference in Berlin on Monday.Travellers across Europe are facing especially long queues this summer as travel demand is back in full force after COVID-19 lockdowns, and airports and airlines are having trouble maintaining enough staff to handle the crunch.According to the ADV airport association, about one in five jobs in security, check-in and aircraft handling is unfilled.Airports are expected to announce their exact needs in the coming days, but the head of the ABL association of aircraft ground handling employees expects 1,000 to 2,000 workers will be allowed in for three months, most likely starting in August.”A time limit of a maximum of six months until the end of the year would have been nice,” said Thomas Richter in an interview with Reuters. “It doesn’t solve the problem, but it certainly helps.”At odds with the desire to quickly bring in help is the need to ensure airport security, with Interior Minister Nancy Faeser emphasizing that there would be no cutbacks in that regard.Andreas Rosskopf, the chairman of Germany’s police union, said newly recruited foreign workers could be used for jobs such as baggage handling, but warned against trying to put them into positions requiring additional security. “We are talking about people who have to be intensively screened and briefed in terms of security. That takes a certain amount of time,” Rosskopf told the Rheinische Post newspaper. More

LONDON (Reuters) – Russia may have defaulted for the first time on foreign bonds since the Bolsheviks refused to pay on a vast debt pile after the 1917 Revolution, but its $1.8 trillion economy is showing no sign of sinking just yet.The sanctions imposed by the West over Russia’s invasion of Ukraine delivered the biggest external shock to Russia’s economy since the 1991 fall of the Soviet Union, but the economy has – so far – been remarkably resilient.Russia’s 2022 “default”, announced by the United States on Monday but rejected by the Kremlin, is very different to debt crises of previous years: in 1918 the Bolsheviks didn’t want to pay and in 1998 Russia could not pay its domestic debts. This time, Moscow can pay and says it is ready to but the West is preventing it. Following are five signs that the Russian economy is still resilient:* The strongest currency in the world: The rouble, which for decades even Russians shunned because it was so weak and volatile, is by far the world’s top performing currency against the U.S. dollar year-to-date. http://fingfx.thomsonreuters.com/gfx/rngs/GLOBAL-CURRENCIES-PERFORMANCE/0100301V041/index.html The rouble has been driven higher by proceeds from commodity exports, a drop in imports and capital controls which have shielded the currency from a broader sell off. The rouble hit a 7-year high against the dollar and euro on June 22.Russia ran a current account surplus of $110.3 billion in the first five months of 2022, up from $32.1 billion in the same period last year, central bank data showed.* Oil – The lifeblood of Russia’s economy has been trading above $100 a barrel since Russia invaded Ukraine. Brent crude oil was trading at $112.99 on Monday.With high oil prices, Russia, the world’s second largest oil exporter after Saudi Arabia and world largest exporter of natural gas, has a trillion-dollar-a-year cushion against sanctions.For sure, Russia’s Urals blend of crude sells at a discount to Brent but is still high. Western sanctions have forced Russia to sell its oil at large discounts up to $40 a barrel to China and India. But U.S. officials have said Moscow was still earning more money from its energy exports today than before the war.* Rates – Russia’s central bank cut its key interest rates to the pre-crisis level of 9.5% on June 10 – and has kept the door open to a further easing as inflation slowed. Just after the invasion, Russia hiked rates to 20%. But that is still far below the astronomical rates of 150% imposed just before the August 1998 devaluation. * Food and no panic – There is still food in the shops of Moscow and few signs of panic.Immediately after the invasion, there was some panic buying of things like sugar. But that has subsided: there is ample food in the shops of Moscow and no run on the banks. That is a sharp contrast to the panic buying which accompanied the 1998 devaluation and the food shortages which accompanied the 1991 fall of the Soviet Union.Back in 1990, to alleviate Russian food shortages, the United States started supplying chicken legs to Russia that became known as “nozhki Busha” – or Bush legs – after President George H. W. Bush who signed the deal with Mikhail Gorbachev. * Unemployment – just 4%, a record low, in April. Some fear unemployment could be understated as big companies have yet to cut staff but for now at least, just 3.0 million are without a job. A new reading for May is due shortly. More

Yulin, a city of 5.8 million known for its annual summer dog meat festival, will recommend a home buyer for more than three jobs, The Economic Observer, a weekly newspaper, reported on Sunday.First-time buyers will also be offered subsidies.Yulin city government officials could not immediately be reached for comment.The Yulin city government hopes to sell 8,000 housing units to villagers this year, the paper said, pointing to the collapse in urban demand.But rural residents in the Guangxi autonomous region, which includes Yulin, on average earn only about 5,000 yuan ($748) a year, less than half of what urban residents make, official statistics show.Yulin’s civil servants have also been told to persuade their relatives and friends to buy properties to help meet the target, it said.Yulin is not alone in taking unusual steps to lure home buyers. In a city in central China’s Henan province, a desperate developer has offered to take wheat and garlic as part of the down payment for properties.Property markets in China’s third- and fourth-tier cities remain bleak even after steps to stimulate weak demand, with new home prices falling for a ninth consecutive month in May and inventories rapidly ballooning.The oversupply is particularly severe in Yulin, where the destocking cycle is more than 10 years, according to a real estate company cited by The Economic Observer, compared with up to three years normally in China.($1 = 6.6869 Chinese yuan renminbi)(The story corrects source of wage information in paragraph 6 to official statistics, not the paper; states that Guangxi is an autonomous region, not a province.) More

BUDAPEST (Reuters) – The Hungarian forint fell to a record low against the euro on Monday, exposing the economy’s vulnerabilities and putting pressure on Prime Minister Viktor Orban to reach a deal with Brussels on the release of frozen European Union funds.Unblocking access to about 15.5 billion euros of EU recovery fund grants and loans, pending approval by the EU’s executive Commission, could boost the forint and trigger a winding down of short positions built up against the currency, while also driving down government bond yields, analysts said.In the absence of a deal, the forint will stay on a weakening trajectory, complicating efforts to curb double-digit inflation and exposing Hungarian assets to any negative shift in sentiment amid the war in neighbouring Ukraine and surging energy costs. The EU funds are also needed to bolster the Hungarian economy which is expected to slow in the second half of the year as rapidly rising interest rates and inflation bite. Like most EU countries, Hungary last year submitted its blueprint on how it would use EU grants to make its economy more environmentally friendly and high-tech after the COVID-19 pandemic.But unlike the blueprints of most other countries, Hungary has yet to receive approval because of EU concerns over corruption, judicial independence and the rule of law.Hungary’s vulnerabilities have increased this year. Its current account gap has widened mostly due to its high energy imports bill at a time when the government has only just started to rein in a huge budget deficit, after a spending spree which helped Orban win a landslide in April elections.”With uncertainty over EU funds and the EM backdrop, we prefer to keep a dislike stance on HUF,” Morgan Stanley (NYSE:MS) said in a note on Friday, referring to the currency.”The recent FX underperformance and rise in HUF yields increase pressure on the government to strike a deal,” Citigroup (NYSE:C) analysts said.On Monday, a day before the NBH is expected to hike interest rates again, the forint fell to a record low 404.50. It has weakened 8.6% so far this year, decoupling from its peers in the region. The Polish zloty has eased 2.2%, while the Czech crown has gained half a percent, supported by hefty rate hikes and, since May, central bank interventions to prevent weakening.The Czech National Bank has ample ammunition, holding 156.1 billion euros in international reserves at the end of May.The NBH, which has lifted its base rate by over 500 basis points in the past 12 months, is expected to raise the rate by another 50 bps to 6.4% on Tuesday, but some analysts pencilled in a bigger rise. The bank, which raised its one-week deposit rate to 7.25% on June 16, had 34 billion euros in international reserves at the end of May. On June 9, Hungary issued foreign currency bonds worth $3.8 billion, which increased reserves, but those still pale in comparison with Czech levels. The NBH never communicates its moves in currency markets.”It is not a coincidence that the forint has decoupled from the region to such an extent. As long as there is no EU deal, this will not change,” said Peter Virovacz at ING in Budapest.NO DEAL IN SIGHT YETIn past weeks, senior Hungarian government officials have flagged that an agreement with Brussels is just around the corner, but nothing has emerged yet.Last Thursday, Balazs Orban, political director for the prime minister, told Reuters that Budapest would welcome detailed recommendations from the EU Commission on exactly what it must change in its laws to get the EU funds flowing.Orban, who is not related to the prime minister, said Hungary was “open to a compromise” to reach a deal.”We are prepared for all scenarios – we can move fast if necessary, but we are also prepared that we will have to survive without the funds,” he said. “It is not a good scenario for us but we are financially prepared.”But analysts say this is a scenario Hungary should avoid or risk a sharper market sell-off. “We pencil in the EUR/HUF moving to 420 by the end of the year and negative returns against forwards. The risk is toward a sharper/faster sell-off amid thin liquidity and in periods of negative sentiment swings,” Societe Generale (OTC:SCGLY) said last week. “These may occur in response to negative developments in the rule of law spat.” On Monday, the government did not reply to emailed Reuters questions on the state of talks with the EU. This month the European Commission approved billions of euros in COVID-19 recovery funds for Poland after withholding approval for a year on the grounds that Warsaw has damaged democracy. But the money will not flow until Warsaw makes reforms to its judiciary. ($1 = 381.0100 forints) More