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U.S. private sector adds 177,000 jobs in August: ADP

NEW YORK U.S. private employers added 177,000 jobs in August, above economists’ expectations, a report by a payrolls processor showed on Wednesday.

Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 175,000 jobs, with estimates ranging from 135,000 to 225,000.

Private payroll gains in July were revised up to 194,000 from an originally reported 179,000 increase.

The report is jointly developed with Moody’s Analytics.

The ADP figures come ahead of the U.S. Labor Department’s more comprehensive non-farm payrolls report on Friday, which includes both public and private-sector employment.

Economists polled by Reuters expect U.S. private payroll employment to have grown by 178,000 jobs in August, down from an increase of 217,000 the month before. Total non-farm employment is expected to have risen by 180,000.

The unemployment rate is forecast to tick down to 4.8 percent from the 4.9 percent recorded a month earlier.

(Reporting by Chuck Mikolajczak; Editing by Meredith Mazzilli)

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Fed’s Evans, citing slow growth, says low U.S. rates are here to stay

BEIJING Chicago Federal Reserve Bank President Charles Evans on Wednesday said he is increasingly convinced that U.S. economic growth has slowed permanently, a situation that will keep U.S. interest rates low for a long time ahead.

Embracing Harvard Professor Larry Summers’ so-called secular stagnation theory, Evans argued that an aging U.S. population and slowing productivity growth mean there is little reason for interest rates to rise either fast or far.

Expectations of low growth have become so embedded in corporate and investing behavior, he said, that even if inflation rises unexpectedly and the Fed has to raise rates faster than it now anticipates, a detrimental spike in long-term interest rates is unlikely.

“Long-run expectations for policy rates provide an anchor to long-run interest rates,” Evans said, according to a detailed outline provided ahead of his remarks to the Shanghai Advanced Institute of Finance in Beijing. “So lower policy rate expectations act as a restraint on how much long-term rates could rise following a surprise over the near-term policy path.”

Fed Chair Janet Yellen said last week that with the U.S. economy near full employment and inflation showing signs of rising toward the Fed’s 2 percent goal, the case for a U.S. interest-rate hike has strengthened in recent months. Traders responded to those and other somewhat hawkish comments from Yellen’s colleagues by adding slightly to their bets that the Fed will raise rates before the end of the year.

Evans, who does not have a vote on Fed policy this year, is known as one of the U.S. central bank’s most outspoken doves, generally in favor of delaying rate rises as long as possible so as to encourage hiring and investment.

Although he did not express any view in his prepared remarks on when the Fed should next raise rates, his argument suggests support for patience.

If inflation rose unexpectedly, he said on Wednesday, the Fed could probably tamp it down with something far short of a spike in rates.

“If necessary, we could normalize policy much faster than currently envisioned and still keep the pace gradual enough to avoid a disorderly change in financial conditions,” Evans said.

(Reporting by Ann Saphir; Editing by Leslie Adler)

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Hanjin Shipping to file for receivership; rival eyes assets

SEOUL South Korea’s Hanjin Shipping Co Ltd (117930.KS) said it would file for court receivership after losing the support of its banks, and the country’s financial regulator said a rival operator will look to buy Hanjin’s “good” assets.

Banks withdrew support for the world’s seventh-largest container carrier on Tuesday, saying a funding plan by its parent group was inadequate to tackle the firm’s 5.6 trillion won ($5 billion) in debt.

Hanjin Shipping also said one of its vessels, the Hanjin Rome, was seized in Singapore by a creditor on Tuesday, while another vessel, the Hanjin Sooho, was denied entry to a port in Shanghai.

South Korea’s Financial Services Commission said Hyundai Merchant Marine Co Ltd (011200.KS), the country’s second-largest shipping line, will look to acquire its rival’s healthy assets, including profit-making vessels, overseas business networks and key personnel.

A Hyundai Merchant Marine spokesman told Reuters nothing had been decided on a potential acquisition of Hanjin assets and that the firm will hold talks with Hanjin’s lead creditor, Korea Development Bank on future plans.

Hyundai Merchant Marine is also in the process of voluntary debt restructuring amid a global downturn for a shipping industry battered by sluggish trade and overcapacity.

The FSC also said Hanjin Shipping’s receivership filing would have a limited impact on domestic financial markets.

(Reporting by Joyce Lee, Chang-ho Lee and Se Young Lee; Editing by Tony Munroe and Edwina Gibbs)

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Exclusive: SWIFT discloses more cyber thefts, pressures banks on security

SWIFT, the global financial messaging system, on Tuesday disclosed new hacking attacks on its member banks as it pressured them to comply with security procedures instituted after February’s high-profile $81 million heist at Bangladesh Bank.

In a private letter to clients, SWIFT said that new cyber-theft attempts – some of them successful – have surfaced since June, when it last updated customers on a string of attacks discovered after the attack on the Bangladesh central bank.

“Customers’ environments have been compromised, and subsequent attempts (were) made to send fraudulent payment instructions,” according to a copy of the letter reviewed by Reuters. “The threat is persistent, adaptive and sophisticated – and it is here to stay.”

The disclosure suggests that cyber thieves may have ramped up their efforts following the Bangladesh Bank heist, and that they specifically targeted banks with lax security procedures for SWIFT-enabled transfers.

The Brussels-based firm, a member-owned cooperative, indicated in Tuesday’s letter that some victims in the new attacks lost money, but did not say how much was taken or how many of the attempted hacks succeeded. It did not identify specific victims, but said the banks varied in size and geography and used different methods for accessing SWIFT.

A SWIFT spokeswoman declined to elaborate on the recently uncovered incidents or the security issues detailed in the letter, saying the firm does not discuss affairs of specific customers.

All the victims shared one thing in common: Weaknesses in local security that attackers exploited to compromise local networks and send fraudulent messages requesting money transfers, according to the letter.

Accounts of the attack on Bangladesh Bank suggest that weak security procedures there made it easier to hack into computers used to send SWIFT messages requesting large money transfers. The bank lacked a firewall and used second-hand, $10 electronic switches to network those computers, according to the Bangladesh police.

SWIFT has repeatedly pushed banks to implement new security measures rolled out after the Bangladesh heist, including stronger systems for authenticating users and updates to its software for sending and receiving messages. But it has been difficult for SWIFT to force banks to comply because the nonprofit cooperative lacks regulatory authority over its members.

SWIFT told banks Tuesday that it might report them to regulators and banking partners if they failed to meet a November 19 deadline for installing the latest version of its software, which includes new security features designed to thwart the type of attacks described in its letter.

The security features include technology for verifying credentials of people accessing a bank’s SWIFT system; stronger rules for password management; and better tools for identifying attempts to hack the software.

(For a graphic on how hackers made off with millions, click

SWIFT is trying coerce members into prioritizing cyber-security by threatening to share confidential information about security lapses that banks want to keep private, said Shane Shook, an independent security consultant who advises central banks.

“That type of information sharing is something that no bank likes to see happen without their direct approval and involvement, because it can affect market confidence,” Shook said.

SWIFT disclosed the new hacks after reports of previous incidents prompted regulators in Europe and the United States to urge banks to bolster cyber-security.

Other cases involving fraudulent transfer requests include the theft of more than $12 million from Ecuador’s Banco del Austro and a failed attempt later in 2015 to steal money from Vietnam’s Tien Phong Bank.

The attacks have prompted regulators globally to press banks to bolster defenses.

The Bank of England in April ordered UK firms to detail actions to secure computers connected to the SWIFT system, while the European Banking Authority in May said domestic authorities should stress test banks for cyber risks.

The Federal Reserve and other U.S. agencies told banks in June to review protections against fraudulent money transfers.

Six U.S. senators on Monday urged the G20 nations to agree when they meet at a summit this weekend on a “coordinated strategy to combat cyber-crime at critical financial institutions.”

(Reporting by Jim Finkle in Boston. Additional reporting by Jonathan Spicer in New York.; Editing by Brian Thevenot.)

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Oil prices dip on stronger dollar; rise in U.S. crude stocks data

SINGAPORE Crude oil futures fell in early trade on Wednesday as the U.S. dollar held around three-week highs and industry stocks data indicated a build in U.S. crude inventories.

International Brent crude oil futures LCOc1 were trading at $48.27 (36.9025 pounds) per barrel at 0052 GMT, down 10 cents, or 0.2 percent, from their previous close.

U.S. West Texas Intermediate (WTI) crude futures were down 16 cents, or 0.4 percent, at $46.19 a barrel.

The U.S. dollar index, which measures the currency against a basket of six majors, rose as high as 96.143 .DXY, its highest level since Aug. 9, on Tuesday.

A stronger greenback makes dollar-priced commodities like oil more expensive for holders of other currencies and possibly capping demand.

The dollar strengthened after recent hawkish comments by Fed Chair Janet Yellen and Vice Chair Stanley Fischer boosted expectations that a rate hike by the U.S. central bank at its September policy meeting could be on the horizon.

“The pullback in commodity prices is likely to continue in the short term with a stronger USD and weaker fundamentals,” Australian bank ANZ said in a note.

U.S. crude stocks rose by 942,000 barrels in the week to Aug. 26 to 525.2 million, nearly in line with analysts’ expectations for an increase of 921,000 barrels, data from industry group the American Petroleum Institute showed on Tuesday.

Official U.S. oil inventories data published by the EIA is due for release on Wednesday.

Concerns over refinery production outages caused by storm threats in the Gulf of Mexico have done little to support prices as a product glut in the United States persists.

“Prices didn’t receive any support from news that nearly a quarter of the capacity in the Gulf of Mexico has been shut due to storms,” ANZ bank said.

(Reporting by Mark Tay; Editing by Richard Pullin)

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Asian shares ease, taking cue from Wall Street, oil slips

TOKYO Asian shares eased on Wednesday following modest losses on Wall Street, but were still on track for a monthly rise as investors waited to see if upcoming job data could prod the Federal Reserve into raising interest rates as soon as September.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.1 percent as traders awaited Friday’s job report, but looked set for a near 2 percent gain in August.

Japan’s Nikkei stock index .N225 added 0.9 percent, poised to rise 1.8 percent for the month, as it got a boost from a weaker yen after upbeat U.S. data lifted the dollar overnight.

The dollar was steady at 102.93 yen JPY= after rising as high as 103.14 yen overnight, its strongest since July 29. It was up 0.9 percent for the month.

Data released earlier on Wednesday showed Japanese industrial output was flat in July from June, underscoring fragility in factory activity and falling short of economists’ median forecast for a 0.8 percent rise.

Along with weak household spending data on Tuesday, Japan’s latest gloomy data are reinforcing expectations the Bank of Japan will ease policy further in September even if many economists and businessmen think it won’t do much good.

“While the latest string of Japanese data has been decent with the jobless rate improving and retail sales rising strongly in July, Japanese officials are clearly still frustrated with the weak growth in the economy,” said Kathy Lien, managing director of FX strategy at BK Asset Management.

If the U.S. unit breaks 103.50 yen, its next stop would be 104, Lien wrote in a note.

The euro was steady at $1.1146 EUR=, down 0.2 percent for August.

The dollar index, which tracks the greenback against a basket of six major counterparts, edged down slightly on the day to 96.010 .DXY but remained not far from its overnight high of 96.143, its highest since early August. It was on track to rise 0.5 percent for the month.

On Wall Street overnight, markets logged losses, dragged down by shares of Apple Inc (AAPL.O) after antitrust regulators ordered the company to pay about $14.5 billion in back taxes to the Irish government.

The SP 500 .SPX fell for the fourth time in five sessions, but was still within 1 percent of its record closing high set earlier this month.

Friday’s jobs report is expected to show employers added 180,000 jobs in August, according to the median estimate of 89 economists polled by Reuters. [ECONUS]

Fed Vice Chairman Stanley Fischer said in a television interview on Tuesday that the U.S. job market is nearly at full strength and the pace of the central bank’s interest rate increases will depend on how well the economy is doing.

Markets were pricing in a 27 percent chance of a U.S. rate hike next month as of Tuesday, according to CME Group’s FedWatch tool. That probability would rise if the jobless figures were stronger than expected, showing U.S. employers continued their strong pace of hiring seen in recent months.

U.S. consumer confidence rose to an 11-month high in August, with households more upbeat about the labor market, data showed overnight.

Crude oil futures continued to slip after ending down for a second straight day on worries of oversupply and a strong dollar. [O/R]

Brent crude LCOc1 was down 0.1 percent at $48.31 per barrel after shedding 1.8 percent on Tuesday. U.S. crude CLc1 was down 0.2 percent at $46.24 after losing 1.3 percent overnight.

Spot gold XAU= edged up 0.1 percent to $1,311.66 an ounce after tumbling as low as $1,308.65 on Tuesday, its lowest since late June, pressured by the stronger dollar and growing expectations of higher U.S. interest rates.

(Reporting by Lisa Twaronite; Editing by Kim Coghill)

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EU ruling on Apple stirs calls for U.S. tax reform

WASHINGTON A European Commission order requiring Apple Inc (AAPL.O) to pay Ireland $13 billion euros ($14.5 billion) in unpaid taxes on Tuesday drew swift rebukes from the Obama administration and lawmakers in Congress, while reigniting calls for U.S. tax reform.

The White House and the Treasury Department, which enforces federal tax policy, warned that U.S.-EU economic relations could be affected by the European Commission’s ruling that Apple had received illegal state aid under its agreement with Ireland.

Business groups protested. The Business Roundtable, which represents U.S. chief executives, called the decision “an act of aggression” against a law-abiding U.S. company and a sovereign government.

Members of both parties in Congress pointed to the stunning decision as evidence that the U.S. tax code should be rewritten to give American companies an incentive to bring home some $2.1 trillion in U.S. corporate profits held abroad. But there was no sign that lawmakers were any closer to bridging the substantial divides that have prevented agreement up to now.

“Above all, this is yet another reason why we need to fix our tax code,” House Speaker Paul Ryan, the highest-ranking elected Republican, said in a statement. “Today’s decision should be a spur to action.”

Apple was found to be holding over $181 billion offshore, more than any U.S. company, in a study published last year by two left-leaning nonprofit groups: Citizens for Tax Justice and the U.S. Public Interest Research Group Education Fund.

“This is yet another example of why we need to reform the international tax system to ensure these revenues come home,” said Senator Charles Schumer, the chamber’s No. 3 Democrat.

Even the European Commission voiced indirect criticism of the U.S. tax code, suggesting that Washington could require Apple’s Irish operations to pay larger amounts of money to the U.S. parent to finance research and development, which would increase Apple’s U.S. tax bill.

Former Senator Carl Levin, a Democrat whose investigation of U.S. corporate tax avoidance was cited by European regulators, blamed the U.S. Internal Revenue Service for failing to challenge Apple’s overseas arrangements.

Republicans and Democrats in the Senate have discussed plans to encourage the repatriation of U.S. profits abroad.

But House Republicans hope to move broader legislation next year that would cut the U.S. corporate tax rate from 35 percent to 20 percent and adopt a “territorial” system that would exempt the overseas earnings of U.S. companies from U.S. taxation. Democrats have dismissed that as a massive tax giveaway.

Other critics in Washington warned that Tuesday’s European Commission move would encroach on U.S. government jurisdiction and ultimately add to the federal deficit.

“We are concerned about a unilateral approach … that threaten(s) to undermine progress that we have made collaboratively with the Europeans to make the international taxation system fair,” White House spokesman Josh Earnest told reporters.

U.S. Representative Kevin Brady, Republican chairman of the House Ways and Means Committee, called the decision “a predatory and naked tax grab”.

Apple and Ireland said they would appeal the EU decision. But some analysts said the ruling, if upheld, could change the calculus that has kept U.S. corporate money overseas if it means higher taxes in low-tax European countries like Ireland.

“The scheme of U.S. multinationals parking money offshore indefinitely, taxed at zero, may be coming to an end,” said Steven Rosenthal of the Tax Policy Center research group.

Online retailer Inc (AMZN.O) and fast-food company McDonald’s Corp (MCD.N) already face probes over taxes in Luxembourg, while coffee chain Starbucks Corp (SBUX.O) has been ordered to pay up to 30 million euros ($33 million) to the Dutch government.

(Reporting by David Morgan and Jason Lange; additional reporting by Jeff Mason and Diane Bartz; Editing by Julia Edwards and Jonathan Oatis)

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Gap reports fire at Fishkill distribution center, no injuries

Retailer Gap Inc (GPS.N) said on Tuesday that its distribution center in Fishkill, New York, had been hit by a serious fire.

All employees at the site affected by the blaze late on Monday were safe and an investigation was still underway, Gap spokeswoman Debbie Felix said.

“While it will take time to understand the full impact and cause of the fire, we have contingency plans in place and are working across our North American network of distributions centers to continue to serve our customers,” Felix said.

The clothing retailer owns a network of distribution centers in North America and England, including the affected facility, which spans over 8.6 million square feet (80 hectares), according to a regulatory filing.

“The Fishkill distribution center is a primary distribution center for the northeast,” said Nomura analyst Simeon Siegel, who added that Gap was re-routing inventory through another center.

(Reporting by Gayathree Ganesan and Supantha Mukherjee and Vishaka George in Bengaluru; Editing by Shounak Dasgupta and Tom Brown)

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AstraZeneca to pay $5.52 million to resolve SEC foreign bribery case

U.S. regulators said on Tuesday that AstraZeneca Plc (AZN.L) will pay $5.52 million to resolve a foreign bribery probe into improper payments by its sales and marketing staff to state-employed healthcare officials in China and Russia.

The U.S. Securities and Exchange Commission detailed the settlement with the London-based drug company in an order instituting an administrative proceeding arising out of violations of provisions in the Foreign Corrupt Practices Act.

AstraZeneca, which cooperated with the probe, neither admitted nor denied wrongdoing. In a statement, it said the U.S. Justice Department has meanwhile closed a related foreign bribery investigation.

“We are pleased to have resolution of these matters,” the company said.

Neither the SEC nor Justice Department responded to requests for comment.

The SEC said that AstraZeneca through at least 2010 failed to devise and maintain a system of internal accounting controls relating to its subsidiaries’ interactions with Chinese and Russian government officials.

Sales and marketing staff in those countries as far back as 2005 provided gifts, conference support, travel, cash and other benefits to the state-employed healthcare providers to buy or prescribe the company’s products, the SEC said.

The company’s Chinese subsidiary also paid healthcare providers speaker fees, sometimes for “totally fabricated” engagements, and in 2008, paid local officials to get reductions or dismissals of proposed financial sanctions it faced, the SEC said.

AstraZeneca also falsely recorded the improper payments in China and Russia as bona fide business expenses, the SEC said.

The regulator said AstraZeneca cooperated with the probe, which factored into the size of the penalty that was assessed against it.

The SEC also said the company has been addressing deficiencies in its compliance program and taking various steps with employees involved in the case, resulting in some being reassigned or fired.

(Reporting by Nate Raymond in New York; editing by Alan Crosby, G Crosse)

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