Author Archives: Reuters News Agency

China develops machines to track data sent abroad by cars

SHANGHAI (Reuters) – China, the world’s biggest vehicle market where regulators are implementing new rules on data protection, is developing machines that will be able to track data sent abroad by cars, a government-backed agency said on Tuesday.

Cars are being fitted with an ever-increasing array of sensors and cameras to assist drivers. But the data such equipment generates can also be used by manufacturers to develop new technologies, such as autonomous driving systems, raising privacy and security concerns, particularly when the information is sent abroad.

U.S. electric carmaker Tesla Inc is under scrutiny in China over its storage and handling of customer data.

Beijing has been increasingly concerned over the mountains of data amassed by private firms and whether such information could be attacked or misused, especially by foreign states. It recently implemented a new data security law and is tightening up oversight in other related areas.

In May, Reuters reported that staff at some Chinese government offices were told not to park their Tesla cars inside government compounds due to security concerns over vehicle cameras, according to two people with knowledge of the matter.

China Automotive Engineering Research Institute Co Ltd (CAERI) said in a statement it has developed a system to analyse the path of data transmission by using a communication-detection device to monitor uploaded data and data gathered from vehicles in a testing environment.

CAERI said the system is the first of its kind in China and was praised by government bodies.

The institute also tested several vehicles, including Tesla’s Model 3 sedan as well as sport-utility vehicles made by Audi, Daimler Mercedes-Benz and Land Rover, the statement said. It did not disclose the results.

Global automakers, including Tesla, Ford Motor and BMW, told Reuters in May they were setting up local data centers to comply with China’s regulatory requirement.

(Reporting by Yilei Sun and Brenda Goh; Editing by Bernadette Baum)

Tamer US August CPI bolsters Fed’s transitory inflation case

NEW YORK (Reuters) – Underlying U.S. consumer prices increased at their slowest pace in six months in August, suggesting that inflation had probably peaked, though it could remain high for a while amid persistent supply constraints.

The Labor Department said on Tuesday its Consumer Price Index excluding the volatile food and energy components edged up 0.1% last month. That was the smallest gain since February and followed a 0.3% rise in July. The so-called core CPI increased 4.0% on a year-on-year basis after advancing 4.3% in July.

Overall CPI rose 0.3% after gaining 0.5% in July. In the 12 months through August, CPI increased 5.3% after soaring 5.4% year-on-year in July.

STORY:

MARKET REACTION:

STOCKS: S&P e-mini futures turned positive and were last up 0.31%, pointing to a firm open on Wall Street

BONDS: Yields on benchmark 10-year notes fell to 1.3293%. Two-year Treasury yields fell to 0.2110%

FOREX: The dollar index extended a slight loss and was off 0.31%.

COMMENTS:

ROBERT PAVLIK, SENIOR PORTFOLIO MANAGER, DAKOTA WEALTH, FAIRFIELD, CONNECTICUT

“Better than expected (data) and that’s fuelling the rise in the Dow futures. The CPI was only up three tenths of percent versus four tenths estimate and below the last month, that’s giving a little bit of encouragement for the overall market.”

“And so while market participants are cautious on inflation, at least this was a good sign and when you partnered up with a PPI, it’s moving in the right direction.”

“It doesn’t force the Fed’s hand, so there’s a possibility that the Fed could drag its feet and when they do announce tapering, it may be smaller than what the Street may be looking for that time.”

“Right now I’m not thinking that they do any tapering in September, but I’m not sure where their heads are all at. If it’s up to Powell, he’ll wait till November. But other Fed members seem to be on different pages. “

THOMAS HAYES, MANAGING MEMBER, GREAT HILL CAPITAL LLC, NEW YORK.

“We didn’t get a really high number on CPI. The fact that they came in just below expectations gives the Fed the chance to punt any taper implementation announcement from September to November.”

“The inflation numbers confirmed that the Fed can push it off a little bit more cause there were worries if inflation numbers came in really hot then the Fed’s hand might be forced to move sooner rather than later, in spite of recent employment numbers being weak.”

KATHY BOSTJANCIC, CHIEF US FINANCIAL ECONOMIST, OXFORD ECONOMICS, NEW YORK

“Overall, we’re getting further moderation in the monthly advance in consumer prices, especially at the core level. The core level was little bit softer than we thought, so that’s good news. But the year-on-year rate is only easing slightly. Ongoing supply chain bottlenecks amid strong demand are going to keep the pace of inflation elevated and sticky in the coming months.”

“If these inflation readings continue to moderate, then it will be transitory. It’s just that transitory could be longer than maybe previously expected.”

ART HOGAN, CHIEF MARKET STRATEGIST, NATIONAL SECURITIES, NEW YORK

“The CPI has been running less hot than PPI and that’s been true for the last five months. When you look at the month over month number, which is the most important number, there is sequential improvement, which is a very good sign. We’re clearly seeing inflation heading in the right direction. These numbers are still elevated for historic norms but the sequential trend is still improving and that’s a good sign.”

(Compliled by the global Finance & Markets Breaking News team)

UK would not have approved Valneva COVID vaccine, health secretary says

LONDON (Reuters) – Britain cancelled its contract for about 100 million doses of a COVID-19 vaccine being developed by France’s Valneva in part because it was clear it would not be approved for use in the country, UK Health Secretary Sajid Javid said on Tuesday.

“There are commercial reasons that we have cancelled the contract but what I can tell her is that it was also clear to us that the vaccine in question that the company was developing would not get approval by the MHRA here in the UK,” he said in response to a question from a Scottish lawmaker.

Shares in Valneva plunged 35% on Monday after it said the British government had ended a COVID-19 vaccine supply deal that could have been worth up to 1.4 billion euro ($1.65 billion).

Valneva’s COVID-19 vaccine candidate VLA 2001 relies on inactivated virus, similar to flu vaccines, and is seen by some as having the potential to win over people wary of some which use new mRNA technology.

The company said on Monday that the British government had alleged it was in breach of its obligations under the supply agreement. It said it strenuously denied the charge.

The vaccine is being produced in Livingston, Scotland, using an adjuvant made by U.S. company Dynavax. The facility has capacity to produce around 200 million doses in 2022.

Valneva has said the UK government had options that could have brought the order to 190 million doses by 2025.

Javid said the British and Scottish governments would be working together to see what they could do to secure the future of the facility.

(Reporting by Paul Sandle; Editing by Alistair Smout)

Oil hits 6-week high as Storm Nicholas hits U.S. Gulf

By Ahmad Ghaddar

LONDON (Reuters) -Oil prices hit a six-week high on Tuesday as Hurricane Nicholas weakened into a tropical storm, bringing the threat of widespread floods and power outages to Texas and Louisiana, and as the International Energy Agency forecast a big demand rebound for the rest of the year.

Brent crude was up 35 cents, or 0.5%, at $73.86 a barrel by 1222 GMT, after hitting a session high of $74.23. U.S. West Texas Intermediate (WTI) crude climbed 31 cents, or 0.4%, to $70.76 a barrel, having hit a high of $71.14.

Both contracts have risen for three consecutive sessions and were trading near their highest since early August.

Nicholas is the second major storm to threaten the U.S. Gulf region in recent weeks. Hurricane Ida killed more than two dozen people in August.

Evacuations were underway on Monday from offshore oil platforms in the area, as onshore oil refiners prepared for Nicholas.

“The substantial production outages in the Gulf of Mexico remain one of the factors driving prices,” Commerzbank said.

About 794,000 barrels per day (bpd), or more than 40% of the U.S. Gulf’s oil and gas output remained offline on Monday, two weeks after Ida slammed into the Louisiana coast, according to offshore regulator Bureau of Safety and Environmental Enforcement (BSEE).

After three months of decline in global oil demand, COVID-19 vaccine roll-outs are set to rekindle appetite for oil that was suppressed by pandemic restrictions especially in Asia, the International Energy Agency (IEA) said on Tuesday.

The IEA sees a 1.6 million bpd demand rebound in October, and continuing to grow until the end of the year.

Overall, the agency lowered its 2021 global oil demand growth forecast by 105,000 bpd to 5.2 million bpd, but raised its 2022 figure by 85,000 bpd to 3.2 million bpd.

These forecasts are well below those of the Organization of the Petroleum Exporting Countries which sees demand growing by about 5.96 million bpd this year and 4.15 million bpd next year.

Protesters blocked an oil tanker from loading at the Libyan terminal of Es Sider on Tuesday, the National Oil Corporation (NOC) media office and an engineer at the port said.

On Tuesday, details on China’s plans to sell crude from its strategic reserves weighed on prices.

China’s state reserves administration said it would auction around 7.38 million barrels of crude on Sept. 24, marking the first batch of sales in a rare release of strategic inventories.

(Additional reporting by Yuka Obayashi in Tokyo; editing by Muralikumar Anantharaman, Jason Neely and Louise Heavens)

U.S. core consumer prices slow sharply in August

WASHINGTON (Reuters) – Underlying U.S. consumer prices increased at their slowest pace in six months in August, suggesting that inflation had probably peaked, though it could remain high for a while amid persistent supply constraints.

The Labor Department said on Tuesday its Consumer Price Index excluding the volatile food and energy components edged up 0.1% last month. That was the smallest gain since February and followed a 0.3% rise in July. The so-called core CPI increased 4.0% on a year-on-year basis after advancing 4.3% in July.

The overall CPI rose 0.3% last month after gaining 0.5% in July. In the 12 months through August, the CPI increased 5.3% after soaring 5.4% year-on-year in July.

Economists polled by Reuters had forecast the core CPI gaining 0.3% and the overall CPI rising 0.4%.

Inflation heated up at the start of the year, driven by soaring prices for used cars and trucks, as well as services in industries worst affected by the COVID-19 pandemic.

There are signs that the used cars and trucks price surge has run its course. The hotel and motel accommodation prices are now above the pre-pandemic level, suggesting moderate gains ahead. The slowdown in monthly inflation rates aligns with Federal Reserve Chair Jerome Powell’s long-held belief that high inflation is transitory.

But bottlenecks in the supply chain remain and the labor market is tightening, pushing up wages.

A shortage of homes is driving record house price gains and rents are going up as vaccinations allow companies to recall workers back to offices, pulling Americans back to cities following a pandemic-fueled exodus to low-density areas. These factors could contribute to keeping annual inflation higher.

“If there is any relation between the real world and government data, we may start to see the enormous increase in home prices and rents filter into the CPI,” said David Donabedian, chief investment officer of CIBC Private Wealth US, in Baltimore.

The government reported last week that producer prices increased solidly in August, with the PPI posting its largest annual gain in nearly 11 years..

The CPI report comes as speculation is growing in financial markets on when the Fed will announce it will start scaling back its massive monthly bond-buying program. Powell has offered no signal on when the U.S. central bank plans to cut its asset purchases beyond saying it could be “this year.”

The Fed’s preferred inflation measure for its flexible 2% target, the core personal consumption expenditures price index, increased 3.6% in the 12 months through July after a similar gain in June. August’s data will published later this month.

“Recently broadening wage pressures across sectors could lead to more broad-based increases in services prices,” said Veronica Clark, an economist at Citigroup in New York.

“Strong increases in ‘transitory’ price components over the last few months will keep the annual pace of inflation elevated for some time, implying that it will be more important to assess the details of inflation data to gauge the persistence of inflationary pressures.”

(Reporting by Lucia Mutikani, Editing by Chizu Nomiyama)

Goldman Sachs appoints Coleman as new CFO, replacing Scherr

By Elizabeth Dilts Marshall

NEW YORK (Reuters) – Goldman Sachs Group Inc plans to replace its finance chief at year-end, with Denis Coleman taking over from current CFO Stephen Scherr, according to an internal memo dated Tuesday and seen by Reuters.

Coleman, 47, is co-head of the global financing group in Goldman’s investment banking division, a role his two predecessors had before becoming CFO. He becomes Scherr’s deputy CFO immediately.

Goldman’s global treasurer, Beth Hammock, will replace Coleman in that position.

The CFO role did not have much cachet on Wall Street until the 2008 financial crisis, when those executives were explaining the mortgage meltdown and investment losses to shareholders.

Since then, bank CFOs have become crucial emissaries to investors, regulators and employees, as well as the broader public. The position is viewed as a stepping stone to bigger things, including a CEO role.

Scherr, 57, has been Goldman’s finance chief since November 2018, around the time CEO David Solomon took his seat.

Scherr has helped Solomon imagine and execute a vision for the fifth-largest U.S. bank as Goldman tries to become more like rivals with large businesses outside of trading and investment banking.

That included acquiring deposits, unveiling a credit card with Apple Inc and launching new services for institutional customers.

In prior roles, Scherr oversaw Goldman’s identity shift from a Wall Street firm to a traditional bank that takes deposits and makes loans.

Solomon celebrated Scherr’s “work ethic, command of complexity and unfailing commitment to the firm” in his memo announcing the changes.

Scherr will remain CFO through year-end, which means analysts and investors can engage with him on Goldman’s quarterly results call in mid-October and have time to get accustomed to Coleman, who is relatively unknown.

Scherr joined Goldman in 1993 as an associate in its financial institutions group and was also key to Goldman’s Latin America business before running its consumer operations.

He formally retires at the end of January, after which he will become a senior director. One of his predecessors, David Viniar, remains on Goldman’s board of directors.

(Reporting by Elizabeth Dilts Marshall; editing by Lauren Tara LaCapra and Jason Neely)

UK likely to require health workers to be vaccinated against COVID

LONDON (Reuters) -Britain is highly likely to require front-line health and social care workers in England to be vaccinated against COVID-19 as part of its plan to contain the virus through the winter.

Setting out the thinking on how the government would respond to the health service coming under unsustainable pressure if there is a resurgence in the virus, Health Secretary Sajid Javid said on Tuesday he was considering toughening the rules.

“I believe that it is highly likely that front line NHS staff and those working in wider social care settings will also have to be vaccinated to protect those that are around them,” Javid told parliament.

“Data continues to show that the link between cases, hospitalisations, and deaths has weakened significantly since the start of the pandemic,” the government said in its plan, entitled “COVID-19 Response: Autumn and Winter Plan”.

Were England to go ahead with the plan it would follow France, Italy and other countries in ordering its healthcare workers to have the vaccine to protect patients. Britain said in June it would be mandatory for care home workers in England to have the vaccine.

Javid said the government had launched a consultation on protecting vulnerable patients by making COVID-19 and flu vaccinations a condition of deployment for frontline health and wider social care staff in England.

The announcement came as he set out to parliament a Plan B for dealing with the virus if the situation deteriorates. More than 80% of British adults have had both doses of the vaccine but with restrictions eased, new daily infection numbers are regularly running at more than 30,000.

Daily fatalities in the last seven days have averaged 141.

Plan B would include a mandatory vaccine certificate in some settings, legally mandating face coverings in certain settings and the government would consider asking people to work from home again for a limited period.

The plans said the government “would seek to give businesses at least one week’s notice” before a requirement for mandatory vaccine certificates came into force.

(Reporting by Guy Faulconbridge and Paul Sandle; editing by Michael Holden)

U.S. Senate Democrats to seek quick passage of revised election reform plan

By Richard Cowan

WASHINGTON (Reuters) – U.S. Senate Democrats on Tuesday unveiled a new version of an election reform bill that is a top priority of President Joe Biden, amid a wave of Republican state legislatures imposing restrictions on voting.

Senator Amy Klobuchar and seven fellow Democrats, including moderates such as Joe Manchin, introduced the bill that would set national standards for states to follow as they administer elections.

The Democratic senators said their bill, dubbed the “Freedom to Vote Act,” would ensure that all qualified voters can request mail-in ballots and have at least 15 days of early voting. The legislation also would allow people to register to vote as late as Election Day.

“Following the 2020 elections in which more Americans voted than ever before, we have seen unprecedented attacks on our democracy in states across the country,” the senators said in a statement.

But with Republicans accusing Democrats of a “power grab” that would rob states of their ability to fashion voting rules, the legislation faces a tough battle in the Senate, which is divided 50-50 between the two parties.

In June, all 50 Senate Republicans banded together to block a more ambitious bill, leaving Democrats 10 votes short of the minimum needed for it to advance. Under the Senate’s “filibuster” rule, at least 60 votes in the 100-member chamber are needed for most legislation to advance.

On Monday, Senate Majority Leader Chuck Schumer said a vote by the full Senate on the retooled bill could come as early as next week.

The bill also would reduce the ability of states to fashion congressional districts in a partisan way and would aim to lift a veil of secrecy over some campaign contributions.

Democrats accused Republican-controlled states of imposing new voting rules to suppress Election Day turnout, especially among Black, Hispanic and young voters, many of whom lean Democratic.

Those Republican efforts expanded significantly after November’s U.S. presidential election in which defeated ex-President Donald Trump falsely claimed he was the victim of widespread voter fraud – an allegation that was rejected multiple times by courts and by his own Justice Department.

In mid-term elections set for Nov. 8, 2022, voters will decide whether control of the U.S. Senate and House of Representatives should remain in Democratic hands or be turned over to Republicans.

Democrats hold the narrowest of majorities in Congress.

Last week, Texas joined the list of states enacting new election restrictions, which Biden called an “all-out assault” on American democracy.

The state’s new rules would make it harder for Texans to cast mail-in ballots and would add identification requirements for such voting.

Texas Governor Greg Abbott said the law would make it “harder for people to cheat at the ballot box.”

If Republicans again refuse to provide the support needed in the Senate for the bill to clear the 60-vote threshold, some Democrats are expected to urge Schumer to carve out an exception to the filibuster rule so that only a simple majority of the 100-seat Senate is required for passage.

(Reporting by Richard Cowan. Editing by Gerry Doyle)

Boeing raises jet demand forecast on pandemic recovery

By Eric M. Johnson and Tim Hepher

(Reuters) – Boeing revised up long-term demand forecasts on Tuesday, as a snapback in commercial air travel in domestic markets like the United States tempers the more gloomy industry predictions seen at the height of coronavirus lockdowns last year.

The rosier view underpins moves by the aerospace giant to prepare for growth in travel demand and military services, even as its own ability to respond to the brighter outlook remains hampered by industrial delays and the lingering 737 MAX crisis.

The U.S. planemaker, which dominates jet sales together with Europe’s Airbus, forecast 43,610 commercial jet deliveries over the next 20 years worth $7.2 trillion, an increase of 500 units from the 43,110 projected a year ago.

On a shorter 10-year view, which is more sensitive to the severe fallout on airlines from the COVID-19 pandemic, Boeing sees 19,330 deliveries, up from last year’s forecast of 18,350.

The 10-year projection is 6% shy of the forecast it published in 2019, but the drop from pre-crisis levels has narrowed from 11% a year ago.

“One of the strongest reasons for confidence is how quickly we have seen a bounce-back in domestic travel in the last 12 months,” Boeing Chief Strategy Officer Marc Allen told reporters.

Boeing sees domestic flying at pre-crisis levels in 2022 followed by regional traffic in 2023 and international in 2024.

Demand for airliners is seen as a bellwether for the wider economy. Boeing raised its assumption for average annual global economic growth to 2.7% from 2.5% from last year’s forecast.

Boeing and other planemakers are predicting that environmental pressure and COVID-19 will accelerate the retirement of jets, leaving room for new planes in the market.

But several analysts have raised concerns about the unpredictable spread of coronavirus variants and ongoing travel restrictions, even as vaccination rates steadily increase.

SHIFTING EMPHASIS

Boeing’s forecast for annual passenger traffic growth was unchanged at 4%, although the growth rate has edged lower since 2015 from the once-reliable 5% as a record aviation boom peaked.

Over the next decade, Boeing sees demand for $9 trillion of goods and services in the full array of markets it operates in, from freighters to fighters, up from $8.7 trillion a year ago.

Its defense and space forecast is flat at $2.6 trillion.

The shift of emphasis toward services comes as mounting budget pressures are expected to limit arms spending and further prolong the use of systems already in the U.S. arsenal. Boeing last year began delivering refurbished and modified F/A-18 jets.

Boeing slightly increased its 20-year forecast for deliveries of twin-aisle models like its 787 Dreamliner and the Airbus A350 to 7,670 jets, up from 7,480 previously.

The segment remains the hardest hit by the crisis as widespread border restrictions choke international air travel.

Boeing is currently grappling with a halt in 787 deliveries due to production problems, cutting off a key source of cash.

For medium-haul single-aisle jets like its 737 MAX – the industry’s No. 1 cash cow – Boeing sees 32,660 deliveries over the next 20 years, up from the previous 32,270.

Boeing’s 737 MAX returned to service late last year after a nearly two-year safety ban. It recently won approval in India, although a lingering ban in China raises uncertainty.

Boeing also cut its 20-year forecast for freighter demand to 890 jets from the 930 it projected a year ago.

Demand for freighters has soared during the pandemic as shippers sought alternatives to the belly space of passenger jets, left on the ground due to weak travel demand. Both Boeing and Airbus are proposing to develop new all-cargo planes.

(Reporting by Eric M. Johnson in Seattle and Tim Hepher in Paris; Editing by Edmund Blair)

Russia’s Vladimir Putin self-isolates after COVID-19 found in entourage

By Andrew Osborn and Maxim Rodionov

MOSCOW (Reuters) -Russian President Vladimir Putin is self-isolating as a precaution after several members of his entourage fell ill with COVID-19, but is “absolutely” healthy and does not have the disease himself, the Kremlin said on Tuesday.

Putin, 68, will therefore not travel to Tajikistan this week for planned regional security meetings expected to focus on Afghanistan, but will take part by video conference instead.

The Kremlin said Putin took the decision to self-isolate after completing a busy round of meetings on Monday, which included face-to-face Kremlin talks with Syrian President Bashar al-Assad.

Putin also met Russian Paralympians and travelled to western Russia on Monday to observe joint military drills with Belarus.

He was quoted by the RIA news agency as telling the Paralympians on Monday that he was worried about the COVID-19 situation in the Kremlin.

“Problems with this COVID are even surfacing in my entourage,” Putin was quoted as saying at the time. “I think I’ll be forced to quarantine myself soon. Many people around me are sick.”

Putin’s decision to self-isolate suggests a potential breach in the rigorous regime set up to keep Putin, who turns 69 next month, healthy and away from anyone with COVID-19.

Kremlin visitors have had to pass through special disinfection tunnels, Putin has had two shots of Russia’s flagship Sputnik V vaccine, journalists attending his events must undergo multiple PCR tests, and some people he meets are asked to quarantine beforehand and be tested.

Kremlin spokesman Dmitry Peskov said Putin had been in touch with several people in his entourage who had fallen ill with COVID-19.

“Of course we know who fell ill in the president’s entourage and the self-isolation does not directly affect the president’s work,” Peskov said.

“But it’s just that in-person meetings will not take place for a while. But that does not affect their frequency and the president will continue his activity via video conferences.”

Asked if Putin had tested negative for COVID-19, Peskov said: “Of course yes. The president is absolutely healthy.”

Alexander Gintsburg, director of the Gamaleya Institute which developed the Sputnik V vaccine, was quoted by the Interfax news agency as saying that, in his view, Putin would need to self-isolate for one week.

Gintsburg said any decision on the length of the isolation period was a matter for the Kremlin’s own medical specialists.

Other world leaders, including French President Emmanuel Macron and British Prime Minister Boris Johnson, have also been forced to self-isolate during the pandemic.

(Reporting by Maxim Rodionov, Andrew Osborn, Tom Balmforth, Darya Korsunskaya, Gleb Stolyarov and Vladimir Soldatkin Editing by Angus MacSwan)