Chief financial officer of Florida Jimmy Patronis on Disney potentially moving jobs to his state.
Chief financial officer of Florida Jimmy Patronis on Disney potentially moving jobs to his state.
(Bloomberg) -- Prime Minister Justin Trudeau’s claims there isn’t a trade-off between Canada’s strict lockdowns and economic growth will be tested this week with the release of new output data.Analysts expect gross domestic product shrank by more than 5% last year, a middling result among advanced economies. The U.S., with far less restrictive pandemic measures last year, shrank by just 3.5%.Canada’s lagging performance is expected to continue into 2021. Economists see a stronger rebound in the U.S. this year because of its faster pace of Covid-19 vaccinations, looser virus-related curbs and President Joe Biden’s stimulus plan.“It’s pretty obvious there is a trade-off,” Doug Porter, chief economist at Bank of Montreal, said in a phone interview.The good news is investors and analysts don’t appear worried. The Canadian dollar is one of five major currencies that’s appreciated against the U.S. greenback this year. And the rise in government bond yields has been faster in Canada than the U.S., another sign of optimism about growth.Despite the underperformance, Canada’s outlook remains positive.Economists anticipate growth of 4.7% this year. That’s slower than the U.S., but also the fastest in two decades. GDP data due Tuesday from Statistics Canada are also likely to show more resilience to the latest wave of restrictions this winter, in part because of a booming housing market.A rally in commodities, meanwhile, is another major tailwind for the resource-producing economy. The Bank of Canada’s index of commodity prices -- which tracks commodities produced in Canada and sold in world markets -- has more than doubled since its lows in April to the highest levels since 2014. Excluding energy, the index is at an all-time high.What Bloomberg Economics Says...“Even a soft start to the year is set to be quickly erased in the months ahead. High-frequency data in our weekly dashboard show 1Q will end on a stronger note, with momentum accelerating in 2Q as more sectors of the economy reopen. The main risk is a frustratingly-slow vaccine roll-out.”-- Andrew Husby, economistFor the full report, click hereThe debate is switching toward upside risks to forecasts.A massive accumulation of excess savings is one wild card. While other countries have seen a similar pickup in household savings during the pandemic, the trend has been more pronounced in Canada because of its stricter lockdowns and generous government aid programs. There were fewer opportunities to spend, even as Canadian incomes surged.Many economists, including those at the Bank of Canada, have chosen to make conservative assumptions about how much of a rush Canadians will be in to draw down those extra savings.Others, including Finance Minister Chrystia Freeland, are more bullish.The reservoir of savings is so large, a bigger worry may be a rebound that is too strong, putting pressure on the central bank to raise interest rates.While there’s debate over who will hike first -- the Federal Reserve or the Bank of Canada -- markets are pricing in more aggressive increases in the policy rate north of the border amid expectations Governor Tiff Macklem will have less tolerance for price pressures.“There is a narrower inflation mandate for the Bank of Canada than the Fed,” Derek Holt, an economist at Bank of Nova Scotia, said by phone.Add rising wealth from a surging housing market and it may not require much to trigger a post-pandemic boom. Which would be great news for a Trudeau government that may face an election soon, but poses another challenge.Freeland wants to keep the spending taps open for the next few years on the grounds the economy will need continued support. That’s getting harder to argue.“With a large stock of excess household savings waiting on the sidelines, plus already highly supportive policy, governments do not need to spend much more to propel a strong economic recovery in the year ahead,” Porter said in a report to investors Friday. “An effective vaccine rollout would be the single most important contributor to growth.”(Updates with Bloomberg Economics box after 8th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
The RBA is widely expected to reinforce its forward guidance for three more years of near-zero rates, while also addressing the market dislocation.
Walmart-owned Flipkart will sell groceries online in more Indian cities, as it seeks to compete better with Amazon and Reliance in an e-commerce market that has grown rapidly during the COVID-19 pandemic. Flipkart has already expanded online grocery sales to more than 50 Indian cities and intends to reach over 70 locations in the next six months, the company said in a statement on Tuesday. "Grocery continues to be one of the fastest-growing categories," said Manish Kumar, senior vice president at Flipkart, adding that the company had seen increased demand for the service from smaller cities in 2020.
It’s a bearish start to the day. Failure to move back through early highs would bring support levels into play.
(Bloomberg) -- Federal Reserve Bank of Richmond President Thomas Barkin played down recent Treasury market volatility, in remarks that reinforce the message that the U.S. central bank is not yet troubled by the increase in yields.“I’m mostly concerned about the labor market,” Barkin said Monday in a Bloomberg Television interview with Michael McKee in answer to a question about turbulence in the bond market. “At these levels of interest rates, when I talk to businesses in my district, I do not hear any sense that people are dialing back their investment.”U.S. Treasury yields surged last week, with the 10-year yield reaching the highest in a year, as investors reviewed the outlook for a stronger economic recovery than expected and priced in a higher likelihood of future Fed interest-rate hikes. Vaccinations and fiscal stimulus have prompted economists to raise estimates for both gross domestic product and inflation.“We obviously have control of the yield curve at the short end. And at the longer end when it moves it depends a lot on the driver,” said Barkin, who is a voter this year on the rate-setting Federal Open Market Committee. “If the driver is -- as it seems to be -- news about vaccines, or news about health of the economy, or news about fiscal stimulus, then I think it’s a natural reaction.”Several Fed officials last week also characterized the bond market upheaval as reflecting economic optimism, with Fed Chair Jerome Powell saying higher yields were a “statement of confidence” in the outlook.Barkin said he didn’t view the market move as a sign of persistent inflation and noted measures of inflation expectations suggested the Fed could miss meeting its 2% target on the low side.“Inflation is a longer-term phenomenon,” he said. “As I am speaking to businesses in our district I am not hearing a sense of overwhelming desire or intent to be escalating prices beyond normal levels.”Fed officials have stressed that they will not preemptively raise rates nor would they be bothered by a one-time spike in inflation later this year as parts of the economy reopen. Powell has estimated the U.S. unemployment rate remains at around 10%, adjusted for workers who have left the labor market, so the nation remains a long way from full employment.Fed OutageBarkin said an outage last week of Federal Reserve systems that execute millions of financial transactions a day -- everything from payroll to tax refunds to interbank transfers -- was unlikely to reoccur. The episode follows two significant disruptions to the Fed’s payment services that occurred in 2019.Barkin said the failure was an operator issue that was internal but didn’t go into details: “It got fixed and it’s back up and running,” he said.“I don’t think this one is going to happen again, that we have figured out,” Barkin said. “These things do happen. Systems do click up and click down. I think we have addressed this one.”The outages affected the automated clearinghouse system known as FedACH and the Fedwire Funds interbank transfer service as well as several other systems comprising the U.S. payment infrastructure.(Adds comment on inflation and Fedwire outage from sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
A $232 million investment has ballooned into a $5.9 billion stake.
A former board member of Tesla Inc (NASDAQ: TSLA) said Tuesday that the company is unlikely to remain the “king of the hill” in electric vehicles forever, CNBC reported. What Happened: Steve Westly said on CNBC’s “Power Lunch” that he had been bullish on the Elon Musk-led automaker for the last 10 years and it’s “hard to imagine an auto company executing better than Tesla has.” Westly pointed to the company’s latest earnings release in January where it said it had a “multi-year horizon” and expected to achieve 50% average annual growth in vehicle deliveries. “No one else in the auto world is doing that. Having said that, Tesla is not going to be king of the hill in electric forever,” said Westly. Why It Matters: The venture capitalist noted that there have been large-scale commitments on EVs from legacy automakers such as General Motors Company (NYSE: GM) and Volkswagen AG (OTC: VWAGY). “Tesla is not just getting hit from the high end,” said Westly on the availability of EVs from Volkswagen marques such as Audi and Porsche. Tesla also faces increased competition from Chinese EV rivals, which have more affordable offerings. The analyst noted increased competition in Europe where according to him the company was “No. 1, they’re now No. 4.” See Also: Tesla's Share Of European EV Market Reduced To 3.5% “They’re getting competition from all sectors. They’re going to have to double down to compete.” Tesla’s plans to make a more affordable $25,000 vehicle have left Chinese rivals such as Xpeng Inc (NYSE: XPEV), Nio Inc (NYSE: NIO), and others unfazed. In January, a two-door $4,500 EV made by Wuling — a joint venture of GM and state-owned SAIC Motor — outsold Tesla’s Model 3 in China by nearly two-to-one. Price Action: Tesla shares closed 4.45% lower at $686.44 on Tuesday and gained 0.34% in the after-hours session. Click here to check out Benzinga’s EV Hub for the latest electric vehicles news. See more from BenzingaClick here for options trades from BenzingaNio Says Chip Shortage Will Hit EV Production In Q2Such Popularity, Much Wow! Dogecoin Now Available At 1,800 ATMs Across US© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
(Bloomberg) -- A string of poorly-received bond auctions in the past week is driving home a message -- the Treasuries-led global rout is leaving investors scarred and governments staring at higher borrowing costs.Treasuries resumed declines on Wednesday, sending yields higher across the curve. That follows a disastrous sale of seven-year notes in the U.S. last week, which set the tone for tepid demand for subsequent sovereign bond offerings from Indonesia to Japan and Germany. The push for higher rates comes as central bank policy makers attempt to ease investors’ discomfort at the pace of the recent jump in yields.Investors are demanding higher yields to compensate for the risk of further volatility, which may complicate efforts to finance $14 trillion worth of fiscal stimulus. Concerns that central banks may withdraw policy support has soured sentiment, amid mounting evidence of a faster-than-anticipated economic recovery.“Investors will be increasingly differentiating countries based on their fundamentals and prospects,” said Tuuli McCully, head of Asia Pacific economics at Scotiabank. “Considering elevated debt levels in some countries, higher funding costs could dampen their economic recovery momentum further.”Clear MessageThe message from Europe and Asia Pacific’s markets this week is clear. In Germany, a sale of 15-year bonds on Wednesday received the weakest demand since the tenor was launched last summer. That comes after Indonesia’s Finance Ministry agreed to sell 13.6 trillion rupiah ($951 million) of non-Islamic bonds on Tuesday, the least since March 2020, according to data compiled by Bloomberg. Including bills, the sale totaled 17 trillion rupiah, below the government’s revised target of 30 trillion rupiah.“If there is still no reversal in sentiment, the government may need to accept higher bid yields, or cut down on planned spending,” said Frances Cheung, a rates strategist at Oversea-Chinese Banking Corp. in Singapore.Even though global bonds have stabilized this week, investors are clearly still rattled by the prospect of more volatility. Other than Indonesia, Japan’s sale of 10-year bonds on Tuesday recorded the lowest bid-to-cover since February 2016, and Germany’s sale of 15-year debt also saw tepid demand.Italy’s sale of green bonds was the exception, racking up 76 billion euros of orders, boosted by its environmentally-friendly tag. In Russia, the Finance Ministry sold the most fixed-coupon notes since June, as mild sanctions from the U.S. failed to deter investors.In early signs of what would unfold at the U.S. auction last Thursday, the coverage ratios for debt sold in Thailand and Australia a day before that dropped. Later, there were signs of distress in Italy, while New Zealand ended up accepting just over half of the bids it received for a sale as yields soared.The U.K.’s annual budget due Wednesday will also be in focus as the government tries to balance the need for prolonged economic aid with calls to control the deficit. Strategists expect Britain to nearly halve its borrowing in 2021-22, following an expected record high of 486 billion pounds this fiscal year.“We are in an uncomfortable spot where attention is shifting toward elevated asset prices,” said Eugene Leow, a rates strategist at DBS Bank Ltd. in Singapore. “Even as central banks try to reassure, there is this lingering fear that less loose policy may be on the way.”PerspectiveFor all the jitters, optimists say that higher yields are a sign of confidence and emerging economies continue to enjoy inflows and improved current-account positions. In Asia, central banks have built up their foreign-exchange holdings by the most since 2013.“We remain of the view that fears of a 2013-like Taper Tantrum for emerging markets are overblown,” said Sameer Goel, Deutsche Bank’s global head of EM research in Singapore. “Central banks stand readier as part of fiscal-monetary coordination to quarterback term premia and the cost of capital to governments.”Still, the recent jump in yields has put central banks on guard. Federal Reserve Governor Lael Brainard warned Tuesday that bond-market volatility could further delay any pullback in asset purchases while European Central Bank Executive Board member Fabio Panetta said the recent jump in yields “is unwelcome and must be resisted.” Still, the institution as a whole sees no need for drastic action to combat rising yields, according to officials familiar with internal discussions..While the Federal Reserve’s guidance is that a hike is unlikely until at least 2024, money markets in the U.S. are positioned for interest rates to start rising again by the end of next year.“That’s a significant difference, a big gap between the Fed’s message and where the market is, and they will push back against that,” said Kathy Jones, chief fixed income strategist at Charles Schwab & Co. in New York.(Updates with German and Italian sales from second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Bond traders have been saying for years that liquidity is there in the world’s biggest bond market, except when you really need it.Last week’s startling gyrations in U.S. Treasury yields may offer fresh backing for that mantra, and prompt another bout of soul-searching in a $21 trillion market that forms the bedrock of global finance. While stocks are prone to sudden swings, such episodes are supposed to be few and far between in a government-debt market that sets the benchmark risk-free rate for much of the world.Yet jarring moves occur periodically in Treasuries, forming a bit of a mystery as no two events have been the same. Some point to heightened bank regulations in the wake of the 2008 financial crisis. Scrutiny over liquidity shortfalls intensified in October 2014 when a 12-minute crash and rebound in yields happened with no apparent trigger. Panic selling during the pandemic-fueled chaos a year ago, exacerbated when hedge funds’ leveraged wagers blew up, brought the issue to the fore again.And then came last week, when the gap between bid and offer prices for 30-year bonds hit the widest since the panic of March 2020.The latest events “are a stark reminder what happens when liquidity suddenly vanishes in the deepest, largest bond market,” said Ben Emons, managing director of global macro strategy at Medley Global Advisors.At issue is whether this vast market is more vulnerable to sudden bouts of turbulence thanks to measures that have made it more difficult for banks to hold Treasuries. Some analysts say the tumult last week was magnified by questions over whether the Federal Reserve will extend an easing of bank capital requirements, which is set to end March 31. Put in place early on in the pandemic, the measure is seen as making it easier for banks to add Treasuries to their balance sheets.The 2014 episode triggered a deep dive into the market structure, and regulators have pushed through some changes -- such as increased transparency -- and speculation has grown that more steps to bolster the market’s structure may be ahead.“While the scale and speed of flows associated with the COVID shock are likely pretty far out in the tail of the probability distribution, the crisis highlighted vulnerabilities in the critically important Treasury market that warrant careful analysis,” Fed Governor Lael Brainard said Monday in prepared remarks to the Institute of International Bankers.There are plenty of potential culprits in last week’s bond-market tumble -- which has since mostly reversed -- from improving economic readings to more technical drivers. Ultra-loose Fed policy and the prospect of fresh U.S. fiscal stimulus have investors betting on quicker growth and inflation. Add to that a wave of convexity hedgers, and unwinding by big trend-following investors -- such as commodity trading advisers.Based on Bloomberg’s U.S. Government Securities Liquidity Index, a gauge of how far yields are deviating from a fair-value model, liquidity conditions worsened recently, though it was nothing like what was seen in March.For Zoltan Pozsar, a strategist at Credit Suisse, the action began in Asia with bond investors reacting to perceived hawkish signs from the central banks of Australia and New Zealand. That sentiment then carried over into the U.S. as carry trades and other levered positions in the bond market were wiped out. A disastrous auction of seven-year notes on Thursday added fuel to the unraveling.Last week’s drama “brings to mind other notable episodes in recent years in which a deterioration in the Treasury market microstructure was primarily to blame,” JPMorgan & Chase Co. strategist Henry St John wrote in a note with colleagues.One key gauge of Treasury liquidity -- market depth, or the ability to trade without substantially moving prices -- plunged in March 2020 to levels not seen since the 2008 crisis, according to data compiled by JPMorgan. That severe degree of liquidity shortfall didn’t resurface last week.The bond-market rout only briefly took a toll on share prices last week, with equities surging to start this week, following a sharp retreat in Treasury yields amid month-end buying.The Fed cut rates to nearly zero in March 2020, launched a raft of emergency lending facilities and ramped up bond buying to ensure low borrowing costs and smooth market functioning. That breakdown in functioning has sparked calls for change from regulators and market participants alike.GLOBAL INSIGHT: Recovery? Yes. Tantrum? No. Yield Driver ModelFor now, Treasuries have settled down. Pozsar notes that the jump in yields has provided an opportunity for some value investors to swoop in and pick up extra yield, effectively helping offset the impact of the leveraged investors who scrambled for the exits last week.“Some levered players were shaken out of their positions,” Pozsar said in a forthcoming episode of Bloomberg’s Odd Lots podcast. “It’s not comfortable -- especially if you’re on the wrong side of the trade -- but I don’t think that we should be going down a path where we should redesign the Treasury market.”Why Liquidity Is a Simple Idea But Hard to Nail Down: QuickTake(Updates with details on Bloomberg’s liquidity index in 10th paragraph, and a chart)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
A bill in Congress would give families up to $300 a month per child starting this summer.
The payments in President Biden's COVID relief plan will rely on an IRS formula.
Heavily shorted mortgage provider Rocket Companies saw its stock surge on Tuesday, in an eye-popping move reminiscent of the rallies that powered GameStop and other so-called meme stocks earlier in the year. Shares of Rocket, the parent company of Quicken Loans, closed up 71.2% at $41.60 after being halted several times for volatility. The outsized move puts Rocket among the stocks that have experienced wild gyrations after becoming a focus of investors on sites such as Reddit’s WallStreetBets, where mentions of the company have multiplied in recent days.
Among investors, Buffett’s annual advice is eagerly awaited and closely followed.
(Bloomberg) -- Intel Corp. was told to pay VLSI Technology LLC $2.18 billion by a federal jury in Texas after losing a patent-infringement trial over technology related to chip-making, one of the largest patent-damages award in U.S. history. Intel pledged to appeal.Intel infringed two patents owned by closely held VLSI, the jury in Waco, Texas, said Tuesday. The jury found $1.5 billion for infringement of one patent and $675 million for infringement of the second. The jury rejected Intel’s denial of infringing either of the patents and its argument that one patent was invalid because it claimed to cover work done by Intel engineers.The patents had been owned by Dutch chipmaker NXP Semiconductors Inc., which would get a cut of any damage award, Intel lawyer William Lee of WilmerHale told jurors in closing arguments Monday. VLSI, founded four years ago, has no products and its only potential revenue is this lawsuit, he said.VLSI “took two patents off the shelf that hadn’t been used for 10 years and said, ‘We’d like $2 billion,”’ Lee told the jury. The “outrageous” demand by VLSI “would tax the true innovators.”He had argued that VLSI was entitled to no more than $2.2 million.“Intel strongly disagrees with today’s jury verdict,” the company said in a statement. “We intend to appeal and are confident that we will prevail.”Intel fell 2.6% to $61.24 in New York trading. The stock is up 23% since the beginning of the year.One of the patents was originally issued in 2012 to Freescale Semiconductor Inc. and the other in 2010 to SigmaTel Inc. Freescale bought SigmaTel and was in turn bought by NXP in 2015. The two patents in this case were transferred to VLSI in 2019, according to data compiled by Bloomberg Law.VLSI lawyer Morgan Chu of Irell & Manella said the patents cover inventions that increase the power and speed of processors, a key issue for competition.‘Willful Blindness’Federal law doesn’t require someone to know of a patent to be found to have infringed it, and Intel purposely didn’t look to see if it was using someone else’s inventions, he said. He accused the Santa Clara, California-based company of “willful blindness.”The jury said there was no willful infringement. A finding otherwise would have enabled District Court Judge Alan Albright to increase the award even further, to up to three times the amount set by the jury.“We are very pleased that the jury recognized the value of the innovations as reflected in the patents and are extremely happy with the jury verdict,” Michael Stolarski, chief executive of VLSI, said in an e-mailed statement.Officials with NXP couldn’t immediately be reached for comment.The damage request isn’t so high when the billions of chips sold by Intel are taken into account, Chu said. Intel paid MicroUnity Systems Engineering Corp. $300 million 2005 and in 2011 paid Nvidia Corp. $1.5 billion even though a settlement in that case involved a cross license of technology, he said.“Operating companies are going to be disturbed by not only the size of the award but also the damages theory,” said Michael Tomasulo, a Winston Strawn lawyer who attended the trial. “They more or less seemed to have bought the entire VLSI case.”The damage award is about half of Intel’s fourth-quarter profit. The company has dominated the $400 billion chip industry for most of the past 30 years, though it’s struggling to maintain that position.The verdict is smaller than the $2.5 billion verdict won by Merck & Co. over a hepatitis C treatment. It was later thrown out. Last year, Cisco Systems Inc. was told by a federal judge in Virginia to pay $1.9 billion to a small cybersecurity companies that accused it of copying a feature to steal away government contracts. Cisco has asked the judge for a new trial.The case is among the few in-person patent trials in recent months, with many courts pressing pause amid the coronavirus pandemic. It was delayed a week because of the winter storm that wreaked havoc across much of Texas.Intel had sought to postpone the case because of the pandemic, but was rejected by Albright, a former patent litigator and magistrate who was sworn in as a federal judge in 2018 and has quickly turned his courtroom into one of the most popular for patent owners to file suit.The case is VLSI Technology LLC v. Intel Corp., 21-57, U.S. District Court for the Western District of Texas (Waco).(Updates with VLSI comment in 12th paragraph. An earlier version corrected the spelling of law firm name in eighth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
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The crypto custodian has had bitcoin on its own balance sheet since 2014, CEO Mike Belshe told CoinDesk.
(Bloomberg) -- Eight years ago, when the taper tantrum roiled emerging markets, the so-called Fragile Five of Turkey, Brazil, South Africa, India and Indonesia suffered the most. Another spike in U.S. Treasury yields is threatening to wreak havoc on at least three of those nations.The Turkish lira, Brazilian real and South African rand led major global declines last week in the worst developing-nation currency selloff since late September. Those exchange rates have the highest one-week implied volatility in the world, with some analysts warning of more pain ahead.“Higher U.S. interest rates leave all EMs vulnerable,” said Robin Brooks, chief economist of the Institute of International Finance in Washington. This is especially the case for “big current-account deficit countries like Turkey and places where fiscal expansion in 2020 causes markets to question funding needs in 2021. The latter affects Brazil and South Africa,” he said.Benchmark 10-year Treasury yields surged last week to the highest in more than a year, leading traders to bring forward their expectations about how soon the Federal Reserve will tighten policy. For now, officials are stressing the central bank has no plans to raise interest rates given lingering weakness in the labor market. That will make Fed Chairman Jerome Powell’s comments on Thursday at a Wall Street Journal event all the more interesting.In the developing world, dollar-denominated and local bonds endured their worst month since March 2020, while stocks posted their biggest weekly decline in almost a year. MSCI Inc.’s emerging-market equity index slid below its 50-day moving average, indicating additional weakness may lie ahead. Meantime, a JPMorgan Chase & Co. gauge tracking volatility in developing-nation assets jumped last week by the most since early August. Even so, inflows to emerging-market exchange-traded funds accelerated last week.Listen to the EM Weekly Podcast: Rising Yields Take Toll; China Congress“In the absence of a more concerted effort to slow the spike in yields, emerging markets may remain under pressure,” said Ilya Gofshteyn, a senior strategist at Standard Chartered in New York. “Higher-yielding currencies will continue to be particularly adversely affected and duration across emerging markets is also likely to remain especially vulnerable.”OPEC+ will meet on Thursday, setting the stage for another potential conflict between Russia and Saudi Arabia after last year’s oil-price war. The same day, Malaysian policy makers are forecast to keep their benchmark rate at a record low of 1.75%. Elsewhere, Turkey may report quickening inflation, while a purchasing managers’ index figure will provide a health check for South Korea.What to WatchChina’s National People’s Congress will hold its annual session on March 5, featuring President Xi Jinping and other top leaders. This year’s gathering marks the 100th anniversary of the founding of the Communist Party of China. The event may last shorter than the regular two weeks because of the pandemicThe proposed agenda includes an examination of the economy and the 14th five-year plan, Xinhua reportedThe Chinese People’s Political Consultative Conference, an advisory body whose annual meeting is held in conjunction with the NPC, will gather on March 4, according to XinhuaThe meetings probably won’t set a GDP growth target but will emphasize “high-quality” growth considering Covid-19 is still widespread outside China, Iris Pang, an economist at ING in Hong Kong, wrote in a noteThe yuan is one of the best-performing currency in Asia this yearU.S.-Saudi relations will be monitored after an American intelligence report implicated Saudi Arabia’s Crown Prince Mohammed bin Salman in approving the killing of Washington Post columnist Jamal Khashoggi, an act President Joe Biden called “outrageous”Nigeria’s central bank governor suggested the currency was devaluedGovernor Godwin Emefiele said the official exchange rate now stands at 410 per dollar. That’s 7.6% weaker than the rate of 379 published on the central bank’s websiteBrazilian lawmakers are slated to pick up the debate around emergency cash handoutsThe real is the worst-performing currency in Latin America this year Bank Negara Malaysia:Malaysia’s central bank is forecast to keep its overnight policy rate at a record low 1.75% on Thursday. Traders are reducing bets on further easing amid a surge in global bond yields“Stringent social containment measures have dented Malaysia’s growth recovery trajectory,” Kanika Bhatnagar, an economist at Australia & New Zealand Banking Group Ltd. in Bangalore, wrote in a client note. “Monetary policy will remain accommodative, with the central bank continuing with its purchases of government bonds and carrying out reverse repo operations”The ringgit has weakened 0.9% this year amid an extended lockdown and a delay in vaccine rollouts. At the same time, rising oil prices are starting to improve the outlook for the currency for emerging Asia’s only exporter of the commodityKey DataChina’s manufacturing activity dropped further in February as the Lunar New Year holidays disrupted production, while travel restrictions to contain virus outbreaks cut spending on servicesPMI data released Monday showed manufacturing expanded in Indonesia, Philippines and Vietnam last month, while it continued to shrink in Malaysia and Thailand. South Korea and Taiwan will report similar data TuesdaySouth Korea said Monday that exports rose for a fourth month in Febuary amid the global recovery. January industrial-production numbers are due Tuesday, and final fourth-quarter GDP figures are scheduled for ThursdayThe won has lost 3.3% this yearIndonesia said on Monday that consumer prices rose 1.38% year-on-year in February. South Korea will publish CPI numbers Thursday, and the Philippines and Thailand on FridayPhilippine real yields turned negative in January after CPI rose to the highest level in two yearsSouth Korea will post foreign reserves data Thursday, followed by Indonesia, Malaysia, Taiwan, Thailand and the Philippines on FridayTurkey’s economy outperformed all peers except China in the final quarter of last year, driven by lower interest rates and a credit binge that boosted domestic consumption while destabilizing the currencyGross domestic product expanded 5.9% from a year earlier, faster than all G-20 nations except China’s 6.5%, data showed on Monday. The median of 20 forecasts in a Bloomberg survey was for 6.9% expansion.Read more: Policy Jitters Compound Lira’s Worst Week Since 2018 CrisisRussia’s purchasing managers’ index picked up in February to 51.5, the highest reading since April 2019A reading of Brazil’s GDP on Wednesday is expected to show strong levels of growth in the final three months of 2020 as Latin America’s biggest economy recovered from the shock of Covid-19Traders will also monitor January industrial production figures, to be released on Friday, for signs of a comebackIn Mexico, the central bank will probably raise its GDP growth forecasts for this year and next when it publishes its quarterly inflation report on Wednesday, according to Bloomberg EconomicsColombia’s February consumer price inflation figures are expected to show a contraction from a year earlier amid weak domestic demandThe results may have an impact on investor expectations for the central bank to remain accommodativeChile’s January economic activity fell 3.1% year-on-year, more than economists expectedA reading of confidence will also be watched for signs of a comeback as vaccines are rolled out(Adds information on ETF inflows in fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Lex Greensill’s multi-billion dollar empire was left reeling after it lost a key source of funding and his biggest backer signaled doubts about the value of his namesake trade finance business.Credit Suisse Group AG on Monday froze a group of supply-chain-finance funds that it ran with the help of the financier, citing “considerable uncertainty” about the valuations of some of the holdings. The funds combined held about $10 billion in assets, most of it in Greensill-sourced securities.Separately, SoftBank Group Corp.’s Vision Fund has substantially written down its $1.5 billion holding in Greensill Capital, and is considering dropping the valuation to close to zero, according to people familiar with the matter. The writedown occurred at the end of last year, said one person.The firm is now fighting for its survival, according to Dow Jones, which reported that Greensill could file for insolvency within days. It’s simultaneously in talks on a sale of its operating business to Apollo Global Management Inc. for about $100 million, the news agency said, citing people familiar with the talks.The rapid deterioration caps almost three years of trouble for Greensill Capital, a startup lender aiming to disrupt a niche part of global finance. Greensill-linked financings played a role in the demise of a former star bond manager at GAM Holding AG in 2018. Things took a turn for the worse last year when Germany’s banking regulator BaFin pressured the financier’s lender to reduce concentration risks on its balance sheet.In each case, Greensill’s exposure to U.K. industrialist Sanjeev Gupta -- an early client of his trade finance firm -- played a key role.Read more: King of Supply-Chain Finance Expands, and Controversy FollowsFor Credit Suisse, the decision to suspend the funds adds to a series of hits to the bank, which is still recovering from a damaging spying scandal a year ago. Since then, new Chief Executive Officer Thomas Gottstein has had to contend with legal charges related to mortgage-backed securities in the U.S. and a writedown on a hedge fund investment. The bank was also left staring at steep losses, along with other lenders, when the stock of Luckin coffee imploded in an accounting fraud.Switzerland’s second-largest bank had been looking at ways to reduce its ties to Greensill, people familiar with the matter said earlier Monday. Credit Suisse is considering winding down the investments packaged by Greensill, replacing the firm as the main source for the assets, or moving loans to firms linked to Gupta out of its supply-chain finance funds, the people said, asking for anonymity because a decision hasn’t been made yet.Crucial Buyers“Greensill acknowledges the decision by Credit Suisse to temporarily gate the two Supply Chain Finance Funds dealing in Greensill-sourced assets,” a spokesperson for the firm said by email. “We remain in advanced talks with potential outside investors in our company and hope to be able to update further on that process imminently.”The funds are crucial to Greensill’s business, who relies on them along with his German bank to buy financings that Greensill Capital arranges. After an internal review last year, Credit Suisse overhauled the funds’ investment guidelines to limit how much exposure they can have to a single borrower.In Germany, meanwhile, BaFin has been pressuring Greensill Bank to reduce the concentration of assets linked to Gupta, Bloomberg reported in August. The bank is now seeking to raise money and cut its exposure to companies linked to the U.K. industrialist, people familiar with the matter have said.In October, the firm had been considering a capital raising that would have valued it at $7 billion. At the time, when its banking arm was facing regulatory scrutiny and clients had hit financial difficulties, the firm said that the fund-raising would help boost growth. More recently, the firm was in talks with Apollo Global Management on a multi-billion dollar financing deal that would give the supply chain financer more headroom, Sky News reported last month.Read more: Greensill Bank Looks to Raise Cash, Cut Risk to Sanjeev GuptaIt’s unclear how much of the Credit Suisse supply-chain finance funds are currently tied up with Gupta.Securities linked to Gupta and arranged by Greensill were among investments at the center of a 2018 crisis at GAM that brought down star trader Tim Haywood. While assets managed in GAM’s supply-chain finance funds were relatively short-term, it took almost a year to liquidate some longer-term loans to Gupta held in different funds.Credit Suisse is the latest firm to suspend or freeze funds related to hard-to-value or illiquid investments. Famed U.K. stock picker Neil Woodford ploughed large amounts into unlisted or thinly-traded companies and was forced to freeze his funds to allow for an orderly liquidation. H20 Asset Management also had to freeze funds under pressure from the French regulator because of illiquid investments tied to German financier Lars Windhorst.(Adds report on insolvency talks in fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
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