Business

By Josh Ye

HONG KONG (Reuters) – China’s Lenovo Group (0992.HK), the world’s biggest maker of personal computers, reported flat quarterly revenue growth, narrowly beating market estimates, marking its slowest growth in eight quarters.

Total revenue was virtually flat at $16.96 billion for the quarter to end-June, slightly above an average Refinitiv estimate of $16.87 billion drawn from seven analysts. Net income attributable to shareholders rose to $516 million.

(Editing By Tom Hogue)

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(Reuters) -Australia’s Graincorp on Wednesday raised its annual profit forecast for the second time, as the agribusiness firm continues to capitalise on a supply crunch from the war in Ukraine, aided by expectations of above-average East Coast Australian (ECA) crop.

Soaring prices and demand for grains amid ongoing geopolitical tensions had driven a five-fold jump in Graincorp’s first-half profit, allowing it to pay a special dividend in early May.

Buyers looking to replace cargoes from Russia and Ukraine have turned to Australia, the world’s sixth-largest wheat exporter, which is set to ship a record volume this year.

The company said it now expects fiscal 2022 underlying net profit after tax to be A$365 million ($254.08 million) to A$400 million, up from its earlier forecast of A$310 million to A$370 million and significantly higher than the A$139 million reported last year.

“This positive outlook is driving an increase in fourth-quarter activity and supporting export volumes, forward contracted grain sales and supply chain margins,” Chief Executive Officer Robert Spurway said.

The agribusiness and processing businesses were on track to deliver record financial results, the company said, adding its supply chains were operating at close to full capacity to export grains.

“In preparation for the upcoming harvest, GrainCorp is investing in additional bunker storage and grain handling equipment to maximise receival capacity at key sites across our network,” Spurway said.

Graincorp’s profit upgrade was also encouraged by expectations of an above-average ECA crop in year 2022/23, combined with a favourable three-month rainfall outlook.

($1 = 1.4364 Australian dollars)

(Reporting by Shashwat Awasthi and Savyata Mishra in Bengaluru; Editing by Krishna Chandra Eluri)

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By Bianca Flowers

(Reuters) -Taiwan’s Foxconn, the world’s largest contract electronics maker, on Tuesday said it will build driverless electric tractors for California-based Monarch Tractor at its Lordstown, Ohio, facility starting in early 2023.

The announcement comes as heavy machinery manufacturers, including Deere & Co and Georgia-based AGCO, set their sights on the electric vehicle market as the U.S. agriculture industry shifts to smart farming.

The agreement with Monarch Tractor is the first manufacturing contract Foxconn, best known for assembling Apple Inc’s iPhone, has entered since purchasing the Ohio facility that was formerly a General Motors Assembly plant last year.

Production for Monarch’s battery powered MK-V series tractor is scheduled to begin in the first quarter of 2023, said Foxconn, formally known as Hon Hai Technology Group.

Monarch, which is based in Silicon Valley, debuted its first pilot series, autonomous electric tractor to a select group of farmers last year. The company has since entered into a multi-year licensing agreement with Italian-American vehicle manufacturer CNH Industrial.

CNH Industrial has a minority stake in Monarch Tractor.

With competition brewing among farm equipment manufacturers to expand product lines in precision agriculture technology and autonomous machinery, Monarch’s chief executive, Praveen Penmetsa, told Reuters that the company’s business model to target smaller farmers gives them unique opportunity to increase the marketshare while being on the same playing field with bigger manufacturers.

“Their technology is focused on the large farm operations and commodity crops. Fruits and vegetable farmers use much smaller tractors so we are focused on smaller farmers – that differentiates us a lot,” Penmetsa said.

The company did not disclose the cost of the tractor but said the autonomous software will be sold separately and that farmers will have to pay a monthly fee to access the services.

(Reporting by Bianca Flowers in Chicago; Editing by Jan Harvey and Lisa Shumaker)

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BERLIN (Reuters) – Germany’s finance ministry wants to raise income tax thresholds and slightly increase child benefits in response to the highest inflation in the country in decades, ministry officials said on Tuesday.

The tax free allowance will rise to 10,632 euros next year and 10,932 in 2024 from 10,347 euros currently, the officials said. Meanwhile, the top tax rate will kick in from an income of 61,972 euros next year and 63,515 euros in 2023 compared with 58,597 euros currently.

Child benefits for the first two children will rise by 8 euros to 227 euros next year, the officials said.

Tax revenue is set to decline by 10.12 billion euros next year as a result, and 17.5 billion in 2024, the officials said.

The changes aim to provide some relief to households after German inflation hit 8.5 % in July, driven by soaring food and energy prices.

(Reporting by Christian Kraemer; Writing by Sarah Marsh; Editing by Peter Graff and Jane Merriman)

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By Alexandra Valencia

QUITO (Reuters) – Ecuador’s capacity to meet its external debt obligations has not been affected by a Luxembourg court’s decision to freeze the country’s assets amid a dispute with oil company Perenco, the economy ministry said on Tuesday.

Ecuador has “promptly complied” with interest and amortization payments on bonds for $185.7 million, which were due on July 31, the ministry said in a statement.

Ecuador will pay its debts to the French oil company, the economy ministry said, adding the payment has been complicated due to Perenco still owing tax in the country.

“We welcome Ecuador’s statement that they will pay the award, although we have had no contact from Ecuador in this regard,” Perenco said.

It did not say anything about tax owed in Ecuador.

Ecuadorean President Guillermo Lasso promised in June 2021 to pay compensation to Perenco after the World Bank’s International Centre for Investment Disputes (ICSID) ruled Ecuador had unlawfully ended a production-sharing agreement with the company.

Perenco sued Ecuador in 2008 and was ultimately awarded $412 million in May last year.

But the ICSID ordered Perenco to pay compensation to Ecuador in relation to environmental damage it caused in areas where it operated, leaving the company with a net award of $374.3 million.

Including interest, Perenco is entitled to $391 million.

At the end of last month, a Luxembourg bailiff ordered 122 banking entities operating in the European country to freeze assets held by Ecuador amid a dispute over payment of the award.

Ecuador defaulted on $17.4 billion of foreign debt two years ago as the country buckled under one of the region’s worst coronavirus outbreaks following years of economic stagnation.

As part of the debt restructuring that followed, Ecuador sold new bonds maturing in 2030, 2035 and 2040 which are listed on the Luxembourg stock exchange.

(Reporting by Alexandra Valencia in Quito; Additional reporting by Rowena Edwards in London.; Writing by Oliver Griffin. Editing by Jane Merriman)

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By Neil Jerome Morales and Karen Lema

MANILA (Reuters) -The Philippine economy expanded less than expected in the second quarter, but at pace still in line with the official 2022 growth target, giving the central bank leeway to further tighten monetary policy to curb red-hot inflation.

The Southeast Asian country’s gross domestic product was 7.4% higher in the June quarter than a year earlier, growing more slowly than the downwardly revised 8.2% annual rate seen in the previous quarter and the median 8.6% forecast in a Reuters poll.

It was the slowest growth in three quarters but the second-fastest so far in Asia for the second quarter, Economic Planning Secretary Arsenio Balisacan said.

The Bangko Sentral ng Pilipinas (BSP) has flagged the possibility of raising key interest rates further by 50 basis points at its Aug. 18 policy meeting, confident the economy can withstand a less accommodative policy.

It has raised interest rates by a total 125 basis points since the start of the year to tame inflation, which soared to its fastest pace in nearly four years in July.

Balisacan attributed the second-quarter growth rate to strong construction and household consumption, among other factors.

He said the country’s economic recovery remained strong, with the second-quarter performance in line with this year’s growth target for full-year GDP of 6.5% to 7.5%.

The administration of President Ferdinand Marcos, whose six-year term began on June 30, is further targeting growth in full-year GDP of 6.5%-8.0% annually from 2023 to 2028.

Marcos, who is concurrent agriculture secretary, has vowed to turn the long-neglected farm sector into an engine of growth and to focus on fiscal management and infrastructure upgrades to sustain the economy’s rebound from the pandemic.

(Reporting by Neil Jerome Morales, Karen Lema and Enrico Dela Cruz; Editing by Martin Petty and Bradley Perrett)

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BEIJING (AP) — Chinese authorities have closed Tibet’s famed Potala Palace after a minor outbreak of COVID-19 was reported in the Himalayan region.

The action underscores China’s continued adherence to its “zero-COVID” policy, mandating lockdowns, routine testing, quarantines and travel restrictions, even while most other countries have reopened.

A notice on the palace’s Weixin social media site said the palace that was the traditional home of Tibet’s Buddhist leaders would be closed from Tuesday, with a reopening date to be announced later.

Tibet’s economy is heavily dependent on tourism and the Potala is a key draw.

China says its hard-line policy has been successful in preventing large-scale hospitalizations and deaths, while critics including the World Health Organization have decried its impact on the economy and society and said it is out of step with the changing nature of the virus and new methods of prevention and treatment.

China announced 828 new cases of domestic transmission on Tuesday, 22 of them in Tibet. The majority of those cases showed no symptoms.

Meanwhile, more than 80,000 travelers remain stranded on the southern resort island of Hainan under requirements that they consistently test negative for the virus in coming days before being allowed to leave.

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By Julie Zhu

HONG KONG (Reuters) – Asian shares were down on Tuesday as financial markets fretted about persistent global cost pressures, with investors turning their focus this week to U.S. inflation data and the prospects for further aggressive Federal Reserve rate hikes.

The unexpectedly strong U.S. jobs data on Friday have raised the stakes for the July U.S. consumer prices report due on Wednesday, especially for the Fed’s policy outlook.

“U.S. stocks were struggling to hold on to gains, as the focus moves from a robust U.S. labour market to the U.S. CPI data out later this week,” ANZ analysts said in a note.

“The priority of reducing inflation to underpin the expansion in domestic demand and sustainable jobs growth will ring loud and clear from the 25-27 August Jackson Hole symposium.”

Early in the Asian trading day, MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.2%. The index is up 0.5% so far this month. U.S. stock futures rose 0.07%.

Japan’s Nikkei slid 0.81% while Australian shares were flat.

China’s blue-chip CSI300 index was down 0.31% in early trade. Hong Kong’s Hang Seng index opened 0.12% lower.

On Monday, Wall Street closed mostly flat after blockbuster jobs data last week reinforced expectations the Federal Reserve will crack down on inflation, while a revenue warning from chipmaker Nvidia reminded investors of a slowing U.S. economy.

Investors now await consumer price data on Wednesday to gauge whether the Fed might ease a bit in its inflation fight and provide a better footing for the economy to grow.

There were some encouraging signs for the Fed on the prices front, with a New York Fed survey on Monday showing consumers’ inflation expectations fell sharply in July.

The Dow Jones Industrial Average rose 0.09% while the S&P 500 lost 0.12% and the Nasdaq Composite dropped 0.1%.

Bonds also got a safe-haven bid due to unease over Beijing’s sabre rattling against Taiwan amid days of Chinese military exercises around the island.

The yield on benchmark 10-year Treasury notes rose to 2.7517% compared with its U.S. close of 2.763% on Monday. The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 3.2115% compared with a U.S. close of 3.216%.

The dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was up at 106.37.

Oil prices continued their recent retreat after suffering the worst week since April on worries about stalling global demand as central banks keep tightening.

U.S. crude dipped 0.19% to $90.59 a barrel. Brent crude fell to $96.48 per barrel.

The rise in the dollar was a setback for gold, though it had managed to bounce from the lows hit on Friday and was traded at $1788.7731 per ounce.

(Editing by Shri Navaratnam)

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(Reuters) – U.S. consumers’ expectations for where inflation will be in a year and three years dropped sharply in July, a New York Federal Reserve survey showed on Monday, indicating U.S. central bankers are winning the fight to keep the outlook for price growth well-anchored as they battle to tame high inflation.

Median expectations for where inflation will be in one year tumbled 0.6 percentage point to 6.2% and the three-year outlook fell 0.4 percentage point to 3.2%, the lowest levels since February of this year and April of last year, respectively.

For the one-year outlook, the fall in expectations was driven by big drops in year-ahead price growth changes for gasoline and food, with the decline in anticipated gasoline price growth being the second largest in the survey’s nine-year history and the decline in food price growth the largest ever.

Inflation expectations are a key dynamic being closely watched by Fed policymakers as they aggressively raise interest rates to contain price pressures running at four-decade highs. The Fed has raised its policy rate by 225 basis points since March as it seeks to return inflation to its 2% goal.

In June, the deterioration in U.S. consumers’ inflation outlook was cited by policymakers who pushed through a 75-basis-point interest rate hike at their policy meeting that month. Fed officials have flagged that the possibility of another rate rise of that magnitude will depend on inflation, employment, consumer and economic growth data between now and their next policy meeting on Sept. 20-21.

The results of the New York Fed’s latest monthly Survey of Consumer Expectations provide some encouragement that things are improving even as a benchmark reading of consumer prices due later this week is expected to show little relief from inflation.

The Labor Department’s Consumer Price Index for July, due to be released on Wednesday, is expected to show headline prices rose by 8.7% from a year earlier, a slight decline from the prior month on the back of falling gasoline prices. Another key measure which strips out volatility from energy and food prices, however, is forecast to accelerate to 6.1% on an annual basis, compared to 5.9% in June.

The median household spending growth expectation fell for the second straight month from May’s record high, the New York Fed’s survey also showed, to 6.9% in July, the lowest level since February. The 1.5-percentage-point drop was the largest in the series history and was broad-based across age, education and income groups surveyed.

In the labor market, expectations that the unemployment rate will be higher a year from now edged 0.2 percentage point lower to 40.2% while the mean perceived probability of losing one’s job also saw a slight decline. The mean probability of quitting one’s job over the next year rose to 19.5% in July from 18.6% in the prior month. A high quits rate is seen as reflecting worker confidence in the labor market.

The New York Fed’s internet-based survey taps a rotating panel of 1,300 households and is structured so that a roughly equal amount of data are collected every week of the month.

(Reporting by Lindsay Dunsmuir; Editing by Paul Simao)

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Prominent demographers are asking the U.S. Census Bureau to abandon a controversial method for protecting survey and census participants’ confidentiality, saying it is jeopardizing the usability of numbers that are the foundation of the nation’s data infrastructure.

The Census Bureau embraced using differential privacy algorithms for the first time with the release last year of the first round of 2020 census data. Those numbers were used for determining how many congressional seats each state gets, as well as redrawing political districts in a once-a-decade process known as redistricting.

The demographers and other researchers ask in a letter to Census Bureau Director Robert Santos that the agency drop future plans to use the algorithms on two other important data releases — annual population estimates and the American Community Survey figures. The annual population estimates are used in the distribution of $1.5 trillion in federal funding each year. The American Community Survey provides the most comprehensive data on how people in the U.S. live by asking questions about commuting times, internet access, family life, income, education levels, disabilities, military service and employment.

The privacy protection methods “are inappropriate for the critically important data sets, which are fundamental to American democracy and to equity in redistricting, fund allocation and planning for government services of all kind,” the letter said.

The Census Bureau has said that the differential privacy algorithms are needed since, without them, the growth of easily available third-party data combined with modern computing could allow hackers to piece together the identities of participants in its censuses and surveys in violation of the law. Previous methods of protection are no longer effective, according to the statistical agency.

A panel of three federal judges last year refused to stop the Census Bureau from using the algorithms after their use was challenged in a lawsuit by the state of Alabama.

Census consultant Terri Ann Lowenthal said the letter reflects “the significant unease about the continued usefulness of Census Bureau data in light of new efforts to protect confidentiality in the modern world.”

“The concerns get to the heart of the bureau’s mission, so I’m sure agency leadership will take them seriously and, hopefully, find acceptable solutions based on meaningful stakeholder engagement,” said Lowenthal, a former congressional staffer who specializes in census issues.

The letter was spearheaded by steering committee members from the Federal-State Cooperative for Population Estimates, which promotes cooperation and communication between the Census Bureau and state agencies responsible for demographic research. Its members started gathering signatures for the letter last week from other researchers and will present the letter to Santos sometime in the next several weeks.

Differential privacy algorithms add intentional errors to data to obscure the identity of any given participant. It is most noticeable at the smallest geographies, such as census blocks. For the next census in 2030, the demographers recommended using other methods to protect confidentiality such as combining blocks with few people.

Some of the detailed data that were made public in previous censuses won’t be released at the smallest geographic levels, and efforts to apply the algorithm have delayed the release of the next round of 2020 census data until next year, almost two years after it should have been released, the letter said.

“These key data for local government planning will be out-of-date when they are finally released,” it said.

City University of New York sociology professor emeritus Andrew Beveridge warned over the weekend at the Joint Statistical Meetings conference in Washington that private data providers are ready “to pounce” and fill the gap if researchers feel the Census Bureau data is unusable. That could lead to the privatization of the U.S. statistical infrastructure, Beveridge said during a presentation at the largest gathering of statisticians and data users in North America.

The demographers claim in their letter that the statistical agency’s credibility is on the line, saying “the experience of the last few years has undermined user trust in the Census Bureau.”

Last month at meeting sponsored by the National Academies on differential privacy, Santos was asked about the feasibility of reverting back to previous confidentiality methods.

“I understand where you are coming from. I feel your pain,” Santos said. “We have made a determination that if we want to protect data in today’s society… that is not possible.”

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Follow Mike Schneider on Twitter at https://twitter.com/MikeSchneiderAP

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