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Nabiullina spoke in Russian. The quotes below were translated into English by Reuters.NABIULLINA ON THE RATE DECISION”We considered three options today: to raise the rate to 20%, to 21% and above 21%. The option of holding the rate was not considered, no one suggested it, but we discussed the options of raising the rate to 20% and 21%.”The possibility of raising the rate with the same steps in the next (meeting) will depend on the data that we’ll receive: data on the development of the economy, inflation, inflation expectations, the rate of credit growth in general, but we allow for the possibility of an additional rate increase in December.”NABIULLINA ON THE MAIN PRO-INFLATIONARY FACTORS”The main factor is that we will continue to have an imbalance of supply and demand. This may be factors related to the budget, we always say that budget changes are an important factor that we take into account. It will also depend on the rate at which loans will grow, and loans in general…. An important factor is inflation expectations, which, unfortunately, are still high and have even increased.”NABIULLINA ON THE WEAKENING OF THE EXCHANGE RATE”We also take this into account, indeed, over the last few months there has been some weakening…we do not change the assessment of the carry-over effect – a 10% change in the exchange rate is about 0.5 times the carry-over into inflation.””But if we look at longer trends in the exchange rate, we have the exchange rate at about the same level as it was a year ago. But it has been volatile during the course of the year, and we take all this into account.”NABIULLINA ON THE INFLATIONARY TARGET”By the end of the year, current price growth will be near 4%…we will reach the target in 2026, in the first half of 2026.”NABIULLINA ON THE DANGERS OF SHOCK RATE INCREASES”We can’t push the rate higher now in order to bring it back to the target even faster…Yes, we can achieve a halt in inflation and even provoke deflation with a prohibitive level of the rate. But the result will not be a return of the economy to sustainable, balanced growth, but an excessive cooling of demand with excessive volatility in all parameters, in interest rates, in production, in employment, and a strong deviation of inflation downward from the target.”And such excessive volatility will have negative consequences for economic development, so we have no need for this kind of shock increase.”*NABIULLINA ON THE TIMING OF A RATE CUT”When inflation starts to fall steadily, and we see it falling in line with our forecast, this may indeed be a signal for the start of a rate cut. When that will happen, we can’t say right now.”*NABIULLINA ON THE INFLUENCE OF GOVERNMENT PROCUREMENT AND CORPORATE LENDING”We have seen that mortgage issuance in recent times was mainly under preferential programs – this has had a serious impact. I am referring to non-recourse concessionary mortgages. For corporate loans, the concessionary programs themselves are much smaller.””But the company’s inclination, let’s say, the company’s appetite to take loans depends not only on incentives, subsidies, interest rates, but also on government contracts, i.e. when there are government contracts that are not short, but long, companies are certainly more willing to take loans at high rates, but it is probably impossible to quantify this share.”*ZABOTKIN ON CORPORATE CREDIT”What’s important to realize is that it doesn’t matter whether corporate credit is growing in the purely market part of the economy or because companies are borrowing in order to operate to meet government demand. It’s the overall level of demand in the economy to which they are responding that matters.” More

(Reuters) -U.S. stock indexes were set to open slightly higher on Friday as Treasury yields eased and investors looked ahead to quarterly results from Wall Street’s biggest companies.The yield on the benchmark 10-year Treasury note dipped to 4.2% after rising as high as 4.26% earlier in the week.The three major stock indexes, however, looked set to snap their six-week winning streak, with equities unsettled by the rapid rise in yields as rate cut bets unraveled on expectations of a stronger economic outlook.”The upward move in yields has paused for a bit, allowing the stock market to catch its breath and focus on company earnings, which by and large have been pretty good,” said Ross Mayfield, investment strategist at Baird.Tesla (NASDAQ:TSLA)’s shares dipped 1.5% in premarket trading, following a nearly 22% surge in the previous session, as investors cheered the EV-maker’s strong sales forecast.Gains in the stock helped the S&P 500 register its first daily advance of the week.The week starting Oct. 28, the final stretch before the Nov. 5 U.S. presidential election, promises to be crucial for Wall Street, marked by results from megacap tech firms including Alphabet (NASDAQ:GOOGL) , Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) as well as the release of nonfarm payrolls data.Shares of Apple dipped 0.6% on a brokerage downgrade and after data showed a decline in iPhone sales in China. Meta Platforms (NASDAQ:META) rose 0.8%, Amazon.com (NASDAQ:AMZN) was up 0.7% and Nvidia (NASDAQ:NVDA) gained 0.4%.Dow E-minis were up 87 points, or 0.2%, U.S. S&P 500 E-minis were up 16.5 points, or 0.28% and Nasdaq 100 E-minis were up 74 points, or 0.36%.Capri Holdings (NYSE:CPRI) slumped 47.6% after a U.S. judge blocked a pending merger between the company and handbag maker Tapestry (NYSE:TPR). Shares of Tapestry rose 14.6%.Regional lender New York Community Bancorp (NYSE:NYCB) dropped 11% after reporting its fourth straight quarter of loss, primarily due to its commercial real estate loans.Memory-chip-maker Western Digital (NASDAQ:WDC)’s shares leapt 12% after it topped quarterly profit estimates on Thursday, while health insurer Centene (NYSE:CNC) advanced 12.2% after beating estimates for third-quarter profit.A mixed set of earnings across sectors and continued uncertainty around the U.S. election have also made investors cautious, though markets have started pricing in a second Donald Trump administration in recent weeks.”We’re so close to the election that it does feel like markets are in a bit of a holding pattern,” Mayfield said.Data showed September Durable Goods orders slipped 0.8%, less than the 1% forecast.The University of Michigan’s final Consumer Sentiment index is still on deck, while the Boston Fed’s Susan Collins is scheduled to speak on the day. [FED/DIARY]Investors are still pricing in another 25-basis-point rate cut at the Fed’s November meeting. They expect about two rate cuts by the end of the year, according to LSEG data. More

Per their estimates, these events likely reduced payrolls by about 50,000 positions.“Note that Governor Waller pointed to a larger drag of ~100k in recent comments,” BofA economists led by Aditya Bhave said in a Friday note. “The hurricane also likely lowered hours worked and, as a result, raised average hourly earnings growth.”“Meanwhile, the unemployment rate should move back up to 4.2%, partly due in part to hurricane distortions,” they added.BofA projects a 0.3% rise in nominal personal income for September, supported by job and wage growth, though partially offset by fewer hours worked.They expect nominal and real spending will climb by 0.5% and 0.3%, respectively, while the saving rate is expected to dip slightly to 4.7%.Core PCE inflation is forecasted to register at 0.27% month-over-month, with the annual rate easing by a tenth to 2.6%.“Although the y/y rate should fall a tenth to 2.6%, this wouldn’t be an ideal print for the Fed and would likely concern the hawks. But we look for softer figures in 4Q,” economists noted.Alongside the nonfarm payrolls data, the ISM manufacturing PMI will also be significant, with expectations of an increase from 47.2 to 47.6 in October.With the Fed shifting its focus more toward the jobs market than inflation, weaker payroll numbers could push the outlook back toward a more dovish stance. More

WASHINGTON (Reuters) – The World Bank will launch its first ever debt-for-development swap within weeks, its Vice President and Treasurer Jorge Familiar told Reuters, as the Washington-based lender expands its toolkit to help economies facing liquidity challenges.World Bank President Ajay Banga announced in the run-up to the IMF and World Bank annual meetings underway in Washington that the lender was working with several countries on potential ways to re-profile debt to reduce servicing costs and help governments funnel funds into development, life and education projects. “We are very close,” Familiar said on the sidelines of the annual meetings, declining to say which countries would benefit from the operation. Debt swaps have become increasingly popular in recent years, especially those where funds saved are used for environmental projects, so-called debt-for-nature swaps. They generate those savings by buying up existing bonds or loans of a country which are then replaced with cheaper debt, usually with the help of a development bank. While other development banks, such as the Inter-American Development Bank, have started getting involved in such transactions, the World Bank has so far stayed on the sidelines. Familiar said the initiative was aimed at countries that faced a liquidity rather than a solvency crisis, and that had taken a series of measures towards debt sustainability but were still facing challenges. “It can certainly be debt-for-nature, but it can also be debt-for-social-development, debt-for-education, debt for a series of relevant topics and relevant issues related to development,” he said. The World Bank role is two-fold – facilitating raising financing at lower costs through guarantees, for example, but also keeping tabs on how the funds are being used.”We will have an operation with World Bank supervision that will ensure that the savings are also going to that sector and are being used in the way intended,” he said. More

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, jumped 0.5% last month after an unrevised 0.3% gain in August, the Commerce Department’s Census Bureau said on Friday.Economists polled by Reuters had forecast these so-called core capital goods orders edging up 0.1% after a previously reported 0.3% rise in August. Core capital goods shipments fell 0.3% after dipping 0.1% in the prior month.Higher borrowing costs have been a constraint on business investment, though a loosening of financial conditions as the Federal Reserve prepared to cut interest rates boosted spending on equipment in the second quarter.Non-defense capital goods orders dropped 4.5% after declining 4.4% in August. Shipments of these goods dropped 3.6% after falling 2.0% in the prior month. These shipments go into the calculation of the business spending on equipment component in the gross domestic product report. Business investment in equipment rose at a brisk 9.8% annualized rate in the second quarter, contributing to the economy’s 3.0% growth pace.Growth estimates for the July-September quarter are currently as high as a 3.4% rate. The government will publish its advance estimate of third-quarter GDP next week. More

(Reuters) -Mercedes-Benz will step up cost cuts after earnings halved in the third quarter hit by tepid demand and fierce competition in China, it said on Friday.The luxury carmaker cut its full-year profit margin target twice during the third quarter, joining a growing number of European rivals blaming a weakening Chinese car market for falling profits and margins.Union Investment, which according to LSEG is among the 30 top investors in Mercedes, called on the management to amend its strategy as it sees no market for 2 million luxury cars any longer. “We are clearly in favour of adjusting the strategy and adapting it to the new market conditions and the new competition from China,” said portfolio manager Moritz Kronenberger. Mercedes refuses to participate in the price war in China and prefers to stick to its “value over volume” strategy, hoping that a massive new model rollout will help to revive sales next year. The “value over volume” approach can be successful if demand and capacity are roughly equal, Kronenberger said, adding that currently this is not the case for the automaker. “Chinese demand is currently focused on affordable electric cars. And Mercedes has nothing to offer here,” he said. Mercedes shares were down 1.6% at 1246 GMT, dragging down peers BMW (ETR:BMWG) and Volkswagen (ETR:VOWG_p). The stock has lost around 8% year to date, underperforming Germany’s benchmark DAX index but still faring better than Volkswagen, BMW, and Porsche AG.The pan-European autos index is down 10% year-to-date, the worst-performing sector in Europe this year. PROFITABILITY DROPS Mercedes’ car division’s adjusted return on sales fell to 4.7% in the third quarter from 12.4% last year, its worst profitability since the pandemic, while earnings in the unit more than halved, worse than expected by analysts. “The Q3 results do not meet our ambitions,” CFO Harald Wilhelm said in a statement, adding that the group will step up cost cuts.Wilhelm declined to provide more details about the cost cuts, but warned that “it will be tighter and tougher for sure”.Europe’s biggest automaker, Volkswagen is considering plant closures in Germany for the first time.Stifel analyst Daniel Schwarz noted substantial progress already made by Mercedes in reducing fixed costs since 2019 but there were “fewer low-hanging fruits”, especially when compared to Volkswagen. In 2020, Mercedes launched a plan to reduce costs by 20% between 2019 and 2025, 15-16% of which was already achieved, according to the finance chief. The July-September earnings were hit as Chinese consumers continued to cut back on luxury goods in a weakening economy, which has in particular weighed on Mercedes’s lucrative high-end S-Class model sales in the country. Model revamp costs added to the pressure, especially for new versions of the G-Class SUV, which will hit the market in the next quarter, Mercedes added.In 2024, the company sees car sales slightly below the previous year, and fourth-quarter sales in line with the third quarter. When asked about a potential sale of Mercedes’s 35% stake in Daimler Truck, Wilhelm said he prefers not to rush with it as he sees “great potential” in the truckmaker that should materialise later.The comments boosted Daimler Truck shares by 4%, to the top of Germany’s DAX stock index. CHINA WOES Mercedes-Benz (OTC:MBGAF) CEO Ola Kaellenius has warned that Chinese consumers are extremely cautious about making big purchases, as long-standing economic weakness and a real estate crisis have created considerable uncertainty for consumers.Stifel’s Schwarz said a substantial part of the problem is also waning Chinese preference for German luxury cars in general. Talks between Brussels and Beijing continue over looming tariffs on imports of Chinese EVs into Europe, a major headache for Europe’s China-dependent car heavyweights due to the fears of potential retaliation.Mercedes-Benz, which counts China’s Beijing Automotive Group Co Ltd and Geely Chair Li Shufu as its two top shareholders, has called the tariffs a “mistake”, urging the European Commission to delay their implementation to allow further talks on a deal. ($1 = 0.9240 euros) More

(Reuters) – Centene (NYSE:CNC) beat Wall Street estimates for third-quarter earnings on strength in its commercial health insurance plans and maintained its annual profit forecast, easing investor fears after dour targets from rivals last week. Shares of the health insurer jumped more than 12% to $69.32 in premarket trading on Friday. They fell 16% since last week after rivals Elevance and UnitedHealth (NYSE:UNH) warned of high costs in government-backed insurance plans. Costs for insurers providing Medicaid plans have been elevated after a federal policy that required insurers to keep low-income Americans enrolled in health plans during the COVID-19 pandemic ended last year, and left the insurers with more sick patients. The quarter was “much better than expected”, said Baird analyst Michael Ha, adding that it was a “surprise” after peers reported “unprecedented levels” of Medicaid pressure last week.Costs related to Medicare plans for those aged 65 and older have also been higher, due to an increase in demand for healthcare services as older people catch up on procedures delayed during the pandemic. Centene reported a medical loss ratio — the percentage of premiums spent on medical care — of 89.2% for the quarter ended Sept. 30, compared with analysts’ estimate of 88.03%, according to data compiled by LSEG.For the full year, it expects the ratio, a key metric to track medical costs, between 88.3% and 88.5%. Analysts expect a ratio of 87.93%.Despite estimated higher costs, the company maintained its annual profit forecast of greater than $6.80 per share, compared with analysts’ expectation of $6.73.Investors had been preparing for a potential cut to Centene forecast, said Stephens analyst Scott Fidel. On an adjusted basis, the health insurer earned $1.62 per share in the third quarter, compared with analysts’ average estimate of $1.33. More