Headlines

The Canadian economy mostly likely started 2022 on a strong footing, despite the impact of the Omicron variant of the coronavirus, while fourth-quarter growth came in above expectations, official data showed on Tuesday, Reuters reported. Canada's economy grew 6.7% in the last three months of 2021 on an annualized basis, beating analyst forecasts of 6.5%, while gross domestic product in January most likely rose 0.2% after stagnating in December, Statistics Canada data showed. The strong fourth-quarter print came in above the Bank of Canada's own forecast in January of a gain of 5.8%.

The European Central Bank should take time to properly assess the implications of Russia’s war in Ukraine before continuing its exit from pandemic-era support for the euro-zone economy, according to Governing Council member Olli Rehn, Bloomberg News reported. Rehn, who heads Finland’s central bank, said additional stimulus isn’t required given the continent’s robust rebound and strengthening labor market. Instead, “prudence and optionality” are warranted so premature monetary tightening doesn’t trigger a recession, he said.

German annual inflation rose in February after a slight decline at the beginning of the year as the Ukraine conflict pushed energy prices even higher and coronavirus-related supply bottlenecks continued, preliminary data showed on Tuesday, Reuters reported. Consumer prices, harmonised to make them comparable with inflation data from other European Union countries (HICP), rose 5.5% on the year, the Federal Statistics Office said. The national consumer price index (CPI) rose 5.1% year on year after dipping in January to 4.9% from 5.3% in December - the highest rate in almost 30 years.

Italy plans to set aside 8.7 billion euros ($9.7 billion) until 2030 to support its carmaking industry, a draft decree seen by Reuters showed on Tuesday. As part of a package to support the economy and curb surging energy bills, Italy intends to allocate 700 million euros in 2022 and 1 billion euros per year from 2023 until 2030, the decree showed.

Britain's finance ministry set out plans on Tuesday to make the country's capital market more competitive by exploiting Brexit "freedoms" to cut unnecessary red tape in trading, Reuters reported. Britain left the European Union's orbit at the end of 2020, leaving the financial sector largely cut off from the bloc and swathes of euro stock and derivatives trading shifted from London to Amsterdam. The ministry said it would remove restrictions on how banks and brokers execute transactions to ensure that market participants can get the best outcomes for investors.

Telecom Italia SpA is seeking to get KKR & Co. to scrap a 10.8 billion-euro ($12.1 billion) takeover bid for the company by involving the U.S. private equity giant in an in-house plan to spin off its landline network, Bloomberg News reported. The phone carrier, which has internally valued the bid as too low and lacking enough value-creation, instead wants to involve KKR in a plan to spin the landline network off into a new unit called NetCo. The counter-proposal would still allow KKR to strengthen its grip over Telecom Italia’s landline network once it’s separated, the people said.

A fugitive Malaysian financier said he won support from allies of former U.S. President Donald Trump for a possible settlement of a probe into the looting of funds from the 1MDB sovereign wealth fund, a former Goldman Sachs banker testified on Tuesday, Reuters reported. Tim Leissner offered a glimpse of what he had heard from financier Jho Low about the attempted deal, on the sixth day of his testimony at the trial of Roger Ng, another former Goldman banker. Ng, 49, has pleaded not guilty to charges of conspiring to launder money and violate an anti-bribery law.

The presidents of eight central and eastern European nations on Monday called on European Union member states to immediately grant Ukraine a EU candidate country status and open membership talks according to an open letter published on Monday, Reuters reported.

Russia's central bank more than doubled its key policy rate on Monday and introduced some capital controls as the country faced deepening economic isolation, but its governor said that sanctions had stopped it selling foreign currency to prop up the rouble, Reuters reported. The admission that restrictions had effectively tied the Bank of Russia’s hands underscores the ferocity of the backlash to Moscow's invasion of Ukraine and Western allies' success in restricting its ability to deploy some $640 billion of foreign exchange and gold reserves.

The European arm of Sberbank (SBER.MM), Russia's biggest lender, faces failure, the European Central Bank (ECB) warned on Monday, after a run on its deposits sparked by the backlash from Russia's invasion of Ukraine, Reuters reported. Western allies have taken unprecedented steps to isolate Russia's economy and financial system, including sanctioning its central bank and excluding some of its lenders from the SWIFT messaging system, used for trillions' of dollars of transactions.