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Biden pick for Fed chair expected soon, Yellen says

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November 1, 2021

By Andrea Shalal

DUBLIN (Reuters) – U.S. Treasury Secretary Janet Yellen said President Joe Biden should pick an “experienced and credible” person as Federal Reserve chair to reassure markets, and while current chair Jerome Powell fit the bill, others would too.

Powell, a Republican placed in the job by former President Donald Trump, is widely favored to win reappointment to another term, and some economists and investors have fretted that financial markets could see turbulence if Biden picks another candidate.

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Yellen, who has not publicly endorsed a candidate, told Reuters she gave her advice to the president and it was his decision to make. She declined to say if she supported Powell, as some media have reported.

Asked whether market concerns should factor into Biden’s decision, Yellen said Biden should pick someone seen as a credible and capable policymaker.

“I think Powell has acquired that reputation, but there are other candidates too, who I think would be similarly perceived,” she said aboard a government plane en route to Dublin after Group of 20 meetings in Rome.

“If the markets are upset because they think the person isn’t credible, then that’s a person who shouldn’t be appointed. The president should appoint someone who is experienced and credible.”

Yellen was the first woman to head the U.S. central bank, nominated by former President Barack Obama, and is now the country’s first female Treasury Secretary. All recent picks for the job have come in October or early November.

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Powell’s odds in betting markets have declined from early September following sharp criticism of his performance by progressive Democrats and a securities trading scandal involving Fed officials. Still, on the online political wagering site PredictIt.org, Powell remained the odds-on favorite at 70%.

As an alternate, many progressives favor Fed Governor Lael Brainard, who served as a senior Treasury official in the Obama administration and was nominated by him to the Fed board in 2014.

Brainard is seen as somewhat more dovish than Powell in part because of her push to retain super-easy monetary policy until there is more progress on a recovery in employment following the downturn from COVID-19. Powell, though, also has signaled he would prefer to be patient in the face of recent high inflation to allow a firmer job market recovery to take hold.

Nonetheless, Fed policymakers are this week expected to announce plans to start reducing their pandemic-era accommodation, with a first step being a pull back in the volume of bonds they buy each month. Any increase in interest rates is still some months away.

Yellen said she hoped and expected Biden to make a decision “reasonably soon,” but said she could give no specific timeline.

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Democratic Senator Sherrod Brown last week said Biden would probably advance a “whole slate” of nominees to the Fed Board, which may or may not include Powell, and ensure a greater emphasis on workers.

The Senate Banking Committee, which he chairs, oversees the Fed and must sign off on Fed nominees before they can be considered for approval by the Senate as a whole.

Powell’s term as Fed chair expires in February; the seven-member Fed Board also has one vacant seat and at least one and potentially two other seats that will open up in coming months.

(Reporting by Andrea Shalal; Editing by Dan Burns and Daniel Wallis)

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U.S. stock futures, oil regain some ground after Omicron battering

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November 29, 2021

By Wayne Cole

SYDNEY (Reuters) – Asian markets regained a little composure on Monday as investors settled in for a few weeks of uncertainty on whether the Omicron variant would really derail economic recoveries and the tightening plans of some central banks.

Oil prices also bounced $3 a barrel to recoup some of Friday’s shellacking, while the safe haven yen took a breather after its run higher.

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The new variant of concern was found as far afield as Canada and Australia as more countries imposed travel restriction to try to seal themselves off.

Britain called an urgent meeting of G7 health ministers on Monday to discuss developments on the virus, although a South African doctor who had treated cases said symptoms of Omicron were so far mild.

“There is a lot we don’t know about Omicron, but markets have been forced to reassess the global growth outlook until we know more,” said Rodrigo Catril, a market strategist at NAB.

“Pfizer expects to know within two weeks if Omicron is resistant to its current vaccine, others suggest it may take several weeks. Until then markets are likely to remain jittery.”

Trading was erratic early on Monday but there were signs of stabilisation as S&P 500 futures added 0.8% and Nasdaq futures 0.9%.

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Both indices suffered their sharpest fall in months on Friday with travel and airline stocks hit particularly hard.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.1% but was off early lows. Likewise, Japan’s Nikkei pared early losses to be down 0.9%.

Bonds gave back some of their gains, with Treasury futures down 11 ticks. The market had rallied sharply as investors priced in the risk of a slower start to rate hikes from the U.S. Federal Reserve, and less tightening by some other central banks.

Two-year Treasury yields edged up to 0.55%, after falling 14 basis points on Friday in the biggest drop since March last year. Fed fund futures had pushed the first rate rise out by a month or so.

The shift in expectations undermined the U.S. dollar, to the benefit of the safe haven Japanese yen and Swiss franc.

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Early Monday the dollar had steadied somewhat at 113.81 yen, after sliding 1.7% on Friday. The dollar index held at 96.190, after Friday’s 0.7% drop.

The euro paused at $1.1294, following its rally from $1.1203 late last week.

European Central Bank President Christine Lagarde put a brave face on the latest virus scare, saying the euro zone was better equipped to face the economic impact of a new wave of COVID-19 infections or the Omicron variant.

The economic diary is also busy this week with China’s manufacturing PMIs on Tuesday to offer another update on the health of the Asian giant. The U.S. ISM survey of factories is out on Wednesday, ahead of payrolls on Friday.

Fed Chair Jerome Powell and Treasury Secretary Janet Yellen speak before Congress on Tuesday and Wednesday.

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In commodity markets, oil prices bounced after suffering their largest one-day drop since April 2020 on Friday.

“The move all but guarantees the OPEC+ alliance will suspend its scheduled increase for January at its meeting on 2 December,” wrote analyst at ANZ in a note.

“Such headwinds are the reason it’s been only gradually raising output in recent months, despite demand rebounding strongly.”

Brent rebounded 3.9% to $75.57 a barrel, while U.S. crude rose 4.5% to $71.24.

Gold has so far found little in the way of safe haven demand, leaving it stuck at $1,791 an ounce.

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(Reporting by Wayne Cole; Editing by Richard Pullin & Shri Navaratnam)

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Nissan Motor to spend $17.6 billion to accelerate electrification

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November 29, 2021

TOKYO (Reuters) – Nissan Motor Co said on Monday it will spend 2 trillion yen ($17.59 billion) over the next five years to accelerate vehicle electrification as it bets tighter carbon emission restrictions will spur demand for electric cars and hybrids.

Japan’s No. 3 car maker will introduce 23 electrified vehicles by 2030, including 15 electric vehicles (EV), and plans to introduce all solid-state batteries by March 2029, it said in a statement.

Nissan’s deeper push into battery-powered cars comes as consumer demand for such vehicles grows in key auto markets such as China and the United States and as its competitors release new electric vehicles.

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Although still only a small portion of vehicles on the road, global electric car registrations in 2020 grew 41% even as the overall car market contracted by almost a sixth, according to the International Energy Agency (IEA).

Nissan, like other Japanese car makers, however, has yet to commit to completely abandoning fossil-fuel vehicles.

At the U.N. climate summit in Glasgow this month, major car makers, including General Motors and Ford Motor Co, signed on to a declaration that committed them to phase out fossil fuel vehicles by 2040.

($1 = 113.7000 yen)

(Reporting by Tim Kelly; Editing by Christopher Cushing and Muralikumar Anantharaman)

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Shares of Macau casino operator Suncity suspended -HKEX

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November 29, 2021

HONG KONG (Reuters) – Shares of Suncity Group Holdings Ltd were suspended on Monday after its chief executive was believed to be among 11 people arrested by Macau authorities on Sunday over alleged links to cross-border gambling and money laundering.

The South China Morning Post reported that Macau police said on Sunday a 47-year-old businessman surnamed Chau was among those arrested. Alvin Chau is head of Suncity.

Suncity could not be reached for comment. Shares of the company last closed at HK$0.255.

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(Reporting By Anne Marie Roantree; Editing by Kim Coghill)

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