2023-12-07 05:05

BRUSSELS, Dec 7 (Reuters) - European Union finance ministers will discuss changes to the EU's fiscal rules on Thursday and Friday to reach a deal or bring positions closer on a reform that would offer countries tailor-made debt reduction paths and incentives to invest. Below are the main points of the new approach now under negotiation. FOCUS OF THE RULES The rules focus on net primary expenditure every year - the indicator under a government's direct control. The European Commission and the country concerned will agree on a path for net primary expenditure for four years to cut its debt and deficit to below the EU's limits of 3% and 60% of gross domestic product (GDP) respectively. This differs from the current rules that target several indicators at the same time - the headline budget deficit, structural deficit and public debt. Some, like the structural deficit, are not directly observable and often revised significantly. FOUR AND SEVEN-YEAR PLANS The four years to bring down public debt through control of government spending can be extended to seven years if a government makes certain types of investments and reforms. One of the sticking points in the talks now is whether reforms and investment in green and digital technologies approved by the EU to pay out in cash from its post-pandemic recovery fund are enough to automatically extend the time. SPEED OF DEBT REDUCTION To make fiscal consolidation faster for countries that have high debt like Italy, Greece or France, the new rules are to set a minimum average annual amount of debt reduction. The latest proposal from Spain, which holds the rotating EU presidency and is therefore responsible for finding a compromise, is that countries with debt above 90% of GDP should cut it by a minimum 1% of GDP a year. For countries with debt between 60% of GDP and 90% of GDP, the reduction can be slower at 0.5% of GDP a year. This is much less ambitious than the current unrealistically high requirement that every country should cut debt by 1/20 of the excess above 60% a year. But it is more stringent than the original plan that any debt cut over four years would be enough. SPEED OF DEFICIT CUTS The upper limit for a budget deficit remains 3% of GDP, but the new rules are to introduce a "deficit resilience safeguard" - a margin below the 3% ceiling that would be used in planning the spending path, to make sure the government has room for manoeuvre even when something unexpected happens, without breaking the 3% EU limit. The size of this margin is under negotiation and the latest proposal sets it at 1.5% of GDP. To create that margin, governments will be asked to improve their structural primary balances by a certain amount every year. The size of the improvement is to be agreed. The Spanish proposal is for 0.3% to 0.4% of GDP improvement a year if a country has four years for it and 0.2% to 0.25% if seven years. This is slightly more lenient than the current rules, which oblige governments to cut structural deficits by a minimum 0.5% of GDP a year until the budget is balanced or in surplus. The current rules also say a deficit in excess of 3% of GDP should be brought down below the ceiling again the following year, unless there are special circumstances. ENFORCEMENT To enforce the agreed spending path, the Commission will be able to launch disciplinary steps, that could end in fines, against a government that would exceed its spending by a certain amount in a given year, or by a certain amount cumulatively over the four- or seven-year period. The size of the excess spending that would trigger the disciplinary procedure is under negotiations. The Spanish propose it should be 0.25% to 0.5% of GDP annually or 0.5% to 0.75% of GDP cumulatively when a country has debt above 60% and is also running a deficit. https://www.reuters.com/world/europe/main-elements-eu-fiscal-reforms-now-under-negotiation-2023-12-07/

2023-12-07 02:51

MUMBAI, Dec 7 (Reuters) - The Indian rupee is expected to decline at open on Thursday as poor risk appetite fuelled demand for the safe-haven U.S. dollar. Non-deliverable forwards indicate the rupee will open at around 83.35-83.36 to the dollar compared with 83.3250 in the previous session. Brent crude plunged nearly 4% on Wednesday to fall below $75 per barrel, the lowest since late-June. Demand concerns have prompted a near 10% decline in Brent so far this month. Meanwhile, Indian equities have seen inflows of more than $3 billion in December, data by National Securities Depository shows. "Looks like yesterday's bit of a relief (for the rupee) will not last. And this is despite another round of selloff on oil and the kind of flows we are seeing," a forex trader at a bank said. "If we are still talking of supports and resistances (on USD/INR), then that lies at 83.20 and 83.40." U.S. equities pulled back overnight and futures on the S&P 500 Index inched lower in Asia. Japan and Hong Kong led Asian shares lower while the Korean won and the Indonesian rupiah paced the decline in Asia FX. The dollar index rose for the third straight day on Wednesday. This was despite soft U.S. economic data prompting a further fall in U.S. bond yields. The 10-year U.S. Treasury yield dropped to 4.10% after U.S. private payrolls rose less than expected. The data indicated "a deceleration in hiring momentum in the U.S.", ANZ said in a note. "The focus is now squarely on the November labour market report out later this week." The U.S. non-farm payrolls data, due on Friday, is expected to show 180,000 job additions in November, according to economists polled by Reuters. It is probable that the market has revised downwards its expectations in wake of the soft private payrolls and job openings data, ANZ said. KEY INDICATORS: ** One-month non-deliverable rupee forward at 83.42; onshore one-month forward premium at 5.75 paisa ** Dollar index at 104.10 ** Brent crude futures at $74.6 per barrel ** Ten-year U.S. note yield at 4.12% ** As per NSDL data, foreign investors bought a net $694.9 mln worth of Indian shares on Dec. 5 ** NSDL data shows foreign investors bought a net $244.7 mln worth of Indian bonds on Dec. 5 https://www.reuters.com/markets/currencies/india-rupee-struggle-weak-risk-boosts-safe-haven-dollar-2023-12-07/

2023-12-07 02:11

BENGALURU, Dec 7 (Reuters) - The European Central Bank will cut interest rates in the second quarter of next year, earlier than previously thought, according to a slim majority of economists in a Reuters poll, as the economy enters a short and shallow winter recession. After inflation fell to 2.4% last month, ECB hawk Isabel Schnabel told Reuters on Tuesday the central bank could take further interest rate hikes off the table. All 90 economists in the Dec. 1-6 Reuters poll said the deposit rate would end 2023 at its current record high of 4.00% after the ECB's final decision of the year on Dec. 14. Taking recent commentary as a dovish signal, investors are now pricing in around 150 basis points of cuts starting March next year. But the Reuters survey was more in line with the "higher for longer" rates narrative. Around 57% of economists - 51 of 90 - predict at least one rate cut sometime before the ECB Governing Council meets in July. That was a change from a November poll where around a 55% majority expected rates would stay at current levels until mid-2024 at least. Medians showed a 25 basis point cut in each quarter of next year starting Q2, significantly less than what markets are currently expecting. "We have pencilled in some rate cuts for next year but not as early nor as steep as markets are currently pricing ... I'm currently still on September as the base case, but I do see risks that they could go in June or July instead," said Bas van Geffen, senior macro strategist at Rabobank. "I think it's really an inflation story ... If the disinflation is a bit quicker, then it could be end of Q2, but I think March is quite a stretch." If survey medians are realised, the ECB would begin cutting rates before the U.S. Federal Reserve, which was expected to remain on hold until at least July by a slim majority in a separate Reuters poll. The predicted 75 basis points worth of cuts from the ECB was also less than that expected from the Fed. Price pressures in the euro zone are currently lower than in the U.S., but cutting before the Fed could weaken the euro and introduce unwanted imported inflation. Headline inflation was predicted to decline over the coming quarters but still remain above the ECB's 2% target until at least 2025. On the other hand, economic prospects appear dim. After contracting 0.1% last quarter, the 20-country economy was expected to shrink again this quarter by the same magnitude. Two consecutive quarters of contractions would fulfil the official definition of a recession. Still, this winter recession was expected to be shallow, with the weakest forecast at -0.3%, and not deter the central bank from focusing on their inflation mandate. "The ECB has said in the past it knows its tightening cycle will hit growth. A recession of the magnitude we're expecting of just 0.1 decline in Q3 and Q4, it's not going to shake them to the core," said Melanie Debono, senior Europe economist at Pantheon Macroeconomics. The economy was expected to exit the recession next quarter by expanding 0.1%, making it a short downturn. Growth was expected to average 0.6% next year and 1.4% in 2025. "It's not very impressive, but it's not zeroes, so at the moment it's better than what we're seeing ... Nobody will be rejoicing because there's still plenty of headwinds in front of the economy," added Debono. (For other stories from the Reuters global economic poll:) https://www.reuters.com/markets/rates-bonds/ecb-cut-rates-q2-earlier-than-thought-winter-recession-seen-shallow-2023-12-07/

2023-12-07 00:28

Campbell Soup rises on quarterly profit beat Plug Power falls on Morgan Stanley downgrade Private payrolls rise less than expected in November Indexes: S&P 500 -0.39%, Nasdaq -0.58%, Dow -0.19% Dec 6 (Reuters) - U.S. stocks ended down on Wednesday, pulled lower by megacaps and energy shares as signs of a cooling jobs market reinforced expectations that the Federal Reserve could start cutting interest rates early next year. The ADP National Employment report showed private payrolls increased by 103,000 jobs in November, below economists' expectation of 130,000. That provided fresh evidence of labor market weakness, a day after news of a drop in October job openings. The latest employment data reinforced expectations the Fed's rate-hike campaign is cooling the economy. "Right now, it's consistent with the overall trajectory of softening job growth, and so far that's not problematic because the economy is still humming along," said Bill Merz, head of capital markets research at U.S. Bank Wealth Management in Minneapolis. "What would be concerning is if that trend persists for too long, and it turns into large job losses." Declines in energy stocks weighed on the major indexes, with oil prices dropping 4% as a larger-than-expected rise in U.S. gasoline inventories exacerbated worries about fuel demand. Of the 11 S&P 500 sector indexes, eight declined, led by energy (.SPNY), down 1.64%, followed by a 0.93% loss in information technology (.SPLRCT). Nvidia (NVDA.O) fell 2.3%, while Microsoft (MSFT.O) and Amazon (AMZN.O) each lost more than 1%. While the S&P 500 ended lower, advancing issues in the index (.AD.SPX) outnumbered decliners by a 1.3-to-one ratio. On Friday, the more comprehensive non-farm payrolls report for November will offer greater clarity on the state of the labor market. Investors widely expect the Fed to hold rates steady at its meeting next week and potentially start cutting rates in March. A slim majority of economists in a Reuters poll said they believe the Fed will leave rates unchanged at least until July, later than earlier thought. Optimism about rate cuts helped push the S&P 500 (.SPX) up nearly 9% in November, and the benchmark is now down about 9% below its record high close in December 2021. The S&P 500 declined 0.39% to end at 4,549.34 points. The Nasdaq Composite Index (.IXIC) fell 0.58% to 14,146.71, while the Dow Jones Industrial Average (.DJI) slid 0.19% to 36,054.43. Volume on U.S. exchanges was relatively heavy, with 11.3 billion shares traded, compared to an average of 10.7 billion shares over the previous 20 sessions. Plug Power (PLUG.O) fell 5.9% after Morgan Stanley downgraded the hydrogen fuel cell firm to "underweight" from "equal weight." Tobacco giants Altria Group (MO.N) and Philip Morris International (PM.N) slipped 2.8% and 1.6%, respectively, after UK peer British American Tobacco (BATS.L) said it will take a $31.5 billion hit from writing down the value of some U.S. cigarette brands. Campbell Soup (CPB.N) rallied 7.1% after the food seller beat quarterly profit expectations, helped by higher prices for its packaged meals and snacks. The S&P 500 posted 29 new highs and no new lows; the Nasdaq recorded 99 new highs and 93 new lows. https://www.reuters.com/markets/us/futures-edge-up-fed-pivot-hopes-jobs-data-focus-2023-12-06/

2023-12-06 23:46

Dec 6 (Reuters) - Producer-writer Norman Lear, whose groundbreaking hit comedies such as "All in the Family" and "Maude" addressed race, abortion and other social issues rarely seen before on U.S. television, died on Tuesday, at the age of 101, his family said. Lear, one of the most influential people in television, died at his Los Angeles home of natural causes, "surrounded by his family as we told stories and sang songs until the very end," the family said on Facebook on Wednesday. Lear, who won six Emmy Awards for his work in television, was known for his campaigning for liberal causes, including voting rights, and worked well into his 90s. In addition to "All in the Family" and "Maude," Lear dominated American TV screens in the 1970s and '80s with the situation comedies "Sanford and Son," "The Jeffersons," and the soap-opera spoof "Mary Hartman, Mary Hartman." At one point in the 1970s, Lear had eight shows on the air with an estimated 120 million viewers, Time magazine said. By drawing material from social themes of the time, Lear's shows made network executives nervous because they had depth and an air of controversy. "For him to say that he didn't have an impact on not only television but society is ... a little too humble," said Rob Reiner, who had a co-starring role on "All in the Family" before becoming a film director. "I loved Norman Lear with all my heart," Reiner said on the X social media platform after news of his death. "He was my second father." President Joe Biden hailed Lear as a "transformational force in American culture." "Norman loved America and told our stories with heart, facing the good, the bad, and the truth of who we are as a nation striving to form a more perfect union," he said in a statement. Lear and production partner Bud Yorkin put "All in the Family" on the air in January 1971, and the show would go on to win four Emmys for best comedy in its nine seasons. It was based on a British show, "Til Death Do Us Part," and gave U.S. television one of its most memorable and controversial characters: Archie Bunker. Veteran actor Carroll O'Connor portrayed Archie as a crude, loud, blue-collar New Yorker who spouted racist, homophobic and antisemitic comments. He was cast against a scatterbrained wife he called "Dingbat," a liberal daughter and an even more liberal son-in-law he referred to as "Meathead," played by Reiner. "All in the Family" was the top-rated show on U.S. television for five straight years, according to CBS, and TV Guide ranked it fourth on its list of television's all-time greatest shows. Born on July 27, 1922 in New Haven, Connecticut, Norman Milton Lear's most lasting creation was partly based on fact. Many of the harsh words that came out of Archie's mouth had first been spoken by Lear's own father, Herman Lear, who went to prison for selling fake bonds, and frequently told his wife to "stifle" herself and called his son "the laziest white kid I ever saw." "I grew up in a family that lived at the top of its lungs and the ends of its nerves," Lear told Esquire magazine. Some critics said the Archie Bunker character put a laughing face on bigotry, but Lear said it only pointed to the complexity of humanity. A year after "All in the Family" started, Lear aired "Maude," a spin-off that starred Bea Arthur as Archie's acerbic sister-in-law and political opposite. As with Bunker, the character was like none previously seen on American television. Maude was on her fourth husband, protested marijuana laws and had an abortion before the U.S. Supreme Court legalized the procedure nationwide. Her husband battled alcoholism, had two nervous breakdowns and attempted suicide. Black characters in U.S. television in the '70s were mostly limited to minor roles until Lear made them the focus of some of his shows. "Good Times" centered on a working-class Black family living in a public housing project in Chicago. Many of the show's episodes deal with the family's efforts to pull their way out of the circumstances through hard work and study. "The Jeffersons," another "All in the Family" spin-off, featured an upwardly mobile Black couple who moved to Manhattan's upscale Upper East Side, where most of their neighbors were white. The show's lead character George was brash, ambitious and unapologetic. Lear's other hits included "Sanford and Son," a sitcom about a Black junkyard owner in a Los Angeles neighborhood. While Lear was celebrated for his inclusion, some critics also said many of his depictions of Black characters tended to perpetuate stereotypes. Lear produced a string of other hit shows, including "Diff'rent Strokes," "Fernwood 2 Night," and the "All in the Family" spin-off "Archie Bunker's Place." But Lear also had flops such as "All That Glitters," "Sunday Dinner" and another "All in the Family" spin-off, "Gloria." Lear dropped out of college during World War Two to join the Army and flew 52 combat missions in B-17 bombers. He went to Los Angeles in 1950 with the intention of being a publicist but began writing for TV stars such as Danny Thomas, Jerry Lewis, Dean Martin and Andy Williams. Lear shifted focus in 1981 and founded the liberal activist group People for the American Way to boost voting rights and fight right-wing extremism. He also established the Norman Lear Center at the University of Southern California's Annenberg School of Communication. In 2001, he and a partner purchased an original copy of the American Declaration of Independence and sent it on a three-year tour of U.S. schools, libraries and events. He rebooted his 1970s TV series "One Day at a Time" to focus on a Cuban American family in 2017, and three years later he earned his sixth Emmy for a live special broadcast of "All in the Family" and "Good Times." In February 2021, Lear received the Carol Burnett Award, a lifetime achievement award, at the Golden Globe Awards ceremony, for his contributions to television. Lear, who was convinced that laughter had lengthened his own life, used humor to enrich the lives of others, his online obituary said. “I’ve never been in a situation in my life, however tragic, where I didn’t see comedy,” Lear said in the 2016 documentary, "Norman Lear: Just Another Version of You." Lear is survived by his third wife, Lyn, and his six children. A private service for his immediate family will be held. https://www.reuters.com/world/us/television-producer-writer-norman-lear-dies-101-new-york-times-2023-12-06/

2023-12-06 23:04

Dec 6 (Reuters) - Oil major Chevron Corp (CVX.N) said on Wednesday that it expects to spend between $18.5 billion and $19.5 billion next year on new oil and gas projects, an 11% increased compared to this year. Its 2024 budget and that of Exxon Mobil reflect the industry's continuing rebound after pandemic-influenced pullbacks last decade, recent acquisitions and carbon reduction initiatives. Exxon outlined its plan to spend between $22 billion and $27 billion annually through 2027. While both are spending more, the combined sums are less than half the combined $84 billion Exxon and Chevron spent in 2013, when oil prices often traded above $100 per barrel. The two are benefiting from higher energy prices and pandemic cost-cuts. Chevron's figure excludes any impact from its proposed acquisition of rival Hess Corp (HES.N). That deal, which is expected to close next year, will push capital expenditures to between $19 billion and $22 billion, it said. Chevron in October agreed to buy Hess for $53 billion in stock to gain a bigger U.S. oil footprint and a stake in rival Exxon Mobil's (XOM.N) massive Guyana offshore oil discoveries. Wednesday's disclosures did not include a new forecast for oil production next year. Chevron previously said the two deals would bring total oil and gas output to about 3.7 million barrels per day. Chevron plans to spend about $9 billion of its current budget in the U.S., as oil companies move investments to the Americas to reduce costs and pare geopolitical risks. Of the total projected budget, about $5 billion will be devoted to its fast-growing Permian shale production operation, and another $1.5 billion to other shale and tight oil businesses. The shale and tight oil spending increases reflect its acquisition of PDC Energy earlier this year. Projects in the Gulf of Mexico will take up about $3.5 billion, with production from a new oil platform, Anchor, expected to start next year. About 80% of its expenditures next year on refining and chemicals will also be in the U.S., it said. The company intends to increase share repurchases by $2.5 billion to the top end of its guidance range of $20 billion per year once the Hess deal closes. Nearly half of a $3 billion budget for its affiliates are planned for the company's Tengizchevroil project in Kazakhstan, it said. https://www.reuters.com/business/energy/chevron-forecasts-16-bln-capex-2024-2023-12-06/