News Archive

Illinois and Chicago eye Wells Fargo business bans

CHICAGO Wells Fargo Co (WFC.N) faces possible bans from doing business with the city of Chicago and the state of Illinois in the wake of its sales scandal that erupted earlier this month.

Alderman Edward Burke, who heads the Chicago City Council’s finance committee, introduced an ordinance on Friday that would suspend the bank from acting in several capacities, including as a municipal depository, bond underwriter and financial adviser.

“The city council should not engage in any business for the next two years with this institution that has deceived, defrauded and duped its customers,” Burke said in a statement.

Illinois Treasurer Michael Frerichs set a Monday news conference to announce “plans to suspend billions of dollars in investment activity with Wells Fargo,” according to an advisory from his office on Friday.

Wells Fargo staff opened checking, savings and credit card accounts without customer say-so for years to satisfy managers’ demand for new business, according to a $190 million settlement with regulators reached on Sept. 8. The bank said it fired 5,300 employees over the issue.

On Wednesday, California State Treasurer John Chiang announced a sweeping suspension of the state’s business relationships with Wells Fargo for the next 12 months. The bank is also under pressure from Oregon’s treasurer to reform its management structure and executive compensation.

U.S. lawmakers called on Thursday for Wells Fargo chief John Stumpf to resign and a top House Democrat demanded the bank be broken up because it is too big to manage.

Chicago’s finance committee is scheduled to take up the proposed ordinance on Wednesday. The city has paid Wells Fargo $19.45 million in fees since 2005, according to the committee.

The bank served as senior underwriter on five Chicago bond issues totaling nearly $969 million since 2006, according to Thomson Reuters data.

Wells Fargo made the list of 15 senior underwriters tapped by Illinois this month for bond sales over the next three years. A spokeswoman for Governor Bruce Rauner declined to comment on whether his office is rethinking Wells Fargo’s selection.

(Reporting by Karen Pierog; Editing by Matthew Lewis)

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Yahoo hack may become test case for SEC data breach disclosure rules

WASHINGTON Yahoo’s disclosure that hackers stole user data from at least 500 million accounts in 2014 has highlighted shortcomings in U.S. rules on when cyber attacks must be revealed and their enforcement.

Democratic Senator Mark Warner this week asked the U.S. Securities and Exchange Commission to investigate whether Yahoo and its senior executives properly disclosed the attack, which Yahoo blamed on Sept. 22 on a “state-sponsored actor.”

The Yahoo hack could become a test case of the SEC’s guidelines, said Jacob Olcott, former Senate Commerce Committee counsel who helped develop them, due to the size of the breach, intense public scrutiny and uncertainty over the timing of Yahoo’s discovery.

Yahoo has not specifically addressed when it learned of the 2014 attack. And the vagueness of SEC’s 2011 rules on disclosure and its failure to enforce them are drawing equal attention, privacy lawyers and cyber security experts said.

The agency has “been looking for the right case to bring forward,” said Olcott. 

The agency in 2011 told publicly traded companies to report hacking incidents that could have a “material adverse effect on the business” but did not define that.

SEC has never acted against a company for failing to disclose a cybersecurity incident or threat, and it has brought just two enforcement actions against companies for insufficient data protection, an agency spokesman said.

Lawyers said this reflected difficulty in determining if breaches were material and many companies’ belief that reporting on cyber threats generally satisfies the disclosure requirement.

Yahoo has not offered a precise timeline about when it was made aware of the breach.

On Sept. 9, it said in an SEC filing it did not know of “any incidents of, or third party claims alleging … unauthorized access” of customers’ personal data that could have a material adverse effect on Verizon Communication Inc’s (VZ.N) planned $4.8 billion acquisition of Yahoo’s core business.

Since then, Yahoo has not clarified if it knew of the attack before that SEC filing. “Our investigation into this matter is ongoing and the issues are complex,” a Yahoo spokesman said last week.

In his letter, Warner asked the SEC to evaluate whether the current disclosure regime was adequate. He cited reports that fewer than 100 of 9,000 public companies disclosed a material data breach since 2010. 

“I don’t know that we need new rules. But in certain situations, you may need more aggressive enforcement,” said Roberta Karmel, a Brooklyn Law School professor.

The SEC in 2014 examined whether cyber disclosure rules needed to be strengthened and imposed new requirements for broker-dealers and investment advisers but not public companies.


Some policymakers worry rules compelling prompt disclosure of cyber attacks could deter companies from cooperating with authorities.

“We cannot blame executives for worrying that what starts today as an honest conversation about a cyberattack could end tomorrow in a ‘punish the victim’ regulatory enforcement action,” Commerce Secretary Penny Pritzker said this week.

Congress last year expanded liability protections for companies that share cyber information with the government, and Pritzker urged granting companies temporary immunity during the response to a hack.

Amid SEC inaction, the Federal Trade Commission has brought 60 successful data security cases since 2001 in part, lawyers said, because its authority is clearer than the SEC’s.

Those cases have dealt with deceptive statements by companies and security lapses. The FTC is hampered by the lack of a national requirement for companies to notify the public about data breaches.

That idea got widespread support after the 2013 hacking of shoppers’ credit card information from Target Corp. (TGT.N) But legislation proposed by President Barack Obama in 2015 fizzled.

(Reporting by Dustin Volz; Additional reporting by Joseph Menn, Jim Finkle and Lisa Lambert; Editing by Jonathan Weber and Cynthia Osterman)

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Delta, pilots negotiators reach deal for new contract

Delta Air Lines Inc (DAL.N) and its pilots union have reached an agreement in principle for a new contract that has been more than a year in the making, the parties said on Friday.

The deal, reached with the help of U.S. federal mediators, requires the approval of union leaders before it can become a so-called “tentative agreement,” which pilots can vote to ratify or reject. About 65 percent of voting pilots turned down the last tentative agreement in July 2015.

Delta did not immediately return a request for comment on the terms of the agreement. But in a statement, it called it an “industry-leading package of pay, benefits and work rules.”

The last tentative agreement offered an 8 percent pay hike upon signing. However, opponents said the gains were slight considering Delta’s growing profits and that higher wages came at the expense of more-lucrative profit-sharing. Changes in sick leave and other work rules also offset the gains, the critics said.

Following the rejection, the leader of Delta’s unit of the Air Line Pilots Association, International resigned. The parties did not come to terms by the old contract’s target date for revision of Dec. 31, 2015.

In a statement, the union’s Chairman John Malone said the Friday’s agreement “achieves the goal of advancing the profession… (and) recognizes and rewards the Delta pilot group for the daily contributions we make to Delta’s financial success.”

The union said it has seven days to review the agreement before deciding whether to put it up for a pilot-wide vote.

(Reporting By Jeffrey Dastin in New York; Editing by Chizu Nomiyama and Dan Grebler)

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Viacom forms committee to consider Redstone’s CBS merger push

Viacom Inc (VIAB.O) said it had formed a special committee to consider National Amusements Inc’s proposal to combine the company with CBS Corp (CBS.N).

National Amusements, owned by media baron Sumner Redstone and his daughter Shari Redstone, on Thursday urged the boards of Viacom and CBS to explore a combination.

National Amusements, the majority shareholder of CBS and Viacom, also said it would not support the acquisition of either media company by a third party or surrender its control of either firm.

The committee consists of independent directors Thomas May and Nicole Seligman, who will act as co-chairs, and Kenneth Lerer, Judith McHale, Ronald Nelson and Charles Phillips, Viacom said in a statement.

Apart from Phillips, a long standing member of the Viacom board, all the other members were picked by the Redstones as a part of their battle for control of Viacom which resulted in the departure of former CEO Philippe Dauman.

National Amusements owns 80 percent of the voting shares of both media companies.

Shari Redstone, Sumner Redstone’s daughter and an owner of National Amusements, has favored recombining the two companies under the leadership of CBS CEO Leslie Moonves, sources have previously told Reuters.

Viacom has hired Debevoise Plimpton LLP as its legal advisor, and also expects to retain a financial adviser.

(Reporting by Narottam Medhora in Bengaluru; Editing by Shounak Dasgupta)

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Russia, bowing to budget pressures, revives oil firm sell-off

SOCHI, Russia Russia said on Friday that it was resuming the shelved privatisation of oil firm Bashneft, in a sign of how anxious the Kremlin is to raise money to fill holes in the budget left by the economic slump.

The Bashneft privatisation, the most significant sell-off of Russian state assets in years, had been postponed indefinitely in August.

Sources close to the government and the bidding process said at the time the postponement was ordered by the Kremlin to staunch infighting among rival clans over who would be the eventual buyer.

But in a U-turn, Deputy Prime Minister Igor Shuvalov said on Friday steps to resume the privatisation would be taken immediately.

He said that Rosneft – the state oil giant whose ambition to acquire Bashneft triggered the infighting – would be free to take part. A spokesman for Rosneft said the company would be lodging a bid.

Shuvalov also said the government would proceed immediately with the sale of a minority stake in Rosneft itself, an acquisition of potential interest to international oil majors who covet a share in Russia’s massive crude reserves.

“Money is needed urgently,” a source in the government said, when asked what brought about the government’s U-turn on its privatisation plans.

A second source in the government said: “The sale of Bashneft to Rosneft is a done deal.”


Russia is in its second year of economic recession, mainly because of the fall in world prices for crude oil, its principal export. It expects only very moderate growth next year,

The government has struggled to find funds to cover its growing budget deficit. The finance ministry said on Friday the deficit may hit between 3.5 percent and 3.7 percent of gross domestic product this year, compared to a 3 percent estimate a few months ago.

Russia’s sovereign wealth funds are depleting fast, and its ability to raise debt on international capital markets is limited by financial sanctions imposed on Moscow over its role in the conflict in Ukraine.

The government has little scope to cut spending. That could alienate ordinary people whose support President Vladimir Putin will need if, as expected, he seeks re-election in a presidential election in 18 months.

“After further study of the Rosneft and Bashneft privatisation issues by the government, and after a presentation to the president, it was decided to resume the preparations for selling a controlling stake in Bashneft and immediately proceed to prepare for selling a 19.5 percent stake in Rosneft,” Shuvalov said.

Speaking to reporters at a business forum in the Black Sea resort of Sochi, he said the government had reconsidered its position after seeing investor appetite for the two stakes and learning what the potential bidders planned to do if they won.

“According to the assurances that we have received from investment consultants, we hope to receive above 1 trillion roubles ($15.92 billion) from these deals by the end of the current year,” Shuvalov said.

“The money from the Rosneft privatisation will be counted as budget revenue, and the revenue from the sale of Bashneft (will go on) covering the federal budget deficit,” he said.

On the Bashneft sale, Shuvalov said: “Rosneft will not be prevented from participating.”


Two years into an economic crisis made worse by the Kremlin’s political stand-off with the West, Putin faces a difficult choice.

He needs to find ways to plug the holes in the budget and put money into the pocket-books of ordinary Russians who have seen their incomes drop in real terms. But the prescriptions for achieving that goal could also unleash conflict within his own entourage, potentially destabilising his rule.

The plan to sell a 50.8 stake in Bashneft had attracted interest from Rosneft, a company headed by Putin’s long-standing associate Igor Sechin, and Lukoil, Russia’s biggest privately-owned oil company run by billionaire Vagit Alekperov.

The interest from Rosneft provoked a storm of protests from pro-market groups within the Kremlin elite who did not see the benefit of one state-owned company acquiring another, according to the sources close to the government and the privatisation process.

But in an interview earlier this month, Putin signalled he did not see a problem with Rosneft bidding.

“It looks like Rosneft convinced the government that it is the most suitable suitor to buy Rosneft,” said Sergei Vakhrameyev, analyst with GL Asset Management.

Shuvalov said there has been substantial interest in both the Bashneft and Rosneft sell-offs.

He said Bashneft has attracted interest primarily from Russian investors.

The planned sale of the 19.5 percent stake in Rosneft, by contrast, was garnering interest mainly from foreign investors, Shuvalov said.

($1 = 62.8070 roubles)

(Additional reporting by Vladimir Soldatkin and Olesya Astakhova in MOSCOW; Writing by Christian Lowe and Lidia Kelly; Editing by Andrew Heavens)

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Betting on the U.S. election via the ‘Trump ETF’

NEW YORK An exchange-traded fund focused on Mexico has become a weather vane for Republican Donald Trump’s chances winning the U.S. presidential election in November, investors said.

Mexico has been a prime target for Trump, who has accused the country of taking away jobs from Americans, focusing particular ire on a landmark 1990s trade agreement with the United States’ southern neighbor and Canada. He has said he will renegotiate the North American Free Trade Agreement, commonly known as NAFTA, or pull out of it, and build a wall along the U.S.-Mexico border to curb illegal immigration.

Although a range of factors influence all markets, investors said this week that the U.S.-listed iShares MSCI Mexico Capped ETF (EWW) is increasingly being driven by the prospect of the New York businessman’s election.

It has been a good year for equity investors in emerging markets in general after three years of negative returns. But the $1 billion ETF has underperformed and is now in negative territory for the year as the peso has fallen and Trump’s chances of winning the Nov. 8 election have gone up – though predictive models such as FiveThirtyEight and betting markets still forecast a Clinton victory.

Short interest in the ETF – essentially bets that it will fall in price – have risen 59 percent since last month as Trump gained steam, according to financial analytics firm S3 Partners LLC.

Trump’s worst relative showing in the past few months was Aug. 9, when a closely watched opinion polling average showed him nearly 8 percentage points behind Democratic rival Hillary Clinton. Her lead has tightened to about 3 points, according to the RealClearPolitics average, although it is off lows of less than 1 point earlier this month. The latest Reuters/Ipsos poll released on Friday gave Clinton a 5-point lead over Trump, with 43 percent of likely voters.

“Shorting the EWW ETF may be a vehicle to bet on Mr. Trump’s success in being elected the next president of the U.S. and his willingness to address the long-standing Mexican trade imbalance,” Ihor Dusaniwsky, S3 Partners’ head of research, said in an email interview. “In other words, as Trump’s popularity rises, the chances of a negative impact on the Mexican economy rises.”

But it is not just shorts. The fund’s price has also tended to suffer when polling averages and betting markets forecast Trump doing better. By contrast, the fund has tended to rise with Clinton’s prospects, according to a Reuters analysis of market data, the polling averages and PredictIt prediction market data over the last quarter.

The ETF saw a mild rebound this week after Clinton was seen by most as besting Trump in their first presidential debate on Monday.

Much of the negative performance has been driven by the decline of the peso since last month, which hurt returns for U.S. dollar investors even when Mexican stocks hold their value.

“There’s no reason for the peso to go from 18.20 to 19.50 (per dollar) unless it’s because Trump has gone from being behind to being dead even with Hillary,” David Garff, president of Accuvest Global Advisors, which sold its last share of the fund in May, said in a phone interview.

Mexico’s central bank chief Agustin Carstens said on Friday that “it was a reality” that there was a correlation between his country’s weakening currency and the Trump campaign.

“I can’t deny there’s a knee-jerk reaction by the peso when it was perceived (Trump) did badly in the debate,” said Win Thin, global head of emerging market currency strategy at financial services firm Brown Brothers Harriman in New York, “but the peso’s been weakening for several years even before Trump became the nominee.”

“The media has been playing this up a bit, but Mexico’s already suffering from low oil prices, sluggish growth,” he said. “The peso is often used as a proxy for the wider emerging markets, so there’s all these other factors that to me are more important to determining the peso exchange rather than Trump.”

Even if the peso’s decline has already come to an end, Accuvest’s Garff said Mexican stocks held by the ETF could still be in for pain under a Trump presidency.

Four-fifths of Mexico’s exports go to the United States, and Garff said Mexican manufacturers could suffer if the United States forces its NAFTA partners to renegotiate the treaty.

Central bank chief Carstens, speaking on local radio, said a Trump victory would hit his country like a hurricane, adding that the scenario for Mexico was better with a Clinton win.

“If Trump does try to blow up NAFTA, it will hurt Mexico. No question,” said Garff, the investor. “It is a double whammy.”

(Additional reporting by Dion Rabouin; Editing by Christian Plumb and Jonathan Oatis)

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Deutsche lifted by CEO letter, settlement report

FRANKFURT/LONDON A report that Deutsche Bank (DBKGn.DE) was close to a cut-price settlement with U.S. authorities over the sale of toxic mortgage bonds helped to fuel a recovery in its shares on Friday after its chief executive said the group remained stable.

Deutsche, which is Germany’s largest bank and employs around 100,000 people, has been engulfed by crisis after being handed the demand for up to $14 billion earlier in September by the Department of Justice (DOJ) for misselling mortgage-backed securities before the financial crisis.

Deutsche shares, which hit a record low earlier on Friday, extended their recovery after the AFP news agency said the bank was near to a settlement for $5.4 billion. Deutsche and the German finance ministry declined to comment on the report.

The bank is fighting the fine but would have to turn to investors for more money if it is imposed in full. The German government this week denied a newspaper report that it was working on a rescue plan for the bank.

Worries over a major bank in Europe’s largest economy and talk of a government rescue have stirred painful memories of the 2007-2009 financial crisis and sent tremors through global markets.

Chief Executive John Cryan had tried to rally staff with a letter addressing reports of the departure of a few hedge fund clients, hitting out at “forces” that wanted to weaken trust in the bank.

People familiar with the matter had earlier told Reuters that one large hedge fund in Asia had pulled out collateral from Deutsche amounting to $50 million in the last two days, while other sources said this had happened elsewhere, albeit on a small scale.

Cryan sought to put the moves into perspective.

“We should look at the complete picture,” Cryan said in the letter to the bank’s workers, adding that Deutsche had more than 20 million customers and reserves of more than 215 billion euros.

“We are and remain a strong Deutsche Bank.”


Deutsche shares were volatile again, initially falling around 8 percent in Frankfurt to a record low below 10 euros before bouncing back to close six percent higher at 11.57. The bank’s U.S.-listed shares (DB.N) were up 13.7 percent at $13.05 in heavy midday trading in New York.

The shares have lost half their value this year and the bank’s market capitalization has fallen to around 15 billion euros ($16.8 billion).

Trading volume in Deutsche’s debt has more than doubled this week and soared 15-fold in a month as investors rushed to offload the troubled German lender’s bonds.

Deutsche is much smaller than Wall Street rivals such as JPMorgan (JPM.N) and Citigroup (C.N) .

But it has significant trading relationships with all of the world’s largest finance houses and the International Monetary Fund this year identified it as a bigger potential risk to the wider financial system than any other global bank.

Following the financial crisis, banks are now required to have plans showing how they would respond to a major market shock, with improved controls on liquidity. Regulators also draw up plans on how lenders could be smoothly closed down in the event of impending failure.

Italy, whose banks have their own troubles caused by soured loans, called for swift action on Deutsche.

“Just like the problem of bad bank loans must be solved within a reasonable time frame, so it should be for Deutsche Bank’s problems,” Economy Minister Pier Carlo Padoan told Italian daily La Stampa.

With Germany facing elections next year, there is little political appetite for helping a group disliked by many Germans because of its pursuit of investment banking abroad that resulted in billions of euros of penalties for wrongdoing.

However, the German government faces a delicate balancing act with a deeper crisis for Deutsche Bank potentially spilling over into its economy.

The problems of Deutsche, once Germany’s flagship on Wall Street, are awkward for Berlin, which has berated many euro zone peers for economic mismanagement and pushed for countries such as Ireland and Greece to cope with their banking problems alone.

Dutch finance minister Jeroen Dijsselbloem, who chairs meetings of euro zone finance ministers, said on Friday that Deutsche Bank must survive “on its own”, without assistance from the German state.

German banks have found their profits squeezed by the European Central Bank’s ultra-low interest rates and Commerzbank, the country’s second largest lender, is cutting almost 10,000 jobs.

(Additional reporting by Jonathan Gould, Georgina Prodhan, Kathrin Jones and John Geddie in Frankfurt, Jamie McGeever and Abhinav Ramnarayan in London; Writing By John O’Donnell; Editing by Keith Weir)

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Drop in U.S. consumer spending clouds Fed rate hike outlook

WASHINGTON U.S. consumer spending unexpectedly fell in August for the first time in seven months while inflation showed signs of accelerating, mixed signals that could keep the Federal Reserve cautious about raising interest rates.

The Commerce Department said on Friday that consumer spending, which accounts for more than two-thirds of U.S. economic activity, fell 0.1 percent last month after accounting for inflation.

Analysts polled by Reuters had expected a 0.1 percent gain.

Yields on U.S. government debt fell after the data and the dollar .DXY weakened against a basket of currencies, signaling investor doubts about the prospect of a near-term Fed rate increase. U.S. stock futures trimmed gains.

Fed Chair Janet Yellen said last week she expected the U.S. central bank would raise rates once this year to keep the economy from eventually overheating.

Prices for fed funds futures suggest investors see almost no chance of a hike at the Fed’s next policy meeting in early November and roughly even odds of an increase at its mid-December meeting, according to CME Group.

Consumer spending, which has been robust in recent months, partially offset the drag from weak business investment and falling inventories in the second quarter when the economy expanded at a lackluster 1.4 percent annual rate.

While overall economic growth could still accelerate in the current quarter even with August’s slight decline in consumer spending, households appear to be spending with less gusto than in prior months.

Consumer spending has been driven by a tightening labor market, which Yellen said this week might be lifting incomes.

Personal income rose 0.2 percent in August, in line with expectations.

Consumer prices also rose about as much expected in August, with the price index excluding food and energy increasing 0.2 percent from the prior month. That left inflation excluding food and energy at 1.7 percent in the 12 months through August, up a tenth of a percentage point from the prior month and closer to the Fed’s 2 percent inflation target.

(Reporting by Jason Lange; Editing by Paul Simao)

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Deutsche Bank woes keep stocks on steep slide

LONDON An eight percent slump in Deutsche Bank’s already battered share price sent Europe into a fresh tailspin on Friday and left world equity markets sliding toward their worst week in three months.

Germany’s biggest lender, Deutsche, hit by a string of fines for wrongdoing and a sharp fall in its revenues, saw its shares drop below 10 euros for the first time in its history (DBKGn.DE) in a brutal European open.

It followed reports that a number of hedge funds that clear derivatives trades with Deutsche had withdrawn some of their cash and adjusted positions, a sign that counterparties were becoming wary of doing business with it.

The turbulence spilled into currency and bond markets again too with the euro falling to a two-month low of 1.081 against the safe-haven Swiss franc EURCHF= and buyers flocked to German government bonds DE10YT=TWEB driving down their yields.

“It is fear itself,” National Australia Bank’s London-based Global Head of Forex Nick Parsons said about the Deutsche Bank angst.

“The problem is we have had previous experiences of bank failures and they are still very fresh in the memory and it is making for a very nervous backdrop.”

As if that wasn’t enough, markets were at traditionally illiquid end-of-quarter point and for those investors who run their books September to September it was the even tighter end- of-year crunch time.

In a sea of red, London’s FTSE 100 .FTSE was down 1 percent, Germany’s DAX .GDAXI and France’s CAC 40 .FCHI both fell 1.5 percent while banks across Europe .SX7E were down 4 percent and almost 6.5 percent for the week.

Britain’s sterling GBP=D4 was heading for its fifth consecutive quarter of losses against the dollar in the currency markets – its worst run since 1984 – as concerns about the UK’s Brexit plans, or lack of, have continued to bite.

There were still some positives to hold on to. For the quarter, only two stock markets look to be set for losses – Mongolia and the Philippines.

Latin America, and Brazil in particular, remains the star performer. Sao Paulo stocks have seen another 15 percent jump this quarter taking their gains for the year to a whopping 62 percent. [L8N1C571K]


Overnight, MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 1 percent. But it is poised for a 1.7 percent gain in September, and a 9 percent jump in the third quarter.

A raft of data out of the United States next week is also contributing to market jitters, with the chance of a Federal Reserve interest rate hike in December still seen at around 50-50.

Numbers to watch include September manufacturing and August construction spending data on Monday, non-manufacturing indexes for September and August factory orders on Wednesday and non-farm payrolls for September on Friday.

“People are very nervous going in to next week, with risk factors including the U.S. election and economy, with payrolls coming out next week,” said Stefan Worrall, director of Japan equity sales at Credit Suisse in Tokyo. “So it’s normal to expect volatility in an air pocket of uncertainty.”

Japan’s Nikkei .N225 closed down 1.5 percent after weaker-than-expected consumption and inflation data. It recorded a loss of 2.6 percent for the month, but ended the quarter up 5.6 percent.

While industrial output beat expectations in August, that did little to lift pressure on the central bank to ease monetary conditions further.

Some Bank of Japan board members doubted whether the central bank’s overhaul of its massive stimulus program, announced last week, would enhance flexibility of monetary policy, a summary of opinions at the central bank’s September rate review showed on Friday.

China’s CSI 300 index .CSI300 bucked the regional trend to rise 0.3 percent, paring losses for the month to 2.1 percent.

China’s factory activity inched up in September, in line with analyst forecasts, but growth was tepid. Output expanded in September but at the slowest pace in three months.

Chinese markets are closed for the National Day holiday all next week.

Oil prices pulled back after rising 7 percent in two days after OPEC agreed to its first output cuts in eight years.

Even if production is scaled back, some analysts doubted the reduction would be enough to make a substantial dent in the global crude glut.

“The accord has not yet defined individual quotas or other forms of accountability, suggesting that this is a soft output cut at best,” Francisco Blanch, commodity and derivatives strategist at Bank of America Merrill Lynch, wrote in a note.

“OPEC’s action won’t propel prices much above our $70 mid-year target,” he added.

U.S. crude futures CLc1 slipped 0.8 percent to $47.48. They closed up 1.7 percent at $47.83 on Thursday, after climbing to as high as $48.32, the highest level in almost five weeks. They’re on track for gains of 6.2 percent in September.

(Additional reporting by Nichola Saminather in Singapore; Editing by Richard Balmforth)

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