(Reuters) – Faraday Future co-founder Nick Sampson has quit his executive post at the Chinese electric vehicle developer, the latest blow to the troubled company that said it was experiencing “extraordinary financial hardship.”
FILE PHOTO: Nick Sampson, senior vice president of product R&D and engineering at Faraday Future, speaks during an unveiling event for the Faraday Future FF 91 electric car in Las Vegas, Nevada January 3, 2017. REUTERS/Steve Marcus
Sampson was senior vice president for product strategy and is the second of three co-founders to resign in just over a year, leaving only Chief Executive Jia Yueting.
His exit announced on Tuesday comes as Faraday is embroiled in a bitter legal fight with its largest shareholder, China’s Evergrande Health Industry Group Ltd, following a planned $2 billion investment that went sour.
The company’s problems underscore the challenges that EV manufacturers face in bringing problem-free cars to market – a feat even Tesla, the biggest U.S. automaker by market value, has struggled to do.
Faraday Future (FF) has placed some employees on unpaid leave through December and offered others the option of taking leave for the same period of time, the company told Reuters in an emailed statement.
This move comes days after Faraday said it was planning layoffs and salary cuts.
The company said Peter Savagian, its senior vice president for global product and technology, had stepped down as well.
“Recent actions taken by Evergrande is causing FF to experience extraordinary financial hardship,” Faraday said.
“The investor has intervened in the company’s capital planning and is preventing FF from utilizing our assets, which requires FF to take some very difficult yet necessary actions,” it added.
Evergrande Health, a unit of property giant China Evergrande Group, owns 45 percent of Faraday. Evergrande Health was not immediately available for comment.
Faraday is free to seek financing from sources other than Evergrande Health, according to an interim ruling earlier this month by a Hong Kong arbitration court.
But the ruling comes with stringent conditions and gives Evergrande Health preferential rights to any new share issue by Faraday.
Faraday, which began in 2014, lost another co-founder Tony Nie in October last year.
Jia, Faraday’s CEO, is best known for starting the tech conglomerate LeEco, which is struggling with high debts after expanding too quickly.
Faraday, which posted a net loss of $340 million last year, said last month that a preproduction model of its first vehicle, the FF 91, was presented to employees on Aug. 29 ahead of schedule.
Reporting by Vibhuti Sharma in Bengaluru and Yilei Sun in Beijing; Writing by Sayantani Ghosh; Editing by Shounak Dasgupta and Darren Schuettler
SINGAPORE (Reuters) – High oil prices are hurting consumers and could also have adverse implications for producers, the executive director of the International Energy Agency (IEA) said on Tuesday.
Fatih Birol, Executive Director of the International Energy Agency, speaks with the media during the International Energy Forum (IEF) in New Delhi, India, April 11, 2018. REUTERS/Altaf Hussain
Major emerging Asian economies such as India and Indonesia have been hit hard this year by rising crude oil prices, which despite declining this month are still up by about 15 percent since the start of 2018.
Fuel import costs have been pushed up further by a slide in emerging market currencies against the dollar, denting growth and even triggering protests and government fuel price controls in India.
“Many countries’ current account deficits have been affected by high oil prices,” IEA chief Fatih Birol said at an energy conference in Singapore.
“There are two downward pressures on global oil demand growth. One is high oil prices, and in many countries they’re directly related to consumer prices. The second one is global economic growth momentum slowing down.”
The effect of high oil prices will be compounded in Southeast Asia as demand is rising fast but production is falling, resulting in the region becoming a net importer of oil, gas and coal, Birol said.
Despite the possibility of a slowdown, Birol said the general outlook for fuel consumption was for continued growth.
While the rise of electric vehicles is expected to result in peak demand for products like diesel and gasoline within coming years, a consumption boom in products such as plastic as well as fuel demand growth from aviation have triggered large-scale refinery investment into petrochemical products and high quality products like jet fuel.
“Global oil demand will continue to grow even amid the rise of electric vehicles as they are governed by petrochemicals, aviation, among others,” he said.
BHP Billiton, the world’s biggest miner, which has oil and gas assets but also hopes to benefit from the demand for raw materials coming from batteries for electric vehicles (EV), also said oil demand would still grow despite the rise of EVs.
BHP’s Chief Commercial Officer, Arnoud Balhuizen, said on Tuesday during a conference in Melbourne that oil demand will increase by 1 percent a year on average over the next 10 to 15 years.
“There will be substitution coming… on the back of an increased pickup of electric vehicles. But even if we plug in the most ambitious electric vehicle trends… in our forecasting, we continue to see oil demand on the back of other sectors,” he said.
To meet the 1 percent per year consumption growth, Balhuizen said “quite a bit of new capital needs to be allocated to the oil industry in the next five to ten years to be able to meet that demand.”
More so than oil, Birol said demand for liquefied natural gas (LNG) would boom.
He said that global LNG trade could pass 500 billion cubic meters per day (bcm) by 2023, growing by a third in the coming five years.
BHP’s Balhuizen echoed this in Melbourne, saying “LNG is a commodity with very strong demand outlook.”
Birol said just three countries, Qatar, Australia and the United States, would supply 60 percent of global LNG by 2023.
LNG demand is primarily driven by growth in China, where an anti-pollution program is driving a massive shift from coal to natural gas.
But demand is also expected to grow fast in Southeast Asia, where Birol said the power sector needed $50 billion of investment by 2040, more than twice the current level, to keep up with consumption.
Despite this growth potential, the LNG sector faces increasing competition from renewables and storage technology, which are cleaner than fossil fuels and becoming much cheaper.
In many countries, Birol said solar power was on track to become the cheapest source of new electricity.
Reporting by Koustav Samanta and Roslan Khasawneh; Writing Henning Gloystein; Editing by Joseph Radford and Christian Schmollinger
SINGAPORE/NEW DELHI (Reuters) – Reliance Industries (RELI.NS), currently India’s second most valuable listed company, got rich by trading fuel across Asia, Africa and Europe while effectively ignoring its home market.
FILE PHOTO: A bird flies past a Reliance Industries logo installed on its mart in Ahmedabad, India January 16, 2017. REUTERS/Amit Dave/File Photo
Reliance’s refineries processed crude from the nearby Middle East and sold fuel to fast-growing markets in North Asia including China, Japan, South Korea and Taiwan.
That began to change when India’s oil demand surged, overtaking Japan as the world’s third-biggest consumer. Reliance took more interest in the country’s retail fuel sector and has opened more than 1,300 service stations.
This push into the domestic fuel market may stumble after India’s government imposed cost controls on Oct. 4 on gasoline and diesel prices to rein in recent record highs.
Reliance’s shares plunged 6.9 percent on the day of the announcement and are down about 20 percent since their record close on Aug. 28.
The decline has pushed Reliance’s market capitalization down to 6.64 trillion rupees ($90.47 billion) and it is no longer India’s most valuable company, sitting behind Tata Consultancy Services Ltd (TCS.NS) at 6.77 trillion rupees.
The price shock, driven by soaring crude import costs, angered consumers and triggered riots by farmers, forcing the government to react at the cost of its refiners’ health.
For now, Reliance is staying with its retail plans despite the recent trouble.
“When prices are cut, you have to effectively match it,” said Venkatachari Srikanth, Reliance’s joint chief financial officer, during their earnings presentation on Oct. 17. “We are not going to let this alter broadly our strategy on retail petroleum.”
In line with that, Reliance is planning as many as 2,000 retail stations with oil major BP Plc over the next three years, local media reported on Tuesday.
Reliance’s domestic push made sense in an Asian fuel market that is increasingly crowded with new refinery capacity from the Middle East, Southeast Asia and China.
The new capacity, combined with soaring crude prices, has eroded profit margins for producing refined fuels.
With the domestic market now also under pressure from price controls, some analysts have been spooked.
Sukrit Vijayakar, director of Indian oil consultancy Trifecta said the government move could “be disastrous for Reliance.”
The retail move puts Reliance into competition against government controlled refiners like Bharat Petroleum Corp (BPCL.NS), Hindustan Petroleum Corp (HPCL.NS) and Indian Oil Corp (IOC.NS), the country’s biggest refiner.
Reliance’s domestic strategy initially won the backing of investors and the retail fuels group was touted by company Chairman Mukesh Ambani in a speech at its annual general meeting in July.
Between January and August, Reliance’s shares soared 45 percent, far outpacing the state-owned refiners as well as India’s main stock index, the Nifty 50 .NSEI, which gained 12.5 percent.
FILE PHOTO: Mukesh Ambani, Chairman and Managing Director of Reliance Industries, arrives to address the company’s annual general meeting in Mumbai, India July 5, 2018. REUTERS/Francis Mascarenhas/File Photo
But rising crude prices LCOc1, which jumped from under $70 per barrel in early 2018 to around $85 in early October, and a tumbling rupee INRUSD=R combined to push domestic fuel prices to records, undermining Reliance’s retail strategy despite some relief from a dip in crude prices in recent weeks.
Still, Rohit Ahuja, senior vice president of India’s BOB Capital Markets, which has a buy rating on Reliance, said signs of an “oil price shock” in India were “already visible.”
Reliance may gradually mothball its retail stations because of the cost controls, said Macquarie Capital Ltd Analyst Aditya Suresh in a note on Oct. 5, though the bank expects no meaningful impact on its earnings.
EXPORT MARKET & IMO 2020
Reliance may be better placed to thrive on exports despite the increasing competition in Asia and the Middle East.
The company operates the world’s biggest refinery complex at the port of Jamnagar in the western Indian state of Gujarat. The first Jamnagar plant can process 663,000 barrels per day (bpd) of crude while the second site can process another 709,000 bpd.
Reliance’s refining margins last quarter were at a premium of $3.40 per barrel over the average Singapore margin, the benchmark for Asia.
However, the Singapore margin DUB-SIN-REF has dropped by about 50 percent since mid-2017 because of rising crude prices. Reliance also said in its results that fewer refinery outages last quarter meant global run rates were high.
Still, Reliance’s refineries benefit from being among the most modern in the world.
Several units process residual fuel oil, the leftovers after crude oil is initially refined, into higher-value gasoline and distillate products as well as remove pollutants such as sulfur.
That ability to cut its high-sulfur fuel oil output to nearly nothing while maximizing its diesel fuel output gives Reliance an advantage as the International Maritime Organization (IMO) will require new low-sulfur fuel oil used in ships starting in 2020.
“IMO regulations are positive because of our mid-distillate configuration,” said Reliance’s Srikanth.
With a move toward cleaner fuels as part of IMO, BOB Capital’s Ahuja said Reliance’s gross refining margins could rise by up to $5 per barrel.
Beyond IMO 2020 and the Indian fuel price turmoil, the oil industry is threatened by the rise of electric vehicles and alternative fuels that could reduce oil’s use as a transport fuel.
Refiners are looking at petrochemicals to replace potentially lost demand in the transport sector.
“If I have to look at it from a ‘oil demand hit from electric vehicles’ perspective, it’s going to be petrochemicals that’s going to survive for them (Reliance) beyond ten years,” said Ahuja.
Combined, Reliance’s refining and marketing group along with its petrochemicals division contribute more than 90 percent of the overall company revenues, its latest annual report showed.
Under Reliance’s “Oil to Chemicals Journey” strategy the company is seeking to “upgrade all of our fuels to high value petrochemicals” over the next decade.
“We are focusing to produce and sell at every level,” said Reliance’s Srikanth. “Between whether to sell domestically or on bulk, whether we will export, every day is an analysis of which is a better option.”
Reporting by Koustav Samanta in SINGAPORE and Promit Muhkerjee in NEW DELHI; Writing by Henning Gloystein; Editing by Christian Schmollinger
FILE PHOTO: Tesla Motors CEO Elon Musk speaks during the National Governors Association Summer Meeting in Providence, Rhode Island, U.S., July 15, 2017. REUTERS/Brian Snyder/File Photo
(Reuters) – Tesla Inc (TSLA.O) Chief Executive Elon Musk said the tweet that cost him and the company $20 million in fines each by the U.S. Securities and Exchange Commision was “Worth It”.
The tweet, sent late Friday evening less than an hour before Musk tweeted that he would take a break from Twitter “for a few days,” was in response to a question from a Twitter follower.
The SEC in September charged Musk, 47, with misleading investors with tweets on Aug. 7 that said he was considering taking Tesla private at $420 a share and had secured funding. The tweets had no basis in fact, and the ensuing market chaos hurt investors, regulators claimed.
Tesla Inc and Elon Musk have agreed to pay $20 million each to financial regulators and the billionaire will step down as the company’s chairman but remain as chief executive, under a settlement.
Under the settlement agreement, Tesla needs to appoint an independent chairman by Nov. 13.
Reporting by Kenneth Li; Editing by Chizu Nomiyama
FILE PHOTO: An Apple logo is seen in a store in Los Angeles, California, U.S., March 24, 2017. REUTERS/Lucy Nicholson
(Reuters) – Qualcomm Inc (QCOM.O) said in a court hearing on Friday that Apple Inc (AAPL.O) is $7 billion behind in patent royalty payments to the mobile chip firm, which for years supplied parts for the iPhone.
Apple and Qualcomm are involved in a series legal actions. Apple has accused Qualcomm of unfair patent licensing practices. Qualcomm, the world’s largest mobile phone chip supplier, has in turn accused Apple of patent infringement.
Qualcomm made its comments about the size of Apple’s unpaid royalties in a hearing in one of the cases in federal court in San Diego. Apple has disputed the amount of royalties that it owes to Qualcomm.
Apple has argued that Qualcomm is forcing it to pay for the same patents twice, once when Apple uses Qualcomm’s chip in iPhones and then again through patent royalties. Qualcomm has argued that its practices are legal and that Apple is seeking to destroy Qualcomm’s business model after agreeing to it for years.
Reporting by Arjun Panchadar in Bengaluru and Stephen Nellis in San Francisco
WASHINGTON (Reuters) – General Motors Co (GM.N) said on Friday it wants the Trump administration to back a nationwide program to boost the sale of zero emission vehicles like electric cars, even as the government has proposed ending California’s ability to require more clean vehicles.
FILE PHOTO: The GM logo is seen at the General Motors Lansing Grand River Assembly Plant in Lansing, Michigan October 26, 2015. REUTERS/Rebecca Cook/File Photo
GM says a nationwide program modeled on California’s effort could result in 7 million electric vehicles, or EVs, on U.S. roads by 2030. The largest U.S. automaker said the requirements would not apply if “battery cost or infrastructure targets are not practicable within the time frame.”
GM product chief Mark Reuss told reporters that governments and industries in Asia and Europe “are working together to enact policies now to hasten the shift to an all-electric future. It’s very simple: America has the opportunity to lead in the technologies of the future.”
A national mandate also would create jobs and reduce fuel consumption, CO2 emissions and “make EVs more affordable,” Reuss added.
GM has said it plans to offer 20 EVs by 2023 globally.
The Trump administration in August proposed reversing Obama administration fuel rules and freezing standards at 2020 model year levels through 2026.
The administration also proposed barring California from setting its own emissions requirements or requiring more zero emission vehicles. The administration is also considering eliminating all emissions compliance credits that automakers receive for building EVs.
Automakers and others have until Friday to file comments on the proposed emissions revisions. Major automakers say they do not support freezing requirements.
California wants 15.4 percent of vehicle sales by 2025 to be EVs or other zero emission vehicles. Nine other states, including Maryland, Massachusetts, New Jersey and New York, have adopted those requirements. In January, California Governor Jerry Brown set a target of 5 million zero-emission vehicles in California by 2030.
A nationwide ZEV plan would give automakers more flexibility to meet a single nationwide target, rather than specific state sales requirements, GM said.
California Air Resources Board chief Mary Nichols said last month the state will “continue to insist on cars that produce fewer emissions, including millions more zero-emission vehicles.”
The Trump administration criticizes California’s ZEV mandate, saying it requires automakers to spend tens of billions of dollars developing vehicles that most consumers do not want, only to sell them at a loss.
Reporting by David Shepardson; Additional reporting by Ben Klayman in Detroit; Editing by Dan Grebler
HONG KONG (Reuters) – Shares of Cathay Pacific Airways Ltd (0293.HK) slid nearly 7 percent to a nine-year low on Thursday after it said data of about 9.4 million passengers of Cathay and its unit, Hong Kong Dragon Airlines Ltd, had been accessed without authorization.
A Cathay Pacific Airways Airbus A350-900 airplane approaches to land at Changi International Airport in Singapore June 10, 2018. REUTERS/Tim Chong/File Photo
Cathay said late on Wednesday that in addition to 860,000 passport numbers and about 245,000 Hong Kong identity card numbers, the hackers accessed 403 expired credit card numbers and 27 credit card numbers with no card verification value (CVV).
The company said it initially discovered suspicious activity on its network in March 2018 and investigations in early May confirmed that certain personal data had been accessed.
Hong Kong’s privacy commission on Thursday expressed serious concern over the data breach and urged the airline to notify passengers affected by the leak as soon as possible and explain details immediately.
Shares of Cathay Pacific slid as much as 6.8 percent on Thursday to HK$9.90, their lowest in nine years. That compared with a 2 percent fall for the benchmark Hang Seng Index .HSI.
FILE PHOTO: A passenger walks to the First Class counter of Cathay Pacific Airways at Hong Kong Airport in Hong Kong, China April 4, 2018. REUTERS/Bobby Yip/File Photo
“People are concerned about why it took so long for them to make an announcement,” said Linus Yip, chief strategist in First Shanghai Securities.
“The market demands more details and explanation.”
It was not immediately clear who was behind the data breach or what the information might be used for.
Cathay said the Hong Kong Police had been notified about the breach and that there was no evidence that any personal information had been misused.
The data breach comes as the airline is undergoing a turnaround designed to cut costs and increase revenue, after back-to-back years of losses, to allow it to better compete against rivals from the Middle East, mainland China and budget airlines.
In August, Cathay Pacific posted a narrower half-year loss on a strong rise in airfares and cargo rates and flagged expectations for a better second half despite economic headwinds from mounting U.S.-China trade tensions.
The hack also comes more than a month after British Airways apologized over the theft of credit card details of hundreds of thousands of its customers over a two-week period in an attack on its website and app.
Reporting By Anne Marie Roantree and Donny Kwok; editing by Richard Pullin
SEOUL (Reuters) – South Korea’s LG Display Co Ltd (034220.KS) posted a 76 percent fall in third-quarter profit on Wednesday compared with a year earlier, after two quarters of consecutive losses, helped by higher seasonal panel prices.
FILE PHOTO: A woman looks at LG Electronics’ organic light-emitting diode (OLED) TV sets, which are made with LG Display flat screens, at its store in Seoul, South Korea, April 26, 2016. REUTERS/Kim Hong-Ji/File Photo
The Apple Inc (AAPL.O) supplier said operating profit was 140 billion won ($123.2 million) for the July-September quarter, beating an average forecast of 79 billion won from 10 analysts, according to a Refinitiv poll.
An LG Electronics’ logo is pictured on a TV displayed at a shop in Seoul, South Korea, April 26, 2016. REUTERS/Kim Hong-Ji/File Photo
Recovering Liquid-Crystal Display (LCD) prices ahead of the year-end holiday period boosted the bottom line but the firm said the trend was not expected to continue into the fourth quarter.
Revenue fell 12 percent from a year earlier to 6.1 trillion won.
The Organic Light-Emitting Diode (OLED) TV panel business turned to profit in the third quarter, supported by sales volume growth. The firm did not disclose the size of the profit.
Eo Kyu-jin, an analyst at eBest Securities, said its costly OLED business was not doing enough to shore up profit, and prices of some panels had already begun to fall.
“Demand will go down again after the holiday season in the fourth quarter is over,” Eo said.
Prices for 50-inch (127 cm) LCD television panels began to rebound in August to $117 after hitting a record low of $109 in June, according to data provider WitsView, part of research provider TrendForce.
Reporting by Heekyong Yang; Editing by Stephen Coates
TOKYO (Reuters) – Philip Morris International Inc will sell cheaper versions of its IQOS “heat not burn” products in Japan from Tuesday and introduce new upgraded products next month to expand market share, its chief executive said.
Philip Morris new IQOS 3 devices are displayed during a news conference by its International’s CEO Andre Calantzopoulos in Tokyo, Japan, October 23, 2018. REUTERS/Kim Kyung-Hoon
As regular e-cigarettes with nicotine-laced liquid are effectively banned in Japan, the country has become the main market for “heat not burn” (HNB) products, which emit less smoke and smell less than conventional cigarettes.
Philip Morris, maker of Marlboro cigarettes, was first to start selling HNB products in Japan in 2014, but it faces heated competition from British American Tobacco and Japan Tobacco Inc and its market share has stagnated in recent quarters after rapid growth last year.
The companies cut prices of heating devices earlier this year.
Philip Morris currently sells a pack of 20 HeatSticks, tobacco rolls used with IQOS devices, at 500 yen ($4.43). CEO Andre Calantzopoulos told Reuters that from Tuesday a new “HEETS” line priced at 470 yen a pack will be available.
Philip Morris International’s CEO Andre Calantzopoulos poses with its new IQOS 3 devices at a news conference in Tokyo, Japan, October 23, 2018. REUTERS/Kim Kyung-Hoon
“Clearly, for some people, spending 30 yen more, 40 yen more per day is expensive,” he said in an interview in Tokyo on Monday.
In mid-November, the company will also release upgraded versions of its “IQOS 3” and “IQOS 3 MULTI” devices. Calantzopoulos said the existing versions will still be available at current prices.
“We want to cater to the entire population. From a pricing perspective, that will help product perception,” Calantzopoulos said.
Philip Morris, the world’s largest publicly traded tobacco company, has seen weaker-than-expected growth in IQOS recently, after building a leading position in the global HNB market.
Japan accounts for about 85 percent of the $6.3 billion HNB market, according to Euromonitor.
Philip Morris says IQOS has a 15.5 percent share in Japan’s overall tobacco market, including conventional cigarettes, but market share has stabilized.
Slideshow (5 Images)
“I think it’s natural in any category that you have slowdowns,” Calantzopoulos said. “We have people who adopted earlier and people who are more conservative,” he said.
Philip Morris has also made a marketing application to the FDA for IQOS, which would allow the company to sell it with a claim of reduced risk.
PMI was spun off from Altria Group Inc, nearly a decade ago, and Altria will commercialize IQOS in the United States.
Calantzopoulos said the companies would not wait for reduced risk claim approval to launch the product, as separately, permission for commercialization would come “hopefully before the end of the year.”
He said Altria was “ready to launch whenever they get (commercialization) approval.”
A Reuters report in December identified shortcomings in the training and professionalism of some of the lead investigators in the clinical trials submitted to the FDA by Philip Morris.
On Monday, Philip Morris drew accusations of hypocrisy after using a four-page newspaper advertisement to urge smokers to quit cigarettes.
Reporting by Taiga Uranaka; Editing by Susan Fenton
SYDNEY (Reuters) – Asian share markets pared early losses on Monday as Chinese stocks swung higher for a second session and helped offset geopolitical concerns over Saudi Arabia, Italy and Brexit.
People walk in front of an electronic stock quotation board outside a brokerage in Tokyo, Japan, October 15, 2018. REUTERS/Toru Hanai
Blue chips in Shanghai climbed 3.5 percent in early trade there, extending Friday’s bounce on Beijing’s pledge of support for the economy and companies.
That helped E-Mini futures for the S&P 500 halve their initial loss to be down 0.25 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan turned around to edge up 0.2 percent.
Japan’s Nikkei was off 0.2 percent, after being down over 1 percent earlier, as were South Korean stocks.
(Graphic: Asian stock markets – tmsnrt.rs/2zpUAr4)
This week is the peak period of the U.S. earnings season and companies reporting include Amazon, Alphabet, Microsoft and Caterpillar.
Helped by a strong economy and deep corporate tax cuts, S&P 500 earnings per share are expected to grow 22 percent in the third quarter, according to I/B/E/S data from Refinitiv.
“The season on an absolute basis will likely wind up being ‘strong’ and the vast majority of companies will exceed consensus expectations,” said analysts at JPMorgan in a note.
“However, headwinds are building at the margin in the form of U.S. dollar strength, supply chain disruptions owing to all the trade uncertainty, and rising costs. Even the mere hint of a turn in profit fundamentals would have severe ramifications.”
The outlook for global growth in 2019 has dimmed for the first time, according to Reuters polls of economists who cautioned that the U.S.-China trade war and tightening financial conditions would trigger the next downturn.
Saudi Arabia remained in the spotlight as Riyadh on Sunday called the killing of journalist Jamal Khashoggi a “huge and grave mistake,” but sought to shield its powerful crown prince from the widening crisis.
On Saturday, U.S. President Donald Trump joined European leaders in pushing Saudi Arabia for more answers after Riyadh acknowledged that the journalist died at the consulate following weeks of denial.
In Europe, Italy has until Monday to explain to the Commission its breach of rules and faces the rejection of its budget, which may eventually lead to sanctions.
The Italian government expects the European Commission to decide for the first time ever on Tuesday to ask a member state to revise its draft budget, a government source said on Sunday.
Italian bond yields hit their highest level since early 2014 on Friday and the premium investors demand in comparison to German debt is at a five and a half year high.
Italy is expected to be on the agenda when the European Central Bank meets on Thursday. The bank is considered certain to keep policy on hold and likely put off discussion about its reinvestment policy until December.
The euro started the week steady at $1.1511 having bounced from support at $1.1431 on Friday. The dollar recovered form an early dip on the yen to stand at 112.55 and it was little changed against a basket of currencies at 95.704. [USD/]
Sterling idled at $1.3063 as the market waited for more developments on Brexit.
Prime Minister Theresa May will tell parliament on Monday that 95 percent of Britain’s divorce deal has now been settled but will repeat her opposition to the European Union’s proposal for the land border with Northern Ireland.
In commodity markets, gold held steady at $1,227.33 an ounce.
Oil prices were stable on Monday, supported by supply concerns ahead of the start of U.S. sanctions against Iran’s crude exports, but held back by rising drilling activity in the United States. [O/N]
Brent crude added 10 cents to $79.88 a barrel, while U.S. crude rose 12 cents to $69.24.