2024-03-26 11:11

GENEVA, March 26 (Reuters) - China has initiated dispute settlement proceedings against the United States at the World Trade Organization to safeguard its interests in the electric vehicle industry, the Chinese mission said on Tuesday and the WTO confirmed. China said it was contesting "discriminatory subsidies" under the U.S. Inflation Reduction Act (IRA) that it said resulted in the exclusion of goods from China and other WTO countries. The wide-ranging law provides billions of dollars in tax credits to help consumers buy electric vehicles and companies produce renewable energy, as President Joe Biden aims to decarbonise the mighty U.S. power sector. "Under the disguise of responding to climate change, reducing carbon emission and protecting environment, (these subsidies) are in fact contingent upon the purchase and use of goods from the United States, or imported from certain particular regions," the Chinese mission said. It said it was launching the proceedings "to safeguard the legitimate interests of Chinese electric vehicle industry and to maintain a fair level playing field of competition for the global market". U.S. Trade Representative Katherine Tai said Washington was reviewing China's request for WTO consultations "regarding parts of the Inflation Reduction Act of 2022 and its implementing measures." In a statement, Tai said the IRA was helping to contribute to a "clean energy future that we are collectively seeking with our allies and partners." She accused China of using what she described as "unfair, non-market policies" to the advantage of Chinese manufacturers. A WTO official confirmed that a request from China for dispute consultations on the matter had been received, without providing details. In Beijing, a spokesperson for China's Ministry of Commerce said it urged Washington to "promptly correct discriminatory industrial policies, and maintain the stability of the global industrial and supply chains for new energy vehicles". WTO rulings on trade disputes are supposed to take six months after an adjudication panel is set up but often take longer. If the WTO finds in favour of China, Washington could always appeal that decision into a legal void in place since December 2019 when the WTO's top appeals bench ceased to function due to U.S. opposition to judge appointments. The United States is calling for reforms to the Appellate Body which it accuses of over-reach and negotiations are under way but face many obstacles. The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/china-opens-dispute-against-us-wto-over-discriminatory-subsidies-2024-03-26/

2024-03-26 11:04

JOHANNESBURG, March 26 (Reuters) - The Central Bank of Nigeria is set to raise its benchmark interest rate to 24.75% on Tuesday and keep it there for the rest of the year, a Reuters poll forecast, a move analysts reckon will be enough to slow inflation and bring dollar inflows. Last month the central bank delivered its largest interest rate hike in around 17 years, adding 400 basis points, yet seven of 13 analysts said it would add another 200 basis points later on Tuesday and take the key rate to 24.75%. The rest were divided between no move, just a 50 basis point (bps) lift, 125, 150 or a bumper 225 bps increase. Nigeria's inflation quickened to 31.70% in annual terms in February, a 28-year high. Tatonga Rusike, BofA's sub-Saharan economist, said a cumulative 600 basis points of hikes would help bring inflation down to 25% by end-year and likely inflows would support naira stabilisation, Eurobond market access and potential World Bank support. "The inflows could help reduce official FX backlogs and mismatches in the FX market," he added. Nigeria is looking at proposals for a Eurobond issue, Finance Minister Wale Edun said on Monday, saying falling interest rates were making international debt issues more affordable. Africa's largest economy has borrowed from international creditors, including the World Bank, but has not tapped the Eurobond market since a $1.25 billion issue in 2022. Nigeria has struggled to attract dollar inflows from its main export source of oil revenues since a commodity price slump around 2015 which it never really recovered from, seen in lower oil production levels. The naira did somewhat recover after last month's hike in rates and some analysts are now taking a more constructive view on the currency after the central bank's strong show of intent in February. It firmed after the central bank said on Wednesday it had cleared its entire verified foreign exchange backlog. Fellow continental peer, the Bank of Ghana kept its main interest rate at 29.00% on Monday, saying the inflation outlook had worsened slightly over the past two months and required close monitoring. South Africa's Reserve Bank is expected to keep its repo rate steady at 8.25% on March 27, all 23 economists unanimously forecast in another Reuters poll, and wait until the third quarter before cutting. (For other stories from the Reuters global economic poll:) The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here. https://www.reuters.com/world/africa/central-bank-nigeria-set-raise-its-benchmark-rate-2475-2024-03-26/

2024-03-26 10:57

LONDON, March 26 (Reuters) - Portugal's data regulator has ordered Sam Altman's iris-scanning project Worldcoin to stop collecting biometric data for 90 days, it said on Tuesday, in the latest regulatory blow to a venture that has raised privacy concerns in multiple countries. Worldcoin encourages people to have their faces scanned by its "orb" devices, in exchange for a digital ID and free cryptocurrency. More than 4.5 million people in 120 countries have signed up, according to Worldcoin's website. Portugal's data regulator, the CNPD, said there was a high risk to citizens' data protection rights, which justified urgent intervention to prevent serious harm. More than 300,000 people in Portugal have provided Worldcoin with their biometric data, the CNPD said. The regulator said it had received dozens of complaints in the last month about unauthorised collection of data from minors, "deficiencies in the information provided to the data subjects" and "the impossibility of erasing the data or withdrawing consent." Jannick Preiwisch, data protection officer at the Worldcoin Foundation said Worldcoin was "fully compliant with all laws and regulations governing the collection and transfer of biometric data". "The report from CNPD is the first time we are hearing from them regarding many of these matters, including reports of underage sign-ups in Portugal, for which we have zero tolerance for and are working to address in all instances, even if a matter of a few reports," Preiwisch said in an emailed statement. Worldcoin also said that the company in March began a transition to "Personal Custody" which would give users control over their data, including deletion and any future use. The CNPD said the order to stop data collection was temporary while it carried out additional due diligence and analysed complaints during an investigation. PRIVACY CONCERNS Worldcoin says it aims to build an "identity and financial network", which Altman says will be necessary for people to prove that they are human in a world dominated by artificial intelligence. Altman is CEO of OpenAI as well as co-founder of the company behind Worldcoin. Worldcoin is under investigation in various countries and has drawn criticism from privacy campaigners over the collection of personal data. UK privacy campaign group Big Brother Watch said after Worldcoin's launch there was a risk biometric data could be hacked or exploited, with senior advocacy officer Madeleine Stone adding that digital ID systems "rarely live up to the extraordinary benefits technocrats tend to attribute to them". Spain's data protection regulator issued a three-month ban on Worldcoin, in response to complaints, earlier this month. Kenya suspended Worldcoin's activities in August. The Bavarian state regulator has said it is the lead authority investigating Worldcoin under the European Union's data protection rules because Tools For Humanity, the company behind Worldcoin, has a German subsidiary there. The CNPD's suspension refers instead to the Worldcoin Foundation - a Cayman Islands entity described on its website as "memberless", having no owners or shareholders. The Worldcoin Foundation's website says it is the only member and director of a British Virgin Islands company called World Assets Ltd, which is responsible for issuing the Worldcoin tokens allocated to people who sign up. The CNPD said that its decision was addressed to the Worldcoin Foundation because that entity is the data controller for the biometric data. Worldcoin is backed by some of the most prominent venture capital names, including a16z crypto and Bain Capital Crypto. Keep up with the latest medical breakthroughs and healthcare trends with the Reuters Health Rounds newsletter. Sign up here. https://www.reuters.com/markets/currencies/sam-altmans-worldcoin-ordered-stop-data-collection-portugal-2024-03-26/

2024-03-26 10:53

LONDON, March 26 (Reuters) - Bank of England policymaker Catherine Mann, who last week dropped her call for increases in borrowing costs, said on Tuesday she thought markets were betting on too many interest rate cuts by the British central bank. "I think they're pricing in too many cuts, that would be my personal view," Mann told Bloomberg TV, referring to financial markets which are almost fully predicting three quarter-point reductions in rates by the BoE this year. "I think that there has been a substantial easing even since the vote last week, and I think that perhaps markets are a bit too complacent about how long they think the BoE overall, the MPC, will hold rates." Last week she joined the majority of the Monetary Policy Committee's (MPC) members who kept Bank Rate at 5.25%, its highest since 2008. She had previously voted for an increase to 5.5%. Mann said she changed her mind due to consumers turning more reluctant to pay higher prices, especially for services such as hospitality and travel, and because firms were cutting hours of workers at a time when the government's cuts to social security rates would add to the number of workers in the labour market. Mann said pricing in financial markets was helping the BoE do its work for it. "In some sense, I don't have to cut because the market already is, in terms of the implications of you know the market curve and mortgage rates, for example," she said. "Those are the rates that are faced by borrowers. Bank Rate is not the rates that borrowers face." Get a look at the day ahead in European and global markets with the Morning Bid Europe newsletter. Sign up here. https://www.reuters.com/markets/europe/boes-mann-says-markets-are-pricing-too-many-rate-cuts-2024-03-26/

2024-03-26 10:25

Governments seek to mobilise savings Economists sceptical this will make a difference Financial advisors warn of risks for households FRANKFURT, March 25 (Reuters) - As Europe seeks to hold its ground against economic rivals, politicians think they have a secret weapon: the untapped savings of its citizens. From Italy selling government bonds to households, to French talk of a pan-European savings product or Britain offering tax breaks for investment in UK shares, governments across Europe are seeking ways to mobilise household wealth. All these plans share an underlying thinking: Europe is sitting on plenty of cash that could be channelled towards its goals, from the green transition to beefing up militaries. Politicians hope private money, invested in local stocks or government debt, can help close a growth and productivity gap with the United States and China, which have been doling out massive subsidies to their industries. But critics say such schemes risk disappointing savers while failing to address deep-rooted shortcomings in the European economic model that they see as dissuading investment. "It's a way of inventing an easy solution to problems that are very complicated," said Daniela Gabor, a professor at the University of the West of England. IDLE MONEY? Europeans have long saved more , opens new tab than their U.S. counterparts and the gap has widened recently, possibly due to uncertainties , opens new tab such as the war in Ukraine. Politicians like French finance minister Bruno Le Maire are now eyeing this nest egg, which includes 8.4 trillion euros , opens new tab of euro zone bank deposits. Le Maire, who has spoken of money "sleeping" , opens new tab in accounts instead of contributing to prosperity, wants a pan-European savings product. French lawmakers have meanwhile suggested savings could be channelled towards domestic defence companies via state-guaranteed deposits , opens new tab. Outside the European Union, the UK government has proposed a new type of account that would allow Britons to invest up to 5,000 pounds ($6,301.50) in domestic companies tax-free. Such schemes have a chequered past. Italians who bought into government-sponsored funds , opens new tab investing in local small-to-medium sized enterprises would have underperformed global stocks by around 35 percentage points in the past five years on average, according to data from consultancy firm Analysis , opens new tab. Many economists dismiss the very idea of dormant money, noting that deposits are a vital source of funding for banks. "The notion of money that is 'sleeping' because it is in a bank account is honestly quite ludicrous, because there's nothing that prevents a bank from making a new loan when it has an opportunity," said Benjamin Braun, a political economist at the Max Planck Institute for the Study of Society. Indeed, European companies have consistently put funding as the least of their problems for nearly a decade and generate enough revenues to finance all their investments, data from the European Commission and the ECB show. Instead, Braun and others argue that low investment in Europe reflects meagre growth prospects compared to the United States. Multinational corporations investing abroad mean the euro zone is even exporting capital, they say. "They have a solution looking for a problem," Dirk Schumacher, head of European macro research at Natixis, said. "I don't think corporate investment spending is held back by tight funding conditions, but by a lack of demand and lots of structural changes." He mentioned competition from China, high energy prices and a lack of skilled labour among other factors. Former European Central Bank chief Mario Draghi is due to report to EU leaders this summer on the issues that are holding Europe back. PUBLIC DEBT Some governments are themselves borrowing directly from citizens. Italian households were the biggest buyers of the country's public debt , opens new tab last year, with a recent bond pitched as a shortcut to a cruise holiday. Britain has announced new savings bonds , opens new tab, joining Belgium and Greece. The main advantage of tapping retail investors is that they are less fickle than professionals and more likely to hold the bonds until they mature because they don't have to worry about their quarterly performance. "There is a great savings product that has worked pretty well throughout history that allows the state to direct public money into areas of priority, and that is the sovereign bond," Braun said. He and other economists said more investment by the state, which doesn't need to make an immediate financial return, had to be part of the solution to long-term challenges for Europe such as building a greener economy. But by giving governments which have mostly been running large deficits since the COVID-19 outbreak access to a pool of patient capital, these retail-targeted bonds risk undermining efforts to get public spending under control. Households might also regret concentrating too many of their assets in their home country, where they are already likely to have their main income and home. "It's a double sin: you give up on diversification and give your government the wrong incentive," said Massimo Famularo, a Milan-based investment consultant. ($1 = 0.7935 pounds) Get a look at the day ahead in European and global markets with the Morning Bid Europe newsletter. Sign up here. https://www.reuters.com/markets/europe/savings-may-not-be-europes-super-weapon-economic-battle-2024-03-26/

2024-03-26 10:02

A look at the day ahead in U.S. and global markets from Mike Dolan Investors appear happy to sit on punchy first quarter stock gains as March drifts to quiet finish, with the dollar back under wraps overseas, interest rate markets calm and volatility subdued into the Easter break for many countries. A slightly downbeat Monday was a mixed bag of fortunes all told. Under-pressure planemaker Boeing (BA.N) , opens new tab popped more than 1% after announcing a broad management shake-up and saying CEO Dave Calhoun would step down from his position at the end of 2024. Artificial intelligence leaders Nvidia (NVDA.O) , opens new tab and Micron Technology (MU.O) , opens new tab pushed higher, but reports China is set to phase out U.S. microprocessors supplied by Intel (INTC.O) , opens new tab and AMD (AMD.O) , opens new tab from government personal computers and servers knocked those stocks back. A decent two-year Treasury auction kept a lid on bond yields, while Federal Reserve officials offered a smorgasbord of different views on the policy outlook that shifted little in futures market expectations. Sales of new U.S. single-family homes unexpectedly fell in February after mortgage rates increased during the month, but the underlying trend remained strong amid a chronic shortage of previously owned houses on the market. With stock markets closed for Good Friday's release of the February PCE inflation gauge, a March consumer confidence readout later today may grab attention. Elsewhere, bitcoin jumped back above $70,000 on Monday for the first time since March 15 - with little obvious news behind it, as is so often the case. It held those gains overnight and was hovering about $71,000 early on Tuesday. Grayscale Bitcoin Trust recorded $1.9 billion in outflows last week, tipping the group of U.S. spot bitcoin exchange-traded funds into net outflows for the week ending March 22, according to data from BitMEX Research. Overseas, China stocks (.CSI300) , opens new tab rebounded about 0.5% and the offshore yuan firmed another notch after last week's swoon. China's President Xi Jinping will meet with American business leaders in Beijing on Wednesday, according to three sources with knowledge of the matter, in a follow up to his November dinner with U.S. investors in San Francisco. The meeting was proposed by chief executive of U.S. insurer Chubb (CB.BN) , opens new tab, Evan Greenberg, according to one source. Other attendees include Stephen Orlins, president of the National Committee on U.S.-China Relations, and Craig Allen, president of the U.S.-China Business Council. Japanese and European stock markets were flat, as were crude oil prices. U.S. stock futures were marginally higher ahead of the open - with Q1's 10% gains in the S&P500 (.SPX) , opens new tab and Nasdaq (.IXIC) , opens new tab holding and implied volatility in stocks (.VIX) , opens new tab and bonds (.MOVE) , opens new tab subdued. The dollar (.DXY) , opens new tab edged back further from Friday's one-month highs. Dollar/yen ebbed a touch amid wariness about Bank of Japan intervention, but held above the 151 level. In politics, a New York judge's decision on Monday to set an April 15 trial date for Donald Trump's criminal hush-money case ups the odds the former president will face at least one verdict that could complicate his bid to retake the White House. And in shocking general news, Baltimore's 1.6-mile Francis Scott Key Bridge collapsed and vehicles plunged into the river early on Tuesday after a ship collided with a support pylon. Rescuers were searching the water for survivors. Key diary items that may provide direction to U.S. markets later on Tuesday: * US March consumer confidence, Feb durable goods orders, Richmond Fed March business survey, Dallas Fed March service sector survey, Philadelphia Fed service sector survey, US Jan house prices * European Central Bank chief economist Philip Lane speaks * US corporate earnings: McCormick * US Treasury sells 5-year notes * French President Emmanuel Macron visits Brazil Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-03-26/