Category: Economy and Policy

STUTTGART, Germany, Feb 6 (Reuters) – Daimler Chief Executive Dieter Zetsche on Wednesday said the carmaker is in talks about deepening its cooperation with China’s Geely , even as German politicians draw up measures to protect German industry from foreign rivals.

In October last year Daimler said it was setting up a ride-hailing joint venture in China with Geely after the Chinese company bought a 9.69 percent stake in Daimler and demanded an alliance, catching German managers off guard.

“We are in talks about other topics which have a bigger dimension,” Zetsche told journalists about the Chinese talks, declining to elaborate further.

Germany’s government on Tuesday said it could buy stakes in domestic companies, including carmakers, as a way to shield them from unwanted prevent foreign takeovers, presenting a marked shift in industrial strategy.

“Countries that pursue industrial policies tend not to be competitive, we did not ask for these measures,” Zetsche told journalists in Stuttgart, where Daimler was hosting its annual press conference. (Reporting by Edward Taylor Editing by Michelle Martin)

WARSAW (Reuters) – Huawei, the world’s biggest producer of telecommunications equipment, offers to launch a cyber security center in Poland, Tonny Bao, the head of Huawei Polish unit said on Wednesday.

“We are ready to establish a cyber security center in Poland if authorities accept this as a trusted solution,” Bao told a news conference.

Another Huawei official, also speaking at the conference, said that there is no reason for Poland’s government to exclude the Chinese firm from its future 5G network development.

In January Poland arrested a Chinese employee of Huawei and a former Polish security official on spying allegations.

MOSCOW, Feb 6 (Reuters) – Russia’s RDIF sovereign wealth fund may consider bidding for a stake of up to 30 percent in Eurasia Drilling Company, the fund’s head, Kirill Dmitriev, said on Wednesday.

“And this stake would be aimed at helping Eurasian Drilling develop in the Middle East… we are prepared to keep (our bid) at 16.1 percent and if the company is interested to increase our stake to 30 percent,” he said. (Reporting by Darya Korsunskaya and Olesya Astakhova; writing by Tom Balmforth; editing by Maria Kiselyova)

Feb 6 (Reuters) – Emerging-market currencies fell on Wednesday with the dollar climbing to its highest in nearly two weeks as investors largely ignored U.S. President Donald Trump’s State of the Union address.

Stocks were mostly flat. Concern over global growth continued to weigh on sentiment and most of Asia remained closed for Lunar New Year holidays.

“The address did not offer anything of real interest to financial markets,” Paul Donovan, chief economist at UBS Global Wealth Management, said in a note.

“There was no escalation of tensions – at least not meaningfully, which might be considered a win for investors, who prefer it when things do not escalate,” he said.

MSCI’s index for emerging-market currencies fell, led lower by South Africa’s rand and Turkey’s lira .

German industrial numbers showed a slump in December, adding to a slew of weak economic data this week.

“We could see EM currencies come under some pressure with global slowdown still weighing on sentiment,” said Jason Tuvey, senior EM economist at Capital Economics.

India’s rupee was subdued as investors awaited the outcome of a three-day central bank policy meeting that ends on Thursday, where officials are expected to leave rates unchanged. Stocks in Mumbai hovered around five-month highs, led by gains in IT stocks.

Russia’s rouble was higher, while stocks in Moscow slid from record highs, led by declines in financials.

Indonesia’s rupiah outperformed other emerging-market currencies, climbing to an eight-month high, after robust growth data.

In emerging Europe, the Hungarian forint slipped for a fifth consecutive session against the euro as investors priced out expectations the central bank would soon tighten market liquidity.

The Polish zloty barely moved before a central bank meeting where officials are expected to leave rates unchanged. Investors were tracking a controversy over the salary of one of Governor Adam Glapinski’s aides, which could force him to quit.

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Reporting by Agamoni Ghosh in Bengaluru; editing by Larry King)

Feb 6 (Reuters) – South Korean and Taiwanese companies led analysts’ earnings downgrades over the past month, Refinitiv data showed, as the two economies are expected to bear the brunt of slowing global demand for tech products and the Sino-U.S. trade war.

Analysts have cut South Korean companies’ 2019 earnings by 10 percent over the past month, while they slashed Taiwanese companies’ earnings by 5.5 percent, the data showed.

In January, Apple Inc took the rare step of cutting its quarterly sales forecast and analysts expect slowing iPhone sales to affect the tech giant’s major suppliers such as Taiwan Semiconductor Manufacturing Co and Foxconn, formally known as Hon Hai Precision Industry Co.

In the fourth quarter, Taiwan’s economy grew at its slowest pace in more than two years due to slowing exports. South Korea’s economy also expanded at its slowest pace in six years in 2018.

On the other hand, Indonesia and the Philippines topped the analysts’ earnings upgrades in Asia over the past month.

ZURICH, Feb 6 (Reuters) – Citi has named Elzbieta Czetwertynska as Citi Country Officer (CCO) for Switzerland, Monaco and Liechtenstein, tapping its Ecuador head for the post.

Pending regulatory approval, she will replace Kristine Braden, who became chief of staff for Chief Executive Mike Corbat, and report to Citibank Europe Plc Cluster Head Zdenek Turek.

Czetwertynska, who joined the group in 1994, generated double-digit revenue growth as CCO and corporate investment banking head for Ecuador, Citi said in a statement on Wednesday.

She previously worked in Poland and Colombia. (Reporting by Michael Shields, editing by Louise Heavens)

LONDON (Reuters) – The Australian dollar nosedived after its central bank opened the door to a possible rate cut in a remarkable shift from its long-standing tightening bias, a further indication of global economic slowdown.

The policy shift caught some investors off-guard as only just the previous day the RBA had steered clear of an easing signal when holding its official cash rate at a record low 1.50 percent for the 30th straight month.

The Australian dollar plunged 1.5 percent overnight and was set for its biggest daily drop in a year.

Elias Haddad, rates and FX strategist, at Commonwealth Bank of Australia said that while there was a risk the Aussie dollar could test $0.70, a more pronounced downward move was unlikely.

“As a bank we have pushed out our call for a 25 basis point rate hike by one year to November 2020 from November 2019,” he said.

Australia’s central bank is the latest to signal policy easing in the face of global economic headwinds.

Last week, the U.S. Federal Reserve all but abandoned plans for further rate hikes, citing slowing global growth as a risk to the world’s top economy. The European Central Bank has also sounded less certain that it will start tightening later this year.

Donald Trump’s combative State of the Union address added to the gloom on markets as the U.S. president unveiled no new infrastructure initiatives and instead raised the prospect of another shutdown should financing not be forthcoming for the wall on the U.S.-Mexico border he wants to build.

As such the dollar settled near a two-week high.

In the annual speech outlining his priorities for the coming year, Trump said illegal immigration was a national crisis and reiterated his vow to build the border wall.

Futures trading indicated a weaker open to the U.S. stock markets with the S&P down 0.16 percent, and Nasqad down 0.07 percent.

The MSCI world equity index, which tracks shares in 47 countries, was last down 0.07 percent at around 0900 GMT.

European stocks markets opened slightly in negative territory as a fresh new batch of earnings failed to lift spirits after Trump’s address touched on trade and budget issues but provided investors with few insights.

Banks were the biggest drag on the STOXX 600, with shares BNP Paribas down 1.6 percent after France’s largest-listed lender lowered its profit and revenue growth targets for 2020 after a tough fourth quarter.

Germany’s DAX opened 0.2 percent lower, France’s CAC 40 was down 0.4 percent and Spain’s IBEX fell 0.1 percent. The euro zone blue chip index fell 0.3 percent.

EUROPE DRAGS

Further weak data from Europe prompted demand for core euro zone bond yields as investors pushed back expectations that the European Central Bank will hold back from rate hikes.

German industrial orders fell unexpectedly on weak foreign demand in December, data showed on Wednesday, a further sign that companies in Europe’s largest economy are struggling with a slowing world economy and trade disputes.

Investors will also be looking to the European Commission’s winter macroeconomic forecasts, due to be published on Wednesday or Thursday. Large downward revisions to growth and inflation are likely, according to analysts at Societe Generale.

“The EC forecast will give a pretty good guideline of how much the ECB will revise their own economic forecasts,” said CBA’s Haddad.

German 10-year government bond yields, the benchmark for the region opened one basis point lower on Wednesday at 0.16 percent, well off the 0.21 percent highs hit on Tuesday.

Italian debt was in focus with the Treasury planning to sell a 30-year bond via a syndicate of banks. Italian 30-year government bond yields jumped to three-week highs at 3.678 percent as investors sold bonds to make way for the new issue.

Sterling meanwhile was a shade lower at $1.2930 after losing nearly 0.7 percent on Tuesday on weak Purchasing Managers Index data for Britain and uncertainty about Brexit talks.

U.K. Prime Minister Theresa May will travel to Brussels on Thursday to tell EU leaders they must accept legally binding changes to the Irish border arrangements of Britain’s divorce deal or face a disorderly no-deal Brexit.

AMSTERDAM (Reuters) – TomTom expects significant growth in its enterprise, or software, sales in 2019, the company said in an email on Wednesday, following publication of its fourth-quarter results.

The company had forecast 15 percent combined revenue growth for 2019 from sales of digital mapping services to carmakers and software customers.

Major software customers include Apple, which is building its own mapping system but still uses TomTom for coverage in most areas for Apple Maps, and Microsoft, which this week announced it was expanding its use of TomTom’s maps in its Bing and Cortana products.

“We expect enterprise to show significant year-on-year growth in 2019, in part due to the Microsoft deal announced this week,” the company said.

BRUSSELS (Reuters) – EU antitrust chief Margrethe Vestager will hold a news conference in Brussels concerning two merger cases at around 1045 GMT, the European Commission said on Wednesday, without providing further details.

Vestager is expected to announce the Commission’s veto of the planned merger of the rail businesses of Siemens and Alstom, and of a proposed copper deal between Aurubis and Wieland-Werke AG.

The deals are seen as hurting competition, sources told Reuters. Siemens and Alstom had wanted to combine their rail operations to compete more effectively with China’s state-owned CRRC Corp Ltd on the global stage.

Aurubis, Europe’s biggest copper smelter, was wanting to sell its flat rolled copper products business to Germany’s Wieland so it can expand into other metals besides copper.

LONDON (Reuters) – European shares were slightly lower on Wednesday as weak results from banks, including BNP Paribas, and carmaker Daimler brought an end to the market’s six-day rally.

Europe’s STOXX 600 fell 0.1 percent in early deals, with the index stalled near the more than two-month highs hit on Tuesday. Germany’s trade-sensitive DAX was down 0.4 percent and France’s CAC 40 fell 0.3 percent.

President U.S. Donald Trump’s combative State of the Union added to gloom on markets as he unveiled no new infrastructure initiatives and instead raised the prospect of another shutdown should financing for the Wall not be forthcoming.

Daimler fell to the bottom of the DAX, down 1.9 percent, after the German carmaker said fourth-quarter operating profit fell 22 percent, as trade wars and ballooning costs for developing electric and self-driving cars hit profits at Mercedes-Benz cars.

Auto makers and suppliers were down 0.6 percent.

Banks were the biggest drag on the STOXX 600, with shares BNP Paribas down 1.6 percent after France’s largest-listed lender lowered its profit and revenue growth targets for 2020 after a tough fourth quarter.

The news reinforced concerns about the euro-zone banking sector’s struggle with low interest rates and tough trading conditions.

Credit Suisse was down 0.6 percent after the Swiss bank said it expected a higher tax rate for 2018 than previously forecast.

In contrasting fortunes, London-listed CYBG jumped 10 percent to the top of the STOXX 600 after reporting a slight rise in lending in the first quarter of its 2019 fiscal year, facing down strong competition on Britain’s housing mortgage market.

Dassault Systemes shot to four-month highs after the French software company’s fourth quarter revenue topped guidance, while Finnish engineering firm Metso jumped more than 8 percent after its results.

CRH rallied on news that activist investor Cevian Capital has built a stake to become the second largest shareholder in the heavy materials and building products group.