FT : Austrian prosecutors accuse René Benko of embezzling tens of millions

Austrian prosecutors accuse René Benko of embezzling tens of millions
Former billionaire property tycoon behind collapsed Signa group remains in pre-trial detention

Vienna criminal prosecutors have accused René Benko of embezzling tens of millions of euros in the run-up to the collapse of his real estate empire in 2023, including potentially through the €46mn sale of an Italian luxury estate by his Signa group to a private foundation authorities say was in effect controlled by him.

Benko, who presided over a group that at its peak owned half of New York’s Chrysler Building, part of Selfridges in London and some of Germany’s biggest department stores, was arrested in Austria last month following a criminal investigation by prosecutors in Vienna, Munich and Berlin.

But Signa, which was built on €5bn of debt, started to disintegrate in late 2023 when one of its central companies, Signa Holding, filed for insolvency. Benko himself filed for personal insolvency last March.

Benko has been in pre-trial detention in Austria since January over alleged aggravated fraud, embezzlement and fraudulent bankruptcy.

Criminal prosecutors in Berlin and Munich are also investigating potential misconduct and Italian law enforcement agencies issued an arrest warrant last year over alleged suspicious payments to local officials.

In December, a lawyer for Benko said his client was confident that “any allegations against him can be clarified as substantively incorrect”.

According to a 38-page arrest warrant issued by Austrian prosecutors and seen by the Financial Times, Benko is accused of deceiving business partners to inject €35mn into the failing property holding company while simultaneously shifting cash and assets worth tens of millions of euros out of creditors’ reach — including furniture worth €8mn, a €90,000 Patek Philippe watch and expensive hunting rifles.

One of the contentious transactions identified by prosecutors is the sale of the luxury estate Villa Eden Gardone in Italy in 2023, originally owned by Signa Holding and sold in August 2023 for €46mn to a foundation officially controlled by Benko’s mother Ingeborg.

Instead of cash, prosecutors state that the mansion was paid for using shares in a Signa subsidiary that became worthless when the entity filed for insolvency three months later.

Prosecutors allege that the transaction was “artificial and economically implausible” as it swapped luxury real estate for an heavily devalued equity stake in a struggling company.

They claim the transaction was conducted haphazardly and the sale documents lacked a detailed description of the assets changing hands, normally standard procedure for such a complex deal.

Moreover, prosecutors allege that Benko called the shots at two family foundations — one notionally controlled by his mother Ingeborg, a retired nursery school teacher, and one by his daughter Laura — which were parties to a number of potentially suspicious transactions.

Prosecutors also raised concerns about a €2mn cash payment in 2023 Benko made to a person close to him: part of a series of payments between 2018 and 2023 that totalled €15.5mn, according to the arrest warrant.

They accuse Benko of concealing his ownership of furniture worth €8mn in an Innsbruck mansion and took issue with a payment of €360,000 in October 2023 to a legal entity that owned a property he used in Innsbruck, characterising it as an advance payment of rent for the next four years. Prosecutors claim that this payment lacked any “objective justification”.

At the same time as Benko was orchestrating the alleged asset stripping in 2023, he was allegedly also misleading investors about his financial health.

In mid-2023, when his own investment vehicle was down to a few thousand euros of cash in its bank account and according to the investigation in effect insolvent, Benko promised that he would personally contribute €35mn to a €350mn capital increase of Signa Holding, the arrest warrant states.

The prosecutors claim that he channelled investments by two of his business partners through multiple legal entities in his empire to mask the origin of the funds, and then misrepresented the money as his own contribution.

A lawyer for Benko did not respond to a request for comment. Vienna prosecutors declined to comment.

FT : ITV investors back M&A talks as rivals circle

ITV investors back M&A talks as rivals circle
London-listed broadcaster could sell studio arm to unleash value

Major shareholders in ITV support management efforts to explore a potential deal for its production arm, with rival studios and private equity now circling one of Europe’s largest TV studios.

ITV has held early talks with RedBird IMI, the Abu Dhabi-backed investment group that last year acquired UK rival All3Media for more than £1.1bn, according to several people familiar with the situation.

A merger of ITV Studios with All3Media could create a production group worth more than £3bn, bringing together the UK studios responsible for shows from Love Island to Traitors and Rivals, and giving negotiating power at a time when many streamers and broadcasters are tightening their budgets.

While the two sides had held conversations, the people added, these were at an early stage with no certainty of any progression or deal. RedBird IMI — whose New York-based boss, Jeff Zucker, was in London in late January — is the Abu Dhabi-backed investment vehicle that the UK government blocked last year from owning the Daily Telegraph.

Meanwhile, a number of other potential suitors are looking at ITV Studios, the people said, including private equity groups CVC and Blackstone. Rivals such as Banijay, one of Europe’s largest production groups, were also monitoring the situation, two people said. 

Blackstone, CVC and Banijay all declined to comment.

A deal with RedBird IMI was still seen as a more likely option, said the people familiar with the situation, in part given ITV’s clear interest in merging with All3Media in the past. 

ITV, RedBird IMI and All3Media declined to comment on the talks.

ITV, led by chief executive Dame Carolyn McCall, lost out to RedBird IMI in the auction for All3Media last year. 

With ITV’s share price near where it was trading 13 years ago, investors told the Financial Times that there was support for its management to explore a potential deal given the lack of value being put on the broadcaster’s business units. 

One top-10 shareholder said that while ITV had done a good job investing in the TV part of the business, notably in online streaming, this had not been recognised by the market. 

“There comes a point with ITV where, if the market can’t see the value for itself, ITV has to do something to make the value of the studio business more apparent,” the shareholder said.

The investor added that they would welcome a transaction involving the studios business, such as selling all or part of the business, or a joint venture, adding that ITV could use the proceeds to buy back shares. 

They said: “If you think you are undervalued and there is something you can do about it, you can’t sit tight forever.”

Liberty Global, which is ITV’s largest shareholder with about a tenth of its shares, is also supportive of the management looking at options for the business, said two people familiar with its thinking. 

The people familiar with Liberty’s position pointed out that a deal could also give the US group an exit for its 10 per cent stake in ITV, or access to content talks for its wider business. Liberty Global declined to comment.

Mark Kelly, chief executive of financial advisory firm MKP Advisors, said that “if you put a conservative valuation multiple on the production side of the business you end up with a valuation of about £3bn”. 

Compared with ITV’s current enterprise value of about £3.3bn, he added, this meant that the broadcast side of the company traded at close to zero.

If a deal was to be struck, it would mark the culmination of more than a decade of speculation about the future of the business. The company regularly reviewed its business units, including its studios arm, said one person close to the group, and has so far not made any move towards a break-up.

There are compelling reasons for keeping the businesses together, with ITV Studios feeding hit shows such as Love Island to its broadcasting stablemate, as well as selling them elsewhere in the world.

But these arguments could be surmountable, said one person familiar with ITV’s thinking, especially given the financial logic of a break-up of businesses that would be worth more to the market separate than together. 

Rival executives think that the likelihood of a deal is better than in past years, with McCall in her eighth year in charge at the group and potentially looking to set out a defining legacy. 

McCall saw the industrial logic of creating a British TV production powerhouse, said one person familiar with her thinking, with any merger likely to see efforts to keep the combined studios business remaining in the UK.

ITV’s management has also been frustrated by the lack of value being given to its two businesses, according to one person familar with the situation, despite signs that its investment in growing a digital TV platform, ITVX, to replace its waning traditional linear broadcasting service was paying off.

In its last set of results, ITV reported 14 per cent growth in streaming hours and a 15 per cent increase in digital advertising revenue in the nine months to September 30 for ITVX.


Some shareholders, while supportive of moves to consider M&A, will still need to be reassured that the price is right for the deal this time. Last year, some balked a the high price being asked for All3Media, according to those close to the situation.

Analysts say that setting out a clear future for the broadcasting arm will be essential to make any deal. The UK government is also expected to want to ensure that the UK’s second-largest public-sector broadcaster — legally known as Channel 3, and required by law to provide “beneficial” content — can thrive on its own. 

Panmure Liberum analyst Johnathan Barrett said that a separation would lead to “ambiguity about getting it right without significant help from within ITV [even] before the complexity of the Channel 3 licence regime and public service broadcast obligation”.

FT : Gulf states turn to metal trading to tap into growing demand

Gulf states turn to metal trading to tap into growing demand
Companies in Oman, Abu Dhabi and Saudi Arabia explore markets fuelled by energy transition as they diversify beyond oil and gas

Leading companies in Oman, Abu Dhabi and Saudi Arabia are planning to launch metal trading companies, as the region taps into growing demand for metals while it looks to diversify beyond oil and gas.

Abu Dhabi-based International Resources Holding, a mining company that is part of a conglomerate chaired by powerful Emirati royal Sheikh Tahnoon bin Zayed al-Nahyan, has already built out a 60-person trading unit to handle energy and metals.

Minerals Development Oman, the state-owned mining company, is also in the process of hiring a top executive to lead a 25-person trading team, according to MDO’s chief executive, Mattar Al Badi.

The trading plans come as many oil-dependent Gulf states seek to position themselves in the global supply chain for the metals needed for the energy transition, such as copper, lithium and iron ore.

“These countries want to diversify from oil, and they are exploring every opportunity to do so,” said JF Lambert, founding partner of consultancy Lambert Commodities.

Many of the world’s biggest oil traders, such as Vitol, Mercuria and Gunvor, have also recently expanded their metal trading operations.

Over the past five years, commodity trading activity has gradually shifted away from the traditional hubs of London and Geneva towards the Middle East, particularly Dubai, where there has been a surge of new trading offices.

Oman, whose oil production is modest compared with neighbouring Saudi Arabia and UAE, will establish a trading company under MDO, which has recently revived copper extraction from its Lasail mine after a three-decade hiatus. 

Al Badi, MDO chief executive, said the trading company would help organise Oman’s fragmented exports of chromite and gypsum, and help the country get a better price for its resources.

“Oman is one of the biggest countries in exporting gypsum, but the market is not organised,” Badi said. A trading company would help Oman “ensure that we maximise the margin” from its goods, he added.

MDO is in talks with six international commodities firms — Trafigura, Glencore, Traxys, IXM, Mercuria and Gunvor — over a potential offtake arrangement for its processed copper and partnership in its trading unit.

In Abu Dhabi, one of the world’s top 10 oil producers, IRH has already hired a trading team in oil and gas, as well as metals, and has been in discussions about potential trading opportunities with international traders, including Mercuria. 

IRH said it was trading commodities from third parties across base metals, energy products and iron ore, as well as developing a “proprietary trading portfolio spanning global commodities and structured transactions”.

Part of national security adviser Sheikh Tahnoon’s sprawling International Holding Company, IRH burst on to the mining scene in late 2023, agreeing to buy a 51 per cent stake in Zambia’s Mopani copper mine for $1.1bn.

In another sign of the Gulf’s pivot towards metals and minerals, Abu Dhabi upped its bet on mining last week. Sovereign investor ADQ announced a $1.2bn joint venture with specialist metals investor Orion Resources, which will focus on copper, iron ore and other materials. Both sides will initially invest $600mn. 

Philip Clegg, managing partner of the joint venture, said on top of buying stakes in miners, the investments were being made to secure the long-term supply of critical minerals.

The Gulf was “becoming a much more dynamic place, and much more strategic in the way that players within the region are thinking about how to invest in the sector”, he said.

Saudi Arabia, the region’s biggest economy and the world’s largest oil exporter, is investing heavily in developing its domestic mining sector, and the government sees mining as a third pillar of the economy, alongside oil and petrochemicals.

State-owned miner Ma’aden and sovereign Public Investment Fund have a jointly managed mining investment fund, Manara. Bob Wilt, Ma’aden chief executive, said last year that Manara was planning to build a trading team, and that Manara’s purpose was to “secure offtake of critical minerals” to meet the needs of Saudi Arabia.

However, according to several traders, Manara could not receive metals produced in 2024 by Vale Base Metals, in which it owns a 10 per cent stake, because its trading team was not ready yet.

Manara and Mercuria declined to comment.

FT : TotalEnergies urges Europe to seek LNG deal with Trump

TotalEnergies urges Europe to seek LNG deal with Trump
Chief executive Pouyanné said a long-term deal with the US was necessary to guarantee energy security

TotalEnergies chief executive Patrick Pouyanné has said he is “ready” to help sell more US liquefied natural gas to Europe, but urged the EU to seek a long-term LNG deal to guarantee energy security.

Pouyanné said an agreement that secured a more favourable licensing regime for European companies would satisfy Trump’s desire for the bloc to buy more US oil and gas, while protecting Europe from future price increases.

The chief executive, whose company is the biggest exporter of energy from the US, said this would guarantee security of supply from the US and help wean Europe off Russian gas.

Currently, export licences to Europe must be regularly renegotiated while countries that have trade agreements with the US have longer-lasting and automatic approvals.

Pouyanné said Europe should also seek “a form of guarantee” to ensure US LNG supply could not be disrupted. He was also concerned that without such guarantees, higher gas prices could lead to the US limiting exports of its LNG.

“Trump wants to sell more energy to Europe, LNG in particular,” Pouyanné said. “Total is one of the main players. I’m ready to bring more energy to Europe.”

The executive’s comments come as Trump has called on Europe to buy more oil and gas from the US to avoid tariffs, and as business leaders and governments contend with his protectionist trade agenda.

Frank Harris, an LNG expert at consultancy Wood Mackenzie, said Pouyanné’s comments demonstrated “the fundamental attractiveness of US LNG to a portfolio player like Total”.

Total’s boss was speaking after the release of 2024 results that showed the company’s net income had fallen more than a fifth in 2024 due to lower crude prices. The company downgraded its 2025 organic investment target slightly to $17bn, from $18bn.

Pouyanné, whose company is involved in several US LNG projects including a 15mn tonnes a year project in Louisiana and an initial 17.5 million tonnes a year project in South Texas, said Total would not rush into more US projects despite Trump’s election.

The US president has promised to roll back environmental rules, open up vast swaths of federal land and waters for development, and reform permitting rules to facilitate the production of fossil fuels.

“The US is attractive, and we will continue to invest . . . but our plate is already quite full,” he said. “I will not do more just because it’s easier to do.”

Pouyanné was scathing about onerous environment, social and governance rules in Europe, which he said hurt the bloc’s competitiveness.

He described the EU’s corporate sustainability reporting directive, which threatens companies with fines for not ensuring their supply chains do not harm workers or the environment, as a “monster” formed from “good intentions”.

In Europe, Total has faced criticism over its long-term plan of continuing to invest in fossil fuels, including LNG. It is seeking a continuous listing of its shares in New York, where institutional investors are less preoccupied with environmental factors.

But the company is not abandoning its ambitions for electricity production, combining renewables and natural gas. It is also seeking to boost net electricity production to 100 TWh in 2030, from 40 TWh last year.

Total would not change strategy “based on one US administration” even as Trump’s hostility to offshore wind has caused it to halt a planned wind farm off the coast of New York and New Jersey, Pouyanné said.

The company “might stop” a small e-methane project in the US, if “fiscal incentives” granted under Joe Biden’s Inflation Reduction Act are not protected, he added.

Analysts have said that other low-carbon projects, such as ExxonMobil’s proposal for a huge hydrogen facility at Baytown, Texas, could be abandoned if IRA tax credits are repealed by Congress.

FT : European companies warn of uncertainty from Donald Trump’s tariff threats

European companies warn of uncertainty from Donald Trump’s tariff threats
Executives left guessing at scale and impact of any US levies on EU imports


European companies are bracing for a financial hit from a potential trade war with the US, with some top executives warning that uncertainty over Donald Trump’s trade policy is already affecting investment plans.

The US president delayed steep tariffs against Canada and Mexico earlier this week but still has the EU in his crosshairs, leaving executives guessing as to the scale and impact of any new levies. 

Markus Krebber, chief executive of Germany’s RWE, one of Europe’s largest power producers, said the threat of tariffs was slowing his group’s investments into wind and solar projects in the US. 

Potential import duties created huge uncertainty over “what you can get into the US”, Krebber told a conference this week.

Intermediate goods such as rotor blades and batteries “need to be imported because there is not yet local manufacturing” of them in the US, he added. 

Some companies, including luxury goods group LVMH and oil major Shell, were considering increasing their US presence. But Krebber said: “Our big customers are all telling the [Trump] administration that it needs to ensure certainty pretty soon, because otherwise, actually, they achieve the opposite of what they want.” 

Analysts at Goldman Sachs said in a note that it was “not necessarily the tariffs themselves that matter, rather the trade uncertainty that hits economic growth and investment intentions”. 

The bank is already expecting some impact from trade barriers, with its equity team projecting European earnings per share growth at just 3 per cent in 2025 — well below analysts’ consensus forecasts.


The EU is preparing to offer concessions to avert a trade war with Trump, who has complained that Europeans “don’t buy our cars, they don’t take our farm products, they take almost nothing and we take everything from them”.

The bloc accounts for approximately 15 per cent of US imports, with machinery, pharmaceuticals and chemicals among its top exports to America. Europe’s automotive sector is also exposed to tariffs, especially if the EU retaliates with levies on US goods. 

“The big question is what happens if those tariffs come in between the US and Europe,” said Jim Rowan, chief executive of Volvo Cars. 

Although it would be “manageable” if the US raised tariffs on EU goods from 2.5 per cent to 10 per cent, a bigger margin would force the company to increase production at its plant in South Carolina, Rowan said this week. 

The Swedish group this week warned of lower profitability this year, in part due to tariff uncertainty. French drinks group Pernod Ricard also said it could be hit.

London-listed drinks conglomerate Diageo forecast a $200mn knock to operating profits by June if Trump carried out his threatened 25 per cent levy on Mexican and Canadian imports.

Jan Rindbo, chief executive of Danish commodities shipping group Norden, warned that if the EU retaliated against US tariffs with levies of its own, then companies would be “hit twice”. A trade war could lead to EU companies importing some goods from further afield, such as from South America, he added. 

Although demand for a wider range of shipments would be positive for the shipping sector, overall it could mean that the “US economy will get hit, that the EU economy will get hit”, he said.

Despite the concerns, a number of executives said they had the flexibility to adapt to trade disruption. Energy companies would be able to reroute liquefied natural gas to avoid tariffs imposed on the fuel between the US and China, said Patrick Pouyanné, chief executive of France’s TotalEnergies. 

“The Chinese are buying energy from companies like Total. In fact, they just asked us, to avoid paying the [tariff], to give them some Australian or Qatari LNG, and we will take the US LNG and send it elsewhere, maybe to Europe,” he told the Financial Times. 

ArcelorMittal, world’s second biggest steelmaker, played down its exposure to potential US tariffs on Mexico and Canada. The group’s Canadian operation is a critical supplier to the US automotive sector, while its American facilities use semi-finished steel products from Mexico. 

Genuino Christino, ArcelorMittal’s chief financial officer, said he was “not overly concerned” about the prospect of tariffs. The company, he said, took a hit of about $100mn per quarter in 2018 when Trump last imposed 25 per cent tariffs on steel. The higher costs, however, were offset by higher prices. 

Micael Johansson, chief executive of Sweden’s defence champion Saab, told the FT: “It’s a bit premature to understand where it is going. Trade wars are never good for anyone.”

FT : Morgan Stanley cedes title of chief Goldman Sachs rival

Morgan Stanley cedes title of chief Goldman Sachs rival
Both JPMorgan and Evercore generated more financial advisory fees last year than Ted Pick’s bank

JPMorgan Chase and investment banking boutique Evercore have displaced Morgan Stanley as the chief rivals to Goldman Sachs in the core Wall Street business of dealmaking advice.

JPMorgan generated financial advisory fees last year — including mergers and acquisitions — of $3.29bn, while Evercore recorded $2.45bn and Morgan Stanley $2.38bn.

M&A fees are volatile between quarters and even years, because they can run to the tens of millions and are in general only paid when a deal closes. But the fees for 2024 confirm a shift in Wall Street’s pecking order in the past decade, with the arrival of JPMorgan, traditionally a top lender to companies, as well as upstarts such as Evercore as major boardroom players.

Goldman Sachs has long dominated the business of advising chief executives on deals. The latest data indicate that JPMorgan has cemented its position as the second-biggest earner, however, after duelling with Morgan Stanley through the 2010s.

Last year JPMorgan narrowed the gap with Goldman to its smallest in at least a decade. In the fourth quarter it reported $1.06bn in advisory fees — excluding revenues from equity and debt underwriting — beating Goldman for the second time in a year.

Evercore recorded $850mn in fees for the quarter, and Morgan Stanley just $779mn.

M&A remains the crown jewel product in investment banking, with high stakes transactions attracting commensurate fees. At the same time, M&A advice requires only a handful of bankers, unlike initial public offerings or bond issues which demand armies of personnel.

“You are providing advice that is not a commodity,” said Devin Ryan, an analyst at Citizens JMP Securities. “And so therefore the fees on transactions have not come under pressure, like a lot of areas within financial services.”


The changing of the Wall Street guard has unfolded as Morgan Stanley has focused resources on building up the wealth management business, where it earns steady fees that are prized by investors.

Morgan Stanley has been a traditional investment banking blue blood, spun out of JPMorgan 90 years ago in the wake of the Glass-Steagall Act that separated commercial from investment banking. Among its alumni are Joe Perella, Bob Greenhill, Frank Quattrone and Paul Taubman, each of whom founded well-regarded boutique banks.

Its wealth management strategy was, however, championed by former chief executive James Gorman, who retired from the role at the end of 2023. His successor, Ted Pick, previously ran Morgan Stanley’s investment bank, raising hopes among the firm’s dealmakers that he would direct more resources towards them.

“There was a lot of relief that Ted became CEO from our side of the bank rather than a guy from investment or wealth management,” said one Morgan Stanley investment banker.

However, bankers often work for years to foster the corporate relationships that can yield the industry’s lucrative fees, requiring a long-term commitment to investment banking.

“Whatever deals happen this year, you earned them three years ago,” said one former senior investment banker at a large Wall Street firm.

JPMorgan has also invested heavily in its M&A business, using the wide range of products it offers to muscle its way into lucrative advisory mandates.

“At some point they got much more aggressive about saying ‘hey, we’re your biggest lender, so you should be giving us your advisory business’,” said one Wall Street chief executive.

In 2023 the bank told investors it had earmarked $200mn to hire “revenue producers” at its corporate and investment bank. Jamie Dimon, the bank’s longtime chief executive, is known to call coveted clients personally to make JPMorgan’s case.

“JPMorgan has been very consistent and very dedicated to growth in the investment bank,” said Ryan of Citizens.

Evercore has been among the biggest winners among a new clique of boutiques that do not offer lending or trading services, landing major mandates including on the $29bn sale of Calpine to Constellation Energy.

It has also expanded its advisory business beyond corporate M&A to private funds transactions and restructuring advice, where there is less competition from large investment banks.

“They’ve done a lot to build out their franchise and establish themselves as a premier boutique investment bank,” said Aidan Hall, an analyst at Keefe, Bruyette & Woods.

Other challengers such as Jefferies have also taken advantage of the shifts on Wall Street to seize ground in investment banking. Jefferies reported $1.8bn in advisory fees for the year to November, beating bulge bracket banks Bank of America and Citigroup after a recent hiring spree.

FT : China’s inflation accelerates after rise in lunar new year demand

China’s inflation accelerates after rise in lunar new year demand
Producer prices contract for 28th month as threat of US trade war clouds economic outlook

Chinese consumer prices rose at the fastest pace in five months in January, as a bump in spending over the lunar new year holiday period breathed life into the world’s second-largest economy, which has been beset by weak demand.

China’s consumer price index gained 0.5 per cent in January compared with the same period last year, official data released on Sunday by the National Bureau of Statistics showed, ahead of the 0.4 per cent growth forecast by economists polled by Reuters.

That figure marked an acceleration from December, when CPI crept up 0.1 per cent year on year, and was the fastest growth rate since August.

Producer prices, a measure of factory gate inflation, fell for a 28th consecutive month, declining 2.3 per cent. The fall was marginally faster than economists’ forecast of 2.2 per cent and matched December’s contraction.

January’s inflation reading was boosted by increased consumer spending over the lunar new year, as millions of Chinese residents travel to their hometowns and exchange cash-filled red envelopes. The holiday, which fell earlier than usual in 2025, also tends to see an uptick in spending on items such as food, as consumers prepare for large family gatherings.

“From a year-on-year perspective, service and food prices increased significantly due to the Spring Festival being in a different month,” Dong Lijuan, an official at the NBS, said in a statement, adding that the reading was also affected by a recovery in petrol prices.


Prices for aeroplane tickets were 8.9 per cent higher than a year earlier, while travel-related costs rose 7 per cent, Dong added.

The stronger consumer price growth represented a rare bright spot for China’s economy, which has been fighting outright deflation after a property sector crisis now in its fourth year and strict pandemic lockdowns damped consumer confidence.

Meanwhile, the manufacturing sector, which was previously a source of growth alongside exports, has also begun to falter.

Factory prices have been stuck in a prolonged slide for more than two years, while output contracted for the first time in four months in January, as Chinese producers have grappled with increasing overseas competition, a situation that analysts suggest will only worsen as US President Donald Trump reopens his trade war with Beijing.

Trump this month imposed an additional 10 per cent tariff of Chinese goods, a move he described as the “opening salvo”. China retaliated with levies of 10 to 15 per cent on goods including US liquefied natural gas, coal, crude oil and farm equipment, which are due to take effect on Monday.

China’s President Xi Jinping has vowed “vigorous” measures to strengthen consumer spending and policymakers have unveiled a series of stimulus measures, but analysts believe that deflationary pressures will continue to plague the Chinese economy in 2025. Beijing also faces a balancing act trying to reflate the economy while Trump’s tariff measures pile pressure on renminbi.

Rising trade tensions have also raised concerns about capital outflows and constrained the ability of the People’s Bank of China, the country’s central bank, to lower rates. The PBoC added a record Rmb2.2tn ($300bn) in short-term funds into the financial system ahead of the new year break to help ease liquidity pressures that are heightened over the period.

>>> Weekend Papers Summary

FINANCIAL TIMES
-Donald Trump has announced that Nippon Steel has abandoned its plan to buy US Steel but will invest heavily in the Pittsburgh producer. The president said the prospect of an investment in US Steel was "very exciting" and would meet Nippon officials next week to mediate and arbitrate the deal. Trump has not changed his mind about opposing Nippon's $15B acquisition of US Steel. The United Steelworkers union, which was the biggest opponent to the proposed acquisition, remained concerned about Nippon Steel. Details of the investment have not been finalized.
-Japanese Prime Minister Shigeru Ishiba has held a face-to-face meeting with US President Donald Trump at the White House. The meeting aims to establish a new golden era for relations between Japan and the US, while also showcasing the country's shared military alliance. Ishiba is the first Asian leader to hold such a meeting since Trump's inauguration. Trump expressed his love for Japan during the meeting, highlighting the importance of the relationship between the two nations.
-US President Donald Trump has temporarily halted measures to cease a tariff exemption on low-cost shipments from China, allowing them to remain in place until adequate systems are in place to process and collect tariff revenue. The de-minimis provision, which exempts shipments under $800 in value from tariffs and rigorous customs checks, was cancelled in an executive order last week. China retaliated with tariffs of 10 to 15% on US liquefied natural gas, coal, crude oil, and farm equipment. Trump is expected to hold a call with Chinese leader Xi Jinping to avoid an escalation in trade tensions.
-In the weekend essay, economist Nobel Prize laureate economist Daron Acemoglu, envisions a fictional account of the next 25 years of US history: the future of nations can be unpredictable, but the fortunes of nations can change dramatically. Politics has consequences, and it's important to think creatively about the consequences and how we might look to those living with them. As an economist, Acemoglu imagines assessing American history in 2050. The premise of the imagined account is that the US appeared unstoppable in the early 21st century, leading in artificial intelligence and aiming to outperform Western European rivals. However, in the early 2030s, Acemoglu sees the US economy as shrinking, even falling behind Europe.
-US President Donald Trump has withdrawn Joe Biden's security clearance, halting his daily intelligence briefings. This move was a payback for Biden's removal of Trump's security clearance following the January 6 attack on the Capitol. Trump has already revoked the security clearance and protective detail for John Bolton, his former national security adviser, and Anthony Fauci, the immunologist who led the country's response to the Covid-19 pandemic. Biden's secret service protection remains in place. Trump campaigned on promises to target his political enemies in government, including the intelligence community and law enforcement. The FBI recently sued the Trump administration to prevent it from publicly naming staff involved in a probe into the January 6 Capitol attack.
-Palantir, a $264B data intelligence company, has been able to profit from a "revolving door" of executives and officials between the company and high-level positions in Washington and Westminster, creating an influence network that has guided its extraordinary growth. The US group, whose billionaire chair Peter Thiel has been a key backer of Donald Trump, has enjoyed an astonishing stock price rally on the back of strong rise in sales from government contracts and deals with the world's largest corporations. Palantir has won over $2.7B in US contracts since 2009, including over $1.3B in Pentagon contracts.
-The Department of Government Efficiency, led by Elon Musk, has infiltrated major agencies, fired or suspended civil servants, and gained access to sensitive data. Doge officials have installed themselves within the federal government, including the US Treasury, state and health departments, and the Federal Aviation Administration. USAID, a $40B agency, has been closed, with contracts cancelled and its workforce reduced from 10,000 to 600. Doge staffers have audited trillions of dollars in remittances and had access to social security numbers, bank account details, and health records of US citizens.
-Nuevo Laredo, a border trade hub and a drug battleground, is a significant issue for US President Donald Trump. With 3M trucks a year passing through the city, it has become so dangerous that executives from Monterrey avoid it. As part of a deal to avoid Trump's threat of 25% tariffs on Mexican imports to the US, Sheinbaum agreed to send 10,000 extra National Guard troops to the border to curb illegal opioid fentanyl exports. This was a top priority for Trump, as it sparked concerns about Mexico's export-oriented economy. The city's security situation has led to many executives opting to fly instead of driving.
-A study by three US finance experts has found that US public pension funds are losing billions of dollars in gains each year to speculators who front-run their periodic trades to rebalance stock and bond portfolios. The research found that some traders take advantage of the funds' "predictable" moves to realign allocations by making similar trades in advance, thereby worsening the price retirement funds get. The lost value each year amounts to at least $16B, or about $200 per retiree. Pension funds are aware of the problem but have been slow to fine-tune their rebalancing practices. The front-running is not considered illegal because the trades do not rely on inside information. The lost upside from rebalancing has posed a fresh challenge to US pensions, which are already struggling with anaemic returns and trillions of unfunded liabilities.
-Airbus has rescheduled plans to fly a hydrogen-powered aircraft by 2035, a setback for the aviation industry's goal of achieving net zero emissions. The decision was made in response to a statement by French labor unions, which claimed the aircraft's entry into service had been delayed by five to ten years. Airbus has stated that "2035 remains the ambition" for the aircraft, despite European airlines scaling back their ambitions for hydrogen's role in reaching net zero by 2050. The company acknowledged the challenge of developing a hydrogen ecosystem, including infrastructure, production, distribution, and regulatory frameworks, and noted that progress on key enablers, particularly hydrogen produced from renewable energy sources at scale, is slower than anticipated. Airbus has been more optimistic about hydrogen's potential to help decarbonize emissions from flying than its US rival Boeing.
-The US economy created 143,000 jobs in January, falling short of forecasts, but a drop in the unemployment rate and strong earnings growth bolstered the strength of the labor market. The unemployment rate dropped to 4.1% in January, bolstering the Federal Reserve's case for slow interest rate cuts. The two-year Treasury yield jumped 0.08 percentage points to a two-week high of 4.29%, while the 10-year yield added 0.05 percentage points to 4.49%. The S&P 500 index of blue-chip US stocks closed almost 1% lower, and the tech-heavy NASDAQ Composite dropped 1.4%.

NEW YORK TIMES
-President Trump has directed Elon Musk to focus on the Pentagon in his budget-slashing initiative, highlighting Musk's growing role in the federal bureaucracy. Musk's cost-cutting team has inserted itself into at least 17 federal agencies in the first three weeks of the new administration, according to The New York Times. Both Musk and Trump have defended the disruptive actions of his young aides, even as some have come under scrutiny for their past actions. One Musk aide, Marko Elez, resigned after The Wall Street Journal revealed racist posts on X. Musk called for the Journal reporter to be fired and said he was reinstating Elez, a move both the president and vice president said they supported.
-Elon Musk has been conducting a series of sweeping changes in the federal government, with his team, the Department of Government Efficiency, gaining significant attention. These young aides, who have been invited to join him in his stately office suite, have become his enforcers, sweeping into agency headquarters with black backpacks and ambitious marching orders. Unlike their 20-something peers in Washington, who are accustomed to doing the unglamorous work ordered up by senior officials, these aides have been empowered to break the system. As Musk continues to disrupt the federal bureaucracy, civil servants have witnessed the sudden intrusion of these young members of the billionaire's team. The aides have been tasked with sweeping into agency headquarters with black backpacks and ambitious marching orders.
-President Trump has announced plans to take control of the John F. Kennedy Center for the Performing Arts in Washington, announcing plans to dismiss several board members and appoint himself as chairman. Trump stated that he aims to make the Kennedy Center "Great Again" and would immediately terminate individuals from the Board of Trustees, including the Chairman, who do not align with his vision for a Golden Age in Arts and Culture. He also announced that a new board will be announced soon, with an "amazing" Chairman, Donald Trump. This move was not surprising to the arts and culture world, but was not surprising to Trump's supporters who have been discussing his desire to become the center's chairman.
-A federal judge has ordered the Trump administration to temporarily halt some aspects of its attempt to shut down the US Agency for International Development. Judge Carl Nichols issued a restraining order, pausing the administrative leave of 2,200 USAID employees and a plan to withdraw nearly all of the agency's overseas workers within 30 days. He also ordered the temporary reinstatement of 500 agency employees already on administrative leave. The ruling comes on a lawsuit filed by the largest union representing federal workers and the union representing Foreign Service officers. The pause in the administration's plans will allow for expedited legal arguments.
-A federal order freezing the $5B Biden-era program to build electric vehicle (EV) charging stations has caused confusion among states, which had been allocated billions of dollars by Congress for the program. Some state officials have halted work on the charging stations due to the Trump administration's memo, while others plan to continue building. Ohio, where Gov. Mike DeWine has welcomed federal money to build 19 EV charging stations, is uncertain about how or whether the state will build more. In interviews, some state officials said they had stopped work on the charging stations due to the memo, while others said they intended to continue.
-Hamas is set to release three Israeli hostages in exchange for Palestinian prisoners, marking the latest in a series of steps in a cease-fire deal with Israel that has been in place for nearly three weeks. The three hostages were abducted during the Hamas-led attack on October 7, 2023, which ignited the Gaza war. In the first phase of the cease-fire, Hamas has pledged to release at least 33 hostages in exchange for over 1,500 Palestinians jailed by Israel. In three previous exchanges, about 18 hostages have been freed for more than 550 Palestinian prisoners. Israel was expected to release around 180 Palestinian prisoners on Saturday. Under the deal, at least some of the prisoners to be released are serving life sentences for committing deadly attacks. The truce has halted over a year of devastating warfare that began with the attack on Israel, which killed around 1,200 people and taken 250 others hostage.
-Canada's Prime Minister Justin Trudeau has expressed his concerns over President Trump's repeated statements of wanting to annex Canada and make it the 51st state. Trudeau stated that he does not view Trump's statements as in jest and believes annexation is a serious threat. He also suggested that the Trump administration knows about Canada's critical minerals and may be even why they keep talking about absorbing it. Trudeau's comments were made at a gathering of company executives and business leaders in Toronto, and while the media was asked to leave the room, the Toronto Star and the CBC were able to hear and record the comments.
-President Trump has ordered the halt of all foreign assistance to South Africa and emphasized the priority of resettling white "Afrikaner refugees" into the US due to the country's government's actions that "racially disfavored landowners." He stated that the US would not provide aid to South Africa and that American officials should focus on helping "Afrikaners in South Africa who are victims of unjust racial discrimination." Trump accused the South African government of engaging in "massive Human Rights VIOLATION" and promised a full investigation and the cut off of aid. The order was seen as supporting long-held conspiracy theories about the mistreatment of white South Africans in the post-apartheid era.

NEW YORK POST
-US Immigration and Customs Enforcement (ICE) agents arrested 11,000 illegal migrants in the first 18 days of the Trump administration, a third of the total busts the agency made last year under former President Joe Biden. The arrests were part of President Trump's mass deportation offensive, which included the arrest of a previously deported Mexican cartel hitman, Fernando Vasquez-Mendoza. Vasquez-Mendoza was identified as a hired killer working for the Cartel del Golfo, a Mexican drug trafficking organization and criminal syndicate. The federal immigration authorities also arrested several members of the Venezuelan prison gang Tren de Aragua and multiple child sex offenders.
-Bud Light, a beer brand, has not fully recovered from the controversy surrounding its partnership with transgender influencer Dylan Mulvaney, according to former Anheuser-Busch President of Operations Anson Frericks. The company's sales were down 29.9% year-over-year for the week ending January 20 compared to the same period last year, according to the latest numbers provided to FOX Business by Bump Williams Consulting, which analyzed NielsenIQ data. Frericks noted that the partnership impacted stocks and that the brand's efforts to recover with Super Bowl ads would not relieve the pain. Frericks also pointed out the dilemma Bud Light faces regarding its vision. Customers are asking them what Bud Light will be moving forward, whether it will be more than Shane Gillis and fun in football or if it is Dylan Mulvaney.