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Fed’s inflation debate heats up as Biden nears Fed chair pick

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November 16, 2021

By Ann Saphir and Jonnelle Marte

(Reuters) – A public debate among Federal Reserve policymakers over how to respond to high inflation intensified on Tuesday, even as U.S. President Joe Biden neared a decision about who will lead the central bank for the next four years.

Biden, who is weighing whether to keep Jerome Powell as Fed chair for another term or elevate Fed Governor Lael Brainard to the post, said Tuesday he would make the final call in about four days.

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As if to illustrate the challenges that either leader would face in crafting a policy consensus, San Francisco Federal Reserve Bank President Mary Daly on Tuesday called for central bank patience, saying price pressures will likely fade on their own as the pandemic recedes.

“Reacting in response to things that aren’t likely to last will move us farther from — not closer to — our goals,” Daly told the Commonwealth Club of California.

Raising interest rates now would not fix the supply chain bottlenecks and other temporary issues that are pushing up prices, she said, but would slow job creation and the recovery.

Daly, who votes this year on Fed policy, said that uncertainty about how long the pandemic will continue to disrupt the economy makes it difficult to predict how long high inflation will last and how quickly workers sidelined by COVID concerns will return to the labor force.

“Over the next several quarters, as tapering occurs, we will watch how the economy does and see whether inflation eases and workers come back,” she said. “As we get a clearer signal, we will be ready to act accordingly, continuing to provide or remove support as needed to ensure the economy settles at a sustainable place.”

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Earlier on Tuesday, St. Louis Fed President James Bullard took the opposite tack, urging a quicker end to the Fed’s asset purchases to put the Fed in position to raise rates as soon as next spring. The Fed began phasing out its bond-buying this month and expects to end purchases altogether by mid-2022.

Its next policy-setting meeting is in mid-December.

The Fed, Bullard said Tuesday, should “tack in a more hawkish direction” over its next couple of meetings to be prepared in case inflation does not ease.

Bullard will be a voter next year on Fed policy.

MIXED DATA, DIVIDED OUTLOOK

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U.S. retail sales surged in October, government data Tuesday showed, as Americans started their holiday shopping early to avoid shortages of some goods because of the ongoing pandemic. Meanwhile manufacturing output rose last month to its highest level since March 2019, data from the Fed showed.

At the same time, with inflation rising at its fastest in decades and well above the Fed’s 2% goal, consumer sentiment is down to a “level that you might associate with a recession,” Richmond Fed President Thomas Barkin noted Tuesday.

“I think that’s very much because of the impact that prices have on people,” including those who spend a significant part of their pay on food and gas, Barkin said.

At a separate event, Atlanta Fed President Raphael Bostic noted the central bank aims for low inflation because it doesn’t want households to stress about rising prices.

“That’s one of the reasons why, you know, I think you’ve heard from all of us concerns about the higher levels of inflation that we’ve seen recently and the need to get that back under control,” he said.

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(Reporting by Ann Saphir, Jonnelle Marte and Steve Holland; Editing by Andrea Ricci)

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Tesla sold 52,859 China-made vehicles in November – CPCA

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December 8, 2021

BEIJING (Reuters) – U.S. electric vehicle maker Tesla Inc sold 52,859 China-made vehicles in November, including 21,127 for export, the China Passenger Car Association (CPCA) said on Wednesday.

Tesla, which is making Model 3 sedans and Model Y sport-utility vehicles in Shanghai, sold 54,391 China-made vehicles in October, including 40,666 that were exported.

Chinese EV makers Nio Inc 10,878 cars last month, a monthly record high, and Xpeng Inc delivered 15,613 vehicles. Volkswagen AG said it sold over 14,000 ID. series EVs in China in November.

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CPCA said passenger car sales in November in China totalled 1.85 million, down 12.5% from a year earlier.

(Reporting by Sophie Yu, Brenda Goh; editing by Jason Neely)

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Renault Zoe goes from hero to zero in European safety agency rating

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December 8, 2021

By Nick Carey

LONDON (Reuters) – French carmaker Renault on Wednesday received a blow for its popular Zoe electric model, as the European New Car Assessment Programme (NCAP) gave it a zero-star safety rating in tests that are standards for Europe.

The carmaker, which is cutting costs and working to turn around its performance after overstretching itself over years of ambitious global expansion, also received a one-star rating for its electric Dacia Spring model.

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Euro NCAP said the latest Zoe had a worse seat-mounted side airbag than earlier versions. Euro NCAP noted the Renault Laguna had been the first car ever to receive a five-star rating in 2001.

“Renault was once synonymous with safety,” Euro NCAP secretary general Michiel van Ratingen said in a statement. “But these disappointing results for the ZOE and the Dacia Spring show that safety has now become collateral damage in the group’s transition to electric cars.”

In the year through October, the Zoe was the third top-selling fully-electric car in Europe, behind Tesla’s Model 3 in top place and Volkswagen’s ID.3.

In a press release titled “Hero to Zero,” UK insurance group Thatcham Research noted the Zoe had initially received a five-star rating back in 2013.

“It’s a shame to see Renault threaten a safety pedigree built from the inception of the rating,” said Matthew Avery, Thatcham’s chief research strategy officer and a Euro NCAP board member.

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Eleven cars received ratings in Euro NCAP’s final round of tests for 2021, which did not include Tesla models.

A number of other vehicles received five-star ratings, including BMW’s electric iX, Daimler’s electric Mercedes-Benz EQS, Nissan’s Qashqai and Volkswagen’s VW Caddy.

(Reporting By Nick Carey; Editing by Bernadette Baum)

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Weibo shares close down 7.2% in Hong Kong debut

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December 8, 2021

By Scott Murdoch

HONG KONG (Reuters) -Chinese social media giant Weibo Corp’s shares closed 7.2% below their issue price in Hong Kong on Wednesday, as it became the latest U.S.-listed China stock to seek out a secondary listing closer to home.

The Hong Kong debut was in line with a fall in Weibo’s primary listing in New York after a torrid week for U.S.-listed China shares, which are facing greater U.S. regulatory scrutiny and also under pressure from Chinese authorities.

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Weibo, which raised $385 million for its Hong Kong listing, opened at $256.20 and closed at HK$253.2 after a volatile debut session.

The stock had been priced at HK$272.80 each in its secondary listing in which 11 million shares were sold.

“For Weibo, it’s a matter of timing. The Hong Kong market had started to rebound this week and now we are seeing some softness emerging in the market,” said Louis Tse, Wealthy Securities director in Hong Kong.

Weibo’s fall came as Hong Kong’s Hang Seng Index closed Wednesday up 0.06% while the Tech Index was 0.03% higher.

Some major stocks such as Alibaba Group Holdings, down 4.35%, were off sharply as sentiment towards tech majors remains fragile.

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“The listing market in Hong Kong is very lukewarm right now,” said Dickie Wong, Kingston Securities executive director.

“Plus, there is regulatory pressure from the (U.S. Securities and Exchange Commission) on Chinese companies to disclose basically everything within three years.

“So there is a major trend that most of the U.S.-listed Chinese companies will seek secondary or dual primary in Hong Kong so they can exit the U.S. market if they need to.”

Ride-hailing giant Didi Global decided last week to delist from New York https://www.reuters.com/technology/didi-global-start-work-delisting-new-york-pursue-ipo-hong-kong-2021-12-03, succumbing to pressure from Chinese regulators concerned about data security and denting sentiment toward Chinese stocks.

Hong Kong and China’s mainland STAR Market have attracted $15.2 billion worth of secondary listings from U.S. listed Chinese companies so far this year, according to Refinitiv data.

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“The moves are probably based on the increasing recognition that the U.S.-China decoupling will not stop and will proceed steadily,” said LightStream Research analyst Mio Kato, who publishes on Smartkarma.

“I would expect a continuous flow of listings from New York to Hong Kong over the next year or two.”

The U.S administration is progressing plans to delist Chinese companies if they do not meet the country’s auditing rules, which could affect more than 200 companies.

Chinese companies https://www.reuters.com/business/us-sec-mandates-foreign-companies-spell-out-ownership-structure-disclose-2021-12-02 that list on U.S. stock exchanges must disclose whether they are owned or controlled by a government entity, and provide evidence of their auditing inspections, the Securities and Exchange Commission (SEC) said last week.

(Reporting by Scott Murdoch and Donny Kwok; editing by Richard Pullin and Louise Heavens)

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