Business

BERLIN (Reuters) -The German government has sold off its 20% stake in Lufthansa acquired during the coronavirus pandemic, it said on Tuesday.

The state’s economic stabilisation fund (WSF), which saved Lufthansa from bankruptcy during the pandemic with a bailout package totalling 9 billion euros ($8.97 billion), had progressively reduced its stake in recent years with the aim of offloading it completely by October of 2023.

It has now sold its last remaining shares to international investors in a block placement for 455 million euros, the fund said in a statement on Tuesday night.

It earned a total of 1.07 billion euros from selling its shares, yielding a 760 million euro profit from the investment.

“The government aid package successfully helped the business through the crisis,” it said.

Deutsche Bank, one of the global coordinators and bookrunners for the sale alongside Goldman Sachs, said earlier on Tuesday that the fund wanted to offer institutional investors around 74.4 million Lufthansa shares, corresponding to 6.2% of the airline’s share capital.

Lufthansa shares closed down 1.5% at 6.32 euros per share on Tuesday.

($1 = 1.0030 euros)

(Reporting by Victoria WalderseeEditing by Bill Berkrot and Jonathan Oatis)

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By Lewis Krauskopf and David Randall

NEW YORK (Reuters) – An already-murky outlook for U.S. stocks and bonds is growing darker, as sizzling inflation ratchets up expectations for how aggressively the Federal Reserve will need to raise rates.

For weeks, investors had debated whether the full extent of Fed hawkishness had been priced into markets, after the central bank already raised rates by 225 basis points this year, with many penciling in another 75 basis point rate hike at its meeting next week.

Tuesday’s hotter-than-expected inflation report – which slammed stock and bond prices – is bolstering the case for those who argue the central bank will need to be far more hawkish than anticipated in the weeks ahead. That’s forcing investors to gird themselves for a potentially bigger dose of Fed tightening that has rocked asset prices all year.

The closely watched CPI report showed U.S. consumer prices unexpectedly rose in August, with such prices rising at an annual pace of 8.3%, not far from the four-decade peak reached in June.

“The Fed was already going on a tightening path in the next several months and now they have got to actually increase that given this report,” said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management. “It’s pretty negative across the board for markets.”

Fed funds futures are now pricing in a roughly 36% chance that the Fed next week raises its benchmark rate by a full percentage point.

The reaction in markets has been swift: the benchmark S&P 500 ended down 4.3% on Tuesday and the tech-heavy Nasdaq fell 5.2%, the biggest one-day drops for both indexes since June 2020. Yields on the benchmark U.S. 10-year Treasury note, which move inversely to bond prices, rose as high as 3.46%, the highest in about three months.

Growing expectations for Fed hawkishness are an unwelcome development for a market already contending with uncertainty on multiple fronts, from worries over whether the central bank’s inflation fight will bring in a recession to the knock-on effects of rising real yields on asset prices.

September also sees the Fed ramp up the unwinding of its balance sheet to $95 billion per month, a move some investors worry may add volatility in markets and weigh on the economy.

‘PIVOT’ HOPES DASHED

Even the time of year is to some, a source of concern: the S&P 500 has fallen an average of 0.5% in September since 1950, the worst monthly performance for the index, according to the Stock Trader’s Almanac. So far for the month, the index was logging a 0.6% loss; for the year it is down over 17%.

Tuesday’s inflation report put further pressure on a rebound that had seen the S&P 500 rise by 17% from its mid-June low. Stocks have now given back roughly half of those gains.

It also dashed some optimism that the Fed would soon be able to “pivot” to easing monetary policy, hopes for which has periodically helped support risk assets.

“Any impending Fed pivot isn’t in front of us and this data point confirms that,” said Matt Peron, director of research at Janus Henderson Investors. “The market got a little ahead of itself over the last couple of weeks with the peak hawkishness narrative.”

More declines in stocks and bonds promise further pain to investors who had counted on a mix of the two asset classes to cushion market declines.

So-called 60/40 portfolios – which hold 60% of their assets in equities and 40% in bonds in anticipation that declines in one asset class will lead to gains in the other – are down more than 12% for the year to date, their worst performance since 1936, according to BofA Global Research.

Of course, many investors have been preparing for more volatility after an already rocky year so far. Fund managers increased cash balances to 6.1% in September, the highest in over 20 years, according to BofA Global Research’s monthly survey released on Tuesday.

“The key question is at what point does the Fed build enough confidence that they’ve done enough. It’s clear that we’re not near that point now,” said Ed Al-Hussainy, senior global rates strategist at Columbia Threadneedle. “On the risk asset side I think there’s more damage to be done.”

(Reporting by Lewis Krauskopf and David Randall, additional reporting by Sinéad Carew, Ann Saphir and Gertrude Chavez-Dreyfuss, editing by Deepa Babington)

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By Caroline Valetkevitch

NEW YORK (Reuters) – The dollar rallied against the yen, euro and other currencies on Tuesday after stronger-than-expected U.S. inflation data boosted investor bets that the Federal Reserve will need to stay aggressive in raising interest rates.

The dollar index, which tracks the greenback against its peers, was up 1.5% at 109.85 and hit its highest in a week, heading back toward last week’s two-decade peak of 110.79. The index turned positive after the data release.

The euro, pound and yen all weakened sharply. The euro was last down 1.5% versus the greenback at $0.9973, after hitting a nearly one-month high of $1.0198 in the previous session. The euro has traded below parity in 16 of the last 17 sessions.

According to the Labor Department report, U.S. consumer prices unexpectedly rose in August and underlying inflation picked up amid rising costs for rents and healthcare.

“The data was far stronger than expected. Particularly worrisome is the fact that core inflation came in almost double estimates,” said Karl Schamotta, chief market strategist at Corpay in Toronto.

“This is going to put the idea of transitory inflation to bed for now and anchor U.S. yields and the dollar substantially higher. The key thing here is that we’re now looking at near-certain odds on a 75-basis-point move next week.”

After the report, interest-rate futures traders dumped any lingering bets on Fed policymakers slowing their rate hike pace when they meet next week. They piled into bets on a third straight 75 basis points hike that would lift the Fed’s current 2.25% to 2.5% policy rate range to 3% to 3.25%, and rate contracts now also reflect about one-in-four odds of a surprise full-percentage-point increase at the Sept. 20-21 meeting.

The dollar had eased in recent sessions after its strong run higher, while the euro had been gaining in recent sessions following hawkish talk from the European Central Bank.

Against the yen, the dollar was last up 1.2% at 144.51. Earlier, the Japanese currency found support from comments from officials signaling the government could take steps to counter excessive yen weakness.

Sterling was down against the dollar as well. The pound was last down 1.6% at $1.1499. Earlier in the day, it rose to a two-week high after the British jobless rate dropped to its lowest level since 1974, while wages excluding bonuses rose by 5.2%, the highest rate since the three months to August 2021.

In cryptocurrencies, bitcoin last fell 9.48% to $20,277.00, while ether was down 6.8% at $1,600.

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

Currency bid prices at 4:08PM (2008 GMT)

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

Previous Change

Session

Dollar index

109.8500 108.2200 +1.53% 14.830% +109.8900 +107.6700

Euro/Dollar

$0.9973 $1.0122 -1.47% -12.27% +$1.0188 +$0.9970

Dollar/Yen

144.5050 142.8200 +1.19% +25.53% +144.6750 +141.6050

Euro/Yen

144.12 144.58 -0.32% +10.59% +145.0300 +144.0400

Dollar/Swiss

0.9616 0.9539 +0.83% +5.45% +0.9632 +0.9482

Sterling/Dollar

$1.1499 $1.1683 -1.56% -14.97% +$1.1738 +$1.1497

Dollar/Canadian

1.3167 1.2985 +1.41% +4.14% +1.3174 +1.2954

Aussie/Dollar

$0.6733 $0.6889 -2.26% -7.37% +$0.6916 +$0.6726

Euro/Swiss

0.9591 0.9652 -0.63% -7.50% +0.9677 +0.9585

Euro/Sterling

0.8671 0.8662 +0.10% +3.23% +0.8694 +0.8649

NZ

Dollar/Dollar $0.5992 $0.6137 -2.38% -12.47% +$0.6161 +$0.5987

Dollar/Norway

10.1080 9.8455 +2.71% +14.79% +10.1185 +9.8185

Euro/Norway

10.0824 9.9616 +1.21% +0.69% +10.0908 +9.9547

Dollar/Sweden

10.6915 10.4874 +0.61% +18.56% +10.6979 +10.4140

Euro/Sweden

10.6645 10.5996 +0.61% +4.21% +10.6708 +10.5995

(Reporting by Caroline Valetkevitch in New York; additional reporting by Samuel Indyk in London; Editing by Ana Nicolaci da Costa, Chizu Nomiyama and Jonathan Oatis)

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By Andreas Rinke, Belén Carreño and Michel Rose

PARIS/MADRID/BERLIN (Reuters) -French scepticism about a new gas pipeline across the Pyrenees highlights the competing visions for Europe’s future energy mix as the continent urgently confronts a power crisis.

MidCat would be a third gas connection between France and Spain which its main backers, Madrid, Lisbon and more recently Berlin, say would help Europe reduce its Russian gas reliance.

But French President Emmanuel Macron has bluntly told his partners he sees no case for the multi-billion euro project.

France says MidCat would take too long to build to ease the looming energy crunch, be costly for France and go against ambitions to shift towards a green economy.

Officials in Spain and Germany, speaking on condition of anonymity, told Reuters they believe that France is acting to protect its own ailing nuclear industry and fend off competition from Spain as a staging post for imported gas.

“Macron is under pressure at home from different groups, which don’t like the pipeline project, the biggest is surely the nuclear power sector,” a senior German government source said.

Spokespersons for the French energy ministry and EDF, which operates France’s nuclear reactors, declined to comment.

Russia supplied 40% of Europe’s gas before its invasion of Ukraine. Now, the region is scrambling to diversify its energy sources and MidCat was one of the projects EU ministers discussed at an emergency meeting in Brussels last week.

German Chancellor Olaf Scholz last month described the pipeline as “dramatically missing” from Europe’s network, and last week raised the issue with Macron during a videocall.

Immediately afterwards, Macron said there was spare capacity in the pipes already linking Spain and France and MidCat could not be constructed swiftly enough to ease this winter’s crisis.

“I do not understand what short-term problem this would solve,” Macron said.

But while it may not provide immediate relief, Spain and Portugal say they have a solution with new gas routes and Madrid said it was ready to persuade Macron over MidCat.

Both have a large gas import capacity, with seven LNG terminals which convert tankers of liquefied natural gas (LNG) back into vapour form for use by industry and households if the infrastructure was in place for it to be piped to other countries such as Germany via France.

The French president has said he does not get all the fuss around MidCat, telling reporters last week: “I do not understand why we would jump around like Pyrenees goats on this topic”.

This has led officials in Madrid to question if Macron may be angling for something in return, whether EU financing or backing for another project. And despite Macron’s statements, French officials have left the door ajar to further discussions.

But in a sign of Spanish frustration, one source said France needed to demonstrate how it was contributing to European “energy solidarity”, given half of its nuclear reactors are offline and it is relying on others to provide it with power.

Macron, however, has said that plans to reactivate a disused interconnector in eastern France so that Paris can pipe its own gas direct to Germany if required is evidence of its commitment.

It will allow France to deliver Germany up to 20 terawatt hours (TWh) of gas over the winter, roughly 2% of the gas needs of Europe’s largest economy. A German official said the deal would not fix Germany’s crunch but sent markets a message.

COMPETING INTERESTS

A joint proposal for a new trans-Pyrenees pipeline that would have a capacity to more than double the volume of gas piped between Spain and France was rejected by energy regulators for both countries in 2019.

The project was proposed by Terega, a gas grid company owned partly by Italy’s Snam and EDF, and its Spanish counterpart Enagas at an estimated cost of 3 billion euros.

While the French regulator said the economic benefits would be tilted towards Spain, Madrid says Russian moves to cut gas supplies mean that the upside of MidCat would now extend far beyond Spain’s own borders.

However, France has terminals on its Atlantic and Channel shores and it too wants a slice of LNG imports.

“France has (LNG terminals) that can process gas for the whole of Europe,” a French government source said.

But longer term, France is betting heavily on reviving its troubled nuclear industry in its drive for carbon neutrality, and Paris has questioned MidCat’s green credentials.

It would be at least the end of the decade before MidCat could be finished, French energy ministry officials say.

“By that point, the priority will be de-carbonising the economy, not using more gas. So we’re somewhat puzzled,” one ministry official told Reuters.

HYDROGEN OPTION

Berlin’s primary interest in MidCat lies in green hydrogen rather than near-term LNG supplies, two senior German officials told Reuters.

Officials in Madrid and Berlin argue the pipeline could be repurposed to carry zero-emission hydrogen fuel made in the Sahara desert or elsewhere to Europe’s industrial heartland.

But France would rather produce hydrogen locally than rely on imports. And it doubts the short-term feasibility, a French government source said, of Germany’s vision for hydrogen, which is notoriously more difficult to transport than natural gas.

In the face of French resistance, Madrid and Berlin are exploring alternatives. Plan B could bypass France altogether and build a pipeline under the Mediterranean to Italy.

Madrid is accelerating a feasibility study for a pipeline from Barcelona to Livorno on the Tuscan coast. A Spanish official said it would take longer to build, but had the political backing of the outgoing Italian government.

A senior official from Spain’s autonomous Catalonia region, a backer of MidCat, said a submarine pipeline to Italy would be more costly and carry greater environmental and other risks.

One problem is the flammability of hydrogen, which also leaks more easily than gas because its molecules are smaller, while it can make also some grades of steel brittle, the official said.

(Reporting by Michel Rose and Elizabeth Pineau in Paris, Andreas Rinke in Berlin, Belen Carreno in Madrid and Joan Faus in Barcelona; Writing by Michel Rose; Editing by Richard Lough and Alexander Smith)

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A look at the day ahead in European and global markets from Tom Westbrook

Traders in Asia hit pause on four days of selling dollars and buying stocks as focus turns on U.S. inflation figures set for release at 1230 GMT. Today’s data will frame the Fed’s policy meeting next week and set the tone for weeks to come.

British employment and a potentially ugly German sentiment survey are due ahead of the U.S. data, but are likely to be overshadowed.

Consumers’ inflation expectations are falling, Monday’s New York Fed survey showed, and markets are hoping for another signal that the inflation peak is firmly in the rear-view mirror.

Economists’ expectations are for a slowdown in headline CPI, thanks to oil and a host of other commodity prices backing down from peaks, but for core prices to stay sticky.

Economists and the market also reckon the Fed is likely to hike by 75 basis points on Sept. 21, so perhaps the data’s largest impact may be on moves beyond that.

Concurrent with the data, industrial disputes on the U.S. railways are worth a wary eye as workers press for big pay rises. The railroads account for nearly a third of U.S. cargo transport by weight and the first strikes since the 1990s are a distinct possibility this week.

At midday on Wednesday, Norfolk Southern will stop accepting intermodal cargo. Big railway operators have until a minute after midnight on Friday to reach deals with unions or risk opening the door to strikes.

Railroads already suspended carriage of hazardous loads like fertiliser so they aren’t stranded if networks grind to a halt.

US CPI inflation ebbing? https://fingfx.thomsonreuters.com/gfx/mkt/mopaneyyzva/One.PNG

Key developments that could influence markets on Tuesday:

UK employment data, final German CPI, German and Euro zone ZEW surveys and U.S. inflation data

(Reporting by Tom Westbrook; Editing by Ana Nicolaci da Costa)

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ZURICH (Reuters) -UBS Group AG plans to increase its dividend by 10% to $0.55 per share and anticipates its share repurchases will exceed $5 billion for 2022, the Swiss bank said on Tuesday.

“UBS will adjust its accrual for the 2022 ordinary dividend from $0.51 to $0.55 per share – an increase of 10% compared to the previous year,” it said in a statement, adding its board intended to propose the dividend at the 2023 Annual Meeting.

“In addition, UBS expects share repurchases to exceed the $5 billion goal for the year 2022. As of 9 September 2022, UBS has bought back $4.1 billion of shares,” it said.

It said it would provide guidance on next year’s capital return with fourth-quarter earnings and expects “to continue to have share repurchases and a progressive dividend”.

(Reporting by Michael Shields; Editing by Christopher Cushing)

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By Fanny Potkin, Eduardo Baptista and Tony Munroe

SINGAPORE/BEIJING (Reuters) – Even as China bars 1.4 billion citizens from Twitter, its local authorities are splurging on global advertising on the site, helping make the country the platform’s fastest-growing overseas ad market and one of its largest non-U.S. revenue sources.

A Reuters review of publicly available government tenders, budget documents and promoted tweets from 2020 to 2022 shows local authorities and Chinese Communist Party propaganda offices for cities, provinces and even districts across the country have flocked to Twitter to buy ads.

The promotions, often outsourced by local governments to state media, pitched local attractions, as well as cultural and economic achievements, to an international audience, and were permitted under an exemption to Twitter’s ban on state-media advertising.

The review shows for the first time just how important China has become for Twitter, under pressure from investors to meet growth targets as its U.S. business stalls. It comes with the company embroiled in a legal battle with Tesla Chief Executive Elon Musk, who is attempting to back out of his unsolicited $44 billion offer to buy Twitter.

Four sources told Reuters operations in China became a source of internal clashes between teams keen to maximise the sales opportunity and others concerned at the optics of doing business with state-affiliated entities at a time of growing tension between Beijing and Washington.

Twitter’s dealings in China may come to the fore on Tuesday when the U.S. Senate Judiciary committee holds a hearing to consider a whistleblower complaint filed by Twitter’s former security chief Peiter Zatko.

Among other claims, the 84-page complaint alleges “Twitter executives knew that accepting Chinese money risked endangering users in China,” and that “Mr Zatko was told that Twitter was too dependent upon the revenue stream at this point to do anything other than attempt to increase it.” Reuters could not independently verify the claims.

Twitter denies the accusations.  Zatko, through an attorney, declined to comment.

Two people with knowledge of the matter said Twitter’s China sales team actively courted local governments in the country as part of its global strategy to compete for ad business with tech rivals like Alphabet’s Google and Meta’s Facebook.

Gaming, e-commerce, and tech firms in China are also key Twitter customers, according to two sources. Twitter’s sales of overseas ads to Chinese clients are estimated to be in the “hundreds of millions of dollars a year”, the people said, the majority coming from these companies.

The people with knowledge of the matter declined to be identified citing confidentiality agreements.

Twitter declined to comment on internal discussions and its sales performance in China. A spokesperson said the company has never hidden the fact that it does business with Chinese commercial entities.

‘INFORMATION IMBALANCE’

The company  banned political and state-media advertising in 2019, though an August blog announcement https://blog.twitter.com/en_us/topics/company/2019/advertising_policies_on_state_media that year allowed a carveout for ads “from (state-media) accounts solely dedicated to entertainment, sports and travel content”. In March this year, though, that exemption was rescinded, effectively banning state-media firms from advertising on Twitter altogether.

In a March Twitter blog post, the company’s vice-president of global public policy, Sinéad McSweeney, said that “a severe information imbalance” is created when governments that block access to Twitter within their state continue to use it for their own communications.

Still, Reuters found dozens of ads for Chinese local governments, as well as for state media themselves, published on Twitter since March. Twitter, like other platforms, also derives revenue when advertisers submit ads via a self-service online platform.

Twitter said it is improving auto-detection technology aimed at activities that violate the platform’s policies. “This work is challenging and we know we have more to do,” the company said in a statement.

The Chinese Communist Party’s top propaganda organ and the central government’s ministry of culture and tourism, both based in Beijing, did not respond to a request for comment. 

‘LIFE IS BRILLIANT’

Twitter’s China region has seen an 800-fold improvement in revenue since 2014, the fastest-growing globally, according to the now-deleted LinkedIn bio of Twitter Greater China Managing Director Alan Lan. The bio was reviewed by Reuters late in August before it was taken down.

Twitter declined to comment on the number in the bio nor make Lan, who leads the Singapore-based China sales team, available for comment.

Chinese local authorities continued buying foreign social media ads and content even after the COVID-19 pandemic triggered the closure of the country’s borders, according to a review of 36 publicly available local government tenders, budget documents from 2020-2022, and social media accounts. It wasn’t immediately clear why such ads were placed with China effectively closed.

“Life is always unusually brilliant because we are in Wuhan,” one promoted tweet from the @Visit_Wuhan account in July 2021 read, part of a 2 million yuan ($289,000) government tender.

Another promoted tweet from September 2022, a verified account for the province of Shaanxi, famous for its Terracotta Warriors, urged users to “Hurry up and follow me to Shaanxi to feel its charm!”  

AD POLICY TESTED

Some Washington-based senior Twitter executives, worried the expansion of its China business could backfire on the company, pushed for sales to Chinese government-affiliated accounts to be curbed altogether during the administration of former U.S. President Donald Trump as tensions with Beijing worsened in 2020, according to two sources.

Twitter declined to comment on internal discussions.

An attempt to set up what would have been the company’s first mainland China-based sales office was shut down in 2019 on data security concerns, sources said, as tensions swirled internally over the company’s operations in China.

Twitter didn’t respond to questions on the mainland office talks.

Reuters’ review of more than 300 accounts representing local governments found that as of the time of this story’s publication less than a dozen were labelled by Twitter as state-affiliated media. Publicly available tender documents reviewed by Reuters show the vast majority of these accounts are outsourced to state media.

Those included the verified accounts @PDChinaLife and @PDChinaSports, run by the Communist Party’s official People’s Daily, and which continued to advertise on Twitter until as recently as last month, as well as @iChongqing, a state-run operation paid by the southwestern metropolis of Chongqing. Both the People’s Daily and iChongqing did not respond to a request for comment.

BLUE TICKS

As the business grew, Chinese local government accounts ramped up their demands on the company, asking for blue-tick verifications just as accounts elsewhere do, or for help with negative activity targeting their accounts, two sources said.

“Some of the government accounts would earlier complain to their Twitter sales reps when there’s negative stuff or bots,” said one person familiar with China’s Twitter sales operations, adding that Twitter only acted on complaints about spam accounts commenting on or engaging with Chinese local government accounts. 

The buying of ads on Twitter by state-affiliated entities has come as Chinese police have increased arrests of citizens who have found ways to use the platform to criticise authorities, according to Chinese news coverage of court cases.

Chinese courts have sentenced dozens of people in the past three years for using Twitter and other foreign platforms to criticise authorities, according to court records and media articles.

China rarely comments on such cases, but when it does it justifies the punishment by accusing the critics of trying to subvert the regime.

($1 = 6.9222 Chinese yuan renminbi)

(Reporting by Fanny Potkin in Singapore and Eduardo Baptista and Tony Munroe in Beijing; Editing by Kenneth Li and Kenneth Maxwell)

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By Medha Singh and Lisa Pauline Mattackal

(Reuters) – For years, ether could barely dream of challenging its big brother bitcoin. Now, its ambitions may be becoming more realistic.

The second-biggest cryptocurrency is taking market share from bitcoin ahead of an all-important “Merge” software upgrade that could sharply reduce the energy usage of its Ethereum blockchain, should the developers pull it off in coming days.

Bitcoin’s dominance, or its share of the crypto market’s market value, has slipped to 39.1% from this year’s peak of 47.5% in mid-June, according to data platform CoinMarketCap. Ether, on the other hand, has climbed to 20.5% from 16%.

The upstart is still a long way from overtaking bitcoin as the No.1 cryptocurrency, a reversal known to aficionados as “the flippening”. It’s made up ground, though; in January 2021, bitcoin reigned supreme at 72%, while ether occupied a slender 10%.

As for price, one ether is now worth 0.082 bitcoin, near December 2021 highs and sharply above the 2022 low of 0.049 in June.

“People are now viewing Ethereum as essentially a safe asset because they’ve seen the success of the network, they think it’s not going anywhere,” said Joseph Edwards, head of financial strategy at fund management firm Solrise Finance.

“There’s a permanency to how Ethereum is perceived in the crypto ecosystem.”

Bitcoin dominance wanes https://graphics.reuters.com/FINTECH-CRYPTO/WEEKLY/zdvxomazgpx/chart.png

CAPRICIOUS CRYPTO

The Merge, expected to take place on Thursday after several delays, could lead to wider use of the blockchain, potentially boosting ether’s price – although nothing is certain in a capricious crypto market.

Ethereum forms the backbone of much of the “Web3” vision of an internet where crypto takes centre stage, powering applications involving crypto offshoots such as decentralised finance and non-fungible tokens – although this much-hyped dream is still unrealised.

Bitcoin and ether have both nearly halved this year on concerns about supersized interest rate hikes from central banks. Nonetheless, investors seem to like the look of the Merge, with ether up over 65% since the end of June. Bitcoin has barely budged in the same period.

“We’re going to see (ether’s) attractiveness to some investors who are concerned about energy consumption,” said Doug Schwenk, CEO of Digital Asset Research, although he cautioned that ether was still a long way behind bitcoin.

THE KING IS STRONG

The diminishing bitcoin dominance in crypto’s current bear market is a departure from previous market cycles when investors sold lesser tokens – “altcoins” – in favor of the more liquid and reliable bitcoin.

Dethroning the king is no easy feat, though.

Bitcoin is still by far the most well-known cryptocurrency. Mainstream investors who have dipped their toes in the crypto market since 2020 have tended to turn first to bitcoin, as the most liquid and widely-traded token.

Its market cap of $427 billion is still more than double Ether’s $210 billion, and market participants firmly believe the original digital coin remains the gold standard in crypto due to its limited supply.

Some market players say bitcoin’s grip on the crypto crown is still strong, even if it has to accept other contenders. For example, Hugo Xavier, CEO of K2 Trading Partners, said its dominance could improve to 50%-60% range if the crypto market turns bullish but it is unlikely to touch 70% again.

(Reporting by Medha Singh and Lisa Pauline Mattackal in Bengaluru; Editing by Tom Wilson and Pravin Char)

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By Anshuman Daga and Tom Westbrook

SINGAPORE (Reuters) – Asian stocks advanced on Tuesday and the dollar steadied below a recent peak ahead of U.S. inflation data that some strategists said could offer another signal that inflation has peaked.

S&P 500 futures and Nasdaq futures held firm, while European stock futures dipped, setting the stage for a subdued start for European markets.

MSCI’s broadest index of Asia-Pacific shares ex-Japan rose 0.8%, led by a 2.6% jump for South Korea’s KOSPI. Japan’s Nikkei put on 0.2%. [.KS][.T]

The MSCI gauge has risen for four days in a row, bouncing back from two-year lows.

Analysts, however, warned that U.S. core inflation is likely to march on and that the near-term rate implications are unclear.

“It’s too early to be celebrating the end of inflation, as some market participants seem already to be doing,” said ING economist Rob Carnell.

U.S. crude is hovering below $90 a barrel, down nearly 30% since the middle of June and roughly where it traded before Russia’s invasion of Ukraine. [O/R]

Interest rate futures imply a 90% chance that the Federal Reserve lifts its benchmark interest rate by 75 basis points at next week’s policy meeting – a position that is perhaps most vulnerable to a downside CPI surprise.

“A further cooling in inflation would support the case for a step down in the pace of policy tightening to a 50 basis points rate hike at the FOMC meeting next week,” said Kristina Clifton, a senior economist at CBA.

“Nevertheless, an upside surprise to inflation will easily cement market expectations of another outsized 75 basis points rate hike.”

U.S. inflation figures are due at 1230 GMT and the consensus is for the core inflation rate last month to have risen 0.3% month-on-month, the same as in July.

On Monday, Wall Street indexes posted a fourth straight session of gains.

DOLLAR BELOW RECENT PEAK

Asia data out on Tuesday offered a cloudy picture of regional economies. A 9% year-on-year jump in Japanese wholesale prices points to pressure on corporate margins, yet a slowdown in gains for August holds some hope of relief.

In New Zealand, rate hikes which began a year ago are starting to bite, sending home prices down 6% since last August.

The investment banking world is also offering a counterpoint to stock markets’ enthusiasm. Goldman Sachs is mulling job cuts, a person familiar with the plans told Reuters.

A KKR-led consortium has told Australia’s Ramsay Health Care it will not improve its $14.5 billion cash-and-stock offer for the hospital operator, a move that will likely put a deal on ice.

In currency markets the dollar is off recent peaks. Its index against major peers was steady at 108.16, after falling 0.7% overnight, the largest daily decline since August. Tailwinds from last week’s European rate hike have the euro extending a bounce and above parity at $1.0127. [FRX/]

Even the battered Japanese yen is having a breather at 142.5 per dollar – a bit stronger than last week’s 24-year low at 144.99 with some investors closing bets on a further slide as risks of official intervention increase.

U.S. Treasury yields rose overnight after some lacklustre auctions. Selling was heaviest at the very long end, with the 30-year yield up about 6 bps to around 3.5%.

Benchmark 10-year yields steadied at 3.3425% in Tokyo trade on Tuesday, beneath the two-year yield of 3.5489%. [US/]

Gold was steady at $1,722 an ounce.

(Editing by Shri Navaratnam and Jacqueline Wong)

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(Reuters) -Bank of America Corp on Monday named company veteran Mike Joo as its new head of global corporate and investment banking (GCIB) for North America, according to a memo seen by Reuters.

The newly created role will add to Joo’s existing responsibilities as GCIB’s chief operating officer (COO). Joo will report to GCIB president Matthew Koder.

“Mike’s extensive experience across the firm will enable him to fully utilize the entire Bank of America platform, including the Market Presidents, to leverage our expansive network and capabilities to deepen and broaden client relationships,” Koder said in the memo.

The contents of the memo were confirmed by a Bank of America spokesperson.

In the new role, Joo will work closely with business leaders across capital markets, corporate banking, investment banking, and global transaction services, Koder added.

Joo has previously served as the COO for global markets, head of global rates and currencies solutions, and head of Asia debt capital markets in his over 15-year stint at Bank of America.

The North Carolina-based bank will announce a new chief of staff for GCIB in the coming weeks, according to the memo. Bloomberg reported on Joo’s new role earlier on Monday.

(Reporting by Mehnaz Yasmin in Bengaluru; Editing by Maju Samuel and Nick Zieminski)

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