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Rouble hits record low in Moscow, remains volatile outside Russia

Russian Rouble coins are seen in front of displayed U.S. Dollar banknote in this illustration taken, February 24, 2022. REUTERS/Dado Ruvic/Illustration/Files

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NEW YORK, March 2 (Reuters) – The rouble touched a record low of 110 to the dollar in Moscow on Wednesday and crawled back near 100 in other trading platforms, though it continued under pressure as Russia’s financial system teetered under the weight of Western sanctions imposed over the invasion of Ukraine.

The Russian stock market remained closed and trading on bonds showed wide bid-ask spreads and little-to-no volume.

The rouble fell 4.5% to 106.02 against the dollar in Moscow trade , earlier hitting 110.0, a record low. It has lost 30% of its value against the dollar since the start of the year. Against the euro , it shed 2.5% on Wednesday to finish the day at 115.40.

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But trading outside of Russia , saw the currency rebound to end the day up 6% to 100 on the EBS platform and 7.6% at 97.6 elsewhere.

The currency is still over 20% weaker than where it traded at during the first half of February.

On the EBS platform, the rouble has this week had the three widest daily ranges since 2010, with Monday the widest range on record.

“Who gosh-darn knows what’s going to happen tomorrow,” said Colin Stewart, head of Americas at Quant Insight in New York.

“It’s just too volatile.”

Russia has responded to the currency weakness by more than doubling its benchmark interest rate to 20% and telling companies to convert 80% of their foreign currency revenues on the domestic market as the central bank, which is now under Western sanctions, has stopped foreign exchange interventions.

The weak rouble will hit living standards in Russia and fan already high inflation, while Western sanctions are expected to create shortages of essential goods and services such as cars or flights. read more

Many international companies have announced plans to exit Russia, while the country’s credit ratings are coming under pressure as a result of the crisis.

Credit rating agency Moody’s said it was reviewing Russia’s rating for a downgrade, a move that “reflects the negative credit implications for Russia’s credit profile from the additional and more severe sanctions being imposed.”

JPMorgan said about $4.2 billion in Russian debt is at risk of being kicked out of investment-grade bond indexes.

Meanwhile, Scope Ratings said capital controls “raise significant questions surrounding the Russian state’s willingness to service its debt owed to foreign residents” a day after cutting its Russia rating to junk status.

The measures, Scope added, make Russia “more vulnerable to banking and liquidity crises.”

In a separate note, JPMorgan said there was a deep recession in the making for Russia and the bank was reassessing its regional macro forecasts.

“The most recent measures targeting the CBR have completely changed the picture,” JPMorgan said.

“Russia’s large current account surplus could have accommodated large capital outflows, but with accompanying CBR and SWIFT sanctions, on top of the existing restrictions, it is likely that Russia’s export earnings will be disrupted, and capital outflows will likely be immediate.”

Several Russian banks have been barred from the SWIFT global financial network that facilitates transfers between banks.

As households and businesses in Russia have rushed to convert the falling rouble into foreign currency, banks raised rates for foreign currency deposits to attract those flows.

Russia’s largest lender Sberbank (SBER.MM) is offering to pay 4% on deposits of up to $1,000, while the largest private lender Alfa Bank is offering 8% on three-month dollar deposits. For rouble deposits, Sberbank offers a 20% annual return.

Sberbank said on Wednesday it was quitting almost all European markets, blaming big cash outflows and threats to its staff and property, after the ECB ordered the closure of its European arm. read more

The bank’s London-traded shares fell to 4.5 cents from $16 at the start of the year.

A U.S.-traded ETF of Russian companies and others heavily exposed to Russia fell 13% on Wednesday, for a 72% drop since mid-February.

Moscow calls its actions in Ukraine a “special operation” that it says is not designed to occupy territory but to destroy its neighbour’s military capabilities and capture what it regards as dangerous nationalists.

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Reporting by Reuters; Editing by Jane Merriman, Jonathan Oatis and Grant McCool

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Amazon to shut bookstores, some other physical shops in turning point

People walk past an Amazon Books retail store in New York City, U.S., February 14, 2019. REUTERS/Brendan McDermid

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March 2 (Reuters) – Amazon.com Inc said on Wednesday it plans to close all 68 of its brick-and-mortar bookstores, pop ups and shops carrying toys and home goods in the United States and United Kingdom, ending some of its longest-running retail experiments.

The news, which Reuters was first to report, marks a turning point for a company that began as an online bookseller and helped drive established rivals such as Borders to bankruptcy.

After opening its first book shop in Seattle in 2015, Amazon has tried out an array of retail concepts: convenience stores without cashiers, supermarkets, and a format called “4-star” in which it sells toys, household items and other goods with high customer ratings.

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Amazon aimed to bring its online touch to the real world. Its bookstores would pull from its vast data trove and showcase what people were reading and even reviews they left online, for instance.

But Amazon’s innovations were not enough for some of these experiments. Its “physical stores” revenue, largely from grocery sales at its Whole Foods subsidiary, has often failed to keep pace with growth in Amazon’s other businesses.

Amazon will close its 4-star, pop up and bookstore locations on various dates and notify customers via signage.

Workers will receive severance or can move to jobs at nearby Amazon stores that the company said it would help them find.

Amazon’s experiments continue. It recently announced plans to open a fashion store in greater Los Angeles where algorithms suggest what to try on. Last week, it opened its first Whole Foods store in Washington, D.C., that isreplete with technology letting customers check out without scanning items or the help of a cashier.

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Reporting By Jeffrey Dastin in Palo Alto; Editing by Nick Zieminski and Richard Chang

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European bank shares halt slide, Russia’s Sberbank exits Europe

FRANKFURT/LONDON, March 2 (Reuters) – European bank shares halted their slide on Wednesday after dropping to their lowest level in nearly 11-months on fallout from the Ukraine crisis, which has forced the European arm of Russia’s Sberbank (SBER.MM) to close.

Russia has shown no intention of stopping its Ukraine attack, which has triggered heavy sanctions against Moscow and led to an exodus of big companies from the Russian market. read more

U.S. President Joe Biden has warned Vladimir Putin that the Russian leader “has no idea what’s coming”. Russia calls its Ukraine actions a “special operation”. read more

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The European arm of Sberbank, Russia’s biggest lender, has been closed by order of the European Central Bank. read more

Regulators are also preparing for a possible closure of the European arm of Russia’s second-largest bank, VTB Bank (VTBR.MM), amid growing concerns about the impact of sanctions, Reuters reported on Wednesday. read more .

Sberbank, which reported record profits in 2021, said it was leaving the European market as its subsidiaries there faced large cash outflows and threats to the safety of employees and property. read more

Sberbank operated in Austria, Croatia, Germany and Hungary, among other countries, and had European assets worth 13 billion euros ($14.41 billion) on Dec. 31, 2020.

Sberbank’s depository receipts in London have plunged 99.9% so far in 2022. “All sellers no buyers,” said one London trader on Wednesday.

The impact of the crisis and the sanctions are expected to have repercussions for European banks.

“Large western European banks’ asset quality will be pressured by the fallout from Russia’s invasion of Ukraine,” the credit rating agency Fitch said on Wednesday.

“The banks also face materially increased operational risk,” it added.

An index of leading European bank stocks (.SX7P) was up 0.1%by midday Wednesday, erasing early losses that came on top of a 5.6% drop on Tuesday and 4.5% on Monday. Earlier on Wednesday, the index hit its lowest level since April 2021, down 27% from last month’s highs.

Austria’s Raiffeisen Bank International (RBIV.VI), which has operated in Russia since the collapse of the Soviet Union thirty years ago, has been one of the biggest fallers so far this week.

The bank is looking into leaving Russia, two people with knowledge of the matter told Reuters, a move that would make it the first European bank to do so since Moscow’s Ukraine invasion. read more

Raiffeisen shares, which are half the value of a month ago, were down 4.7%.

Some finance officials are trying to reassure markets.

The capital position of Hungary’s OTP Bank , central Europe’s largest independent lender, is excellent and the bank can withstand further possible market shocks in Russia and Ukraine, Hungary’s central bank said in an emailed reply to Reuters. read more

SHEDDING ASSETS

Germany’s market regulator BaFin is closely monitoring the European arm of Russia’s VTB Bank (VTBR.MM), which was no longer accepting new clients. The bank, headquartered in Frankfurt, had 8.1 billion euros of assets at the end of 2020.

On Tuesday, Russia said it was placing temporary restrictions on foreigners seeking to exit Russia assets, as it tried to stem an investor retreat driven by crippling Western sanctions.

But investors are continuing to shed assets. Aviva’s (AV.L) fund management business will divest its small exposure to Russia “as soon as we practically can,” chief executive Amanda Blanc said on Wednesday.

Financial companies are scrambling to keep up with the situation.

Dubai’s Mashreqbank (MASB.DU) has stopped lending to Russian banks and is reviewing its existing exposure to the country, two sources familiar with the matter told Reuters. read more

The move is one of the first reported instances of a bank in the Middle East halting ties to Russia and underscores growing global nervousness about falling foul of Western sanctions.

France’s BNP Paribas (BNPP.PA) said it was working to maintain its activities as much as possible at its Ukraine arm Ukrsibbank, which has close to 5,000 employees.

A task force at Germany’s Commerzbank, which has a subsidiary in Russia, is meeting multiple times a day, a board member has said.

Aki Hussain, CEO of Hiscox (HSX.L), said the Lloyd’s of London insurer provided cover for international businesses in Ukraine.

“We insure those offices and some of the people there and we’ve been working closely with our clients for the last eight weeks and effectively – to the extent they want – we’ve been helping them leave the country and evacuate their staff.”

($1 = 0.9022 euros)

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Additional reporting by Gergely Szakacs, Zuzanna Szymanska, Saeed Azhar and Yousef Saba
Editing by Paul Carrel, Tomasz Janowski and Jane Merriman

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Russian advances on Ukraine cities stall

  • Kherson would be biggest city yet captured by Russians
  • Ukrainians say street battles are going on
  • Russia bombards other cities as its advances stall
  • Centre of Kharkiv turned into bombed-out wasteland
  • Russians ‘have orders to erase us’, says Zelenskiy

KYIV/KHARKIV, March 2 (Reuters) – Ukrainians said on Wednesday they were battling on in the port of Kherson, the first sizeable city Russia claimed to have seized, as air strikes and bombardment caused devastation in cities that Moscow’s bogged down forces have failed to capture.

After nearly a week, Russia has yet to achieve its aim of overthrowing Ukraine’s government, but has, according to the Ukrainian emergency service, killed more than 2,000 civilians and destroyed hospitals, kindergartens and homes.

The invasion has sent more than 870,000 people fleeing over Ukraine’s borders and retaliatory sanctions have shaken the world economy, with surging oil prices exacerbating fears of inflation. read more

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Bombing of Kharkiv, an eastern city of 1.5 million people, has left its centre a wasteland of ruined buildings and debris.

“The Russian ‘liberators’ have come,” one Ukrainian volunteer lamented sarcastically, as he and three others strained to carry the dead body of a man wrapped in a bedsheet out of the ruins on a main square.

After an air strike on Wednesday morning, the roof of a police building in central Kharkiv collapsed as it was engulfed in flames. Authorities said 21 people were killed by shelling and air strikes in the city in the past 24 hours, and four more on Wednesday morning.

Moscow denies targeting civilians and says it aims to disarm Ukraine, a country of 44 million people, in a “special military operation”.

Apple, Exxon, Boeing and other firms joined an exodus of international companies from Russian markets that has left Moscow financially and diplomatically isolated since President Vladimir Putin ordered the Feb. 24 invasion.

“He thought he could roll into Ukraine and the world would roll over. Instead, he met a wall of strength he could never have anticipated or imagined: he met Ukrainian people,” U.S. President Joe Biden said on Tuesday in his annual State of the Union address.

U.S. lawmakers stood, applauded and roared, many waving Ukrainian flags and wearing its blue and yellow colours. read more

Russia said it had sent delegates for a second round of peace talks in Belarus. Ukrainian President Volodymyr Zelenskiy said Russia must stop bombing if it wanted to negotiate.

Moscow said on Wednesday it had captured Kherson, a southern provincial capital of around 250,000 people strategically placed where the Dnipro River flows into the Black Sea.

Zelenskiy advisor Oleksiy Arestovych denied Kherson was fully under Russian control, saying: “The city has not fallen, our side continues to defend.”

Also in the south, Russia was bombarding the port of Mariupol, which it says it has surrounded in a ring around the entire Sea of Azov. The besieged city’s mayor said Mariupol had suffered mass casualties after a night of intense strikes. He gave no full casualty figure, but said it was impossible to evacuate the wounded and that water supplies were cut.

“The enemy occupying forces of the Russian Federation have done everything to block the exit of civilians from the city of half a million people,” mayor Vadym Boichenko said in a live broadcast on Ukrainian TV.

On the other two main fronts in the east and north, Russia so far has little to show for its advance, with Ukraine’s two biggest cities, Kyiv and Kharkiv, holding out in the face of increasingly intense bombardment.

“We are going to see … his brutality increase,” British Defence Secretary Ben Wallace said of Putin in a radio interview. “He doesn’t get his way, he surrounds cities, he ruthlessly bombards them at night … and he will then eventually try and break them and move into the cities.”

‘ORDERS TO ERASE US’

In Kyiv, the capital of 3 million people where residents have been sheltering at night in the underground metro, Russia blasted the main television tower near a Holocaust memorial on Tuesday, killing bystanders.

Zelenskiy, in his latest update to his nation, said that attack proved the Russians “don’t know a thing about Kyiv, about our history. But they all have orders to erase our history, erase our country, erase us all.”

Earlier, a tired and unshaven Zelenskiy, wearing green battle fatigues in a heavily guarded government compound, told Reuters and CNN in an interview that the bombing must stop for talks to end the war.

“It’s necessary to at least stop bombing people, just stop the bombing and then sit down at the negotiating table.”

Russia’s main advance on the capital – a huge armoured column stretched for miles along the road to Kyiv – has been largely frozen in place for days, Western governments say. A senior U.S. defense official on Tuesday cited problems including shortages of food and fuel, and signs of flagging morale among Russian troops. read more

“While Russian forces have reportedly moved into the centre of Kherson in the south, overall gains across axes have been limited in the past 24 hours,” Britain’s ministry of defence said in an intelligence update on Wednesday morning.

“This is probably due to a combination of ongoing logistical difficulties and strong Ukrainian resistance.”

It said Russia was carrying out intensive air and artillery strikes, especially on Kharkiv, Kyiv, Mariupol and the eastern city of Chernihiv.

The Kremlin’s decision to launch war – after months of denying such plans – has shocked Russians accustomed to viewing Putin, their ruler of 22 years, as a methodical strategist. have been forced to queue at banks to salvage their savings, an echo of the post-Soviet economic collapse of the 1990s.

Ukraine said more than 1,000 volunteers from 16 countries were on their way to fight alongside Ukrainian forces, and that it would free any Russian prisoners whose mothers come to collect them.

Moscow has given no full account of its losses so far, but Ukraine says it has killed nearly 6,000 Russian troops and captured hundreds more. Pictures online have shown burnt-out columns of Russian tanks surrounded by corpses.

Russia has largely eliminated domestic opposition, with Putin’s main critics jailed or forced into exile. Leading opposition figure Alexey Navalny said from prison that Russians should protest daily against the war, a spokesperson tweeted.

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Reporting by Reuters bureaux
Writing by Peter Graff
Editing by Philippa Fletcher and Catherine Evans

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U.S. private payrolls rise solidly; January revised sharply higher

A restaurant advertising jobs looks to attract workers in Oceanside, California, U.S., May 10, 2021. REUTERS/Mike Blake

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  • Private payrolls increase 475,000 in February
  • January data revised higher to show gain instead of loss

WASHINGTON, March 2 (Reuters) – U.S. private employers hired more workers than expected in February and data for the prior month was revised sharply higher to show strong job gains instead of losses, aligning with other reports that have painted an upbeat picture of the labor market.

The ADP National Employment Report on Wednesday suggested the economy was on solid footing as the winter wave of COVID-19 infections driven by the Omicron variant was subsiding. But some economists raised concerns about the report’s credibility because of the sharp upward revision to January’s data.

Private payrolls increased by 475,000 jobs last month. Employers added 509,000 jobs in January rather than laying off 301,000 workers as was initially reported. Economists polled by Reuters had forecast private payrolls rising by 388,000 jobs.

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“Huge revisions undermine ADP’s credibility,” said Michael Pearce, a senior economist at Capital Economics in New York. “Quite frankly, with January’s 301,000 reported drop revised into a 509,000 gain, the ADP figures are as much noise than signal.”

ADP Chief Economist Nela Richardson, however, said revisions were part of the process, drawing parallels with the Labor Department’s Bureau of Labor Statistics, which compiles the closely watched monthly employment report.

“If you look over the last three months, like the November, December (data), BLS also has substantially revised their numbers over the course of 2021,” said Richardson. “I think what’s important to remember is the overall trend. Both NER and the BLS are showing more than 6 million jobs created in 2021.”

The ADP report is jointly developed with Moody’s Analytics and was published ahead of the BLS’ more comprehensive and closely watched employment report for February on Friday. It has a poor record predicting the private payrolls count in the BLS employment report because of methodology differences.

While the initial ADP estimate showed private payrolls fell for the first time in a year in January, the BLS reported that the private sector hired 444,000 workers, with large upward revisions to employment gains in November and December.

ADP

UNRELIABLE PREDICTOR

“The ADP report is not always a reliable predictor of the BLS data, but it does suggest that our expectations for Friday are pretty reasonable,” said Daniel Silver, an economist at JPMorgan in New York.

According to the ADP report, large companies accounted for almost all of the job gains in February, with employment at small businesses declining by 96,000. Businesses continue to report difficulties finding workers. There were a near record 10.9 million job openings at the end of December.

Tightening labor market conditions are feeding into higher inflation pressures. Federal Reserve Chair Jerome Powell told lawmakers on Wednesday that the U.S. central bank would move forward with plans to raise interest rates this month, but Russia’s war against Ukraine had made the outlook “highly uncertain.” read more

Economists are expecting as many as seven rate hikes this year. Stocks on Wall Street were trading higher. The dollar rose against a basket of currencies. U.S. Treasury prices fell.

“We expect little fallout on the U.S. labor market, but there are major downside risks in the months ahead,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. “These include a recession in Europe, even higher inflation because of rising energy prices, and the increasing likelihood that the Fed could be forced to raise interest rates so aggressively to combat inflation that the recovery stalls.”

Indications are that companies maintained a strong pace of hiring in February. Data from Homebase, a payroll scheduling and tracking company, showed substantial increases in the number of employees on the job as well as hours worked in mid-February.

According to UKG’s workforce activity report, shift work in February recorded its largest monthly gain since the spring of 2020. The workforce management software company said the surge meant that the impact of the Omicron variant of COVID-19 on hourly shift work was over.

That aligns with expectations for another month of solid employment gains in February. Nonfarm payrolls likely increased by 400,000 jobs after rising 467,000 in January, according to a Reuters survey of economists. Private payrolls are forecast to have increased by 378,000 jobs in February.

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Reporting By Lucia Mutikani;
Editing by Chizu Nomiyama and Andrea Ricci

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Sanctions significantly increase chance of Russia international debt default, analysts warn

A sign outside JP Morgan Chase & Co. offices is seen in New York City, U.S., March 29, 2021. REUTERS/Brendan McDermid

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LONDON, March 2 (Reuters) – Sanctions imposed on Russia have significantly increased the chance of the country defaulting on its dollar- and other international market government debt, analysts at JPMorgan and elsewhere warned on Wednesday.

Russia has over $700 million worth of government bond payments due this month. While in theory it has ample reserves to cover debt, in practice a freeze on some assets and other measures could affect its ability to make payments. read more

“The sanctioning of Russian government entities by the United States, counter-measures within Russia to restrict foreign payments, and disruptions of payment chains present high hurdles for Russia to make a bond payment abroad,” JPMorgan said in a note to clients.

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“Sanctions … have significantly increased the likelihood of a Russia government hard currency bond default.”

The central bank and the finance ministry did not reply to a Reuters request for comment on the possibility of defaults.

The first crunch date, JP Morgan analysts said, is March 16 when two bond coupon payments are due, although like much of Russia’s debt these have 30-day “grace periods” built into them, which would push back any formal moment of default to April 15.

Russia has just under $40 billion worth of international market or “hard currency” debt as it is known. While it is a small amount for an economy of Russia’s importance, any missed payment will trigger a chain of events.

Major credit rating agencies like S&P Global, Moody’s and Fitch, which all had investment grade scores for Russia until last week, would downgrade it en masse.

JPMorgan estimated that some $6 billion worth of Credit Default Swaps (CDS) that bondholders have bought as insurance policies would also need to payout, although the process could be complicated in the case of further debt sanctions.

The default concerns follow a warning from the Institute of International Finance (IIF) this week, which flagged how roughly half of Russia’s $640 billion of foreign exchange reserves had effectively been frozen by international sanctions. read more

Capital Economics also warned on Wednesday of the growing default risks. It said it would primarily hit international investors – foreigners held $20 billion of Russia’s dollar- and rouble-denominated government debt at the end of last year, according to Russia’s central bank – though it also would further scar Moscow’s reputation in international markets.

“The likelihood that the government and companies are unable or unwilling to make external debt repayments has risen significantly,” Jackson said.

Russia international debt default looming
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Reporting by Marc Jones Editing by Karin Strohecker and Mark Potter

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Boeing, Exxon, Apple join Western firms spurning Russia over Ukraine

  • Ford suspends operations in Russia
  • Apple stops iPhone sales in Russian market
  • ESG investors press Western firms to act

March 2 (Reuters) – Boeing (BA.N) suspended maintenance and technical support for Russian airlines and U.S. energy firm Exxon Mobil (XOM.N) said it would exit Russia, joining a growing list of Western companies spurning Moscow over its invasion of Ukraine.

U.S. tech giant Apple (AAPL.O) said it had stopped sales of iPhones and other products in Russia, while Ford Motor (F.N) joined other automakers by suspending operations in the country.

Western nations have steadily ratcheted up sanctions on Russia since it invaded Ukraine last week, including shutting out some Russian banks from the SWIFT global financial network.

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The measures have hammered the rouble and forced the central bank to jack up interest rates, while Moscow has responded to the growing exodus of Western investors by temporarily restricting Russian asset sales by foreigners.

Russian firms, meanwhile, have felt increasingly squeezed. Sberbank (SBER.MM), Russia’s largest lender, said on Wednesday it was leaving the European market because its subsidiaries faced large cash outflows. It also said the safety of its employees and property was threatened. read more

Signalling there would be no let up from the West, U.S. President Joe Biden said in his State of the Union address on Tuesday that his Russian counterpart Vladimir Putin “has no idea what’s coming” as he joined European states and Canada in closing U.S. airspace to Russian planes. read more

With international shippers such as Maersk (MAERSKb.CO), Hapag Lloyd (HLAG.DE) and MSC suspending bookings to and from Russia, the country has become increasingly shut out of world commerce. Sanctions are also squeezing Russia’s aviation sector.

Boeing’s said on Tuesday it was suspending operations as other aviation companies face growing European and U.S. restrictions on dealings with Russia clients, affecting leasing planes, exporting new aircraft and providing parts.

CHORUS OF CONDEMNATION

Exxon said it would not invest in new developments in Russia and was taking steps to exit the Sakhalin-1 oil and gas venture, after similar moves to dump assets by Britain’s BP , Russia’s biggest foreign investor, and Shell Plc (SHEL.L).

However, French firm TotalEnergies (TTEF.PA) stopped short of saying it would exit Russia, only saying it would not put in new cash. read more

Apple, which halted sales in Russia, said it was making changes to its Maps app to protect civilians in Ukraine.

It also joined a growing chorus of Western companies openly condemning Russian actions.

“We are deeply concerned about the Russian invasion of Ukraine and stand with all of the people who are suffering as a result of the violence,” Apple said.

“We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people,” Exxon said, while Ford said in its condemnation: “The situation has compelled us to reassess our operations in Russia.”

Motor cycle maker Harley-Davidson Inc suspended shipments of its bikes to Russia.

The increasing focus of investors in environmental, social and governance (ESG) issues has added pressure on companies to act swiftly in ending ties with Russia and Russian entities.

“The only course of action for many is simply divestment,” said TJ Kistner, vice president at Segal Marco Advisors, a large U.S. pension consultant.

Big Western technology companies said they were continuing efforts to stop Russia from taking advantage of their products.

Apple said it had blocked app downloads of some state-backed news services outside of Russia.

Google, owned by Alphabet Inc (GOOGL.O), said it had blocked mobile apps connected to Russian state-funded publisher RT from its news-related features, including the Google News search.

Google also barred RT and other Russian channels from receiving money for ads on websites, apps and YouTube videos, mirroring a move made by Facebook (FB.O).

Microsoft (MSFT.O) said it would remove RT’s mobile apps from its Windows App store and ban ads on Russian state-sponsored media.

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Reporting by Paresh Dave in Oakland, Ross Kerber in New York, Dawn Chmielewski in Los Angeles; Writing by Peter Henderson and Sayantani Ghosh; Editing by Lincoln Feast and Edmund Blair

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U.N. General Assembly set to censure Russia over Ukraine invasion

The United Nations headquarters building is pictured with a UN logo in the Manhattan borough of New York City, New York, U.S., March 1, 2022. REUTERS/Carlo Allegri

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UNITED NATIONS, March 2 (Reuters) – The United Nations General Assembly is set to reprimand Russia on Wednesday over its invasion of Ukraine and demand that Moscow stop fighting and withdraw its military forces, a move that aims to diplomatically isolate Russia at the world body.

By Tuesday evening nearly half the 193-member General Assembly had signed on as co-sponsors of a draft resolution ahead of a vote on Wednesday, diplomats said. The text “deplores” Russia’s “aggression against Ukraine.”

It is similar to a draft resolution vetoed by Russia in the 15-member Security Council on Friday. No country has a veto in the General Assembly and Western diplomats expect the resolution, which needs two-thirds support, to be adopted.

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“Russia’s war marks a new reality. It requires each and every one of us to take a firm and responsible decision and to take a side,” Germany’s Foreign Minister Annalena Baerbock told the General Assembly on Tuesday.

While General Assembly resolutions are non-binding, they carry political weight.

The draft text “demands that the Russian Federation immediately, completely, and unconditionally withdraw all of its military forces from the territory of Ukraine within its internationally recognized borders.”

Dozens of states are expected to formally abstain from the vote or not engage at all. In two votes by the 15-member U.N. Security Council on the Ukraine crisis in the past week, China, India and the United Arab Emirates abstained.

“We must leave space for a diplomatic off-ramp,” UAE U.N. Ambassador Lana Nusseibeh said on Tuesday. “Channels must remain open and those countries that did abstain have those channels with President Putin and will use them to help and support in whatever way we can.”

The General Assembly vote will come at the end of a rare emergency special session of the body, which was convened by the Security Council on Sunday. Russia was unable to veto the move because it was a procedural matter. read more

More than 100 countries will have addressed the session before the vote.

The moves at the United Nations are mirroring what happened in 2014 after Russia annexed Ukraine’s Crimea region.

The Security Council voted on a draft resolution opposing a referendum on the status of Crimea and urged countries not to recognize it. It was vetoed by Russia.

The General Assembly then adopted a resolution declaring the referendum invalid. It received 100 votes in favor, 11 against and 58 formal abstentions, while two dozen countries didn’t take part.

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Reporting by Michelle Nichols;
Editing by Mary Milliken and Richard Pullin

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$10 toothpaste? U.S. household goods makers face blowback on price hikes

A display of Colgate toothpaste is seen on a store shelf in Westminster, Colorado April 26, 2009. REUTERS/Rick Wilking/Files

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March 1 (Reuters) – Get ready for the $10 tube of toothpaste.

Colgate-Palmolive Co (CL.N) CEO Noel Wallace said last week at an industry conference that the household goods maker sees its new Optic White Pro Series toothpaste as the type of premium product “vital” to its ability to raise prices, which will help drive profit growth this year.

His remarks come when many consumer products companies are hiking prices as much as they can to offset their own rising costs, a trend that could continue due to the conflict between Russia and Ukraine, whose economic risks include driving up gasoline prices. read more

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So far retailers and consumers seem largely unfazed by higher prices. But some lawmakers and consumer advocates argue that companies are excessively raising prices in order to fuel profits and return money to shareholders.

“We’re seeing significant price hikes on virtually every item consumers purchase,” said U.S. Representative David Cicilline, who is working on proposed antitrust legislation aimed at bringing down prices. “They’re imposing real hardships. People are taking things out of their grocery carts because it’s too expensive.”

In the past, major retailers such as Walmart Inc (WMT.N) pushed back on price hikes. But now, retailers like Walmart and Target Corp (TGT.N) are mostly going along with them, though they are still trying to undercut rivals and protect their market share when possible.

Target said on Tuesday in an earnings call that bumping up pricing is the last lever it pulls when faced with increased costs. read more

The U.S. Federal Trade Commission over the last three months has probed sky-high prices and supply chain disruptions, requiring companies including Procter & Gamble, Kraft Heinz Co (KHC.O), Kroger Co (KR.N) and Walmart to turn over internal documents on profit margins, pricing and promotions.

Comments on the inquiry are due March 14 and so far show small grocers angry with having to pay more and receive less of crucial products. Consumers wrote in about being unable to find oatmeal, cereal and cat food.

In an interview with Reuters, Cicilline cited Colgate as an example of a company touting price hikes, making basic items too costly, and paying out more to investors.

Colgate expects its margins to widen this year, due in part to higher prices. It also bought back almost 50% more shares last year, a boon for investors.

Raising prices is a “key capability” for Colgate that will help drive profit growth, Wallace said last week.

A Colgate spokesperson said in a statement that the company has a wide portfolio of products at different price points, and touted its new $10 toothpaste as the first with 5% hydrogen peroxide, with “demonstrated efficacy to whiten teeth.”

Consumer goods companies last year started hiking prices in response to rising raw material costs and labor shortages due to the pandemic. read more

“There is incredible appetite for our products,” said Katie Denis, a spokeswoman for the Consumer Brands Association, a trade group for consumer packaged goods companies including Colgate. “We make essentials. And there is no option of not delivering.”

Prices also rose on competing private label items, analysts said.

The White House is targeting corporate profits as it grapples with inflation. Bharat Ramamurti, deputy director of the White House’s National Economic Council, said there are examples of companies outside of the meatpacking industry — which has particularly been in the White House’s crosshairs — increasing prices beyond their own climbing costs. read more

Lindsay Owens, executive director of the progressive non-profit Groundwork Collaborative, named diapers as a category with little competition, paving the way for aggressive price hikes.

Kimberly-Clark Corp’s (KMB.N) margins took a hit in 2021 due to rising costs. The maker of Huggies diapers is betting that consumers will buy pricier options made with plant-based material, helping its profits recover, executives said at last week’s conference.

P&G executives said last week that they expect margins to continue to improve as higher prices hit stores. The company also plans to buy back more stock than originally planned. read more

Reuters Graphics

“Many companies are taking advantage of high consumer demand to continue to raise prices when they don’t need to,” said Jack Gillis, executive director of the Consumer Federation of America, a non-profit consumer interest group. “As long as consumers are willing to pay those prices, there’s no incentive to lower them.”

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Reporting by Jessica DiNapoli in New York; Editing by Leslie Adler and Andrea Ricci

Our Standards: The Thomson Reuters Trust Principles.

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As Ukraine conflict rages, Biden seeks to unite Americans in State of the Union speech

U.S. President Joe Biden hosts a virtual roundtable on securing critical minerals at the White House in Washington, U.S., February 22, 2022. REUTERS/Kevin Lamarque 

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WASHINGTON, March 1 (Reuters) – U.S. President Joe Biden, who has earned praise for his efforts to rally European allies and other nations against Russian President Vladimir Putin’s invasion of Ukraine, will turn to uniting Americans in his State of the Union speech on Tuesday.

With the conflict in Ukraine raging, Biden intends to use the annual speech both to stress the importance of countering Putin and to push his domestic economic agenda, including reintroducing elements of his stalled Build Back Better program, administration officials said.

“There’s no question that this speech is a little different than it would have been just a few months ago,” White House spokesperson Jen Psaki said on Monday, referring to the Ukraine conflict. “The president will lay out the efforts… he has led on to rally the world to stand up for democracy and against Russian aggression.”

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Democrats are expected to have a difficult time holding onto control of the U.S. House of Representatives – and perhaps the Senate as well – in Nov. 8 mid-term elections, which would likely cripple Biden’s policy goals.

A rebound in Biden’s public standing would help.

“The (speech) comes at a good time,” said John Geer, a political scientist and an expert in public opinion at Vanderbilt University. “He needs to grab the national stage and set a course that offers a brighter future.”

Biden should tout his work helping the world resist Putin’s advances, Geer said, while celebrating the effectiveness of vaccines and other measures that have brought about a sharp decline in COVID-19 cases and easing of guidance by the Centers for Disease Control and Prevention.

Public opinion polls have shown Biden out of favor with the majority of Americans for months. The most recent Reuters/Ipsos poll, taken last week, showed him at 43% approval.

Even with the jobless rate at 4%, most voters remain pessimistic about the economy, largely due to skyrocketing consumer prices. A quarter of Democrats think the party has failed to take advantage of its rare control of the White House and both houses of Congress. read more

While aides believe Biden’s perceived strength in handling COVID helped him win the presidency, some voters, especially Republicans, think the country has not moved quickly enough to ease pandemic restrictions as case counts have fallen.

On Tuesday, members of Congress attending Biden’s speech at the U.S. Capitol will not be required to wear masks for the first time in months, a sight that could provide helpful optics for the president.

Authorities are reinstalling fencing around the Capitol as Washington prepares for planned trucker protests against pandemic-related restrictions, but it does not appear that the convoys will cause major disruptions. read more

U.S. ECONOMY, RUSSIA SANCTIONS

Biden must convince viewers at home that the economy is, in fact, in solid shape despite inflation concerns, and that tough sanctions imposed by Washington and allies are worth the pain. Russia’s invasion of Ukraine could cause gasoline prices to skyrocket.

The Ukrainian ambassador to the United States, Oksana Markarova, is set to attend the speech, sitting with the president’s wife Jill Biden.

Biden will also lay out a strategy to address the nation’s “unprecedented mental health crisis” in his speech, the White House said. With social media platforms playing a role in the youth mental heath crisis, the White House said, Biden will call on Congress to strengthen privacy protections, ban targeted advertising to children, and demand technology companies stop collecting personal data on children.

The president will also call on Congress to support his agenda to fight climate change and boost clean energy, a senior administration official said.

About two-thirds of Americans support Biden slapping Russia with economic sanctions over its invasion of Ukraine. read more

Even so, Americans are concerned about domestic issues, including the economy and high inflation, and allies hope Biden will highlight his successes and address their worries in his speech.

“They want to hear what the solutions might be to contain inflation but while continuing to move a pro-family, pro-worker agenda,” said Lee Saunders, president of the American Federation of State, County and Municipal Employees union.

Saunders said Biden needed to address voting rights, as well. “He’s got to talk about the importance of fighting back and not thinking that the battle is over with as far as voting rights is concerned,” he said.

Matt Bennett, vice president of Third Way, a moderate Democrat think tank, said that Biden should aim for a sweeping tone about U.S. leadership on the world stage and the economy.

“The most important thing,” Bennett said, “is that he shows America that he is in command of world and domestic events. No policy idea or accomplishment is going to make a real difference.”

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Reporting by James Oliphant and Trevor Hunnicutt. Additional reporting by Jeff Mason, Steve Holland, Jason Lange, and Doina Chiacu; Editing by Heather Timmons, Colleen Jenkins, Jonathan Oatis and Rosalba O’Brien

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