China’s Economic Wobbles Cast Long Shadow for Asia

China’s gross domestic product faltered in the third quarter, data showed this week, with growth hitting its weakest in a year, hurt by power shortages, supply chain snags and a property market crisis.

For China’s trading partners, the slippage presents new risks to what is shaping up to be a bumpy global recovery from the pandemic slump.

“Yes, growth elsewhere, namely the U.S. and Europe, appears robust,” wrote Frederic Neumann, co-head of Asian economics research at HSBC. “But it is China that’s been the main engine for growth across the region – and as it sputters, Asian economies will lose much of their torque.”

HSBC analysis showed Asia-Pacific economies from South Korea to New Zealand far more correlated to changes in China’s growth than they were to changes in U.S. or European GDP.

For every percentage point China added to its growth, trade powerhouse South Korea reported about 0.7 of point of additional growth, the bank’s economists said.

South Korea was by far the most sensitive to changes in Chinese growth, according the analysis, followed by exporting nations Thailand and Taiwan.

An anticipated Chinese slowdown has already prompted Citi analysts to downgrade growth projections for economies in the region, including South Korea, Taiwan, Malaysia, Singapore and Vietnam.

A Reuters Corporate Survey last week showed a majority of Japanese firms were concerned that a slowdown in China, Japan’s largest trading partner, would affect their business.

The slowdown is being felt across most of China’s economy, from the retail to factory sectors, which posted its weakest output growth since the start of the pandemic.

China’s auto sales slumped 19.6% in September from a year earlier, industry data showed last week, falling for a fifth consecutive month amid a prolonged global shortage of semiconductors and the power crunch.

Similarly, sharp declines in new construction starts in China’s property market, due to a regulatory crackdown, loom as risks for exporters of raw materials, such as Australia.

Iron ore prices have nearly halved since hitting a record in mid-May, with demand hurt by China’s steel output curbs and the property slowdown.

Last week, mining giant Rio Tinto downgraded its 2021 iron ore shipments forecast, mostly due to tight labour market conditions in Australia, but it also warned of headwinds from China’s regulatory crackdown.

‘STAGFLATION’

Despite the risks from China, analysts say Asia will be able to prevent a precipitous collapse in domestic demand, as improved vaccination rates allow countries in the region to shake off COVID-19 restrictions.

Similarly, Chinese demand for some goods, such as fuel and food, remains firm. That means for now, central banks are unlikely to swerve from their general shift away from crisis era monetary settings.

Singapore last week tightened its monetary policy.

Beyond the broader demand shock, complications for economies in Asia and elsewhere could come from worsening supply-side problems in China, such as the power crunch.

So far, China’s manufacturers and exporters have yet to significantly pass on higher costs caused by supply shortages of everything from coal to semiconductors.

But analysts warn the situation around inflation is fluid.

While weaker demand could relieve pressure on prices, supply chain bottlenecks, if unresolved, could create a “stagflation” nightmare in which surging prices are accompanied by stagnant growth.

“I think it could potentially be a bit of a double whammy now. Because China is one of the economic engines for the region, any slowdown can affect the demand for regional goods and services,” said Selena Ling, head of treasury research and strategy at OCBC Bank.

“Secondly, the ongoing power crunch, in all likelihood, policymakers will prioritise home (use) for winter demand over industrial activity. So that could exacerbate global supply chain disruptions.”

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Tetsushi Kajimoto, Kantaro Komiya and Leika Kihara in Tokyo; Orathai Sriring in Bangkok; and Tom Westbrook in Singapore; Writing by Sam Holmes; Editing by Raju Gopalakrishnan)

China Evergrande Makes Onshore Coupon Payment – Sources

Hengda Real Estate Group Co, Evergrande’s flagship unit, has remitted funds to pay an onshore bond coupon of 121.8 million yuan ($19 million), the people said.

One of the people said Evergrande, China’s No. 2 developer, needs to prioritises its limited funds towards domestic market where the stakes are much higher for the country’s financial system.

The liquidity crisis at Evergrande, which has $300 billion in debt and has missed a series in bond payments, has roiled global markets. High-yield bonds issued by Chinese property developers have been especially hammered.

An Evergrande bond due March 23, 2022 will officially be in default if the company does not make good after a 30-day grace period for a missed coupon payment that had been due on Sept. 23.

But the offshore bond market has responded positively after China central bank’s assuring comment and coupon payments of two major developers.

An index of China high-yield debt, which is dominated by property developer issuers, has seen spreads tighten from last week’s record levels to around 1,484 points on Tuesday.

Sunac China, which has a $27.14 million payment due Tuesday, has paid its bondholders, a source with direct knowledge of the matter said.

The source was not authorised to speak to media and declined to be identified. A Sunac representative declined to comment.

Kaisa Group said on Monday it has paid a coupon due Oct. 16 and it plans to transfer funds for a coupon worth $35.85 million due Oct. 22 on Thursday.

In the past few days, the People’s Bank of China has said spillover effects on the banking system from Evergrande’s debt problems were controllable and that China’s economy was “doing well”.

Bonds from Chinese developers that gained on Tuesday included Modern Land’s 2022 bonds which bounced over 8% to 40.250 cents on the dollar, while Central China Real Estate’s 2024 bonds climbed over 5% to 44.843 cents.

On Monday, smaller developer Sinic Holdings defaulted on $246 million in bonds as expected. It had warned of the default last week, saying it did not have sufficient financial resources.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Clare Jim in Hong Kong, Samuel Shen in Shanghai, Shanghai newsroom and Beijing newsroom; Editing by Edwina Gibbs and Lincoln Feast)

Bitcoin Nears Record High Ahead of Futures ETF Listing

Bitcoin, the world’s biggest cryptocurrency by market value, rose as far as 1.5% during the Asia session to $62,991, its strongest level since the record peak of $64,895 in April.

It is up some 40% in October on hopes that the advent of bitcoin exchange traded funds (ETF), of which several are in the works, will allow billions of dollars managed by pension funds and other institutional investors to flow into the sector.

ProShares’ Bitcoin Strategy ETF is expected to list on Tuesday under the ticker BITO, provided the U.S. regulator, the Securities and Exchange Commission, does not object.

Analysts cautioned that the fund will not invest directly in bitcoin – rather in Chicago-traded futures – and so may not have any immediate implications for flows. But speculators have been wagering its launch is a positive signal for spot prices anyway.

Bitcoin futures rose on Tuesday, last trading at $62,690, and spot prices could rise if cash keeps flowing in, said cryptocurrency analysts at Arcane Research.

“This could lead to more constant buying pressure on CME, causing the open interest to rise. This will attract more cash and carry opportunities, leading to buying pressure in the spot market,” they said in a note.

Crypto ETFs have launched this year in Canada and Europe amid surging interest in digital assets. VanEck and Valkyrie are among fund managers pursuing U.S.-listed ETF products, although Invesco on Monday dropped its plans for a futures-based ETF.

The Nasdaq on Friday approved the listing of the Valkyrie Bitcoin Strategy ETF and Grayscale, the world’s largest digital currency manager, is planning to convert its Grayscale Bitcoin Trust into a spot bitcoin ETF, CNBC has reported.

ProShares ETF is set to begin trade on Tuesday after a 75-day period during which the SEC could object to its listing elapsed on Monday.

Ether the second-largest cryptocurrency, has tracked bitcoin’s rise and also traded firmly on Tuesday. It was last up 1.2% at $3,790.

For a look at all of today’s economic events, check out our economic calendar

(Reporting by Tom Westbrook; Editing by Kim Coghill)

Marketmind: Fast and Furious

A look at the day ahead from Sujata Rao

Besides Britain, some are placing bets on a September 2022 Fed rate hike; a month ago, no move was predicted before 2023. Earlier on Tuesday, Australia’s central bank was at pains — again — to stress it did not plan interest rate rises before 2024, yet that hasn’t budge money markets from pricing a late-2022 move.

So, is it justified? Growth is clearly wobbling, especially in China where Q3 GDP slowed to 4.9% while Monday data showed U.S. industrial production shrank 1.3% month-on-month in September.

Inflation is less transitory than anticipated, yet raising rates probably won’t fix the supply-side glitches that are driving up prices and curbing output.

Perhaps that’s why bonds have not built on the recent moves, with yields lower today and the dollar slipping to three-week lows. That’s cheered markets, especially on top of robust earnings so far in the Q3 season and equity futures are implying firmer New York and European sessions, following gains across Asia.

Another piece of good news — Chinese developers Sunac and Kaisa made coupon payments, while Evergrande may also meet an onshore bond coupon due on Tuesday.

What’s ahead today? A raft of Fed and ECB policymakers, another airing for Bank of England governor Andrew Bailey and of course a slew of earnings, including from a FAANG — Netflix.

Key developments that should provide more direction to markets on Tuesday:

-Morrisons investors set to rubber stamp $10 bln CD&R takeover

-UK global investment summit, looking at green finance, technology, life sciences

– Bitcoin a whisker off April 2021 record high

– ECB speakers: Chief economist Philip Lane, board members Fabio Panetta and Frank Elderson

-Fed speakers: San Francisco Fed President Mary Daly; Atlanta Fed President Raphael Bostic; Philadelphia Fed President Patrick Harker

-Bank of England Governor Andrew Bailey

-Emerging markets: Indonesia seen holding rates, Hungary to hike 15 bps

-European earnings: Unilever, Deutsche Boerse

-U.S. earnings: BNY Mellon, Halliburton, Proctor & Gamble, Johnson& Johnson, Netflix

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sujata Rao; editing by Saikat Chatterjee)

S&P, Nasdaq Enjoy Boost From Big Tech Firms, Dow Ends a Hair Lower

After a weak start following disappointing economic data from China, the S&P and Nasdaq gathered steam in late morning with gains in FAANG stocks – Facebook Inc, Apple, Amazon.com Inc, Netflix Inc, Alphabet Inc’s Google – as well as Microsoft Corp.

Apple shares closed 1% higher after the company made a splash by unveiling new Mac laptop computers with more powerful processor chips.

Facebook shares, under pressure recently, closed up more than 3% with some positive reports out including its plans to create 10,000 jobs in Europe to help build the so-called metaverse – an online world.

With just a small minority of companies having reported quarterly results so far, investors were hopeful for some good news in the days and weeks ahead.

“You’re going to get a heavier slate of earnings reports this week from a diverse set of industries,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles, adding, “the path of least resistance remains higher going into earnings season for large-cap tech.”

The Dow Jones Industrial Average fell 36.15 points, or 0.1%, to 35,258.61, the S&P 500 gained 15.09 points, or 0.34%, to 4,486.46 and the Nasdaq Composite added 124.47 points, or 0.84%, to 15,021.81.

Forecast-beating results from big U.S. lenders last week had set a positive tone for third-quarter earnings season, with analysts expecting S&P 500 earnings to show a 32% rise from a year ago, according to Refinitiv data.

The solid start likely helped investors shrug off uneasiness from earlier in the day after China recorded its slowest pace of economic growth in a year for the third quarter, hurt by power shortages and wobbles in the property sector. [MKTS/GLOB]

Other top contributors to the S&P’s gains were Tesla Inc ahead of its earnings report this week, Amazon, which added 1% and chipmaker Nvidia Corp, which closed up 1.6%.

While technology, closing up 0.9%, was the S&P’s top index point boost, consumer discretionary was the biggest percentage gainer, climbing 1.2% and communications services followed with a 0.7% gain.

Johnson & Johnson, Netflix, Verizon Communications Inc and oilfield services company Baker Hughes Co are also due to report quarterly results this week.

But while mega tech gainers were strong enough to boost the S&P and the Nasdaq, optimism was not widespread with four industry sectors closing in the red.

Of the S&P’s 11 major sectors, seven closed higher. The biggest decliners were utilities, down 0.97%, and healthcare, down 0.7%.

Shares of Walt Disney Co closed down 3% after Barclays downgraded the media giant’s stock to “equal weight” from “overweight.”

Declining issues outnumbered advancing ones on the NYSE by a 1.09-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored decliners.

The S&P 500 posted 39 new 52-week highs and no new lows; the Nasdaq Composite recorded 65 new highs and 113 new lows.

Volume on U.S. exchanges was 9.1 billion shares, compared with the 10.3 billion average for the last 20 trading days.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sinead Carew in New York and by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur and Matthew Lewis)

Apple Doubles Down on Chip Strategy With New Premium-Priced MacBooks

The new 14-inch and 16-inch models start at $1,999 and range up to $6,099 in their most expensive variations. Using two new chips called the M1 Pro and M1 Max, Apple claims they will far outperform rival machines based on Intel and Advanced Micro Devices, especially when the new laptops are used with only battery power.

With the moves announced in an online event on Monday, Apple is courting a group of users that include professional photographers, film makers and audio producers looking for a powerful tool – a prestige segment that rivals such as Microsoft Corp have in recent years tried to peel away from with its lineup of Surface hardware.

But it is also laying out a path for what Apple’s computers will look like when it completes its two-year transition away from Intel chips next year. The chips have helped propel Mac sales, which were up 32% to $26 billion in the first nine months of Apple’s fiscal 2021.

Apple’s first laptop chip – last year’s M1, used in the company’s consumer-oriented MacBook Air and less-expensive Pro models – had some advantages over Intel’s chips. But those have become more stark with the professional-grade chips, whose features will likely filter into lower-end models over the coming years, said Ben Bajarin, head of consumer technologies at Creative Strategies.

“This is the first bedrock that has been laid architecturally, and in many ways it’s unprecedented to see this level of performance at this level of power efficiency,” he said.

Johny Srouji, Apple’s chip chief, said the M1 Max chip uses up to 100 watts less power than other high-end laptop chips, which translates to better battery life.

“It’s the most powerful chip we’ve ever built,” Srouji said of the M1 Max.

Apple said the 14-inch model will start at $1,999 and the 16-inch model will start at $2,499. Both computers will start shipping next week, Apple said.

Apple also announced several new music-related products at its Monday event. The company announced a $5-a-month version of its streaming music service that will allow access to its full music catalog on Apple devices by using its Siri voice assistant. Apple’s full service remains $10 a month, and shares of streaming music rival Spotify Technology SA were up 0.4% on the news, suggesting Spotify’s investors do not view the new service as a major threat.

Apple also introduced a third generation of its AirPods wireless ear buds. Apple’s new AirPods are sweat- and water-resistant for use with workouts and will have some sound features previously found in the higher-end AirPods Pro, Apple said during the launch event. Apple said the new AirPods will cost $179 and start shipping next week.

Add-on devices like AirPods tend to be large sellers during holiday shopping seasons and have become one of Apple’s fastest-growing categories, with its home and accessories segment growing 25% to $30.6 billion in Apple’s fiscal 2020.

Apple shares were up about 0.8% on Monday afternoon.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Stephen Nellis in San Francisco and Subrat Patnaik in Bengaluru; Additonal reporting by Nishara Karuvalli Pathikkal, Karina Dsouza, Ahmed Farhatha and Shivansh TiwaryWriting by Bernard Orr;Editing by Peter Henderson and Matthew Lewis)

Dollar Edges Lower After Weak U.S. Factory Production Data

U.S. manufacturing output was hurt  as an ongoing global shortage of semiconductors depressed motor vehicle output, providing further evidence that supply constraints were hampering economic growth.

Supply disruptions are adding to concerns about high inflation and adding to expectations that the U.S. central bank will need to act to stamp out price increases.

“Prospects for global central banks to be more aggressive to counter growing inflation fears may put the USD under some pressure, though the Fed in turn may act sooner than previously expected, supportive of the dollar,” said Ronald Simpson, managing director, global currency analysis, at Action Economics.

The dollar fell 0.02% to 93.95 against a basket of currencies. It had earlier reached 94.17 as U.S. Treasury yields increased.

The New Zealand dollar gained after data showed that the country faced its highest price pressures in a decade.

It was last at $0.7081, after earlier rising to a one-month high of $0.7105.

Sterling briefly hit a 20-month high against the euro after Bank of England Governor Andrew Bailey sent a fresh signal that the central bank was gearing up to raise interest rates as inflation risks mount.

The euro was last up 0.24% against the British pound at 0.8455, after earlier falling as low as 0.8427.

The euro rose 0.11% to $1.1610, after earlier dropping to $1.1570. It has fallen 5% this year.

Analysts at Bank of America noted on Monday that commodity-linked currencies, including the Norwegian krone and the Canadian and Australian dollars, had been the best performers since the summer as energy prices rise, while the euro and the yen had been the worst.

The yen was close to a new three-year low, with the dollar last up 0.01% at 114.27 yen, close to Friday’s 114.46 level that was last hit in October 2018.

========================================================

Currency bid prices at 3:14PM (19:14 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change Session

Dollar index 93.9540 93.9750 -0.02% 4.415% +94.1740 +93.8660

Euro/Dollar $1.1610 $1.1599 +0.11% -4.97% +$1.1622 +$1.1572

Dollar/Yen 114.2700 114.2000 +0.01% +10.57% +114.4450 +114.0300

Euro/Yen 132.66 132.52 +0.11% +4.52% +132.7800 +132.1600

Dollar/Swiss 0.9232 0.9231 +0.02% +4.36% +0.9273 +0.9224

Sterling/Dollar $1.3727 $1.3745 -0.12% +0.48% +$1.3764 +$1.3710

Dollar/Canadian 1.2379 1.2359 +0.15% -2.80% +1.2409 +1.2350

Aussie/Dollar $0.7414 $0.7419 -0.03% -3.59% +$0.7436 +$0.7379

Euro/Swiss 1.0717 1.0706 +0.10% -0.83% +1.0735 +1.0704

Euro/Sterling 0.8455 0.8435 +0.24% -5.39% +0.8463 +0.8425

NZ $0.7081 $0.7072 +0.12% -1.40% +$0.7105 +$0.7040

Dollar/Dollar

Dollar/Norway 8.4270 8.4235 +0.00% -1.90% +8.4830 +8.4145

Euro/Norway 9.7846 9.7768 +0.08% -6.52% +9.8192 +9.7433

Dollar/Sweden 8.6654 8.6030 +0.73% +5.72% +8.6710 +8.6073

Euro/Sweden 10.0610 9.9878 +0.73% -0.14% +10.0666 +9.9845

For a look at all of today’s economic events, check out our economic calendar.

(Additional reporting by Saikat Chatterjee in London; Editing by Paul Simao)

U.S. Reviews Sanctions Policy, Warns of Threat From Cryptocurrencies

Following a broad review launched shortly after Biden took office in January, the U.S. Treasury Department unveiled a revised framework intended to take a more surgical approach to sanctions instead of the blunt-force method favored by his predecessor, Donald Trump.

The Treasury warned that countries reducing the use of the U.S. dollar and exposure to the U.S. financial system could erode the effectiveness of sanctions, while digital currencies and other technological innovations also pose a risk to the tool’s success.

While seeking to turn the page on the Trump era, the new policy prescriptions offered few specifics on how the Biden administration could change its handling of sanctions against major targets such as Iran, Venezuela and China.

Treasury Department officials promised more rigor would be added to the sanctions process while also modernizing the tool through the new framework, which seeks to tie designations to clear policy objectives and emphasizes the importance of multilateral coordination and mitigating humanitarian impacts.

The new guidelines also advise that Treasury should invest in building its technological capabilities and workforce as part of the effort to counter the threat from digital currencies.

“The key for us is making sure that we’re in a place where sanctions can be as effective as possible, and that means addressing the fact, the truth, which is that the technology is making it easier for people to look outside of the traditional U.S. financial system,” a senior Treasury official told reporters.

Treasury officials made clear on Monday that sanctions would remain a crucial part of U.S. foreign policy. The Biden administration has aimed for a much more targeted use of the tool while still keeping up pressure on Venezuela, Iran and other countries under U.S. sanctions.

“Sanctions are a fundamentally important tool to advance our national security interests,” Deputy Treasury Secretary Wally Adeyemo said in a statement.

“Treasury’s sanctions review has shown that this powerful instrument continues to deliver results but also faces new challenges. We’re committed to working with partners and allies to modernize and strengthen this critical tool.”

But so far Biden’s approach, while continuing to inflict economic damage on sanctions targets, has been no more successful than Trump’s efforts at forcing U.S. foes and rivals to bend to America’s will.

Trump employed sanctions as his go-to response to international problems ranging from Iran’s military activities to North Korea’s nuclear arsenal to Venezuela’s political crisis.

While keeping in place many of Trump’s sanctions programs, Biden made some changes since taking office.

He removed sanctions that Trump placed on officials of the International Criminal Court and held off on sanctioning European entities involved in construction of the Nord Stream 2 natural gas pipeline from Russia despite pressure from Republican lawmakers.

Biden has also offered to ease sanctions on Iran if it returns to compliance with a 2015 nuclear deal that Trump abandoned – though indirect negotiations between Washington and Tehran have been stalled for months.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Daphne Psaledakis and Matt Spetalnick; Editing by Alistair Bell)

Biden Advisor Says Carbon Fee on the Table for Climate Policy

“There’s a lot of things in the mix now that people are thinking about … climate fees are one of them, whether it’s a sector based or it’s a broad based fee, none of those issues are off the table,” White House National Climate Advisor Gina McCarthy told a meeting of President Joe Biden’s council of advisors on science and technology.

“Congress is debating and hopefully we will see the end of that debate soon,” McCarthy said. She did not say whether the White House is pushing lawmakers to support a carbon fee policy. Under a carbon fee, the government sets a price for each ton of greenhouse gas that polluters emit that gradually rises, incentivizing industries to move to cleaner energy sources.

Biden and his fellow Democrats have been trying to push forward other measures to tackle climate change in a bipartisan infrastructure bill and a wider spending bill, including expanding tax credits for wind and solar power and incentives for electric vehicles.

But conservative West Virginia Democrat Manchin has opposed a major component of the spending bill known as the Clean Electricity Performance Plan, that would reward power utilities for investing in renewable power and fine those who do not, saying taxpayer money should not be used for something that utilities have already embarked on.

Manchin and fellow Democratic centrist Senator Kyrsten Sinema have opposed the cost of the $3.5 trillion spending bill that Democrats hope to pass on a party line vote in the 50-50 divided Senate.

Some lawmakers, including Democratic Senator Ron Wyden, who is chairman of the Senate finance committee, have been advocating for a carbon fee and dividend program. That program could raise revenues to help pay for the reconciliation bill but would also have to abide by Biden’s pledge not to raise taxes on families earning less than $400,000 annually. A carbon fee could also be crafted to avoid higher gasoline and fuel costs.

But carbon fees have long been unpopular among industry advocates and could face opposition from moderate Democrats in the House from states that depend on revenues from fossil fuel production. And time is running short for Congress to act before the annual climate talks that begin on Oct. 31 in Glasgow, Scotland, where Biden is hoping to show the world that the United States is again committed to moving ambitiously on climate.

McCarthy said that beyond what is going on in Congress, the executive branch can also act on climate.

“Despite what happens on the Hill there are many ways in which we can continue to work through our authorities in the federal government and using our partnerships with states and local communities,” she said.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Timothy Gardner; Editing by Aurora Ellis)

Oil Prices Pull Back as U.S. Factory Data Intensifies Demand Concerns

Production at U.S. factories fell by the most in seven months in September as an ongoing global shortage of semiconductors depressed motor vehicle output, further evidence that supply constraints were hampering economic growth.

“The oil market started off with a lot of exuberance, but weak data on U.S. industrial production caused people to lose confidence in demand, and China released data that intensified those worries,” said Phil Flynn, senior analyst at Price Futures Group in New York.

Brent crude oil futures were down 62 cents or 0.7% at $82.26 a barrel by 2:30 p.m. EST (18:30 GMT) after hitting $86.04, their highest since October 2018.

U.S. West Texas Intermediate (WTI) crude were 12 cents higher, or 0.1%, at $82.40 a barrel, after hitting $83.87, their highest since October 2014.

Both contracts rose by at least 3% last week.

Weaker industrial data was compounded by rising production expectations on Monday, further weighing on market sentiment.

U.S. production from shale basins is expected to rise in November, according to a monthly U.S. report on Monday. [EIA/RIG]

Oil output from the Permian basin of Texas and New Mexico was expected to rise 62,000 barrels per day (bpd) to 4.8 million bpd next month, the Energy Information Administration said in its drilling productivity report. Total oil output from seven major shale formations was expected to rise 76,000 bpd to 8.29 million bpd in the month.

The early push higher on Monday came as market participants looked to easing restrictions after the COVID-19 pandemic and a colder winter in the northern hemisphere to boost demand.

“Easing restrictions around the world are likely to help the recovery in fuel consumption,” analysts at ANZ Bank said in a note, adding gas-to-oil switching for power generation alone could boost demand by as much as 450,000 barrels per day in the fourth quarter.

Cold temperatures in the northern hemisphere are also expected to worsen an oil supply deficit, said Edward Moya, senior analyst at OANDA.

“The oil market deficit seems poised to get worse as the energy crunch will intensify as the weather in the north has already started to get colder,” he said.

“As coal, electricity, and natural gas shortages lead to additional demand for crude, it appears that won’t be accompanied by significantly extra barrels from OPEC+ or the U.S.,” he said.

Prime Minister Fumio Kishida said on Monday that Japan would urge oil producers to increase output and take steps to cushion the impact of surging energy costs on industry.

Chinese data showed third-quarter economic growth fell to its lowest level in a year hurt by power shortages, supply bottlenecks and sporadic COVID-19 outbreaks.

China’s daily crude processing rate in September also fell to its lowest level since May 2020 as a feedstock shortage and environmental inspections crippled operations at refineries, while independent refiners faced tightening crude import quotas.

Global trade has swiftly recovered from pandemic lows, Bank of America commodity strategist Warren Russell said in a note. Trade levels are up 13% year to date, and 4% higher than 2019 levels. The trade indicates rising crude demand as economies recover from the pandemic, the analysts said.

“Financial assets like oil should perform strongly into 2021,” the analysts said.

(Reporting by Jessica Resnick-Ault and Noah Browning; additional reporting by Jessica Jaganathan; editing by Chris Reese and Nick Zieminski)

U.S. Stagflation Fears Overblown, Bond Market Investors Say at Milken Conference

Stagflation – when stagnant economic activity is combined with high inflation – is “extremely unlikely,” PIMCO Chief Executive Emmanuel Roman said in a panel discussion at the conference, held in Beverly Hills, California.

Other participants in the panel discussion – including PGIM CEO David Hunt; Invesco CEO Martin Flanagan; Elizabeth Burton, chief investment officer for the Employees’ Retirement System of Hawaii; and Scott Minerd, Guggenheim Partners global chief investment officer – largely agreed that the threat of stagflation was remote.

With energy prices on the rise even as the economy remains constrained by supply-chain gridlock, an increasing number of investors have started to fret about the specter of stagflation in recent months.

In the past, a stagflationary environment has tended to weigh on stock performance, analysts at Goldman Sachs said in a report published earlier this month.

The S&P 500‘s median real total return fell to negative 2.1% per quarter over stagflationary periods in the last 60 years, compared with an overall median real total return of 2.5% per quarter over that time period, the report said.

Invesco’s Flanagan and the panel’s other speakers, however, believe that comparatively strong U.S. growth makes the prospect of stagflation unlikely.

Guggenheim’s Minerd, who views the recent rise in inflation as temporary, said the current interest rate environment supports stock valuations at current levels.

The S&P 500 Index, is trading at a forward price-to-earnings ratio of about 20, close to the two-decade high of 23 touched in early September.

“Are stocks going to correct again? Yes, for sure,” Minerd said. “But do I think stocks are going to correct now? No. We might very well be in a bubble, but there are a lot of opportunities here for a long-term investor.”

With Treasuries yielding very little, investors’ reach for better returns is supporting equity markets, PGIM’s Hunt said.

“It’s never been more punitive to hold cash,” he said.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Saqib Iqbal Ahmed; Editing by Leslie Adler)

FTSE 100 Falls on Rate Hike Worries; Playtech Soars

By Shashank Nayar and Bansari Mayur Kamdar

The blue-chip FTSE 100 index declined 0.1% by 08:10 GMT, with AstraZeneca and Diageo PLC being among the top losers.

Softbank-backed online retailer and tech group, The Hut Group, rose 8.4% after saying it would remove its founder’s “golden share” and seek a place on the premium segment of the main stock market.

A survey of chief financial officers at top British companies found that they expect supply chain problems in the UK to persist for at least another year and consumer price inflation to still be above 2.5% in two years’ time.

Supply worries and rising energy costs have slowed the pace of gains on the FTSE 100 recently and led the benchmark index to underperform developed market peers in Europe and the United States.

While U.S. and the wider European stock aggregate have hit multiple record highs this year, the FTSE 100 is around 8% away from all-time highs that were last hit in May 2018.

“If consumers are facing higher energy prices and higher prices of goods in the shops, they may start to become less spend-happy, buying less at some point, which then could have an impact on companies,” said Susannah Streeter, market analyst at Hargreaves Lansdown.

The domestically focussed mid-cap index was unchanged.

Investor sentiment also took a hit after data showed China’s economy grew more slowly than expected in the third quarter, clouding the global recovery outlook.

Gaming software supplier Playtech Plc soared 58% after Australia’s Aristocrat Leisure Ltd said it will buy the company for 2.1 billion pounds ($2.89 billion).

British transport group National Express and its takeover target Stagecoach Group dropped 1.7% and 2.1%, respectively, after the regulator extended the deadline until Nov. 16 for National Express to make a firm offer.

(Reporting by Bansari Mayur Kamdar; editing by Uttaresh.V)

Take Five: China, FAANGs, Turkey and Christmas Fears Loom Large

And for many, the big question: Is Christmas cancelled?

1/CHARTING CHINA

From an Evergrande-induced property market crisis to power shortages halting production lines supplying Apple and Tesla, the world’s no. 2 economy has plenty to worry about.

Data released on Monday showed gross domestic product (GDP) grew 4.9% in July-September from a year earlier, the weakest clip since the third quarter of 2020 and missing forecasts.

Overall industrial output edged just 3.1% higher in September from a year earlier, marking the slowest growth since March 2020, during the first wave of the pandemic.September new construction starts slumped for a sixth straight month, the longest spate of monthly declines since 2015.

But retail sales bucked the negative trend to grow 4.4%, faster than forecasts and the 2.5% growth in August, and the surveyed nationwide jobless rate fell from 5.1% to 4.9%.

The latest readings have increased expectations that policymakers will do more to shore up growth and to prop up the faltering recovery.

2/PROFIT STREAM

Netflix kicks off third quarter reporting on Thursday for the ‘FAANG’ group of big U.S. tech and growth companies of Facebook, Apple, Amazon, Netflix and Google-parent Alphabet.

The video streaming company said “Squid Game” has become its biggest series launch ever, while last month “The Crown” won the best drama series Emmy award. Netflix also bought video game creator Night School Studio in a push to diversify.

Netflix’s stock price has climbed some 16% in 2021, broadly in line with the S&P 500 and in the middle compared to the other FAANG stocks. Other companies due to report results next week include Tesla, Johnson & Johnson, and Intel.

3/INFLATION SPOTTING

Markets will look for signs that production bottlenecks, supply chain strains, labour shortages and surging energy prices are starting to undermine future profits when Europe’s earnings kick off.

With rates hikes in the works to fend off inflation stickiness, financial and energy sectors are set to thrive as rising yields dent the appeal of so-called growth stocks.

Tasters of the third-quarter earnings season from luxury giant LVMH, tech star SAP and steelmaker Outokumpu so far left no bitter after-taste. Now it is the turn of blue chips such as ASML Holding, Unilever, Barclays and ABB.

Earnings are seen jumping 46.7% year-on-year for pan-European STOXX 600 index constituents, though the gap between positive and negative revisions has been shrinking, vindicating the narrative Europe is cruising past peak growth.

4/CHRISTMAS, CANCELLED?

A year after coronavirus lockdowns dampened festive spirits, world leaders will be hoping supply disruption won’t be the Grinch that stole Christmas.

It may be more than two months away, yet panic buying of turkeys and festive goodies has begun amid supply chain chaos.

White House officials warn Americans may face higher prices and empty shelves this Christmas. The busy ports of Los Angeles and Long Beach are expanding operations to unload an estimated 500,000 containers waiting on cargo ships offshore.

Britain has urged consumers to buy normally after containers carrying toys and electrical goods were diverted from its biggest port because it was full.

Friday’s October flash purchasing managers indices (PMI) from Australia, Europe and elsewhere might illustrate supply chain pain. Germany business sentiment  is already suffering.

5/EMERGING WOES

Central banking is rarely dull in emerging markets, but Turkey outstrips most others for excitement.

A fresh batch of policy makers will meet https://www.reuters.com/world/middle-east/revolving-door-turkeys-last-four-central-bank-chiefs-2021-10-08 on Thursday after President Tayyip Erdogan instigated another reshuffle, clearing the way for more rate cuts in the face of stubbornly high inflation and sending the lira to fresh record lows.

But central banks elsewhere are busy ramping up rates. Hungary is expected to nudge up its benchmark on Tuesday to tackle a rise in inflation which prompted sharp rate rises elsewhere in central Europe.

Russia’s central bank will likely follow on Friday as policy makers have come out in droves warning of rising price pressures and unanchored inflation expectations.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Kevin Buckland in Tokyo, Danilo Masoni, Dhara Ranasinghe, Julien Ponthus and Karin Strohecker in London, Lewis Krauskopf in New York; compiled by Karin Strohecker; editing by Alexander Smith)

Marketmind: What Could Possibly Go Wrong?

A look at the day ahead from Julien Ponthus.

World stocks have just enjoyed their biggest one-week rally since June with Wall Street’s favourite gauge of volatility, the VIX index, tumbling.

Earnings for the S&P 500 and Europe’s STOXX 600 are currently expected to rise 32% and 46% respectively and, so far, companies which have already reported results have exceeded expectations overall.

Goldman Sachs’s 66% surge in profit on Friday, courtesy of a big wave of M&A and IPOs, came after the four largest U.S. consumer banks also shone.

But now as Europe waits on blue chips such as ASML Holding and Unilever to enter the arena and for Netflix to kick off the reporting for the ‘FAANG’ group, the mood may be souring again.

Philips on Monday lowered its outlook as parts shortages bite and over on Wall Street, there are now more downward than upward revisions, suggesting Q3 enthusiasm may have reached its peak.

Data showing that China’s economy hit its slowest pace in a year due to power shortages, supply chain bottlenecks and property market wobbles, has dampened the mood and MSCI’s broadest index of Asia-Pacific shares outside Japan is losing 0.4%.

Futures for European and U.S. equities are also in negative territory while Brent crude oil prices are trading well above $85 a barrel after hitting their highest price since October 2018.

Elsewhere bitcoin is above $62,000 with the first American bitcoin futures ETF expected to begin trading this week amid global inflation worries.

Prices are rising too quickly for policymakers’ tastes and Bank of England Governor Andrew Bailey on Sunday warned investors that he and his colleagues “will have to act”.

Investors are speculating that the BoE might become the first of the world’s biggest central banks to raise rates, later this year or early in 2022.

Central bank action will be closely watched this week with a meeting in Turkey, Hungary expected to nudge up its benchmark on Tuesday and Russia’s central bank to follow on Friday.

Key developments that should provide more direction to markets on Monday:

— China’s economy stumbles on power crunch, property woes

— -Philips lowers outlook as recall, parts shortages bite

— Bitcoin hovers near 6-month high on ETF hopes, inflation worries

— UK RightMove house prices

— U.S. industrial production

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Julien Ponthus; Editing by Rachel Armstrong)

Chinese and HK Shares Slide as China Q3 GDP Misses Estimates

Analysts said comments by Xi Jinping on Friday, calling on progress on a long-awaited property tax, also hurt sentiment, already weighed down by rising oil prices.

Oil prices extended a recent rally amid a global energy shortage to hit multi-year peaks, with U.S. crude touching a seven-year high and Brent a three-year peak.

China’s gross domestic product (GDP) grew 4.9% in July-September from a year earlier, the weakest pace since the third quarter of 2020, as the world’s second-largest economy grappled with power shortages, supply bottlenecks, sporadic COVID-19 outbreaks and debt problems in its property sector.

Chinese blue chips were down 1.55% and the Hong Kong benchmark lost 0.54%, although most of the falls came right after the bell, prior to the release of the data.

“The numbers are actually much weaker than what we thought… I think in the fourth quarter it will be even slower because we will see more impact from the energy crunch,” said Woei Chen Ho, economist at UOB.

But David Chao, global market strategist for the Asia Pacific (ex-Japan) region at Invesco, said Xi’s comments about higher taxes had been the catalyst for the stock fall, seeing grounds for optimism in the GDP data, including the stronger retail sales.

Regional benchmarks were weighed down by Chinese stocks. MSCI’s broadest index of Asia-Pacific shares outside Japan was last down 0.34%, while Japan’s Nikkei lost 0.15%.

U.S. stock futures, the S&P 500 e-minis, fell 0.3%, while pan-region Euro Stoxx 50 futures lost 0.4% and FTSE futures shed 0.35%

Shane Oliver, chief economist at AMP, said investors also continued to worry about global inflation, which was being driven by the reopening of many economies after COVID-19 restrictions and supply chain issues.

On Monday, data showed New Zealand’s consumer price index rose 2.2% rise in the third quarter, the biggest rise in over a decade, causing the local dollar to jump as much as 0.5%

Some other currencies are also responding to rising inflation expectations, as investors increasingly bet central banks will have to raise rates.

The dollar edged higher against a basket of its peers to 94.11, in sight its one-year high of 94.563 hit last Monday, as traders position themselves for a looming tapering of the Federal Reserve’s massive bond buying programme.

Against a stronger dollar, sterling fell 0.2% despite hawkish comments from Bank of England Governor Andrew Bailey over the weekend.

The yen meanwhile hovered near its lowest in nearly three years against the dollar, as the Japanese central bank looked increasingly likely to trail behind other monetary authorities in terms of rate hikes.

High energy costs are driving some of the inflation fears and U.S. crude was last up 1.6% at $83.59 a barrel, while Brent crude was last 1.19% higher at $85.87 per barrel.

Gold gained 0.01% at $1,768.7 an ounce, after falling 1.5% on Friday as upbeat retail sales drove U.S. bond yields higher.

Bitcoin traded at $62,300, not far from a record of $64,895 hit in April. It gained last week on hopes that U.S. regulators would allow a cryptocurrency exchange-traded fund to trade.

(Reporting by Alun John; editing by Richard Pullin and Ana Nicolaci da Costa)

For Britain’s Chicken Farmers, Brexit and COVID Brew a Perfect Storm

Like food manufacturers across Britain, Upson was hit this year by an exodus of eastern European workers who, deterred by Brexit paperwork, left en masse when COVID restrictions lifted, compounding his already soaring cost of feed and fuel.

Such is the scale of the hit, he cut output by 10% and hiked wages by 11%, a rise that was immediately matched or bettered by neighbouring employers in the northeast of England.

Increases in the cost of food will surely follow.

“We’re being hit from all sides,” Upson told Reuters in front of four vast, spotless sheds that house 33,000 chickens apiece. “It is, to use the phrase, a perfect storm. Something will have to give.”

The deepening problems at Upson’s Soanes Poultry plant in east Yorkshire are a microcosm of the pressures building on businesses across the world’s fifth largest economy as they emerge from COVID to confront the post-Brexit trade barriers erected with Europe.

In the broader food sector, operators have increased wages by as much as 30% in some cases just to retain staff, likely forcing an end to an economic model that led supermarkets such as Tesco to offer some of the lowest prices in Europe.

Following the departure of European workers who often did the jobs that British workers didn’t want, retailers may have to import more.

While all major economies have been hit by supply chain problems and a labour shortage after the pandemic, Britain’s tough new immigration rules have made it harder to recover, businesses say.

Already a driver shortage has led to a lack of fuel at gas stations and gaps on supermarket shelves, while chicken restaurant chain Nandos ran out of chicken.

The Bank of England is weighing up how much of a recent jump in inflation will prove long-lasting, requiring it to push up interest rates from their all-time low.

MOUNTING PRESSURE

For the rural businesses situated near the flat, open fields of Yorkshire, Upson says the situation is dire.

Although he says he needs 138 workers for his plant, he recently had to operate with under 100. Staff turnover is high.

Richard Griffiths, head of the British Poultry Council, says that with Europeans making up about 60% of the sector, the industry has lost more than 15% of its staff.

When numbers are particularly tight Upson gets his sales, marketing and finance staff to don the long white coats and hairnets that are needed on the processing line.

“Three weeks ago the offices were empty, everyone was in the factory,” he said, of a business that supplies high-end birds for butchers, farm shops and restaurants. For the run-up to Christmas, he may look to students.

On difficult days Soanes can only deliver the absolute basics – chickens piled into boxes. They do not have time to truss the birds for retail or put them into separate, Soanes-labelled packaging that commands a higher selling price.

Around 3 tonnes of offal that is normally sold each week is going in the skip due to the lack of staff to process it.

The sudden rise in wages and the drop in output also come on top of spikes in the cost of animal feed, energy and fuel, carbon dioxide, cardboard and plastic packaging.

“We’ve just had to say to our customers, sorry, the price is going up,” Upson said, shaking his head. “We’re losing money, big style.” The poorest consumers would be hardest hit, he said.

Business owners have urged the government to temporarily ease visa rules while they do the staff training and automation of processes needed to help close Britain’s 20-year, 20% productivity gap with the United States, Germany and France.

But far from changing course, Prime Minister Boris Johnson says businesses need to cut their addiction to cheap foreign labour now, invest in technology and offer well-paid jobs to some of the 1.5 million unemployed people in Britain.

Upson says there is a shortage of workers in rural communities and with some 1.1 million job vacancies in the country, people can be choosy about which they pick. “Working in a chicken factory isn’t everybody’s idea of a career,” he said.

While 5,500 foreign poultry workers will be allowed to work in Britain before Christmas, and the UK will offer emergency visas to 800 foreign butchers to avoid a mass pig cull sparked by a shortage in abattoirs, the industry says it needs more.

As for automation, the production of whole birds is already highly mechanised, and while it could be used more for boneless meat and convenience cuts, the cost is prohibitive for a small operator.

The National Farmers’ Union and other food bodies said in a recent report that parts of the UK’s food and drink supply chain were “precariously close to market failure”, limiting the ability to invest in automation.

Soanes has an annual turnover of around 25 million pounds ($34 million). In the last three years its owners have spent 5 million on expansion. Now output must fit the size of the workforce.

TOO CHEAP

According to “Chicken King” Ranjit Singh Boparan, founder of the UK’s biggest producer, 2 Sisters, food prices must now rise.

“Food is too cheap,” he said. “In relative terms, a chicken today is cheaper to buy than it was 20 years ago. How can it be right that a whole chicken costs less than a pint of beer?”

Upson says he can get a higher price selling bones for pet food than he can for a leg of chicken.

For major producers, the main barrier to higher prices is often the purchasing power of the biggest supermarkets, which have since the 2008 financial crash battled to keep prices down for key items such as fruit, vegetables, bread, meat, fish and poultry.

Sentinel Management Consultants’ CEO David Sables, who coaches suppliers on how to negotiate with British supermarkets, said desperate food producers had already pushed through some price rises, and he expects another round to come in early next year.

With chicken a so-called “known value item”, of which shoppers instinctively know the cost, he said supermarkets would likely push the price rises on to other goods. He described the chicken sector as an “absolute horror show”.

One senior executive at a major supermarket group, who asked not to be named, said retailers were under pressure to “hold the line” on key prices, and that they all watch each other.

“If you see one of the big six move (on price), you can bet your damnedest others will take about 12 hours to follow,” he said.

Back in Yorkshire, Upson and others are praying they do. While he acknowledges Johnson’s desire to move to a “high-wage, high-skills” economy, he said not all jobs fit that bill.

“What skill do you need to put chicken in a box?” he asks. “We can put wages up, but prices will go up.” He is starting to despair. “Normally you can just be pragmatic and say, it will sort itself out. But I’m not sure where this one ends.”

For a look at all of today’s economic events, check out our economic calendar.

($1 = 0.7277 pounds)

(Writing by Kate Holton; Editing by Guy Faulconbridge and Jan Harvey)

 

 

 

China to keep up scrutiny of internet sector – Xinhua

China has been engaged this year in a sweeping campaign across regulators to rein in its massive and free-wheeling online economy, led by giants Alibaba Group Ltd, Tencent Holdings Ltd and others.

In July, the Ministry of Industry and Information Technology launched a six-month regulatory campaign aimed at tackling issues including disrupting market order, infringing on the rights of users, compromising data security and bombarding users with pop-up windows that could not be closed.

“Currently, corporates have increased their awareness of compliance, and some outstanding problems have been solved preliminarily,” Xiao Yaqing, China’s industry and information minister, told the official Xinhua news agency.

He said that the blocking of rivals’ links had been resolved, while uncloseable pop-ups had mostly been eliminated.

Xiao said the ministry will work with other government departments and the industry to ensure more space for the development of small- and medium-sized firms in the sector.

(Reporting by Muyu Xu and Tony Munroe; Editing by Jan Harvey)

Roche family shareholders will maintain stability – vice chairman

“The new generation has the same values ​​as the older family members,” Andre Hoffmann, the great grandson of the company’s founder, told the newspaper in an article published on Sunday.

“Our role as the owner family is to enable Roche to focus on creating sustainable values ​​over the long term. We are convinced of that,” said the 63-year-old, who is spokesman for the pool of family members that controls 45.01% of the Basel company.

A pooling agreement between the descendants of company founder Fritz Hoffmann-La Roche has existed since 1948, and was extended for an indefinite period in 2009. A fifth generation was admitted to the pool in 2019.

Hoffmann, who is also a vice chairman of Roche, said family ownership of large companies did not always work.

“If it works, it is a great strength for the company. If not, it can be diabolical,” he said.

(Reporting by John Revill; Editing by Jan Harvey)

Czech regulator examines energy sector supplies amid market crunch

The ERU regulator has called on the Czech market’s 434 licensed energy suppliers to document supplies for household and company clients by the end of next week, with results expected by the end of October, it said late on Saturday.

The extraordinary step comes as benchmark European gas prices have soared because of factors like low stocks, outages and high demand in Asia, lifting power prices to record highs around the continent.

Bohemia Energy, one of the largest Czech alternative energy suppliers, ended supplies for customers on Wednesday citing the wholesale market’s price spike, affecting 900,000 clients who need to be covered by suppliers of last resort.

Some smaller suppliers have also closed.

ERU’s chairman Stanislav Travnicek said it wanted assurances that suppliers had not engaged in what it called gambling in markets. But he added that the biggest groups had secured supplies, and that panic was unnecessary.

Major suppliers like majority state-owned utility CEZ have had to step in after the closure of Bohemia Energy, whose customers could face higher prices.

With energy customers facing rising bills because of the spike in markets, the government, like others in Europe, has also sought ways to ease the burden on households, for example by “energy checks” to help needy families cover costs.

(Reporting by Jason Hovet; Editing by Pravin Char)

China could widen property tax trial, official media outlet reports

China launched a pilot property tax programme in Shanghai and Chongqing in 2011, and experts have in the past suggested that the pilot testing be broadened to include Shenzhen city and Hainan province, according to state media.

President Xi Jinping on Friday called for progress on a property tax that could help reduce wealth inequality as the country strives to achieve his goal of “common prosperity” by mid-century.

“China could consider conducting system innovations to expand the scope of property tax while moving forward with tax legislation as soon as possible,” said Jia Kang, ex-director of the finance ministry-backed Chinese Academy of Fiscal Sciences, according to China Property News, which is managed by the housing ministry.

China has mulled introducing a property tax for over a decade but has faced resistance from stakeholders including local governments, which rely on revenue from land sales and worry it would erode property values or trigger a market sell-off.

However, such a tax could help curb rampant speculation in the housing market, which has come under intense global scrutiny as massive developer China Evergrande Group struggles with a debt and liquidity crisis.

Jia suggested extending the property tax trial to the wealthy eastern province of Zhejiang.

Real estate prices vary greatly within China, with prices many times higher in tier-one cities such as Beijing and Shanghai compared with markets in hinterland cities.

“Generally speaking, third- and fourth-tier cities would not be among the first batch for a property tax trial,” Jia said, adding that any property tax regime should adapt to regional circumstances.

China has been collecting property taxes on certain categories of high-end residences in Shanghai and Chongqing since the pilot programme started in those cities in 2011.

In March, the Chinese government said in its development plan for 2021-2025 that it would push for property tax legislation over the next five years, but there was no mention of such a tax in the country’s 2021 legislative agenda for the second consecutive year.

(Reporting by Muyu Xu and Tony Munroe; Editing by Ana Nicolaci da Costa)