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Internet

French police to investigate vandalism behind internet outage

PARIS, April 27 (Reuters) – The Paris prosecutor’s office said it has opened a probe into the causes of a major internet outage which affected France’s telecommunications network on Wednesday following reports of coordinated acts of vandalism.

The French Telecoms Federation said attacks of vandalism had impacted telecoms networks in several regions, including the Ile-de-France region around Paris, eastern France and the Auvergne-Rhone-Alpes and Bourgogne-France-Comte regions.

The investigation will be co-handled by France’s internal intelligence services and the national judicial police, the prosecutor’s office said, citing a potential threat to the fundamental interests of the nation.

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Earlier, Minister for Digital Affairs Cedric O said on Twitter that internet cables had been cut in the Ile-de-France region, which was affecting the landline and mobile network and that the ministry was working with operators to restore service.

A spokesperson for Altice’s French telecoms operator SFR said the group had been the target of acts of vandalism that affected the company’s broadband fiber optic network after 3 am local time (0100 GMT) on Wednesday.

The attacks concerned long-distance cables linking Paris with the cities of Strasbourg and Lyon, the spokesperson said.

These long distance cables link large hubs to the broadband network and the internet, potentially affecting direct customers as well as other operators that rent SFR’s network, such as Free, which also pointed to vandalism in a tweet.

SFR declined to provide further details on the location of the damaged underground cables. It also declined to say when full service would summarize or elaborate on the number of cities and customers potentially affected.

Another long distance fiber network connection, linking Paris to the city of Lille, was also damaged, an industry source said.

French rival Orange (ORAN.PA), which operates a substantial part of the fiber network in the country, said it was not affected by the attacks.

French media reported major internet outages in big cities like Paris, Lyon, Bordeaux, Reims and Grenoble, quoting officials saying that vandalism or sabotage was suspected.

Le Parisien newspaper reported that underground cables had been damaged in France’s Seine-et-Marne and Essone departments, adding that these cables were linking the hubs of Paris and Lyon.

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Reporting by Tassilo Hummel, Geert De Clercq and Mathieu Rosemain; editing by Tomasz Janowski, Elaine Hardcastle

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Markets

World stocks clamber off 18-month lows, but markets on recession watch

 

  • S&P futures up 1.13%, European stocks gain 0.96%
  • MSCI Asia ex-Japan +1.8%, Nikkei +2.64%
  • Worries over inflation, tightening policy remain
  • Dollar hovers near 20-year highs on safe-haven demand

LONDON/SHANGHAI, May 13 (Reuters) – World stocks rose from the previous day’s 18-month lows and the dollar pulled back from 20-year highs on Friday, though investors remained nervous about high inflation and the impact of rising interest rates.

Markets are becoming anxious about the possibility of recession, with the S&P getting close to a bear market on Thursday, at nearly 20% off its January all-time high.

In an interview late on Thursday, US Federal Reserve Chair Jerome Powell said the battle to control inflation would “include some pain.” Powell repeated his expectation of half-percentage-point interest rate rises at each of the Fed’s next two policy meetings, while pleading that “we’re prepared to do more.” read more

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The war in Ukraine has aggravated supply chain disruptions and inflationary pressures already in place after more than two years of the COVID-19 pandemic, but stocks enjoyed a bounce on Friday.

“There’s an awful lot of negative sentiment out there, we’re looking at a 40% chance of recession,” said Patrick Spencer, vice chairman of equities at Baird Investment Bank.

“A lot of fund managers have cut their equity allocations and raised cash, though we think this is a correction rather than a bear market.”

MSCI’s world equity index (.MIWD00000PUS) rose 0.32% after hitting its lowest since November 2020 on Thursday, though it was heading for a 4% fall on the week, its sixth straight week of losses.

S&P futures bounced 1.13% after the S&P index dropped 0.13% overnight, with the index also eyeing a sixth straight week of declines.

S&P 500 set for a sixth straight week of falls

European stocks (.STOXX) rallied 0.96% and Britain’s FTSE 100 (.FTSE) gained 1.17%.

The US dollar eased 0.22% to 104.54 against a basket of currencies, but remained close to 20-year highs due to safe haven demand.

Russia has bristled over Finland’s plan to apply for NATO membership, with Sweden potentially following suit.

Moscow called Finland’s announcement hostile and threatened retaliation, including unspecified “military-technical” measures. read more

The dollar rose 0.36% to 128.76 yen , while the euro gained 0.3% to $1.0408, recovering from Thursday’s five-year lows.

Cryptocurrency bitcoin also turned higher, cracking through $30,000 after the collapse of TerraUSD, a so-called stablecoin, drove it to a 16-month low of around $25,400 on Thursday. read more

“Some traders may see the sharp fall this month as an opportunity to buy the dip, but given the hugely volatile nature of the coins, the crypto house of cards could tumble further,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown .

The moves higher in equities were mirrored in US Treasuries, with the benchmark US 10-year yield edging up to 2.9221% from a close of 2.817% on Thursday.

The policy-sensitive 2-year yield was at 2.6006%, up from a close of 2.522%.

“Within the shape of the US Treasury curve we are not seeing any particularly fresh recession/slowdown signal, just the same consistent marked slowing earmarked for H2 2023,” Alan Ruskin, macro strategist at Deutsche Bank, said in a note.

German 10-year government bond yields edged up to 0.9250%.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was up almost 2% from Thursday’s 22-month closing low, trimming its losses for the week to less than 3%.

Australian shares (.AXJO) gained 1.93%, while Japan’s Nikkei stock index (.N225) jumped 2.64%.

In China, the blue-chip CSI300 index (.CSI300) was up 0.75% and Hong Kong’s Hang Seng (.HSI) rose 2.71%, encouraged by comments from Shangahi’s deputy mayor that the city may be able to start easing some tough COVID restrictions this month. read more

“We had some pretty big moves yesterday, and when you see those big moves it’s only natural to get some retracement, especially since it’s Friday heading into the weekend. There’s not really a new narrative that’s come through,” said Matt Simpson, senior market analyst at City Index.

Oil prices were higher against the backdrop of a pending European Union ban on Russian oil, but were still set for their first weekly loss in three weeks, hit by concerns about inflation and China’s lockdowns slowing global growth.

US crude rose 0.75% to $106.97 a barrel, and global benchmark Brent crude was up 1.05% at $108.58 per barrel.

Spot gold , which had been driven to a three-month low by the soaring dollar, was up 0.2% at $1,824.61 per ounce.

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Reporting by Andrew Galbraith; Editing by Simon Cameron-Moore, Lincoln Feast and Kim Coghill

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Internet

US joins 55 nations to set new global rules for the internet

WASHINGTON, April 28 (Reuters) – The United States and 55 other nations on Thursday signed a political commitment to push rules for the internet that are underpinned by democratic values, at a time when the US has accused Russia of wielding internet disruptions as a part of its escalating attacks on Ukraine.

The commitment, called the “Declaration for the Future of the Internet” – the first such effort of its kind – protects human rights, promotes free flow of information, protects the privacy of users, and sets rules for a growing global digital economy among steps to counter what two Biden administration officials called a “dangerous new model” of internet policy from countries such as Russia and China.

The United States is witnessing a global trend of rising digital authoritarianism, with countries such as Russia having acted to repress freedom of expression, censor independent news sites, interfere with elections, promote disinformation, and deny their citizens other human rights, the officials said.

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“Look at what…Russia is doing, some of the steps China is taking, and I think we see this as a response to these kind of ‘splinternet’ tendencies by a number of authoritarian countries around the world,” one of the officials said, referring to a characterization of the internet as splintering and dividing due to various factors, such as politics.

Since its invasion of Ukraine, Russia has launched cyberattacks, including hacking into a satellite internet provider’s network at the beginning of the invasion. The administration officials said the new effort is not an attempt to address cyber warfare.

The declaration is a modified version of the White House’s efforts from last year to rally a coalition of democracies around a vision for an open and free web.

The countries joining the US include Australia, Argentina, Belgium, Canada, Denmark, Georgia, Germany, Greece, Israel, Italy, Japan, Netherlands, the United Kingdom and Ukraine.

The effort will be launched virtually at the White House on Thursday by Biden’s national security adviser, Jake Sullivan, at 7:30 am ET (1130 GMT).

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Reporting by Nandita Bose in Washington; Editing by Leslie Adler

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Artificial intelligence

D-Wave sets up latest quantum computer in California

A D-Wave 2X quantum computer is pictured during a media tour of the Quantum Artificial Intelligence Laboratory (QuAIL) at NASA Ames Research Center in Mountain View, California, December 8, 2015. REUTERS/Stephen Lam

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May 12 (Reuters) – Vancouver-based quantum computing firm D-Wave Systems Inc said on Thursday it has deployed its latest quantum computer to the University of Southern California.

D-Wave’s most powerful machine, called the Advantage system, was launched in September, 2020 and has been operational in Canada and Germany, said Murray Thom, D-Wave’s vice president of product management.

US researchers and companies have been able to access the machine online, but the deployment will put a machine physically in the US and comes as Washington boosts its support for quantum technology, he said.

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“People are paying very close attention to where things are located and who’s working on what,” said Murray.

The Advantage system has over 5000 qubits, or quantum bits, which are an indication of the power of the quantum computer.

Quantum computers are expected one day to be able to operate millions of times faster than today’s advanced supercomputers.

D-Wave, founded in 1999, said in February that it will go public by merging with blank-check company DPCM Capital (XPOA.N) in a deal that values ​​the combined company at nearly $1.6 billion. read more

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Reporting By Jane Lanhee Lee, Oakland, Calif.; editing by Richard Pullin

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Business

Twitter CEO says two leaders to depart, hiring paused amid Musk takeover

May 12 (Reuters) – Two senior Twitter (TWTR.N) leaders who oversee the consumer and revenue divisions will depart the social media company, Chief Executive Officer Parag Agrawal told employees in a memo on Thursday, in one of the biggest shake-ups at the company since billionaire Elon Musk announced he would buy it for $44 billion.

Agrawal also said in the memo, which was seen by Reuters, that Twitter would pause most hiring and review all existing job offers to determine whether any “should be pulled back.”

He attributed the decision in part because Twitter was not able to hit user growth and revenue milestones to maintain confidence that it could reach aggressive growth targets it had set in 2020.

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“We need to continue to be intentional about our teams, hiring and costs,” Agrawal wrote.

The company was targeting $7.5 billion in annual revenue and 315 million daily users by the end of 2023, but withdrew those goals in its recent earnings report.

Kayvon Beykpour, who led Twitter’s consumer division, and Bruce Falck, who oversaw revenue, both tweeted on Thursday that the departures were not their decisions.

“Parag asked me to leave after letting me know that he wants to take the team in a different direction,” Beykpour tweeted, adding he was still on paternity leave from Twitter.

“I’ll clarify that I too was fired by (Parag),” Falck said, though he appeared to later delete the tweet.

Falck thanked his team in a tweet thread and updated his bio to say “unemployed.”

“We were able to achieve the results we did through your hard work – quarterly revenue does not lie. Google it,” he said.

Jay Sullivan, who was leading the consumer unit during Beykpour’s leave, will become permanent head of the division. He will also oversee the revenue team until a new leader is named, Agrawal said in the memo.

While no layoffs are planned, Agrawal said Twitter will reduce its spending on contractors, travel and marketing as well as its real estate footprint.

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Reporting by Sheila Dang in Dallas; additional reporting by Katie Paul Editing by Chizu Nomiyama, Will Dunham, Nick Zieminski and Bernard Orr

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Markets

Explainer: What are stablecoins, the asset rocking the cryptocurrency market?

Representations of cryptocurrencies including Bitcoin, Dash, Ethereum, Ripple and Litecoin are seen in this illustration picture taken June 2, 2021. REUTERS/Florence Lo/Illustration

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LONDON, May 12 (Reuters) – Most cryptocurrencies have a major problem with price volatility, but one sub-category of coins is designed to maintain a constant value: stablecoins.

As cryptocurrency prices plummeted this week, with bitcoin losing around a third of its value in just eight days, stablecoins were supposed to be isolated from the chaos.

But an unexpected collapse in the fourth-largest stablecoin TerraUSD, which broke from its 1:1 dollar peg, has brought the asset class under renewed attention. read more

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Here’s what you need to know:

WHAT ARE STABLECOINS?

Stablecoins are cryptocurrencies designed to be protected from the wild volatility that makes it difficult to use digital assets for payments or as a store of value.

They attempt to maintain a constant exchange rate with fiat currencies, for example through a 1:1 US dollar peg.

HOW IMPORTANT ARE THEY?

Stablecoins have a market cap of around $170 billion, making them a relatively small part of the overall cryptocurrency market, which is currently worth around $1.2 trillion, according to CoinMarketCap data.

But they have emerged in popularity in recent years. The largest stablecoin, Tether, has a market cap of around $80 billion, having emerged from just $4.1 billion at the start of 2020.

The No.2 stablecoin, USD Coin, has a market cap of $49 billion, according to CoinMarketCap data.

While data on the specific uses of stablecoins is hard to come by, they play a crucial role for cryptocurrency traders, allowing them to hedge against spikes in bitcoin’s price or to store idle cash without transferring it back into fiat currency. read more

In its biannual financial stability report on Tuesday, the US Federal Reserve warned stablecoins are increasingly used to facilitate leveraged trading in other cryptocurrencies.

From 2018 onwards, stablecoins have increasingly been used in international trade and as a way to avoid capital controls, says Joseph Edwards, head of financial strategy at crypto firm Solrise. The stablecoin Tether in particular is used for trade in and around China and South America, he said.

HOW DO THEY WORK?

There are two main types of stablecoin: those which are backed by reserves comprising assets, such as fiat currency, bonds, commercial paper, or even other crypto tokens, and those which are algorithmic, or “decentralized”.

Major stablecoins such as Tether, USD Coin and Binance USD are reserve-backed: they say that they hold enough dollar-denominated assets to maintain an exchange rate of 1:1.

The companies say that one of their stablecoins can always be exchanged for one dollar.

Asset-backed stablecoins have come under pressure in recent years to be transparent about what is in their reserves and whether they have sufficient dollars to back up all the digital coins in circulation. read more

Meanwhile TerraUSD is an algorithmic stablecoin. This means it does not have reservations. Instead, its value was supposed to be maintained by a complex mechanism involving swapping TerraUSD coins with a free-floating cryptocurrency called Luna to control supply.

WHAT CAN GO WRONG?

TerraUSD’s stability mechanism stopped working this week when investors lost faith in Luna, amid a broader downturn in cryptocurrency markets. TerraUSD’s price crashed to as low as 30 cents.

In theory, asset-backed stablecoins should hold firm despite this.

But Tether also broke away from its dollar peg for the first time since 2020 on Thursday, dropping to as low as 95 cents.

Tether sought to reassure investors, saying on its website that holders were still able to redeem their tokens at the 1:1 rate.

WHAT DO REGULATORS SAY?

While regulators globally are trying to establish rules for the cryptocurrency market, some have highlighted stablecoins as a particular risk to financial stability – for example, if too many people tried to cash out their stablecoins at once.

In its stability report, the Fed warned that stablecoins are vulnerable to investor runs because they are backed by assets that can lose value or become illiquid in times of market stress. A run on the stablecoin could therefore spill over into the traditional financial system by creating stress on these underlying assets, it said.

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Reporting by Elizabeth Howcroft; Editing by Michelle Price and Lisa Shumaker

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Markets

US labor market still tightening; producer price gains moderate

An “Apply Now” sign stands outside the new Faccia Brutta Bar Pallino looking to hire employees on Newbury Street in Boston, Massachusetts, US, April 27, 2022. REUTERS/Brian Snyder

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  • Weekly jobless claims increase from 1,000 to 203,000
  • Continuing claims drop 44,000 to 1.343 million
  • Producer prices rise 0.5% in April; up 11.0% year-on-year

WASHINGTON, May 12 (Reuters) – The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, touching the highest level in three months, but there is no material shift in labor market conditions amid strong demand for workers.

The report from the Labor Department on Thursday also showed that the number of people on state unemployment rolls was the smallest in more than 52 years at the end of April. Companies, scrambling to fill record job openings, are increasing wages, contributing to keeping inflation elevated.

“There is no change in the underlying message of a very tight labor market and employers unwilling to lay off existing workers in the face of extreme labor scarcity,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.

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Initial claims for state unemployment benefits increased 1,000 to a seasonally adjusted 203,000 for the week ended May 7, the highest level since mid-February. Data for the prior week was revised to show 2,000 more applications received than previously estimated. Economists polled by Reuters had forecast 195,000 applications for the latest week.

Claims have been largely treading water since hitting more than a 53-year low of 166,000 in March. Economists blamed the second straight weekly increase on residual volatility in the data around moving holidays like Easter, Passover and school spring breaks. Big rises in filings in California, Virginia and Illinois offset a decline of 9,811 in New York.

Jobless claims

There were a record 11.5 million job openings on the last day of March, and nonfarm payrolls rose by 428,000 in April, the 12th straight month of employment gains in excess of 400,000. Claims have dropped from an all-time high of 6,137 million in early April 2020.

The number of people receiving benefits after an initial week of aid dropped 44,000 to 1.343 million during the week ending April 30. That was the lowest level for the so-called continuing claims since January 1970.

Stocks on Wall Street were trading mixed while the dollar rose against a basket of currencies. US Treasury prices climbed.

LONG ROAD TO LOW INFLATION

The Federal Reserve last week raised its policy interest rate by half a percentage point, the biggest hike in 22 years, and said it would begin trimming its bond holdings next month.

The US central bank, which started raising rates in March, hopes to bring the demand and supply of labor back in alignment, and cool wages and inflation, while avoiding high unemployment as well as an abrupt economic slowdown or recession.

While inflation remains above the Fed’s 2% target, there are encouraging signs it has probably peaked, at least when measured on an annual basis. Last year’s high inflation readings are dropping out of the calculation of annual inflation rates.

In another report on Thursday, the Labor Department said the producer price index for final demand rose 0.5% in April as gains in energy products slowed. That marked a sharp deceleration from March, when the PPI surged 1.6%. April’s increase was in line with economists’ expectations.

Energy prices rose 1.7% after shooting up 6.4% in March. Food prices climbed 1.5%. As a result, goods prices advanced 1.3% after jumping 2.4% in March. The cost of services was unchanged after vaulting 1.2% in March. But energy prices have since accelerated while demand is reverting back to services from goods, which suggests the monthly PPI will pick up in May.

In the 12 months through April, the PPI increased 11.0% after accelerating 11.5% in March.

“While inflation is still looking strong, there are some signs that we may have moved past peak rates,” said Daniel Silver, an economist at JPMorgan in New York.

The slowdown in monthly producer price gains follows a similar trend in consumer prices last month. Data on Wednesday showed that consumer prices logged their smallest rise in eight months in April. The annual increase in consumer prices also slowed down for the first time since last August. read more

Producer prices excluding food, energy and trade services climbed 0.6% in April after rising 0.9% in March. In the 12 months through April, the so-called core PPI rose 6.9% after accelerating 7.1% in March. The rise in underlying producer prices followed a similar trend with the core CPI.

inflation

But components which go into the core personal consumption expenditures (PCE) price index, one of the key inflation measures closely watched by Fed officials, were weak last month. Portfolio management fees dropped for a third straight month because of the stock market sell-off.

The cost of hospital inpatient care and doctor services fell, due to a reduction in Medicare payments to providers starting in April.

Used motor vehicle prices were flat. While airline fares rose, they did not match the record increase in the CPI report.

Based on the CPI and PPI data, economists are estimating that the core price index rose by about 0.2% in April after advancing by 0.3% for two straight months. That would slow the year-on-year increase to 4.7% from 5.2% in March.

“Still, modestly softer PCE inflation is unlikely to alter the near-term path of Fed policy, and we continue to expect 50-basis-point rate hikes at each of the next three meetings,” said Veronica Clark, an economist at Citigroup in New York.

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Reporting by Lucia Mutikani; Editing by Andrea Ricci, Chizu Nomiyama and Paul Simao

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Business

Siemens to leave Russia due to Ukraine war, take hefty charge

  • Siemens to leave Russia after 170 years
  • Russia makes up around 1% of total revenues
  • Shares fall after earnings miss
  • CEO condemns the war in Ukraine

ZURICH, May 12 (Reuters) – Siemens (SIEGn.DE) will quit the Russian market due to the war in Ukraine, it said on Thursday, taking a 600 million euro ($630 million) hit to its business during the second quarter, with more costs to eat.

The German industrial and technology group became the latest multinational to announce losses linked to its decision to leave Russia following the Feb. 24 invasion, which Moscow calls a “special military operation”.

Several companies, from brewers Anheuser-Busch InBev (ABI.BR) and Carlsberg to sportswear maker Adidas (ADSGn.DE), carmaker Renault and several banks have been counting the cost of suspending operations in or withdrawing from Russia. read more

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Siemens Chief Executive Roland Busch described the conflict as a “turning point in history.”

“We, as a company, have clearly and strongly condemned this war,” Busch told reporters.

“We’re all moved by the war as human beings. And financial figures must take a back seat in the face of the tragedy. Nevertheless, like many other companies, we’re feeling the impact on our business.”

During the second quarter Siemens incurred 600 million euros in impairment and other charges mostly recorded in its train-making mobility business subsequent to sanctions on Russia, Siemens said.

Busch said further impacts were to be expected, mainly from non-cash charges related to the winding-down of legal entities, revaluation of financial assets and restructuring costs.

“From today’s perspective, we foresee further potential risks for net income in the low- to mid-triple-digit million range, although we can’t define an exact timeframe,” he added.

Siemens shares dropped 5% in early trading as the company missed analysts’ expectations for second-quarter profit.

The Munich company employs 3,000 people in Russia, where it has been active for 170 years. It first went to Russia in 1851 to deliver devices for the telegraph line between Moscow and St Petersburg.

The country now contributes about 1% of Siemens’ annual revenue, with most of the present day business concerned with maintenance and service work on high-speed trains.

Its sites in Moscow and St Petersburg are now being ramped down, Busch said.

The costs weighed on Siemens’ second quarter earnings, with net income halved to 1.21 billion euros ($1.27 billion), missing analysts’ forecasts of 1.73 billion.

The company posted industrial profit of 1.78 billion euros, down 13% from a year earlier and also missing forecasts.

But demand stayed robust, with orders 22% higher on a comparable basis and revenue 7% higher.

As a result it confirmed its full-year outlook, with comparable revenue growth of 6% to 8% for the full year, with a downturn in mobility expected to be compensated by faster growth in factory automation and digital buildings.

JP Morgan analyst Andreas Willi described the results as “mixed with strong orders, industry leading growth in automation and strong cash conversion.”

($1=0.9508 euros)

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Reporting by John Revill; Editing by Kim Coghill and Clarence Fernandez

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Business

Stocks in a tailspin, dollar soars as hard landing fears grow

A broker reacts while trading at his computer terminal at a stock brokerage firm in Mumbai, India, February 1, 2020. REUTERS/Francis Mascarenhas

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  • World stocks drop to 1-1/2 yr low, down almost 20% YTD
  • Europe opens down 2% US equity futures struggle
  • Dollar hits 2yr highs on AUD, NZD
  • Bitcoin tumbling, hits new 16-month low
  • Copper buckles to lowest since October

LONDON, May 12 (Reuters) – Shares sank to a 1-1/2 year low on Thursday and the dollar hit its highest in two decades, as fears grew that fast-rising inflation will drive a sharp rise in interest rates that brings the global economy to a standstill.

Those nerves and the still-escalating war in Ukraine took Europe’s main markets down more than 2% in early trade and left MSCI’s top index of world shares (.MIWD00000PUS) at its lowest since late 2020 and down nearly 20% for the year.

The global growth-sensitive Australian and New Zealand dollars fell about 0.8% to almost two-year lows. The Chinese yuan slid to a 19-month trough while the dollar powered to its highest level since late 2002.

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Nearly all the main volatility gauges were signaling danger. Bitcoin was caught in the fire-sale of risky crypto assets as it fell another 8% to $26,570, having been near $40,000 just a week ago and almost $70,000 just last November.

“We have had big moves,” UBS’s UK Chief Investment Officer Caroline Simmons, said referring as well to bond markets and economic expectations. “And when the market falls it does tend to fall quite fast.”

Data on Wednesday had shown US inflation running persistently hot. Headline consumer prices rose 8.3% in April year-on-year, fractionally slower than the 8.5% pace of March, but still above economists’ forecasts for 8.1%. read more

US markets had whipsawed after the news, closing sharply lower, and futures prices were pointing to another round of 0.2%-0.7% falls for the S&P 500, Nasdaq and Dow Jones Industrial later.

“We’re now very much embedded with at least two further (US) hikes of 50 basis points on the agenda,” said Damian Rooney, director of institutional sales at Argonaut in Perth.

“I think we were probably delusional six months ago with the rise of US equities on hopes and prayers and the madness of the meme stocks,” he added.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell 2.3% to a 22-month low overnight. Japan’s Nikkei (.N225) fell 1.8%.

Treasuries were bid in both Europe and Asia, especially at the long end, flattening the yield curve as investors braced for near-term hikes to hurt long-run growth – an outcome that would most likely slow or even reverse rate hikes.

The benchmark 10-year Treasury yield had dropped in the US and fell a further 7 bps to 2.8569% on Thursday. The gap between the highly rate-rise sensitive two-year yields and 10-year ones narrowed 4.2 bps .

In Europe, Germany’s 10-year yield, the benchmark for the bloc, fell as much as 12 bps to 0.875%, its lowest in nearly two weeks.

“I think a lot of it is catch up from what happened yesterday, and also there’s still a lot of negative sentiment in the US Treasury curve,” said Lyn Graham-Taylor, senior rates strategist at Rabobank.

SELL IN MAY

The rates outlook is driving up the US dollar and taking the heaviest toll on riskier assets that shot up through two years of stimulus and low-rate lending.

The Nasdaq (.IXIC) is down nearly 8% in May so far and more than 25% this year. Hong Kong’s Hang Seng Tech index (.HSTECH) slid 1.5% on Thursday and is off more than 30% this year.

Cryptocurrency markets are also melting down, with the collapse of the so-called TerraUSD stablecoin highlighting the turmoil as well as the selling in bitcoin and next-biggest-crypto, ether. read more

A weakening growth picture outside the United States is battering investor confidence, too, as war in Ukraine threatens an energy crisis in Europe and lengthening COVID-19 lockdowns in China throw another spanner into supply chain chaos.

Nomura estimated this week that 41 Chinese cities are in full or partial lockdowns, making up 30% of the country’s GDP.

Heavyweight property developer Sunac (1918.HK) said it missed a bond interest payment and will miss more as China’s real estate sector remains in the grip of a credit crunch. read more

The yuan fell to a 19-month low of 6.7631 and has dropped almost 6% in under a month.

The Australian dollar fell 0.8% to a near two-year low of $0.6879. The kiwi slid by a similar margin to $0.6240, though the euro and yen held steady to keep the dollar index just shy of a two-decade peak.

Sterling was at a two-year low of just under $1.22 as well as economic data there caused worries and concerns grew that Britain’s Brexit deal with the EU was in danger of unraveling again due to the same old problem of Northern Ireland’s border. read more

In commodity trade, oil wound back a bit of Wednesday’s surge on growth worries.

Brent crude futures fell 2.3% to $104.93 a barrel, while highly growth-sensitive metals copper and tin slumped over 3.5% and 9% respectively. That marked copper’s lowest level since October.

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Additional reporting by Tom Westbrook in Singapore; Editing by Kim Coghill

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Markets

Toyota to make EV parts in India for domestic, export markets

The Toyota logo is seen on the bonnet of a newly launched Camry Hybrid electric vehicle at a hotel in New Delhi, India, January 18, 2019. REUTERS/Anushree Fadnavis

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  • Move is part of Toyota’s 2050 carbon-neutrality goals

NEW DELHI, May 11 (Reuters) – Toyota Motor Corp (7203.T) plans to make India a manufacturing hub for electric vehicle parts to meet demand there as well as for export to Japan and some ASEAN countries, a senior company executive told Reuters .

The carmaker plans to start by producing e-drives or electric powertrain parts used by different electric vehicle types, including battery EVs, plug-in hybrids and other hybrid models, Vikram Gulati, executive vice president at Toyota Kirloskar Motor said.

“The aspiration is to make India the manufacturing hub for cleaner technologies. This is about creating the building blocks,” Gulati told Reuters.

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He did not name the countries in ASEAN, or the Association of Southeast Asian Nations, that Toyota would export to.

The move follows the company’s recent announcement that it will invest 48 billion rupees ($621 million) in India to localize the supply chain for EVs, and is also part of its broader 2050 carbon-neutrality goals.

It also comes as Prime Minister Narendra Modi’s government is offering companies billions of dollars in incentives to build EVs and their parts locally.

The bulk of the investment in India will be made by Toyota’s local unit, Toyota Kirloskar Motor and Toyota Kirloskar Auto Parts (TKAP), a joint venture of Toyota Motor Corp, Aisin Seiki Co (7259.T) and Kirloskar Systems, the company said on Saturday.

The world’s biggest carmaker said in December it plans to invest $70 billion to electrify its automobiles by 2030, including developing battery EVs as it plays catch-up with global automakers investing billions of dollars in the shift to cleaner vehicles. read more

In India, however, Toyota is more focused on launching its hybrid models first, which it believes are better suited to the country’s aim of reducing dependence on fossil fuels and carbon emissions.

Gulati said this would also address varying consumer needs and enable “a faster transition towards an electrified future”.

Building out the supply chain early will help Toyota become competitive in terms of volume and price in India, Gulati said.

Toyota expects this to enable a “faster and smoother” shift for the Indian auto industry to electric-vehicle technology, I added.

($1 = 77.2475 Indian rupees)

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Reporting by Aditi Shah; Editing by Bernadette Baum

Our Standards: The Thomson Reuters Trust Principles.

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