PORT LOUIS (Reuters) – Mauritius President Prithvirajsing Roopun appointed Rama Krishna Sithanen as governor of the central bank on Friday, following a general election last weekend that was won by an opposition political coalition lead by Navin Ramgoolam.
MEXICO CITY (Reuters) – Mexico has room to boost tax revenues next year without turning to a deep fiscal reform, President Claudia Sheinbaum said on Friday, as her government is expected to present its budget proposal later in the day.
Sheinbaum said that her government could roll out strategies to shore up revenues obtained by tax agency SAT and through customs.
“If additional reforms are necessary, we’ll work on it through next year,” Sheinbaum said, adding that “there are still many opportunities to boost revenues without needing a deep fiscal reform.”
The comments from Sheinbaum, who entered office at the beginning of October, come a day after Moody’s (NYSE:MCO) Ratings downgraded its outlook on Mexico to negative from stable.
The ratings agency pointed to institutional and policy weakening that risks undermining the economy as well as government accounts, which Sheinbaum brushed off when asked about on Friday.
Sheinbaum inherited Mexico’s largest budget deficit since the 1980s and analysts have questioned how she can fulfill campaign pledges to increase welfare and the minimum wage while also taming the deficit.
The president, as well as her finance minister, have agreed that the budget for next year should contain a sizeable deficit reduction.
By Rodrigo Campos
(Reuters) -Foreign investors sold out of emerging market stocks in October by the most since the COVID-19 market sell-off in early 2020, but inflows to EM bonds and debt more than offset the outflow, data from a banking trade group showed on Friday.
The October monthly net total inflow of $1.9 billion compares with a $56.4 billion inflow in September and an $8.1 billion outflow in October 2023, data from the Institute of International Finance showed.
Stock portfolios saw a $25.5 billion outflow, the largest since March 2020, while bonds attracted $27.4 billion.
Chinese equities alone shed $9 billion after having posted in September the largest inflow since at least 2015, while China bonds pulled in $1.4 billion. A renewed stimulus push from the government in late September failed to impress and a fresh November stimulus announcement also fell short of expectations.
“Despite targeted easing measures by the Chinese government, investor confidence remains low,” IIF economist Jonathan Fortun said in a statement.
“These dynamics have driven substantial market shifts, where growth concerns and regulatory uncertainty continue to deter foreign investment in China.”
As markets were setting up for the U.S. presidential election in early November, late October saw a move toward trades that would benefit if Donald Trump returned to the White House – driving up the dollar and U.S. rates.
“Concerns over the dollar’s strength relative to EM currencies have amplified risk aversion in equity markets,” Fortun said.
“This shift aligns with the expectation that yield differentials and rate trajectories may increasingly favor EM debt over equities as risk aversion rises globally.”
Regionally, last month Asia saw a net $6.8 billion outflow, while Emerging Europe received $5.2 billion and Latam $3.6 billion. Flows to Africa were marginally negative.
Year-to-date, foreigners have poured about $249 billion net into their emerging market portfolios. Some $220 billion has gone to debt, $169 billion of which went outside of China.
WASHINGTON (Reuters) – U.S. industrial production fell for a second straight month in October, continuing to be depressed by hurricanes and a strike by factory workers at Boeing (NYSE:BA), but a rebound is likely in November as the drag from these factors lifts.
Industrial output dropped 0.3% last month after a downwardly revised 0.5% decline in September, the Federal Reserve said on Friday. Economists polled by Reuters had forecast industrial production falling 0.3% after a previously reported 0.3% decrease in September.
The Fed estimated that the strike depressed industrial production by 0.2 percentage point in October after exerting a 0.3 percentage point drag in September. Hurricane Milton and the lingering effects of Hurricane Helene subtracted 0.1 percentage point from production. The strikers returned to work last week after accepting a new contract and disruptions from the hurricanes have almost faded.
Industrial production slipped 0.3% year-on-year in October.
Factory output decreased 0.5% last month after falling 0.3% in September. Production at factories declined 0.3% on a year-on-year basis. Manufacturing, which accounts for 10.3% of the economy, has struggled amid higher interest rates. It is likely to stay in a holding pattern for some time even as the U.S. central bank has started its easing cycle.
U.S. Treasury yields have surged as investors fear that economic polices by President-elect Donald Trump’s incoming administration could stoke inflation and narrow the scope for rates next year.
Motor vehicle and parts output dropped 3.1% last month, while production of aerospace tumbled 5.8%. That resulted in durable manufacturing production falling 1.2%. Nondurable manufacturing output inched up 0.1% as gains in the production of chemicals, paper petroleum and coal products offset declines in output at textile mills as well as apparel and leather, printing and support, and plastics and rubber products.
Mining output rebounded 0.3% last month after dropping 1.9% in September. Utilities production rose 0.7% after gaining 0.3% in the prior month.
Capacity utilization for the industrial sector, a measure of how fully firms are using their resources, fell to 77.1% from 77.4% in September. It is 2.6 percentage points below its 1972–2023 average. The operating rate for the manufacturing sector dropped 0.5 percentage point to 76.2%. It is 2.1 percentage points below its long-run average.
By Iain Withers
LONDON (Reuters) -JPMorgan is assessing options for its European headquarters in London as the fast-expanding Wall Street bank outgrows its existing tower in London’s Canary Wharf financial district, three sources familiar with the matter told Reuters.
The bank has begun examining options for where to base around 12,000 staff in London, with a decision likely to be made some time after U.S. staff move into their new global headquarters in New York next year, the sources said.
JPMorgan’s European headquarters has been at 25 Bank Street since 2012, after it acquired the tower from collapsed rival Lehman Brothers following the global financial crisis.
Like other U.S. investment banks, JPMorgan under CEO Jamie Dimon has been pushing for employees to return to the office after the COVID-19 pandemic. That, combined with growing headcount at the bank and its British retail subsidiary Chase UK, has increased the urgency of needing more space.
Its current office at Bank Street, a 33-storey tower with 1.1 million square feet, is full up, one of the sources said.
The bank could require as much as 1.5-2.0 million sq ft of space in London in future, another of the sources said.
JPMorgan is considering three options – upgrading 25 Bank Street, building a new tower in Canary Wharf on land it already owns, or relocating to central London – the sources said.
Its deliberations will be closely watched by the property industry.
Leaving Canary Wharf is the least likely option given the sheer amount of office space required, two of the sources said.
The bank has begun drawing up plans to spend potentially hundreds of millions of pounds upgrading its existing office, two separate sources said.
No final decisions have been made and any move could take years to execute, the sources said, speaking anonymously while discussing confidential plans.
JPMorgan and Canary Wharf Group, which manages the east London financial district, declined to comment.
Canary Wharf has seen several high profile departures since the pandemic, including HSBC, which is moving to a much smaller office in the central City of London district. HSBC is now concerned the new building will be too small and is considering taking additional space in another building, Bloomberg News has reported.
One of the options being considered by JPMorgan is building an entirely new office at a vacant plot to the west of the Canary Wharf estate, known as Riverside South, which it acquired in 2008, two of the sources said. JPMorgan previously got planning permission for a new devlopment there, but shelved the idea.
Any move to the City of London would be difficult as few sites could accommodate the size of building required, but landowners could get creative to secure such a prized tenant, two of the sources said.
A 1.5 million sq ft building would be roughly twice the size of UBS’s 700,000 sq ft ‘groundscraper’ building in the Broadgate area of the City of London, one of the largest investment bank offices in the central district.
JPMorgan’s asset management business will stay at its base by the Thames in London’s Blackfriars area regardless of the decision on the Canary Wharf office, two of the sources said.
(Reuters) – U.S. equity funds witnessed a significant boost in investor demand in the week through Nov. 13, fueled by optimism that Donald Trump’s return to office would enhance the outlook for U.S. corporate earnings.
According to LSEG data, investors acquired a massive $37.37 billion worth of U.S. equity funds in their largest weekly net purchase since at least January 2014.
Investors expect that Trump’s policies would boost the U.S. corporate sector with lower taxes, more lenient regulation and consolidation across industries through mergers and acquisitions.
The small-cap equity funds segment saw robust demand, securing the largest weekly inflow in four months at $7.43 billion net. Meanwhile, the large-cap segment attracted $18.89 billion, the most in six weeks, with multi-cap and mid-cap funds receiving net additions of $2.66 billion and $633 million, respectively.
Investors pumped $4.42 billion into financial sector funds, the biggest amount in at least a decade. Industrials and consumer discretionary also drew $1.28 billion and $453 million worth of inflows, respectively.
U.S. bond funds continued to attract strong demand, drawing in $5.71 billion in net purchases for the 24th consecutive week. General domestic taxable fixed income funds and loan participation funds saw significant inflows, receiving $2.5 billion and $2.15 billion respectively.
Investors, meanwhile, snapped up $76.56 billion worth of money market funds, extending net purchases into a second straight week.
By Richa Naidu
LONDON (Reuters) -Unilever is cutting about 1,500 fewer jobs in Europe than initially anticipated and hiring about 1,000 people, primarily those affected by its cost-cutting drive, for its soon-to-be spun off ice cream business, the head of the company’s European Works Council told Reuters.
The British company, whose shareholders include billionaire activist investor and board member Nelson Peltz, has been trying to streamline its business over the past year under CEO Hein Schumacher.
Prior to his apppointment, Unilever (LON:ULVR) had underperformed for years and was criticised for allowing its brand portfolio to grow to around 400, leaving management with too little time to focus on its best performers.
Some investors had also said Unilever was too slow to revive margins in the wake of the Covid-19 pandemic and needed to become leaner.
Unilever said earlier this year it would axe 7,500 jobs globally as part of a restructuring to save about 800 million euros ($845 million). It also said it would spin off its ice cream unit which is home to brands including Ben & Jerry’s and Magnum.
Unilever’s European Works Council (UEWC) has strongly criticized those decisions, saying a realignment of the ice cream business could have been successfully managed within Unilever.
UEWC Chairman, Hermann Soggeberg, told Reuters exclusively on Friday that the company had, however, reached a deal in October with Unilever that would see a reduction of about 1,700 jobs having initially anticipated about 3,200 job losses in Europe.
“We have been negotiating intensively with the company throughout the summer,” Soggeberg said.
He said Unilever is still making the savings it promised to investors, but was able to significantly reduce the job cuts in Europe through savings projects from 2022 to 2024 and not hiring externally.
Soggeberg said about 1,000 additional jobs will be offered at Unilever’s European ice cream company primarily to employees affected by job cuts in the rest of Unilever’s business.
“They are planning for growth in ice cream,” Soggeberg said. “We agreed with Unilever that this process to hiring these people will be synchronized with the job cut program.”
The ice cream business’ spinoff is expected to complete by the end of 2025, London-listed Unilever has previously said, adding that it would move to a separate head office in Amsterdam.
“We remain fully on track to deliver the 800 million euros savings from our productivity programme,” a Unilever spokesperson said.
“When we announced the programme, we were determined to mitigate the impact of these changes on our people and so we are pleased that we have achieved this in Europe,” the spokesperson added.
($1 = 0.9464 euros)
WASHINGTON (Reuters) – U.S. retail sales increased slightly more than expected in October, but underlying momentum in consumer spending appeared to slow at the start of the fourth quarter.
Retail sales rose 0.4% last month after an upwardly revised 0.8% advance in September, the Commerce Department’s Census Bureau said on Friday.
Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, climbing 0.3% after a previously reported 0.4% gain in September. Estimates ranged from no change to an increase of 0.6%. Robust consumer spending helped the economy maintain its strong pace of growth last quarter.
Consumption is being largely underpinned by low layoffs, with additional help from strong household balance sheets thanks to a stock market rally and high home prices. Household savings also remain lofty.
Concerns have been raised that growth is mostly being driven by middle- and upper-income households, which have more flexibility and substitutability of consumption. But Bank of America card data shows spending resilient across income groups.
“We do not see signs of increased reliance on credit cards in any income cohort,” said Aditya Bhave, a U.S. economist at Bank of America Securities. “However, we note that higher-income households appear to be outperforming in certain service sectors such as airlines, lodging, entertainment and cruises.”
Retail sales excluding automobiles, gasoline, building materials and food services dipped 0.1% last month after an upwardly revised 1.2% gain in September. These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have jumped 0.7% in September.
Consumer spending grew at a 3.7% annualized rate in the third quarter, accounting for most of the economy’s 2.8% pace of expansion during that period.
The Federal Reserve last week cut its benchmark overnight interest rate by 25 basis points to the 4.50%-4.75% range.
Though the U.S. central bank is widely expected to deliver a third rate cut in December, some economists say that will be a close call citing lack of progress in lowering inflation back to its 2% target.
Fed Chair Jerome Powell said on Thursday that “the economy is not sending any signals that we need to be in a hurry to lower rates.” The central bank embarked on its policy easing cycle with an unusually large half-percentage-point rate cut in September, its first reduction in borrowing costs since 2020.
It hiked rates by 525 basis points in 2022 and 2023 to tame inflation.
(Reuters) -Alibaba Group Holding missed analysts’ estimates for quarterly sales on Friday, as lingering economic uncertainty sapped consumer spending in China and weighed on the e-commerce giant’s domestic business.
Chinese consumers have sharply cut back on spending, especially on discretionary items, as the world’s second largest economy struggles to pick up pace amid a property sector crisis and heightened youth job insecurity.
That has knocked retail sales, which remain pressured even as major vendors like Alibaba (NYSE:BABA) and JD (NASDAQ:JD).com dole out promotions and discounts. JD.com on Thursday also missed estimates for quarterly revenue.
Alibaba is also facing stiff competition from discount-based retailers such as PDD Holdings’ Pinduoduo (NASDAQ:PDD) and ByteDance-owned Douyin, which have wooed thrifty shoppers with rock-bottom prices on everything from headphones to sweaters.
Alibaba reported revenue of 236.50 billion yuan ($32.72 billion) for the second quarter ended Sept. 30, compared with analysts’ average estimate of 240.17 billion yuan, according to data compiled by LSEG.
($1 = 7.2275 Chinese yuan renminbi)
By Jacob Gronholt-Pedersen
COPENHAGEN (Reuters) -Vaccine maker Bavarian Nordic (CSE:BAVA) expects the incoming Trump administration to boost biodefence funding despite the nomination of Robert F. Kennedy Jr., a vaccine sceptic, as health secretary, the company’s CEO said on Friday.
Shares in European vaccine makers fell on Friday after U.S. President-elect Donald Trump selected Kennedy, who has previously spread misinformation on vaccines, to lead the top health agency.
“Vaccine scepticism was part of Trump’s first administration,” Bavarian Nordic CEO Paul Chaplin told Reuters in an interview.
“When I look back at his first administration, it was some of the most successful years in terms of the public preparedness business with the U.S. government,” he said.
Biodefence is preparing for and responding to potential biological threats, from pandemics to potential biological warfare.
“The only thing I’ve ever seen with a Republican administration is that the biodefence business and funding goes up,” said Chaplin.
Bavarian Nordic is providing the U.S. government with a freeze-dried variant of its smallpox vaccine as part of America’s smallpox preparedness strategy. Its current contract with the U.S. government expires in 2027, Chaplin said.
The company’s smallpox vaccine is also approved for mpox in certain countries.
Chaplin said he is a bit more concerned how Kennedy will impact the spread of vaccine scepticism and sales for general vaccine programs, which include an anti-rabies treatment.
“It doesn’t help when you’ve got a health secretary who’s sceptical of vaccines in convincing the public to take vaccines,” Chaplin said.
Shares in Bavarian fell more than 16%, hurt by third-quarter results. Analysts at Sydbank and Kempen told Reuters that the nomination of Kennedy also weighed on the stock.