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In remarks delivered to the Austrian World Summit in Vienna via video, Antonio Guterres issued a sobering assessment of the planet's prospects. "Most national climate pledges are simply not good enough," he said.Michael M. Santiago | Getty Images News | Getty ImagesThe U.N. Secretary General has slammed new funding for fossil fuel exploration, describing it as "delusional" and calling for an abandonment of fossil fuel finance.In remarks delivered via video to the Austrian World Summit in Vienna, Antonio Guterres issued a sobering assessment of the planet's prospects."The energy crisis exacerbated by the war in Ukraine has seen a perilous doubling down on fossil fuels by the major economies," he said on Tuesday."The war has reinforced an abject lesson: our energy mix is broken," Guterres said. "Had we invested massively in renewable energy in the past, we should not be so dramatically at the mercy of the instability of fossil fuel markets now."Concerns related to both the energy transition and energy security have been thrown into sharp relief by Russia's invasion of Ukraine, with the price of both oil and gas continuing to surge in recent months.Russia is a significant supplier of both, and a number of major economies have formulated plans to reduce their reliance on its hydrocarbons in recent months. This desire to move away from Russian imports has led to some challenging situations. Read more about energy from CNBC ProIn May, the European Commission fleshed out details of a plan to ramp up the EU's renewable energy capacity and reduce its reliance on Russian fossil fuels. It simultaneously acknowledged that existing coal facilities may have to be used for "longer than initially expected."Coal has a substantial effect on the environment and the U.S. Energy Information Administration lists a range of emissions from its combustion. These include carbon dioxide, sulfur dioxide, particulates and nitrogen oxides.Elsewhere, Greenpeace has described coal as "the dirtiest, most polluting way of producing energy."In his speech to the summit in Vienna, the U.N.'s Guterres highlighted the "crippling prices" currently being experienced by businesses and households. "Our world faces climate chaos," he added."New funding for fossil fuel exploration and production infrastructure is delusional," he said. "It will only further feed the scourge of war, pollution and climate catastrophe."The former prime minister of Portugal also called on "all financial actors to abandon fossil fuel finance" and invest in renewables instead."The only true path to energy security, stable power prices, prosperity and a livable planet lies in abandoning polluting fossil fuels — especially coal — and accelerating the renewables-based energy transition," he said.Renewable energy sources, Guterres argued, were "the peace plan of the 21st century." He outlined a strategy that would, he claimed, "jumpstart the renewable energy transition."This included a tripling of investments in renewables, moving energy subsidies away from fossil fuels to renewables, and fast-tracking approvals for wind and solar projects.'Not good enough'On the planet's future, Guterres delivered an urgent rallying call."The window to prevent the worst impacts of the climate crisis is closing fast," he said. "Our planet has already warmed by as much as 1.2 degrees.""To keep the 1.5-degree goal within reach," he said, "we must reduce emissions by 45% by 2030 and reach net zero emissions by mid-century. But current national commitments will lead to an increase by almost 14% this decade."Guterres' reference to 1.5 degrees Celsius relates to the Paris Agreement's target of limiting global warming "to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels."In a nod to a recent report from the International Energy Agency, he also noted that 2021 had seen energy-related global CO2 emissions jump by 6% in 2021. "Let me be blunt," he said. "Most national climate pledges are simply not good enough."Guterres' comments represent his latest intervention in the discussion about climate change and the future of the energy sector.In March, he said the planet had emerged from last year's COP26 climate summit in Glasgow with "a certain naïve optimism" and was "sleepwalking to climate catastrophe."In the same speech, he also said coal was a "stupid investment — leading to billions in stranded assets."
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Energy & Natural Resources
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The customer-owned bank is flaunting its eco-credentials as larger rivals face pressure over fossil fuel investments Warning sign: a highway leads to AGL’s coal-fired Loy Yang power station. Such plants are coming under close scrutiny as Australia tries to reduce its carbon footprint © Bloomberg Receive free Asia-Pacific companies updatesWe’ll send you a myFT Daily Digest email rounding up the latest Asia-Pacific companies news every morning. Moe, located in the Latrobe Valley in the Australian state of Victoria, has a long association with fossil fuels. The region is rich in brown coal, and Moe is home not just to the miners who extract it but also to the State Electricity Commission workers who burn it at the nearby power plants.The resulting greenhouse gas emissions mean the region is a big contributor to Australia’s overall carbon footprint — and it is accordingly bracing for the country’s energy transition. Power stations such as AGL’s giant Loy Yang plant, to the east of Moe, look to be on borrowed time as the country plots a path to net zero by 2050. Even the future of AGL itself — and Australia’s other big energy providers — may be defined by those who want a faster transition.And one of these emission evangelists is another key player in Moe’s economy: Bank Australia, which has its customer service operation in the town. It is one of the largest non-power employers there, and has set an ambitious target of achieving net zero emissions by 2035, including across its lending portfolio. Bank Australia is making progress, too. Of the businesses on the FT’s new Asia-Pacific Climate Leaders list — compiled with Nikkei Asia and data provider Statista — it has cut its Scope 1 and 2 emissions relative to revenue the most. Scope 1 and 2 emissions arise respectively from a business’s own operations and from the energy that it purchases.Damien Walsh, Bank Australia’s managing director, says that having staff and customers in the Latrobe area has helped strengthen its decision to push hard in driving the country towards net zero.“Part of our role is to support the transition from the coal-fired energy economy,” he says. “We are growing in that region by attracting customers who want to be part of that change.” Gone with the wind?: vapour billows from cooling towers at Loy Yang. Australia’s new prime minister Anthony Albanese has promised to slash carbon emissions © Bloomberg The bank traces its roots to the mid-1950s when it was founded as a co-operative credit union for the government’s scientific research department. It went on to absorb more than 70 similar organisations — including the SEC’s credit union — before becoming a bank in 2011 and rebranding as Bank Australia in 2015.Walsh says it adopted its climate stance in response to its customers, each of whom — since the bank has retained its co-operative ethos — has voting rights at the annual general meeting. They made it clear that climate change was a top priority by “leaps and bounds”, Walsh says. Bank Australia moved to be carbon neutral by 2011, a goal it achieved after it bought a conservation reserve in west Victoria. This helped the bank offset the environmental impact of the new buildings it financed. Eight years later, it moved all of its own energy supplies to renewable sources.The approach has paid off in terms of attracting customers: it currently has 183,000, with the growth rate doubling since the bank launched a “clean money” investment framework in 2019, according to chief impact officer Sasha Courville. The initiative directs investment away from fossil fuels, live animal transportation and weapons, and towards areas such as renewable energy.Transitioning from fossil fuels has become a live issue across Australia, which remains one of the largest coal and gas exporters in the world and has suffered a series of climate-related disasters, including bushfires and floods. Climate activists have been quick to criticise the country’s “Big Four” banks — ANZ, Commonwealth Bank, NAB and Westpac — for continuing to fund fossil fuel projects (they make it on to the Climate Leaders list as so-called “financed emissions” fall outside Scopes 1 and 2.)The strength of feeling was demonstrated last month at a banking summit in Sydney, organised by business newspaper the Australian Financial Review. A 15-year-old schoolboy, driven to protest after witnessing a cyclone that swept through Western Australia last year, confronted the Commonwealth and NAB chief executives and demanded that they stop financing the fossil fuel industry.More stories from this reportThe chief executives defended their record, with Commonwealth’s Matt Comyn arguing that the bank’s policies were aligned with the Paris Agreement on climate change and fossil fuels accounted for just 2 per cent of the bank’s balance sheet.But, while banks might try to frame the funding of fossil fuels as only a small part of their business, Dan Gocher, director of climate and environment at the Australasian Centre for Corporate Responsibility, a shareholder advocacy organisation, says: “They come out with plenty of statements about net zero but it doesn’t have an immediate impact or stop the big expansion of fossil fuel projects.”Gocher adds that most of the larger banks remain “passive” in their approach to climate change. “It’s business as usual for the banks who are not taking the hard decisions.”The banks do, however, have support from the Australian Prudential Regulation Authority, the country’s financial regulator. It argues that it is important that Australia’s financial institutions support fossil fuel companies that are transitioning from “brown” to “green” energy sources.For its part, Bank Australia argues that hitting net zero goes beyond “clean money” financing and to the heart of its mortgage book, which represents 84 per cent of its lending. “Customer [property] ownership represents the vast majority of (our) emissions,” Courville says. The bank says 23 per cent of Australia’s emissions are from buildings, with half of that from homes. So it offers discounted loans to people buying homes with solar panels, double-glazing or insulation — arguing that lending policies can help make residential energy use more efficient.Gocher adds that some larger banks have launched products for solar power and electric vehicle purchases, which have proved successful but are “piecemeal” without government support. He notes that last month’s change in government — with new prime minister Anthony Albanese promising a 43 per cent cut in emissions from 2005 levels by 2030 — could help push such initiatives further.Walsh says Bank Australia can risk driving the shift toward net zero because of its small size, but that the whole sector needs to move faster. “We can’t do this on our own,” he says.Climate Capital Where climate change meets business, markets and politics. Explore the FT’s coverage here.Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets hereGet alerts on Asia-Pacific companies when a new story is published
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Australia Business & Economics
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Sky's Paul Kelso says the latest official employment figures show that record vacancy levels are unlikely to come down without the aid of one particular group of around half a million people. Tuesday 14 June 2022 10:34, UK Unpicking the messages from labour market data is a full-time job in itself, but the latest release from the Office for National Statistics (ONS) is unlikely to make anyone skip into work this morning.Unemployment remains close to a 50-year low of 3.8%. Expect to hear this mentioned frequently by ministers - a vindication of the furlough scheme that sustained livelihoods through 18 months of COVID lockdowns.
But unemployment tells only part of the story. Just as significant is the number of vacancies, running at a record 1.3 million unfilled jobs.The combination of fewer people out of work but actively looking, and companies struggling to fill roles, is what economists mean when they talk about a "tight" or "hot" labour market.On the ground, it's why sectors from agriculture to tourism and travel complain of a shortage of workers, exacerbated by the impact of Brexit. BT Openreach is the latest major company to complain that the inability to easily recruit European workers is slowing down operations - in its case, the pace of superfast broadband rollout.
Whether it's picking fruit, working security, lugging luggage or digging holes, repetitive, unskilled minimum-wage roles are not as easy to fill as they were. More from Business Cost of living: Inflation takes record bite from regular pay while jobless rate rises unexpectedly Northern Ireland Protocol: EU Commission threatens 'proportionate actions' over UK government plans to override part of post-Brexit deal Ratings review platform Trustpilot kicks off hunt for new chairman Image: Openreach is among brands to complain about difficulties in hiring staff In theory the tight market should give more power to potential employees able to ask for better terms and higher wages, and there are some signs this is happening.Companies report having to seduce workers onto payrolls with bonuses and benefits because there is a dearth of applicants for jobs.According to the ONS pay is up, on average 6.8% including bonuses and 4.2% without.But the impact of inflation is impossible to avoid, so in real terms wages actually fell 4.5% in April.That was the biggest decline seen since records began in January 2001.Companies unable to fill jobs to drive growth and productivity, and workers' pay eroded by inflation, is an unusual and corrosive combination, one that may explain another key feature of the labour data, the almost half a million people considered "economically inactive".This category broadly includes those unwilling or unable to work; those who are sick, students and the retired, with more than half aged over 50. (It also counts those "looking after family or home", which given the central role in enabling work played by those in caring roles emphasises how economics has long ignored the home and historically the role of women.)This trend has been termed the "great resignation", a post-COVID reset by people of middle years who've decided work is no longer central to their goals and ambition.This group is hard to quantify, and the impact of long-Covid and other sickness may be just as significant in driving the over-50s away from the labour market.But an economy desperate for growth is unlikely to achieve it without them.
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Unemployment
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Federal Reserve Chairman Jerome Powell speaks at a news conference following a Federal Open Market Committee meeting on May 4, 2022 in Washington, DC.Win McNamee | Getty ImagesThe Federal Reserve looks set to raise its benchmark rate again today, and may even hand out the first three-quarter-point hike in 28 years.The central bank is likely to raise its target federal funds rate again to address the worst inflation in about 40 years.It may move fast and raise interest rates by 75 basis points instead of 50 basis points, as was the previous expectation, because inflation has remained high. A basis point is equal to 0.01%.More from Invest in You:Want to give your finances a spring cleaning? First, get organizedHere's what to know about managing your debt in retirementWant to find financial success? Here's how to get startedIn May, inflation rose 8.6%, more than analysts expected and at the fastest clip since 1981. Yet consumers who are already grappling with higher prices putting a strain on their wallets may be wondering how increasing borrowing costs will help tamp down inflation."This is something really hard for the typical consumer to understand, seeing these fast price raises that are so unfamiliar to large parts of our population who haven't seen inflation rates like this before," said Tara Sinclair, a senior fellow at the Indeed Hiring Lab. "And then trying to figure out the Fed's complicated role in all of this is very confusing."Here's what you need to know.The Fed's main tool to battle inflation is interest ratesThe Federal Reserve has a few main goals with respect to the economy: to promote maximum employment, keep prices stable and ensure moderate long-term interest rates.Generally, the central bank aims to keep inflation around 2% annually, a number that lagged before the pandemic.Its main tool to battle inflation is interest rates. It does that by setting the short-term borrowing rate for commercial banks, and then those banks pass rates along to consumers and businesses, said Yiming Ma, an assistant finance professor at Columbia University Business School.That higher rate influences the interest you pay on everything from credit cards to mortgages to car loans, making borrowing more expensive. On the flip side, it also boosts rates on savings accounts.How raising rates can slow inflationBut how do higher interest rates reel in inflation? They help by slowing down the economy, according to the experts."The Fed uses interest rates as either a gas pedal or a brake on the economy when needed," said Greg McBride, chief financial analyst at Bankrate. "With inflation running high, they can raise interest rates and use that to pump the brakes on the economy in an effort to get inflation under control." Basically, the Fed policymakers aim to make borrowing more expensive so that consumers and businesses hold off on making any investments, thereby cooling off demand and hopefully holding down prices.The Fed uses interest rates as either a gas pedal or a brake on the economy when needed.Greg McBridechief financial analyst, BankrateThere could also be a secondary effect of alleviating supply chain issues, one of the main reasons that prices are spiking right now, said McBride. Still, the central back can't directly influence or solve that particular problem, he said."As long as the supply chain is an issue, we're likely to be contending with outside wage gains," which drive inflation, he said.The Fed wants to avoid stalling the economyThe main worry for economists is that the Fed raises interest rates too quickly and dampens demand too much, stalling the economy.This could lead to higher unemployment if businesses stop hiring or even lay off workers. If policymakers really overshoot on rate hikes, it could push the economy into a recession, halting and reversing the progress it has made so far.Treating inflation in the economy is like treating cancer with chemotherapy, said Sinclair of the Indeed Hiring Lab."You have to kill parts of the economy to slow things down," she said. "It's not a pleasant treatment."Of course, it will take some time for any action to affect the economy and curb inflation. That's why the Federal Open Market Committee carefully watches economic data to decide how much and how frequently to raise rates.There is also some uncertainty due to the war in Ukraine, which has also increased prices on commodities such as gas. The Fed will have to watch how the war is hampering the U.S. economy and act accordingly.It might get worse before it gets better
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Interest Rates
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NEWYou can now listen to Fox News articles! Steven Rattner, who served as counselor to the Treasury Secretary during the Obama presidency, called on the Federal Reserve to "make amends for its mistakes" in a New York Times column Wednesday. Rattner wrote that the Consumer Price Index report on Friday "made clear" that "inflation is raging, and the central bank needs to move more aggressively to cut off the upward spiraling of prices." But, he said, "The Fed has yet to evince a full grip on this reality," arguing that "far more substantial interest rate increases have always been necessary to restrain fast rising prices."The economist noted that while raising the interest rates are necessary, "higher rates slow inflation by slowing the economy, which in turn means fewer jobs, higher unemployment and often, a recession."FOX NEWS POLL: VOTERS REVEAL WHICH PARTY THEY TRUST MORE ON CRIME, INFLATION AS MIDTERMS APPROACH Former Obama adviser Steven Rattner said "you almost have to thank Joe Manchin for blocking" President Biden’s Build Back Better act. (REUTERS/Brendan McDermid)Rattner wrote that, in his view, a recession may be the price we have to pay for irresponsible Federal Reserve policies and challenging events on the world stage.He argued that while the Russian invasion of Ukraine played a role in driving up prices, "so have policy errors, for which the central bank bears significant responsibility, along with the Biden administration.""The inflationary die was cast, in effect, by the response to the pandemic, well before Russian troops crossed the Ukrainian border," he added."Borrowing a page from its successful response to the 2008 financial crisis, the Fed pushed interest rates close to zero and bought trillions of dollars of debt securities," Rattner said, recounting the mistakes. POWELL SAYS FED COULD HIKE INTEREST RATES BY ANOTHER 75-BASIS POINTS IN JULY Former Obama Treasury adviser Steve Rattner on the set of MSNBC's "Morning Joe" on May 12, 2022. (Screenshot/MSNBC) "The ultralow interest rates encouraged a surge in the value of a vast array of assets, from equities to houses to art. Meanwhile, a flotilla of government stimulus programs put more than $1 trillion of extra cash into Americans’ bank accounts," he continued.When Biden became president, "the mantra from the White House became that it was better to do too much than too little, an axiom that the Fed enthusiastically adopted," but COVID was "substantially less daunting" economically than expected. Then, "To make matters worse, the Fed was inexplicably slow to reverse course, even when the need became glaringly obvious" as inflation proved stickier than previously predicted. As he noted, the Fed "continued to add mortgage securities to expand its balance sheet until just three months ago, when it also first raised interest rates." The Federal Reserve building is seen January 22, 2008 in Washington, DC. (Photo by Chip Somodevilla/Getty Images) Rattner called on the Fed to "make amends for its mistakes," and "quickly," by raising interest rates by 0.75%. Soon after the column was published, Fed Chairman Jerome Powell had announced a 0.75% interest rate increase.CLICK HERE TO GET THE FOX NEWS APP Rattner’s article, which criticized the Fed and President Biden for reckless spending, underscores the problems with the left's "modern monetary theory" - the idea that the government can never run out of money so long as it uses its own currency. Powell and other mainstream economists have denounced modern monetary theory, but politicians like Rep. Alexandria Ocasio-Cortez have endorsed it. Joe Silverstein is a production assistant for Fox News Digital.
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Inflation
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The Conservatives have suffered two heavy defeats, but have narrowly held on to former PM Boris Johnson's old Uxbridge seat, after a night of three dramatic by-election results.
In Somerton and Frome, the Lib Dems overturned a majority of more than 19,000, with a 29% swing.
And Labour made history, overturning a 20,137 majority to take the Yorkshire seat of Selby and Ainsty.
But it was disappointed as the Tories clinched Uxbridge and South Ruislip.
Despite a 6.7% swing to Labour, the Tories managed to capitalise on local anger over the the planned expansion of the Ulez Ultra Low Emissions Zone to outer London under Labour mayor Sadiq Khan, winning the seat by just 495 votes.
It meant Prime Minister Rishi Sunak was spared the prospect of being the first prime minister for 55 years to lose three by-elections in one night.
However, it was still a bruising night for the Tories, who are trailing Labour in the national polls ahead of an expected general election next year.
In Selby and Ainsty, Labour managed to overturn a 20,137 majority to win the North Yorkshire seat.
Keir Mather, 25, will become the youngest MP in the House of Commons, after he secured 16,456 votes compared to Conservative candidate Clare Holmes's 12,295.
The safe Conservative seat, which is largely rural, had been held by the party since its creation in 2010.
Labour leader Sir Keir Starmer said: "This is a historic result that shows that people are looking at Labour and seeing a changed party that is focused entirely on the priorities of working people with an ambitious, practical plan to deliver."
Mr Mather said his party had "rewritten the rules on where Labour can win".
"For too long, Conservatives up here and in Westminster have failed us, and today that changes," he said.
The by-election followed the resignation of Mr Johnson's ally former Tory MP Nigel Adams, after he was not included in the former prime minister's honours list - although Mr Adams has not said this was why he quit.
In Somerton and Frome, Lib Dem Sarah Dyke, a Somerset councillor with a farming background, secured a dramatic victory, winning 21,187 votes, while Conservative councillor Faye Purbrick trailed in second with 10,179 votes.
In her victory speech Ms Dyke thanked "lifelong Conservative voters" who had voted Lib Dem for the first time, as well as Labour and Green supporters who had "lent" their votes.
She said the public had been "let down and taken for granted for far too long" by the Conservatives, with the government "too busy being a circus of chaos".
The by-election was triggered by the resignation of former Tory MP David Warburton, following allegations of drug-taking and sexual misconduct.
Mr Warburton, who had held Somerton and Frome since 2015, resigned as an MP last month, admitting he had taken cocaine but denying the claims of sexual harassment.
Ms Dyke accused Mr Warburton, who was suspended from the Conservative parliamentary party last April, of being an "absent" MP and said people had been "left without a voice in Parliament for far too long".
South-west England was a former stronghold for the Lib Dems until their near wipe-out in 2015 after they went into coalition with the Tories.
However, last year they overturned a majority of more than 24,000 in the Tiverton and Honiton by-election to win the Devon seat, and they also took control of Somerset Council from the Tories.
Lib Dem leader Sir Ed Davey said the "stunning victory shows the Liberal Democrats are firmly back in the West Country" and that the country are "fed up with Rishi Sunak's out-of-touch Conservative government".
Labour had hoped to deliver a triple by-election defeat for the Tories by taking the west London seat of Uxbridge and South Ruislip, which had a majority of 7,210.
But Conservative Steve Tuckwell edged ahead in a closely fought contest which saw Conservative and Labour votes recounted.
Mr Tuckwell, who opposed the Ulez expansion, made the issue central to his campaign, with activists saying it was raised frequently by voters on the the doorstep.
Labour's Danny Beales, who came second with 13,470 votes compared to Mr Tuckwell's 13,965, had sought to distance himself from the policy, arguing it was not the right time to expand the charge amid a cost-of-living crisis.
However, the Tories highlighted how the expansion of the daily charge for cars which fail to meet emissions standards to outer London was the policy of a Labour mayor.
In his victory speech, new MP Mr Tuckwell said Mr Khan's "damaging and costly Ulez policy" lost Labour the seat.
Labour's shadow business secretary Jonathan Reynolds said the Ulez expansion was always going to make it difficult for Labour to take Uxbridge and South Ruislip.
However, he told the BBC the scheme was a "specific issue to that particular part of the United Kingdom" and that, ahead of a general election, Labour would be focusing on the "national story".
The by-election was triggered by Mr Johnson's resignation, after the former prime minister claimed he was "forced out" by an inquiry which found he misled Parliament over lockdown parties at Downing Street.
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United Kingdom Business & Economics
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CANBERRA, Australia -- Australian Prime Minister Anthony Albanese will visit China in early November, his office said Sunday hours before he was set to fly to the United States to meet President Joe Biden.
Albanese's office also said China agreed to review the crippling tariffs it placed on Australian wine that have effectively blocked trade with the winemakers’ biggest export market since 2020.
Albanese will become the first Australian prime minister to visit China in seven years when he travels to Beijing and Shanghai from Nov. 4-7.
He will meet President Xi Jinping and Premier Li Qiang in Beijing and then attend the China International Import Expo in Shanghai.
The visit to China and a potential breakthrough in the wine dispute mark a further repair in bilateral relations since Albanese’s center-left Labor Party won elections last year after nine years of conservative rule in Australia.
“I look forward to visiting China, an important step towards ensuring a stable and productive relationship,” Albanese said in a statement.
“I welcome the progress we have made to return Australian products, including Australian wine, to the Chinese market. Strong trade benefits both countries,” Albanese added.
Albanese accepted an invitation weeks ago to visit China this year, but finding suitable dates has been challenging.
Albanese is visiting Washington, D.C., to meet Biden this week and will return to the United States after his China trip to attend the Asia-Pacific Economic Cooperation leaders’ forum in San Francisco from Nov. 15-17.
It will be the ninth time Biden has met Albanese as prime minister. The first meeting was in Tokyo hours after Albanese was sworn in as government leader in May last year.
The discussions this week are expected to cover the AUKUS deal in which the United States and Britain will cooperate to provide Australia with a fleet of submarines powered by U.S. nuclear technology to counter a more assertive China.
The leaders will also seek more cooperation on clean energy, critical minerals and countering climate change.
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Australia Business & Economics
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The Japanese yen is hovering close to its weakest levels since 1998, and authorities have hinted at taking action to stem the currency's decline.Ahead of Bank of Japan's rate decision later this week, CNBC takes a look at whether Japan's central bank might shift from its ultra-loose monetary policy, as the Federal Reserve maintains its hawkish stance, signaling more aggressive rate hikes to come.related investing newsThe widening rate differential has caused the yen to weaken significantly, with the Japanese currency falling about 25% year-to-date.Core inflation in Japan increased 2.8% from a year ago in August, the fastest growth in nearly eight years and the fifth consecutive month where inflation exceeded the BOJ's target of 2%.Last week, the Bank of Japan reportedly conducted a foreign exchange "check," according to Japanese newspaper Nikkei – a move largely seen as preparing for formal intervention.The so-called check, as the Nikkei explained, involves the central bank "inquiring about trends in the foreign exchange market" and is widely seen as a precursor to physical intervention to defend the yen.Despite talk of a physical intervention in the forex markets, analysts are all pointing to another reason behind the weakening yen: the Bank of Japan's yield curve control (YCC) policy — a strategy that was implemented in 2016, which caps 10-year Japanese government bond yields around 0% and offers to buy unlimited amount of JGBs to defend an implicit 0.25% cap around the target.HSBC's Senior Asia FX Strategist Joey Chew said defending this policy would be the central bank's priority instead of a currency intervention, which would be decided by the Ministry of Finance, and carried out by the Bank of Japan.Talk of FX intervention at this juncture may not have a material impact. Even actual intervention may only lead to a large but short-lived reactionJoey ChewSenior Asia FX strategist, HSBC"The BOJ will be conducting bond purchases – theoretically unlimited – to maintain its yield curve control policy," Chew said, adding such monetary operations would be somewhat contradictory to any potential foreign exchange action, given dollar-yen sales would tighten the Japanese currency's liquidity."Talk of FX intervention at this juncture may not have a material impact," said Chew. "Even actual intervention may only lead to a large but short-lived reaction."Chew pointed to limitations from previous instances when Japan stepped in to defend its currency.Strategists at Goldman Sachs also don't see the central bank shifting from its yield curve control policy, pointing to its hawkish global peers."Our economists expect the BOJ to firmly maintain its commitment to YCC policy at this week's meeting against a backdrop of five other G10 central banks that are all likely to deliver large rate hikes," they said in a note.Goldman Sachs says though direct intervention should be more likely with reports of rate checks, economists see the chance of a successful operation in defending the yen as "even lower."End of AbenomicsMonetary policy changes by Japanese authorities as unlikely, chances being especially low under BOJ governor Harukiho Kuroda, said UBS Chief Economist for Japan Masamichi Adachi."One possibility that they would deliver is amending its current neutral to dovish forward guidance to just neutral or deleting it," he said, adding the probability is at maximum 20% to 30%.One of the first indicators in a shift in Japan's monetary stance would be stepping away from Prime Minister Fumio Kishida's predecessor Shinzo Abe's economic policy, widely referred to as Abenomics, according to Nomura."The first necessary step toward normalization would be for Prime Minister Kishida to show that his policy priority has now diverged away from Abenomics, and he will no longer tolerate further yen depreciation," said Naka Matsuzawa, chief Japan macro strategist at Nomura.The Bank of Japan's next two-day monetary policy meeting concludes on Thursday, one day after the U.S. Federal Open Market Committee meeting, where officials are widely expected to hike interest rates by another 75 basis points.
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Forex Trading & Speculation
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The Federal Reserve on Wednesday used a sledgehammer to try to throttle rising prices not experienced by Americans in four decades, and suggested it could repeat its newly aggressive stance, however uncommon, even if more Americans lose their jobs and a U.S. downturn can’t be ruled out. Chairman Jerome Powell, speaking to reporters, said the central bank decided to raise its interest rate by a muscular three-quarters of a point this month instead of half a point because inflation projections “have moved up notably.” “Inflation can’t go down until it flattens out,” Powell said while repeatedly pointing to various economic crosswinds the Fed cannot control, including the war in Ukraine, COVID-19 lockdowns recently lifted in China, commodity prices and supply chain disruptions. Powell, who has been accused along with some of his Federal Open Market Committee colleagues of clinging to a rosy narrative about the future of the economy, said consumer demand is still stubbornly gung-ho, despite inflated prices for goods, services and commodities. “We are not seeing a broad slowdown,” he said, adding, “It will take some time to get inflation back down, but we will do that.” Powell was referring to years. Asked about odds of a “softish” landing for inflation without a recession, the chairman responded, “it’s possible.” “We’re not trying to induce a recession” — Federal Reserve Chairman Jerome Powell. ▪ The Wall Street Journal: The risk of recession depends on which banker you ask. ▪ The Washington Post: Seven ways you can financially prepare for a recession. “For many people right now, this inflation problem is akin to an emergency,” said Mark Hamrick, Bankrate.com senior economic analyst, who favors stockpiling some savings. The Fed’s rate decision was anticipated in financial markets, which have been in a deep swoon for days, illustrating investors’ worries that spiraling prices and steep losses in investment wealth would erode confidence and skew decision making. The S&P 500 and Nasdaq Composite are in bear market territory, down roughly 21 percent and 32 percent, respectively, from their all-time highs in January and November. The Dow Jones, in the meantime, is 17 percent below its Jan. 5 all-time intraday high. CNBC: Stock futures inch higher after the Fed raises rates by the most since 1994. The Fed’s detailed projections underpinning its June meeting are HERE. The New York Times: What the Fed’s interest rate means for credit cards, car loans and student loans. Rising prices are weighing on President Biden’s approval ratings and undermine his cheerleading about strong employment and wages at a time when many Americans look at their costs and argue they are falling behind. Republicans are hammering Democrats on inflation, crime and what they describe as an immigration “crisis” ahead of the November midterm contests (The Washington Post). © Associated Press / Jacquelyn Martin | Federal Reserve Chairman Jerome Powell on Wednesday. Related Articles ▪ Sebastian Mallaby, contributing columnist, The Washington Post: With Powell’s rate hike, the inflation fight begins in earnest. “To get inflation under control, the Fed will almost certainly have to cause a recession.” ▪ The Associated Press: In a letter on Wednesday, Biden told U.S. oil refiners to produce more gasoline and diesel to help lower gasoline prices for consumers. The industry told the president that refinery capacity declined as U.S. policy shifted away from fossil fuels. ▪ The Hill: The president, his economic advisers and Cabinet secretaries are weighing ideas to try to lower soaring gasoline prices, even modestly. LEADING THE DAY ➤ CONGRESS Bumps in the road have emerged for the process to pass the gun violence framework as Sen. John Cornyn (R-Texas) cautioned on Thursday that the proposal may have to be slimmed down in order to get it across the finish line. Cornyn told reporters that some issues still need to be ironed out “before we can reach an agreement” and that he’s “starting to get a little concerned” about the holdup. Namely, provisions incentivizing states to institute red flag laws and dealing with the “boyfriend loophole,” are creating problems, according to the Texas Republican (ABC News). “At some point, if we can’t get to 60 then we’re going to have to pare some of this,” he told reporters on Wednesday morning. “We’ve got to settle these issues or else we’re talking about jeopardizing the whole deal,” he added, referring to the remaining work as “a lift” (The Hill). Senate negotiators met on Wednesday evening in an attempt to resolve the remaining troubles, but were unable to break the deadlock. According to Cornyn, progress was made, but “we’re not there yet.” Lawmakers are set to convene again this afternoon for another round of talks (NBC News). The news comes as lawmakers look to complete legislative text on the proposal and potentially put a vote on the floor by the end of next week. ▪ Politico: Senate Minority Leader Mitch McConnell’s (R-Ky.) gun safety gamble. ▪ The New York Times: Toiling to complete a gun bill, two parties part ways on its reach. © Associated Press / Andrew Harnik | Sen. John Cornyn (R-Texas) in March. The House select committee investigating the Jan. 6 attack on the Capitol will resume its hearings this morning and focus on the pressure former President Trump and his allies heaped on former Vice President Mike Pence. Two former Pence advisers are expected to testify today — Greg Jacob, Pence’s former counsel, and retired appeals court Judge J. Michael Luttig, an informal adviser to the former VP. The panel showed video last week of a noose brought to the Capitol that day. According to reports, when Trump was informed about chants to “hang Mike Pence,” he responded, “maybe our supporters have the right idea.” “Even as advice was swirling around the White House saying that this scheme was illegal, it was totally baseless, the president nevertheless continued publicly to apply pressure on Mike Pence,” an aide to the committee added, something that “directly contributed to the attack on the Capitol. And it put the vice president’s life in danger” (The Hill). As The Hill’s Niall Stanage notes, beyond the actions during the day in question, the hearing will also shine the spotlight on the relationship between the two GOP heavyweights. ▪ CBS News: Luttig has a stark message for the Jan. 6 committee. ▪ ABC News: Photo shows Pence, family in hiding on Jan. 6. The committee also made news on Wednesday as it released footage tied to a tour Rep. Barry Loudermilk (R-Ga.) gave the day before the attack, featuring a man taking photos of hallways in the Capitol complex before ultimately attending the rally itself. Loudermilk has acknowledged showing a small group of constituents around House office buildings on Jan. 5, but claimed those participants did not attend the rally upon seeing “chaos.” However, video shared by the panel claims one of the men was indeed there, showing clips of the unnamed man marching toward the Capitol the morning of Jan. 6 (The Hill). ▪ The Hill: GOP lawmaker: “I was excited” to meet Saudi crown prince. ▪ The Hill: Four Senate Democrats push Sen. Amy Klobuchar (D-Minn.) to revise antitrust bill over hate speech concerns. ➤ POLITICS Republicans scored a major win on Tuesday night as Mayra Flores pulled off a historic win in Texas’s 34th District, handing the party a major talking point as it motors toward November when it expects to make major gains, especially in the House. Flores became the first GOP candidate to flip a majority-Hispanic Democratic seat in the Rio Grande Valley in more than 100 years by defeating Democrat Dan Sanchez in the contest to replace former Rep. Filemon Vela (D-Texas), who retired in March. Flores will serve through the remainder of this year under the old congressional lines. Democrats did not spend as they normally would in a contested special election, as the new congressional map is far more favorable heading into November, with Flores set to face Rep. Vicente Gonzalez (D-Texas). In addition, as The Hill’s Emily Brooks points out, the special election was low-turnout, meaning it may not turn out to be the marker some Republicans are making it out to be. NYT Analysis: GOP far-right, peddling falsehoods and plots, has gained significant sway to impact future US elections in major battleground states The news for Democrats is better in Pennsylvania, though, as a new poll shows Lt. Gov. John Fetterman (D) leading Republican Mehmet Oz in the state’s Senate race. According to a new USA Today-Suffolk University poll, Fetterman leads with 46 percent support among likely voters. Oz pulls in 37 percent, with 13 percent remaining undecided. The winner would replace the retiring Sen. Pat Toomey (R-Pa.). The poll also shows that Republicans have started to coalesce around Oz as their nominee in the days since David McCormick, his rival in the race, conceded the GOP nod. Seventy-six percent of GOP voters say they support Oz (The Hill). Reid Wilson, The Hill: Democrats face congressional rout amid historically terrible headwinds. IN FOCUS/SHARP TAKES ➤ ADMINISTRATION & INTERNATIONAL *** THIS JUST IN *** French President Emmanuel Macron, German Chancellor Olaf Scholz and Italian Premier Mario Draghi traveled by night train from Poland to Kyiv on Thursday and are meeting today with Ukrainian President Volodymyr Zelensky and visiting nearby Irpin, a site of Russian attacks (The New York Times). It’s an unusual, high-level show of Europe’s support for Ukraine, complete with photos aboard the train, plus interviews and international news coverage of Europe’s leaders walking through a sun-splashed war zone dressed in business suits. “It’s a message of European unity for the Ukrainian people, support now and in the future, because the weeks to come will be very difficult,” Macron said. … Scholz said the leaders want to show solidarity but also their commitment to keeping up their financial and humanitarian help for Ukraine, and their supply of weapons, adding it will continue “for as long as is necessary for Ukraine’s fight for independence,” according to reporting by the German news agency dpa. President Klaus Iohannis of Romania — which borders Ukraine and has been a destination for many Ukrainian refugees — arrived in Kyiv on a separate train, tweeting on arrival: “This illegal Russian aggression must stop!” (The Associated Press). At a time when the West is asking tough questions about Ukraine’s capabilities and strategies to expel or defeat the Kremlin as Russian forces seize more of the Donbas region in the east, Biden on Wednesday answered a plea from Zelensky and announced $1 billion more in weapons and humanitarian aid for Ukraine, including anti-ship rocket systems, artillery rockets, howitzers and ammunition (Reuters). Gen. Mark Milley, chairman of the Joint Chiefs of Staff, said on Thursday that the “numbers clearly favor the Russians” in the war with Ukraine, but he defended U.S.-supplied weapons and humanitarian aid for Ukraine during an interview with reporters while he was in Brussels (The Washington Post). “Right now, the Severodonetsk, the city is probably three-quarters taken by Russian forces, but the Ukrainians are fighting them street by street, house by house, and it’s not a done deal,” he said, adding that “there are no inevitabilities in war.” … Meanwhile, Chinese President Xi Jinping told Russian President Vladimir Putin in a phone call that Kyiv and Moscow “should push for a proper settlement” in the ongoing war, according to a Chinese readout of the call (CNBC). A shake-up related to rules at the government’s bipartisan Chemical Safety and Hazard Investigation Board stirred turbulence that ended with Chair Katherine Lemos resigning last week amid tensions with her colleagues. The independent board investigates industrial chemical accidents, seen by some experts as on the rise on a warming planet (Bloomberg News and The Hill). The president used an executive order to instruct federal agencies and departments on Wednesday to tap their legal authority to consider ways to counter so-called conversion therapy and other state and local actions he believes are mistakenly applied to individuals, including minors, in the LGBTQ community. “Unrelenting political and legislative attacks at the State level — on LGBTQI+ children and families in particular — threaten the civil rights gains of the last half century and put LGBTQI+ people at risk,” Biden wrote (The Associated Press). 📝 Introducing NotedDC, The Hill’s curated commentary on the beat of the Beltway. Click here to subscribe to our latest newsletter. OPINION ■ On inflation, economics has some explaining to do, by Greg Ip, chief economics commentator, The Wall Street Journal. https://on.wsj.com/3xTsfYt ■ Can America “do big things” again? Ask the regulators and lawyers, by George F. Will, columnist, The Washington Post. https://wapo.st/3mW7W68 WHERE AND WHEN The House meets at 9 a.m. to consider legislation to address high food and fuel prices. Speaker Nancy Pelosi (D-Calif.) will hold her weekly press conference at 10:45 a.m. The Senate convenes at 10 a.m. and expects to vote on final passage of legislation to expand access to Veterans Affairs health care and disability benefits for toxic-exposed veterans. The president will receive the President’s Daily Brief at 10:30 p.m. Biden at 3:10 p.m. will sign the Ocean Shipping Reform Act of 2022 in the State Dining Room. Vice President Harris at 10 a.m. will speak to reporters about the administration’s efforts to expand postpartum health coverage for mental health. Harris will speak at 1:40 p.m. while announcing the launch of a White House Task Force aimed at helping to curb online harassment and abuse. Secretary of State Antony Blinken hosts a reception for the diplomatic corps at the Department of State at 6:30 p.m. and will address the guests. Treasury Secretary Janet Yellen today will meet with CEO members of the Bank Policy Institute to discuss the global economic outlook. Economic indicator: The Labor Department will report at 8:30 a.m. on filings for unemployment benefits in the week ending June 11. First lady Jill Biden will speak at 8 p.m. at the Smithsonian’s Molina Family Latino Gallery exhibition “¡Presente! A Latino History of the United States,” marking the first gallery and physical presence of the National Museum of the American Latino. The White House daily press briefing is scheduled at 12:15 p.m. 🖥 Hill.TV’s “Rising” program features news and interviews at http://thehill.com/hilltv, on YouTube and on Facebook at 10:30 a.m. ET. Also, check out the “Rising” podcast here. ELSEWHERE ➤ SUPREME COURT Justices on Wednesday dismissed an effort by GOP attorneys general to reinstate the Trump-era “public charge rule” penalizing lawful immigrants for using welfare benefits, indicating that it shouldn’t have heard the case originally. The Biden administration eventually discarded the rule and declined to defend it in court. The move leaves in place an appeals court ruling that rebuffed Arizona Attorney General Mark Brnovich’s (R) bid to step into the shoes of the Trump administration in hopes of reviving the public charge rule via a legal victory (The Hill). ➤ POX & PANDEMIC The Food and Drug Administration’s expert advisers on Wednesday recommended federal authorization for Moderna’s and Pfizer’s versions of COVID-19 vaccines for children 5 and younger (The Hill and The New York Times). © Associated Press / Jenny Kane | FDA experts are weighing approval of Moderna’s COVID-19 vaccine for children younger than 5. 🦠Anthony Fauci, 81, director of the National Institute of Allergy and Infectious Diseases, tested positive for COVID-19 with mild symptoms after being fully vaccinated and boosted twice. His office said in a Wednesday statement that he is isolating and working from home and had not been in close contact with Biden or senior officials (CNN and The Hill). Total U.S. coronavirus deaths reported as of this morning, according to Johns Hopkins University (trackers all vary slightly): 1,012,607. Current average U.S. COVID-19 daily deaths are 276, according to the Centers for Disease Control and Prevention. After five weeks of declines, the World Health Organization reports this morning that global deaths from COVID-19 rose in the week ending June 12 by 4 percent compared with the previous week. ➤ PARKS AND WRECK Yellowstone National Park evacuated 10,000 visitors and National Park Service staff members because of an emergency this week, which was prompted by biblical flooding in Montana that did significant damage (The Associated Press). Floodwaters hit 16 feet as they moved through Billings, Mont., on Wednesday, overtaking farms and ranches and forcing the shutdown of the city’s water treatment plant. Bridges succumbed and water poured into nearby homes. Flooding pushed a popular fishing river off course — possibly permanently — and may force roadways nearly torn away by torrents of water to be rebuilt (The Associated Press). THE CLOSER © Associated Press / Susan Walsh | The Watergate complex view from room 723, 1997. And finally … It’s Thursday, which means it’s time for this week’s Morning Report Quiz! Inspired by Friday’s 50th anniversary of the Watergate break-in, we’re eager for some smart guesses about one of the biggest scandals in American history. Email your responses to asimendinger@thehill.com and/or aweaver@thehill.com, and please add “Quiz” to subject lines. Winners who submit correct answers will enjoy some richly deserved newsletter fame on Friday. Days after the break-in, what did Nixon’s White House press secretary dismiss the incident as? 1. “Who cares?” 2. “A non-event” 3. “A third-rate burglary attempt” 4. “Bullshit” Which of the following is not an article of impeachment the House Judiciary Committee approved against Nixon? 1. Obstruction of justice 2. Abuse of power 3. Corruption 4. Contempt of Congress Which Nixon administration or campaign official involved in Watergate did not spend any time in prison? 1. Commerce Secretary Maurice Stans 2. John Dean, White House counsel 3. H.R. Haldeman, White House chief of staff 4. Attorney General Richard Kleindienst In the movie “All The President’s Men,” what actor did Robert Redford originally choose to play Carl Bernstein before ultimately deciding on Dustin Hoffman? 1. Robert De Niro 2. Michael Douglas 3. Jeff Bridges 4. Al Pacino Stay Engaged We want to hear from you! Email: Alexis Simendinger and Al Weaver. Follow us on Twitter (@alweaver22 & @asimendinger) and suggest this newsletter to friends!
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Inflation
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U.S. Dollar banknote is seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/IllustrationRegister now for FREE unlimited access to Reuters.comSINGAPORE, Aug 18 (Reuters) - The dollar was on the front foot on Thursday after minutes from the Federal Reserve's July meeting pointed to U.S. interest rates staying higher for longer to bring down inflation.The greenback gained most against the Antipodeans, especially the Aussie, which was dragged down as weaker-than-expected wage growth weighed on Australia's rates outlook.The Australian dollar fell 1.2% on Wednesday to a one-week low of $0.6912. It hovered just above there at $0.6922 in the Asia session, with little reaction to noisy labour data that showed falls in both employment and the jobless rate.Register now for FREE unlimited access to Reuters.comThe New Zealand dollar was also pinned to Wednesday lows and was last down 0.2% at $0.6267. The greenback rose marginally on the euro and sterling and was steady on the yen."The bigger picture for the dollar is that it's in a strong uptrend," said Matt Simpson, a senior analyst at brokerage City Index in Brisbane, adding it has now paused a weeks-long pullback"In some ways, bulls are looking to step back in and I think the Fed minutes gave them a reason to do so."The dollar rose 0.6% on the yen overnight and held at 135.06 yen on Thursday. The euro bought $1.0165 and the dollar index rose 0.1% to 106.740.Fed officials saw "little evidence" late last month that U.S. inflation pressures were easing, the minutes showed. The minutes flagged an eventual slowdown in the pace of hikes, but not a switch to cuts in 2023 that traders until recently had priced in to interest-rate futures. read more "Once a sufficiently restrictive level has been reached, they are going to stick to that level for some time," Rabobank strategist Philip Marey said in a note to clients."This clearly stands in contrast to the early Fed pivot that the markets have been pricing in."Traders see about a 39% chance of a third consecutive 75 basis point Fed rate hike in September, and expect rates to hit a peak around 3.7% by March, and to hover around there until later in 2023.Sterling and China's yuan , meanwhile, were beset by economic worries.Weak consumption, low confidence, anaemic credit growth, a property crisis and restrictive COVID-19 policies have cast a long shadow over China's prospects. read more The yuan fell about 0.2% to 6.7928 per dollar.Britain, meanwhile, is staring at soaring inflation and interest rates. Consumer prices rose at an annual pace of 10.1% in July, the highest since 1982. After blipping higher, growth fears dragged sterling lower and it was last at $1.2040.It also dropped below its 200-day moving average against the euro. read more "Do we get weaker sterling now, ahead of the inevitable recession? Or will sterling hold around here until rates peak and the economic disaster can dominate," asked Societe Generale strategist Kit Juckes in a note."I am confident that we will make a new cycle low this year," he said.========================================================Currency bid prices at 0506 GMTAll spotsTokyo spotsEurope spotsVolatilitiesTokyo Forex market info from BOJRegister now for FREE unlimited access to Reuters.comReporting by Tom Westbrook; editing by Richard Pullin and Sam HolmesOur Standards: The Thomson Reuters Trust Principles.
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Interest Rates
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Rising energy and food prices, sparked by the Russia-Ukraine war, and shrinking forex reserves have hit Bangladesh.The International Monetary Fund (IMF) has provisionally agreed to provide a $4.5bn support programme to Bangladesh, with the country’s finance minister saying the deal would help prevent economic instability escalating into a crisis.
Bangladesh’s $416bn economy has been one of the world’s fastest growing for years. But rising energy and food prices, sparked by Russia’s invasion of Ukraine, along with shrinking foreign exchange reserves, have swelled its import bill and current account deficit.
On Wednesday, it became the third South Asian nation to secure a “staff-level agreement” with the IMF for loans this year after Pakistan and Sri Lanka.
“The heat of the global economy has affected our economy to some extent,” Finance Minister AHM Mustafa Kamal told reporters after the IMF announcement. “We requested the IMF loan as a precautionary measure to ensure that this instability does not escalate into a crisis.”
“Bangladesh’s robust economic recovery from the pandemic has been interrupted by Russia’s war in Ukraine, leading to a sharp widening of the current account deficit, a rapid decline of foreign exchange reserves, rising inflation and slowing growth,” said Rahul Anand, who led a visiting IMF staff mission.
The group arrived in Bangladesh late last month to iron out provisions for providing the loan to the South Asian nation of more than 160 million people.
IMF said a “staff-level agreement” had been reached for a 42-month arrangement, including about $3.2bn from its Extended Credit Facility (ECF) and Extended Fund Facility (EFF), plus about $1.3bn from its new Resilience and Sustainability Facility (RSF).
“The objectives of Bangladesh’s new Fund-supported program are to preserve macroeconomic stability and support strong, inclusive, and green growth, while protecting the vulnerable,” the lender said in a statement.
A staff-level agreement is typically subject to approval by IMF management and consideration by its executive board, which is expected in the coming weeks.
Bracing for a slowdown
Bangladesh’s economic mainstay is the export-oriented garment industry, which is bracing for a slowdown as big customers like Walmart are saddled with excess stocks as inflation forces people to prioritise their spending.
The country’s foreign exchange reserves had dwindled to $35.74bn by November 2 from $46.49bn a year ago, central bank data showed.
The IMF said Bangladesh has put together a programme to foster growth that includes measures to contain inflation and strengthen the financial sector.
Finance Minister Kamal said the IMF team agreed with the government’s economic reforms. Earlier, in August, Bangladesh hiked fuel prices by about 50 percent in a move to trim its subsidy burden, but government officials denied at the time that this was a prerequisite for the IMF loan.
Funds will be disbursed in seven tranches, Kamal said, adding that the first instalment will be available in February 2023.
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Asia Business & Economics
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China creates the carbon equivalent of a new Australian economy every year as it steadily increases emissions but some climate activists want this fact demonised as misinformation.Australians shivering through the worst energy crisis in decades should not be lectured on climate policy by pseudointellectual foreign activists masquerading as academics.This week a British-based think tank, the Institute for Strategic Dialogue, released a report titled Deny, Deceive, Delay, which demonised debate around climate policy and complained about the spread of “disinformation”.Ironically, this is a national conversation sorely needed at a time when the Energy Minister of New South Wales is telling people there isn’t enough electricity for them to use a dishwasher at night.The SDI report’s findings were used by reporters at The Guardian who this week wrote with glee about Sky News Australia’s supposed role in spreading these anti-orthodox views.“Australia’s Sky News channel has become a central source for climate science misinformation around the world, gaining high traction among conservative social media influencers and networks, according to a report,” they wrote.“The report looked at how views antagonistic to climate change action are spread around the world, how the content is created, and who is influential in spreading those views.”What followed was a hyperbole-fuelled opinion piece by the Guardian’s environment reporter Graham Readfearn, who seems to confuse misinformation with policy viewpoints he disagrees with.Readfearn failed to provide examples of misinformation, and instead spread false narratives himself.The report attempted to coin a new phrase in the climate change debate, “discourses of delay”.Instead of being slandered as a denier you are now referred to as a “delayer” if you do not agree with the specific and exact course of action sought by the report’s authors.“The report identified key ‘discourses of delay’ used to undermine action on the climate crisis, particular in the lead up to and during the UN climate talks in Glasgow in 2021,” Mr Readfearn wrote.“These included attacks on ‘unreliable renewables’ or claimed ineffectiveness of electric vehicles. Other popular themes were to point to major emitters – often China – and use their high emissions to absolve other countries of the need to act, or to argue that advocates for climate action were wealthy elites and part of a ‘New World Order’.”If you note that China is the single largest emitter of C02 in the world, and responsible for 33 per cent of all carbon emissions, then this report claims you are spreading misinformation.These facts should be highly relevant to policy debates so that we can factor in what, if anything, China is doing to minimise CO2 emissions.If we as a global community fail to curtail the worsening Chinese problem, all climate reduction efforts will fail. That is what the science tells us in the clearest possible terms.Those who truly wish to see action on climate change should be beyond anger that China has abandoned its Paris Accord obligations.Or as global emissions tracking website climateactiontracker.org puts it, President Xi Jinping has “seemingly completely reneged on this strategy” to pursue burning more coal instead.“We estimate China’s emissions have risen 3.4% to 14.1 GtCO2e in 2021 due to a large spike in energy demand as the country’s pandemic recovery continues—this is concerning as power consumption has been projected to rise 5–6% in the upcoming year,” the site wrote.“In 2020–2021, China began toning down its outlook on coal, highlighted by President Xi Jinping when he announced that China will strictly control coal consumption until 2025 and start to gradually phase it down thereafter. By the end of 2021, however, China had seemingly completely reneged on this strategy to focus on shoring up coal (and other fossil fuels) supply off the back of energy security and shortage concerns.”It is worth noting that the pace China’s C02 contribution grows each year is more than Australia’s entire C02 output, meaning every year China effectively creates a new carbon equivalent of Australia while we dutifully reduce our emissions in line with global commitments.And while this is happening we squabble over supply source statistics instead of being able to guarantee that Australians will be able to keep the lights on.But for the Guardian this level of nuance is lost on its writers, who for some reason fail to acknowledge the significance of the global issue.However, it was with great amusement to see that the research found The Guardian itself was one of the world’s top “delayers”.“The report said the Guardian was ‘anomalous within this section, in that the articles shared were not themselves misleading or warranting factchecks, but were nonetheless used to support opposition lines of attack by cherrypicking data or adopting a ‘culture wars’ frame’,” The Guardian wrote.And this writer does not begrudge The Guardian stooping to culture war media feuds in its climate coverage. That is The Guardian’s niche and it should be free to do so.The issue is with foreign researchers authoring a report about subjects they know nothing about.The first writer of the report was ISD Global Head of Civic Action Jennie King, whose employment history shows she has zero experience as either a journalist or climate scientist.The second was a political scientist and the third appears to be well versed in digital marketing.But despite the grossly unqualified credentials any of the trio hold related to media and science, the report contained this passage.“If a free press is uniquely important to society then it should also be subject to continual scrutiny and the highest standards of accuracy,” she wrote.“If not, its potential to drive and amplify harm is disproportionate. This point is especially relevant for issues like climate change, where certain media outlets have been consistent vectors for laundering denial, ‘discoursesof delay’ and fossil fuel industry talking points into the mainstream. Referring back to Policy Ask 2, in cases where an outlet is itself a ‘repeat offender’, platforms must be authorised to act in line withtheir Terms of Service or Community Guidelines and minimise the impact of such content.”If King believes a media outlet has used “talking points” from the fossil fuel industry or engage in “delaying” speech then she wants repeat offenders booted off the internet.Even The Guardian, which has been established as one of the worst “delayers”, would be at risk of breaching that standard.The policy of censorship that these marketing hacks propose is truly ill-considered and would completely inhibit our ability as a society to discuss and debate energy policy as our country sees fit.Australia’s biggest problem right now is energy supply and while large investments in renewable energy should form an aspect of our pathway forward, there is also certainly a place for fossil fuels.Our pace of transition and what that transition looks like practically must not become a taboo subject.You should not be shamed into thinking that viewpoint is misinformation or somehow immoral.Instead, I would like to participate in a free and robust national debate so that we never again have to tell elderly Australians they are not allowed to pack the dishwasher.
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Energy & Natural Resources
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It was created more than 40 years ago and inflamed the land rights debate in Australia. Red Over Black, a book and documentary released in the early 1980s, claimed the movement was a communist plot to erode Australia's sovereignty.
Now, the film is being used as a clarion call by anti-Voice to Parliament campaigners in the referendum to be held on October 14.
ABC Investigations has tracked how the hour-long documentary was repurposed, revealing Australian white supremacists played a major role in its appropriation and dissemination.
The documentary has been circulated among groups promoting today's rallies against the Voice around the country.
Warning: This story contains references to racist and anti-Semitic language.
Leading far-right and conspiracy theory researcher Kaz Ross described it as a "deliberate infiltration strategy" of the anti-Voice campaign by sections of the far right.
'Communism by the back door'
The ABC has analysed dozens of Telegram channels and Facebook groups showing mentions of Red Over Black — created by former Communist Party member turned right-wing activist Geoff McDonald — dating back to August last year.
During the first re-shares of his documentary, there was no mention of the Voice to Parliament.
But then on January 30, the anti-Semitic website XYZ — founded by white supremacist David Hiscox — linked McDonald's work to the proposed Voice and described it as "communism by the back door".
Two days later, a new telegram channel, Aboriginal Voice Exposed (AVE) was created. It would go on to become one of the most shared anti-Indigenous and anti-Voice to Parliament spaces on Telegram.
Its very first post was a link to McDonald's documentary, which it claimed "exposes the Communist and New World Order agenda behind Aboriginal activism and the so-called Aboriginal Voice To Parliament".
Five days later, the site shared the video again.
"Geoff McDonald is an ex-Communist who blows the whistle on the history behind the Aboriginal rights movement," the post stated.
"And this extends through to the modern Constitutional Voice to Parliament in 2023 under the Albanese Government."
The channel regularly posts anti-Indigenous and anti-Semitic content directly from the XYZ website and also neo-Nazi figure Blair Cottrell.
AVE's posts were also shared by neo-Nazi Thomas Sewell, who earlier this year avoided jail for bashing a black Melbourne security guard.
Around this time, the Red Over Black documentary also began circulating in freedom and anti-lockdown groups, many of which have been promoting today's unofficial anti-Voice rallies.
Dr Ross, who has been closely monitoring these channels, said AVE appeared to be collaborating with other anti-Semitic groups to push the case for a No vote.
She said the freedom groups initially did not have a position on the Voice, but that has since changed.
"They were quite influenced by those Aboriginal sovereign citizens in Canberra and they thought, 'Well, this is good, right? This is giving Aboriginals a voice,'" she said.
"And then over time, they were really bombarded … new material started coming up through a number of hideously racist Telegram channels."
Video creator unmasked
In late July, four months after it was first published in far-right channels, the Red Over Black documentary was adapted to specifically attack the Voice.
Key parts were incorporated into a new documentary which promised to expose "the secret communist plot" behind the Voice. It was posted by a mysterious YouTube channel called Blacklisted Research.
The new documentary contained false and racist claims about Jews and communists and was widely shared on social media.
A copy of the Blacklisted Research's video was shared more than 4,400 times on Facebook.
Since it was posted on Facebook on July 23, it has been shared almost twice as many times as any post by the official Yes23 campaign. It has outperformed most official Vote No material, including that of senator Jacinta Nampijinpa Price and No-vote advocate Warren Mundine, and most of One Nation leader Pauline Hanson's Facebook posts.
ABC Investigations has established the owner of Blacklisted Research is Queensland man Daniel Walker, who has an extensive history of sharing anti-Semitic materials.
In one video he posted last year on a neo-Nazi video-sharing platform, which the ABC has chosen not to name, Mr Walker included a photoshopped image of himself having a barbecue outside the Auschwitz concentration camp.
Mr Walker is then seen telling an Israeli man on Omegle — where participants are randomly matched for video chats — that he hated Jewish people.
ABC Investigations also identified Mr Walker as the administrator for the Blacklisted Research Telegram channel, where some of its subscribers discuss strategies on how to sell a No vote.
When ABC Investigations approached Mr Walker over Instagram he denied he had ever produced videos and blocked the ABC. He later posted about that interaction and other approaches made by the ABC on the Blacklisted Research Telegram channel.
He did not respond to further inquiries.
'They don't even know they've been manipulated'
The claim that the Voice is a Communist plot has become a clarion call for the anti-Voice campaigners, despite similar claims being debunked for decades.
In 1983 when McDonald published his fifth edition of the book Red Over Black, subsequent claims of Communist infiltration through First Nations organisations were rubbished.
Yawuru man Pat Dodson, then a land rights advocate before being elected as a Labor senator, rejected McDonald's accusation of Indigenous collusion with communists.
"The Communist Party doesn't have influence at all," Mr Dodson said.
"In fact, we've been quite vigilant about resisting any kind of overtures from the Communist Party to either allow them to participate in our meetings to present their ideological platforms, as we've been in regards to every other party."
Today, communists in Australia are split on the Voice. The Australian Communist Party has directed its members to Vote No, while members of the Communist Party of Australia were seen last weekend walking in support of the Yes campaign,
Today's rallies against the Voice were originally promoted as "freedom" protests, without an overt focus on the referendum.
While Fair Australia, the official organiser of the Vote No campaign, has distanced itself from today's protests, opposition to the Voice will be front and centre.
Among those encouraging people to attend are Australian neo-Nazis Joel Davis and Thomas Sewell, who in a live stream on Thursday night told their viewers to bring "provocative signs" and "make friends" at the rally.
Sewell added it was "important to racialise the conversation".
Dr Ross said Australian white supremacists saw the referendum as an opportunity to build support for their base and grow their audience. The freedom movement, which is naturally opposed to the government, was also a fertile recruiting ground for them.
"I find it very distressing, actually, to see how the freedom movement has been manipulated and their biases used to create a convincing narrative to vote No," she said.
"They may not even be aware they've been sharing anti-Semitic content. They don't even know they've been manipulated."LoadingLoading...
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Australia Business & Economics
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Skip to content An investor stares at their watchlist in disbelief. Quickly scrolling down, every asset is down, a sea of red flows from their monitor screen. It is September 2022 and global markets have been brutalized. Inflation continues to run hot as fed chairman Powell, like a broken record, screams the FED’s commitment to the dual mandate. Something does not add up – how can currency be inflating while assets bleed value? Across the board assets and currencies are down. The Dollar Index (DXY) remains in a parabolic uptrend as interest rates hike and Quantitative Tightening (QT) put downside pressure on markets. The investor’s worst nightmare has become reality. The question on everyone’s mind “where is the money going?” Forex DXY stands as the only contrarian, a massive green wall unscathed by the moves of other markets. This should be confusing to investors – CPI numbers in August came in above predicted %8.5 how can the DXY continue to climb? This is best explained by examining the weighted basket that the DXY represents. “The euro is, by far, the largest component of the index, making up 57.6% of the basket. The weights of the rest of the currencies in the index are JPY (13.6%), GBP (11.9%), CAD (9.1%), SEK (4.2%), and CHF (3.6%).” – Investopedia.com Inflation is not unique to the US dollar in the current Forex climate. This is especially highlighted by the euro’s plummet below parity with the dollar, GBP’s recent descent to near parity, and simultaneous multi-year support being smashed on JPY, CAD, SEK, and CHF. Perhaps the best way to understand what is happening is to imagine each of these currencies being dropped out of a plane, each with its own sized parachute. They all begin accelerating towards the ground at varying speeds, the dollar however brought the biggest chute and therefore is falling slower than its peers. Gravity will deliver them all to the ground eventually, the dollar (currently) is on course to be the last to touchdown. The dollar is not gaining strength, it is dropping the slowest. Stocks Major US Indices such as Nasdaq, S&P 500, and Dow Jones remain in perfect inverse correlation to the rising DXY. Each index seeing sell offs akin to the March 2020 crash. The extent of their sell offs was so bad, in response the US re-defined ‘recession’ to avoid further sentiment damage to investors. While individual stocks have seen scattered green days the market as a whole appears limp and unable to retain any gains. All eyes are fixed today as SPX plummets below June’s low, breaking down to levels not seen since 2020. Gold September has not been kind to precious metals. Gold has broken below a multi year support and is currently trading in the low 1600’s. Despite its claim to ‘store of value’ it appears to be following equities down with little hesitation. What was once considered a safe haven in uncertain economic times is now mirroring its physical properties, weak, malleable, and quick to bend under pressure. There are many explanations and excuses available – justifying its behavior. However for the sake of this article, we will acknowledge its seemingly irrational behavior and move on. Cryptocurrency Bitcoin and the total cryptocurrency market has perhaps been the most savaged since November 2021, dropping 75%~ from 3 Trillion to 762 Billion. Currently it hovers just under 1 Billion. Trading in-sync with US equities, talk of correlation and risk-on asset behavior are buzzing. The highly criticized asset class, birthed in 2009 by anonymous creator Satoshi Nakamoto, designed in response to a similar currency crisis does not currently appear to be the safe haven for capital. However, unlike equities both Bitcoin and the total cryptocurrency market cap has to date held its lows set in June 2022. While this remains true, crypto investors hold onto hope that it will function as intended – as a hedge to inflation and monetary mismanagement. Time will tell if it is truly resilient in the environment it was created to thrive. At the moment, it has not been delivered. Bonds If forex, equities, metals, and cryptocurrency are all in the same sinking ship where is the money going? The answer appears to be government backed bond yields, particularly US Treasury bonds. Earlier in 2022 the US experienced yield curve inversion for the first time in over a decade. US02Y yields overtook US10Y yields foreshadowing deep pain and economic decline. As investors’ risk appetite continues to dry, bond yields have laid claim to robust up trends. This is perhaps the only logical asset-market response in this article. But can this be our answer to the question – where is the money going? In part, yes, I believe capital is seeking shelter in bonds. However, it does not appear to fully satisfy the query. Climbing yields are a problem of their own and largely a symptom of inflation. The Answer Global markets fester with uncertainty. Investors are scrambling to find shelter from the storm and currently only finding minor protection in the US dollar & government backed bonds. It is logical that money is flowing into these assets, however I do not believe this fully represents where capital is moving. The answer I believe is an unsatisfying “We don’t know.” The FED appears to be dead set on tightening until something breaks. Perhaps after it is accomplished we will witness the strongest asset lay claim to the throne of capital. Post navigation
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Forex Trading & Speculation
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Economists have urged Treasurer Jim Chalmers to overhaul Australia’s tax system after new data showed households suffered the largest fall in living standards of any advanced economy over the past year.
Inflation-adjusted disposable incomes have hit their lowest level since June 2019 as high inflation, a rapid increase in mortgage repayments and rising income taxes ravage household budgets, newly released data from the OECD show.
In the 12 months to June, Australian household incomes slumped 5.1 per cent, the sharpest fall recorded across the OECD, according to analysis by The Australian Financial Review.
The figures underscore the political challenge facing the Albanese government, as polling consistently shows the rapid rise in the cost of living has become the single most important issue for voters. The data are also adjusted for population growth.
The Opposition hammered Labor over the figures during Senate question time on Thursday, accusing the Albanese government of overseeing falling living standards.
A spokesman for Dr Chalmers said “higher interest rates and higher inflation are putting pressure on people and that’s why our number one priority as a government is addressing inflation and the cost of living”.
“We’re rolling out $23 billion worth of cost-of-living relief which is easing pressure on Australians at the same time as it helps to ease inflation in our economy,” the spokesman said. “The ABS has confirmed that without our cost-of-living plan, inflation would be half a percentage point higher.”
Opposition finance spokeswoman Jane Hume accused the government of taking its eye off the ball.
“With inflation forecast to stay higher for longer, interest rates rising, and real wages going backwards, it’s clear that Australians are paying the price for Labor’s lack of a plan in this crisis,” Senator Hume said.
Disposable incomes surged at the onset of the pandemic as the Morrison government unleashed $429 billion in fiscal stimulus, which experts have since found dramatically overcompensated households for the losses experienced due to COVID-19.
Excessive stimulus meant the Australian household sector accumulated a far larger savings buffer than other advanced economies, according to economists at the US Federal Reserve. While those savings have supported households over the past year, the researchers found the buffer was almost depleted.
The decline in real incomes over the past year contrasted with the OECD as a whole, where living standards increased 2.6 per cent.
The United States recorded a 3.5 per cent increase in disposable incomes over the past year after a sharp 12.4 per cent peak-to-trough fall when pandemic supports were withdrawn over the course of 2021 and 2022.
‘Bracket creep is also definitely a factor’
Seven consecutive quarters of decline meant Australian real household incomes were now just 18 per cent higher than in 2007, compared with 22 per cent across the OECD as a whole.
While headline inflation in Australia is lower than the OECD average, nominal wages are also growing at a much slower pace than many other advanced economies, including the UK, Canada, the Euro Area and the US.
Jarden chief economist Carlos Cacho said the OECD data showed Australian households were victim to a perfect storm of factors that led to materially worse outcomes than other countries – surging population growth, persistently high inflation and a household sector dominated by variable rate borrowers.
“Bracket creep is also definitely a factor in Australia. A combination of strong nominal gross income growth and the non-indexation of tax brackets means the rise in tax paid is above our global peers,” Mr Cacho said.
Australia is among the cohort of 21 OECD countries that do not index their tax brackets for inflation. Seventeen OECD countries automatically adjust their brackets to compensate for higher prices.
Because tax brackets are not indexed to inflation, increases in nominal wages lead to increases in average taxes, since a greater proportion of a worker’s pay is pushed into the highest bracket applicable to them. Economists call this bracket creep.
As a result, a near-record 16.2 per cent of household incomes was lost to income tax in the three months to June, according to the national accounts.
Deloitte Access Economics lead partner Pradeep Philip said the decline in real incomes highlighted the importance of fundamentally overhauling the tax system.
“The over-reliance of taxation on individuals is something that has to shift dramatically,” Dr Philip said.
“The key thing is to shift the mix away from direct personal income tax to other sources.”
Households are unlikely to receive relief until July 1, 2024, when the stage three tax cuts come into effect, which will return some bracket creep to households.
The package will abolish the 32.5 per cent and 37 per cent brackets, introducing a single 30 per cent rate for incomes between $45,000 and $200,000.
But experts say more fundamental change is needed.
Interest rate pain
E61 Institute research director Dan Andrews said Australia should shift its tax burden from individuals to less sensitive areas like land or consumption, such as through raising the GST.
He said high rates of personal income taxes were a major disincentive for secondary earners, who faced high effective marginal tax rates when they worked more hours since they might lose family tax benefits or other payments.
“The evidence internationally is that when taxes really distorts labour supply, it comes from the second earner in a two-adult household. When a wife, for example, goes back to work, they lose other benefits, so it’s not worth working,” Mr Andrews said.
Another factor dragging on household incomes was the dominance of variable rate mortgages, which made households highly sensitive to changes in interest rates.
“The pass-through of interest rate hikes to households is faster and stronger for Australia than many peers,” Mr Cacho said.
“Norway and Sweden are the next two countries with the weakest real disposable income growth, who are also seeing a material drag from interest payments.”
The share of outstanding mortgages with variable rates is higher in Australia than in any other advanced economy except for Norway, according to Reserve Bank research.
With the cash rate at 4.35 per cent, a household with a $500,000 loan is paying $1210 a month more on its mortgage than it was in May 2022, representing a 59 per cent increase, according to RateCity.
Dr Philip said Australia’s 2.2 per cent population growth rate explained about one-third of the decline in per capita incomes.
“The problem is not population growth per se, because there are a lot of benefits from population growth, and Australia has unambiguously been a winner from population growth,” he said.
“The solution is actually to grow the economy to accommodate that high population growth because then we create a virtuous cycle.
“We want people coming in because there are skill shortages. We need reforms that lift the supply side and growth capacity of the economy.”
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Australia Business & Economics
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The US secretary of state, Antony Blinken, has pushed back at the Australian government’s calls to end the pursuit of Julian Assange, insisting that the WikiLeaks founder is alleged to have “risked very serious harm to our national security”.
After high-level talks in Brisbane largely focused on military cooperation, Blinken confirmed that the Australian government had raised the case with the US on multiple occasions, and said he understood “the concerns and views of Australians”.
But he pointedly added that it was “very important that our friends here” in Australia understood the US concerns about Assange’s “alleged role in one of the largest compromises of classified information in the history of our country”.
The key announcements after the meeting on Saturday included that the US would increase the “tempo” of visits of nuclear-powered submarines to Australia.
The US also plans to step up rotations of maritime patrol and reconnaissance aircraft and introduce new rotations of US army watercraft, while pledging to help Australia to start domestic manufacturing of missiles within two years.
The US assured the Australian government that the attempts to secure congressional support for the Aukus deal remained on track, even as some Republicans push for greater funding for US production.
But Blinken’s defence of the US charges against Assange will be seen as a blow to the campaign to free the Australian citizen.
Assange remains in Belmarsh prison in London as he fights a US attempt to extradite him to face charges in connection with the publication of hundreds of thousands of leaked documents about the Afghanistan and Iraq wars as well as diplomatic cables.
The Australian foreign affairs minister, Penny Wong, confirmed she had raised the case with the US government.
At a joint press conference alongside Blinken, Wong said: “We have made clear our view that Mr Assange’s case has dragged for too long, and our desire that it be brought to a conclusion, and we’ve said that publicly and you would anticipate that that reflects also the position we articulate in private.”
Wong added, however, that there were limits to what could be achieved in talks between governments “until Mr Assange’s processes have concluded”.
Blinken, speaking second, told reporters that as a general matter of policy the US did not comment on extradition proceedings.
“I really do understand and certainly confirm what Penny said about the fact that this matter was raised with us, as it has been in the past, and I understand the sensitivities, I understand the concerns and views of Australians,” he said.
“I think it is very important that our friends here understand our concerns about this matter.”
Blinken said the US Department of Justice had indicated that Assange was “charged with very serious criminal conduct”.
“The actions that he has alleged to have committed risked very serious harm to our national security, to the benefit of our adversaries, and put named human sources at grave risk – grave risk – of physical harm, and grave risk of detention,” Blinken said.
“So, I say that only because just as we understand sensitivities here, it’s important that our friends understand sensitivities in the United States.”
Assange’s brother, Gabriel Shipton, said it was now up to the prime minister, Anthony Albanese, to “put Australians’ views in front of the president himself” during a forthcoming visit to the US.
“Secretary of state Antony Blinken’s snub to Australians demanding Julian’s freedom cuts deeper knowing the American who allegedly leaked the information has been free since 2017,” Shipton said.
The former US military analyst Chelsea Manning’s sentence was commuted by the Obama administration in 2017.
An adviser to the Australian Assange Campaign, Greg Barns, also responded to Blinken’s comments.
“Australia is the US’s closest ally,” Barns said.
“Mr Blinken needs to understand the overwhelming view of Australians which is that enough is enough. Julian must be released immediately and be able to rejoin his family.”
Australian federal politicians from across the political spectrum wrote to the US attorney general, Merrick Garland, in April to argue that case “set a dangerous precedent” for press freedom and would damage the reputation of the US.
The 48 MPs and senators, including 13 from the governing Labor party, said the charges – which include 17 counts under the Espionage Act and one count under the Computer Fraud and Abuse Act – pertained to Assange’s actions “as a journalist and publisher” in publishing information “with evidence of war crimes, corruption and human rights abuses”.
The Media, Entertainment and Arts Alliance has argued the prosecution of Assange “imperils journalism everywhere and undermines the United States’ reputation as a safe place for press freedom and free speech”.
Blinken and Wong were joined by the US defence secretary, Lloyd Austin, and the Australian defence minister, Richard Marles, for annual talks known as Ausmin.
The meeting was overshadowed by an Australian defence force helicopter training accident near Queensland’s Hamilton Island on Friday night that left four crew members missing.
Marles, the deputy prime minister, said at the outset of Saturday’s talks that they were meeting “with heavy hearts”, with a search for the four members continuing, while Blinken said: “We’re thinking of them, we’re thinking of their family, their friends, comrades.”
As dozens of Republicans in the Senate flex their muscle on Aukus legislation on Capitol Hill – demanding extra funds to boost US domestic production – Marles said he and Wong were “both legislators” and “very much understand the heat and light that comes with the passage of legislation”.
“We are absolutely assured by Tony and Lloyd, but also in fact by the efforts that we’ve undertaken ourselves, in speaking with those on the hill, that there is a bipartisan commitment to Australia acquiring the capability to operate nuclear-powered submarines,” Marles said.
Austin defended the adequacy of the US level of investment into its own submarine production, but did not rule out considering an increase in funds: “We will continue to make sure that all the pieces are in place as we proceed.”
He said the US had committed to “help Australia produce guided multiple-launch rocket systems, or GMLRS, by 2025”.
“We’re racing to accelerate Australia’s access to priority munitions through a streamlined acquisition process,” Austin said.
“We’re also thrilled to announce that we’re taking steps to enable Australia to maintain, repair and overhaul critical US source munitions.”
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Australia Business & Economics
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With inflation heading toward the 9% mark and gasoline at record-high prices, President Joe Biden risks going down in history as the man who both surpassed former President Donald Trump’s general disapproval ratings and whose stewardship of the economy ranks lower than Presidents Jimmy Carter and Herbert Hoover. Biden might complain that history dealt him a poor hand. He exaggerates. The pandemic caused a sharp recession, but booms follow busts unless poor government decisions interfere. Biden also inherited not one but three vaccines. He can blame Russian President Vladimir Putin for sharp inflation, but Putin’s decision to invade Ukraine did not occur in a vacuum: Biden’s self-inflicted humiliation in Afghanistan surely played into the Kremlin’s calculus and sense of impunity. The fact: The buck stops with Biden, even if inflation makes that buck worth far less than a year ago. Printing trillions of extra dollars has consequences, but it needn’t be this bad. Among Biden’s first appointments was John Kerry as the first Cabinet-level climate envoy. Politically, it was a risky move. There was the bipartisan consensus when Kerry was a senator that he was the body’s most arrogant and condescending member. Kerry looks down on Biden and believes he would make a better president. As a former secretary of state, Kerry also was loath to accept lower stature or power. Visiting heads of state and their entourages report that either Kerry or his trusted aides sit in almost every meeting they have with the Biden team when they visit Washington. Because almost all foreign visitors have known Biden for decades, they readily observe the president does not have the same acuity he had just a decade ago and question who dominates policymaking behind the scenes. Kerry is a prime suspect. Kerry’s arrogance is not simply a personality flaw — it has profound policy implications. As secretary of state, Kerry did not believe law or financial prudence applied to him. When the Washington press corps criticized former Secretary of State Mike Pompeo for dinners with prominent intellectuals and business leaders, they were wrong. Commerce is at the cutting edge of foreign policy, and no foreign policy is worth its salt if middle America doesn’t accept it or if Washington leaders cannot be bothered to explain it to those outside the Amtrak corridor. Kerry, meanwhile, got a free pass from the press when he took his whole entourage on a multimillion-dollar junket to Antarctica to meet with scientists to discuss climate change. He cared little for the fossil fuels burnt to get there, that Skype could suffice, and that the National Science Foundation and the U.S. Antarctic Program govern U.S. personnel and research stations on the southern continent and not the State Department. Kerry summarized his general attitude toward ordinary people when he visited Iceland to pick up a climate award. "It’s the only choice for somebody like me," he said when criticized for taking a private jet rather than flying commercial. As the Biden whisperer, Kerry is more responsible than most for the energy crunch. Upon coming to office, Biden canceled pipelines and kneecapped America’s energy independence as rising gas prices
, which have more than doubled in Biden’s term, drive people to desperation and contribute to food inflation. Kerry seems not to care: Living off the public dole while in government and married into money as a private citizen, he doesn’t feel the pain. Instead, he seems to want to drive and prolong the crisis to transform the economy and energy profile permanently. Not only will he condemn Biden’s legacy, but he will also fail. Put aside the fact that his understanding of the science is less than he believes and that burning fossil fuels today is far more efficient and clean than a quarter of a century ago. Affluent societies protect the environment more than impoverished ones. To impoverish people knowingly, purposely, and callously in pursuit of a personal agenda is obtuse. To do so absent the check and balance of senate confirmation violates the spirit of the constitution. This rubs the public the wrong way and breeds cynicism toward government. Biden will never be a great president, but he can step back from the precipice with a simple move: Fire John Kerry.
Michael Rubin (
@mrubin1971
) is a contributor to the Washington Examiner's Beltway Confidential. He is a senior fellow at the American Enterprise Institute.
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Inflation
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The looming global recession and the fast-dropping growth rates of Japan and Germany — currently the third and fourth largest economies in the world — are key factors helping the world's fastest growing major economy to realise its goal sooner than estimated by economists and analysts India will become a $30 trillion economy with 25 per cent share in exports by 2047. — File photo Published: Wed 19 Oct 2022, 4:37 PM India is poised to become the world’s third biggest economy in next five years, after the United States and China, a dream target to be achieved by default two years earlier than initially hoped for by the South Asian economy. The looming global recession and the fast-dropping growth rates of Japan and Germany — currently the third and fourth largest economies in the world — are key factors helping the world's fastest growing major economy to realise its goal sooner than estimated by economists and analysts. The database of International Monetary Fund's recent World Economic Outlook shows that India, at present the fifth largest global economic powerhouse after overtaking the UK just recently, will remain a powerful global growth engine notwithstanding the headwinds of inflationary recession or stagflation that is feared to wreak havoc across some of the leading economies in world through 2023 and 2024. In its October World Economic Outlook, the IMF has slashed India's GDP forecast to 6.8 per cent in 2022, from 7.4 per cent predicted in July and 8.2 per cent predicted in January this year. Between April 2021 and March 2022, India had grown at 8.7 per cent. The IMF has lowered its projection for Japan to 1.6 per cent while Germany’s GDP growth is expected at 1.2 per cent in 2022 and 0.8 per cent in 2023. India is growing faster than other nations in the G20 except for Saudi Arabia. In 2023-24, according to the IMF, India’s GDP is likely to grow 6.1 per cent, the highest in the G20. In tandem with the GDP growth, the per capita GDP of India, which is about to overtake China as the world’s most populous nation, is also on track to reach $3,652 in 2027 as compared to $2,466 in 2022. India’s Finance Minister Nirmala Sitharaman has said that the Indian rupee is holding ground at a time when the dollar has strengthened. “The fundamentals of the Indian economy are good, macroeconomic fundamentals are good. The foreign exchange reserve is good. This is what I keep repeating that inflation is also at a manageable level,” said the minister. Turbo-charging India’s growth in the coming years will be an estimated exponential growth in merchandise and services exports. Commerce and Industry Minister Piyush Goyal has expressed confidence that the country would achieve an ambitious $2-trillion export target for goods and services by 2030. Speaking on Sunday at the Exporters’ Conclave held at Chennai, Goyal said India will become a $30 trillion economy with 25 per cent share in exports by 2047. Data released by India’s commerce industry shows that merchandise exports rose by 4.82 per cent to $35.45 billion. During April-September 2022, exports recorded a growth of 16.96 per cent to $231.88 billion. A Sakthivel, president of Federation of Indian Exports Organisations, said Indian exporters have good opportunities for exports to Russia and the EU despite recessionary trends visible there. There would be about $8 to $10 billion additional exports to Russia in the next 12 months and $15 to $20 billion to the EU. The IMF's report said that though inflation in India is high but is not skyrocketing like elsewhere in the EU and the US. Inflation rate rose to a 5-month high of 7.4 per cent in September. India’s current account deficit is high but expected to moderate while forex reserves stand comfortably at nearly $550 billion. The banking sector is also in a strong position and the credit cycle is picking up. The Reserve Bank of India, which has kept a steady hand on monetary policy, said in its quarterly bank lending survey released on September 30 that bankers are confident about higher loan demand, and easier loan terms over the next two quarters. As this comes on the back of rising interest rates, it shows higher investment and consumption demand from the corporate, and household sectors. This trend is matched by the bullishness reported in the RBI’s latest consumer confidence survey. The RBI has raised the repo rate four consecutive times since May in order to tame inflation. – issacjohn@khaleejtimes.com
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India Business & Economics
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Woman holds British pound banknotes in this illustration taken May 30, 2022. REUTERS/Dado Ruvic/Illustration/Register now for FREE unlimited access to Reuters.comTOKYO, Sept 26 (Reuters) - Sterling tumbled nearly 5% to an all-time low on Monday as investors ran for the exits after the new government's fiscal plan threatened to stretch Britain's finances to their limits.The currency dived as much as 4.85% to an unprecedented $1.0327 , extending a 3.61% dive from Friday, when finance minister Kwasi Kwarteng unleashed historic tax cuts, and the biggest increase in borrowing since 1972 to pay for them.Economists and investors said Prime Minister Liz Truss's government, in power for less than three weeks, was losing financial credibility in unveiling such a plan just a day after the Bank of England hiked interest rates to contain surging inflation.Register now for FREE unlimited access to Reuters.comSterling was last down 2.7% at $1.0560.Marc Chandler, chief market strategist at Bannockburn Global Forex, called the currency's record plunge "incredible"."The weekend press tarred and feathered sterling with assertions of its emerging-market status," he said."I don't buy that schadenfreude. Still, there is now bound to be speculation of an emergency BOE meeting and rate hike."Kwarteng's announcement marked a step change in British financial policy, harking back to the Thatcherite and Reaganomics doctrines of the 1980s that critics have derided as a return to "trickle down" economics.The so-called mini budget is designed to snap the economy out of a period of double-digit inflation driven by surging energy prices and a 15-year run of stagnant real wage growth.In total, the plans will require an extra 72 billion pounds of government borrowing over the next six months alone.British government bond yields surged by the most in a day in more than three decades on Friday, with yields on the five-year gilt - one of the most sensitive to any near-term shift in interest rate or borrowing expectations - up by half a percentage point."When we see those gilt markets open a little later on, we're probably going to see a pretty sharp spike," said Chris Weston, head of research at Melbourne-based brokerage Pepperstone."In this environment, you either need to see much higher growth - which isn't happening at the moment - or you need to see significantly higher bond yields to incentivise capital inflows. To get bond yields up to those levels, you need to see the Bank of England coming out and doing an emergency hike."Register now for FREE unlimited access to Reuters.comReporting by Kevin Buckland; Additional reporting by Jamie McGeever; Editing by Jacqueline WongOur Standards: The Thomson Reuters Trust Principles.
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United Kingdom Business & Economics
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Smoke hangs over the Oakland-San Francisco Bay Bridge in San Francisco, California, U.S., on Wednesday, Sept. 9, 2020. Powerful, dry winds are sweeping across Northern California for a third day, driving up the risk of wildfires in a region thats been battered by heat waves, freak lightning storms and dangerously poor air quality from blazes.Bloomberg | Bloomberg | Getty ImagesAir pollution, which is primarily the result of burning fossil fuels, takes 2.2 years off the global life expectancy for each person, according to a new report out Tuesday from the Energy Policy Institute at the University of Chicago (EPIC).The Air Quality Life Index, or AQLI, finds that taken together, air pollution takes a collective 17 billion years of life, and reducing air pollution to meet international health guidelines would increase the global average life expectancy from roughly 72 to 74.2 yearsLife expectancy of air pollution compared with other more well-known causes of harm to human health, like smoking and terrorism.Chart courtesy the Energy Policy Institute at the University of Chicago (EPIC).First-hand cigarette smoke reduces life expectancy by 1.9 years, on average, according to the report. Alcohol and drug use reduce life expectancy by 9 months on average, unsafe water and sanitation reduce expectancy by 7 months, HIV and AIDS reduce life expectancy by 4 months, malaria reduces average life by 3 months and conflict and terrorism reduce life expectancy by 7 days, the report said.The AQLI report is notable because its estimate of the impact on particulate pollution on human life expectancy is based on research that allows it to show causation, not just correlation. "Because of the way these studies were designed - and the quite fortuitous set of policies that enabled that design, they established a causal, rather than a correlative, relationship between particulate matter exposure and mortality," Christa Hasenkopf, the director of AQLI, told CNBC.Air pollution is so dangerous because it is impossible to avoid, especially for people who live in particularly polluted locations, the report says. "Whereas it is possible to quit smoking or take precautions against diseases, everyone must breathe air. Thus, air pollution affects many more people than any of these other conditions," the report says.Sixty percent of particulate matter air pollution is caused by fossil fuel combustion, 18% comes from natural sources (including dust, sea salt, and wildfires), and 22% comes from other human activities.The report, developed by the University of Chicago's Michael Greenstone and his team at the EPIC, is a measurement of the air pollution in 2020, when the Covid-19 pandemic was reducing activity and transportation.The massive contraction of activity only reduced global pollution levels by a tiny bit. Population weighted-average particulate matter declined from 27.7 micrograms (one-millionth of a gram) per cubic meter of air to 27.5 micrograms per cubic meter of air between 2019 and 2020, according to the report.And in South Asia, where air pollution is the most dire, the air pollution rose in 2020 from the year prior. India, Pakistan, Bangladesh and Nepal are among the most polluted countries in the world.Particulate matter air pollution is suspended in the air and categorized by its size. The smaller it is, the deeper it can get into the body. Particulate matter with a diameter of less than 10 micrometers, often designated PM10, can pass through the hairs in the nose, down the respiratory tract and into the lungs.Smaller particulate matter with a diameter less than 2.5 micrometers, often designated as PM2.5, is about 3% the diameter of a human hair and can get into the bloodstream by way of the lungs' alveoli. It can affect blood flow eventually causing a stroke, heart attack and other health issues.More than 97% of the global population lives in areas where the air pollution exceeds the current recommended guidelines from the World Health Organization.Chart courtesy the Energy Policy Institute at the University of Chicago (EPIC).When the World Health Organization first published air quality guidance in 2005, it said the acceptable levels of air pollution was less than 10 micrograms per cubic meter. In September, the World Health Organization changed its benchmark guidelines to below 5 micrograms per cubic meter.Currently, 97.3% of the global population, equaling 7.4 billion people, live in places where the air quality does not pass the recommended 5 micrograms per cubic meter limit recommended by the WHO for particulate matter with a diameter of less than 2.5 micrometers."This report reaffirms that particulate pollution is the greatest global health threat," wrote Greenstone, who was previously the Chief Economist for President Obama's Council of Economic Advisers. "Yet, we also see the opportunity for progress. Air pollution is a winnable challenge. It just requires effective policies."Buildings are shrouded in smog in Beijing, China, on February 26, 2014.Anadolu Agency | Getty ImagesFor example, China has been able to dramatically improve its air quality. In 2014, after a year in which China had record levels of pollution, the then Premier, Li Keqiang, declared a "war against pollution." The government spent money to combat pollution and was able to reduce particulate pollution by 39.6%, the report says.Despite China's progress, the air pollution levels in China are still more than what the WHO recommends."It is important to note that air pollution is also deeply intertwined with climate change. Both challenges are primarily caused by the same culprit: fossil fuel emissions from power plants, vehicles, and other industrial sources," the report's executive summary says. "These challenges also present a rare win-win opportunity, because policy can simultaneously reduce dependence on fossil fuels that will allow people to live longer and healthier lives and reduce the costs of climate change."The American Medical Association, the country's largest physician trade group, voted on Monday to adopt a policy to declare climate change a public health crisis."The scientific evidence is clear – our patients are already facing adverse health effects associated with climate change, from heat-related injuries, vector-borne diseases and air pollution from wildfires, to worsening seasonal allergies and storm-related illness and injuries. Like the COVID-19 pandemic, the climate crisis will disproportionately impact the health of historically marginalized communities," said AMA Board Member Ilse R. Levin, in a written statement announcing the vote. "Taking action now won't reverse all of the harm done, but it will help prevent further damage to our planet and our patients' health and well-being.
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Energy & Natural Resources
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Basic income was life-changing for Jessica Topfer.
The Cannington, Ont. resident was a student at Trent University in 2017 when then-premier Kathleen Wynne's government launched the largest basic income pilot North America had seen in 50 years.
"I was working full-time in addition to my full-time course load, so I was under a lot of stress. My mental health was not great. My social relationships were also not great," Topfer said. "That first $714 cheque made a huge difference to me."
It was enough to cover rent and help with some essentials. Soon, Topfer was able to work fewer hours at her part-time retail job, focus on school, and look for work in her field that was too precarious for her to take on before.
"It was a single key that unlocked dozens upon dozens of doors for me in terms of education and employment."
As the Senate considers a bill that would require the creation of a national framework for basic income, supporters in Ontario say the stories of pilot participants make it clear basic income works.
"When decision makers turn to us and say 'we don't have evidence; we don't have a basis,' we do," Wynne said in Hamilton last month.
On Oct. 27, she was one of many supporters who met at Hamilton's Central Library to discuss new research on that pilot and the future of basic income advocacy.
What is basic income?
While there are variations on its implementation, basic income generally describes a policy in which the government gives individuals unconditional cash transfers to meet basic needs.
In the pilot — which Doug Ford's provincial government canceled in July 2018, before it finished—about 4,000 participants in Hamilton, Lindsay, Ont. and Thunder Bay, Ont. earning less than $34,000 received just under $17,000 annually. The amount decreased by 50 cents for every dollar an individual earned through work and couples received just more than $24,000. People with disabilities received an additional $6,000.
"I wish we had put the pilot in place the moment I became premier," Wynne told a group of about 50 people, since that would have prevented its early cancellation. She said that's one of the things that keeps her awake at night.
"We don't all start at the same place," Wynne said, reflecting on the idea that people are responsible for their own wealth or lack thereof. "Life throws shit at us and we have to deal with it. Policy doesn't always take that into account."
New research finds basic income recipients felt more dignified
The new basic income research is a qualitative study by Carleton, McMaster and Toronto Metropolitan universities. It follows up on earlier work based on surveys and interviews with pilot participants, which found people continued to work and became healthier while receiving payments.
For example, researchers found:
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33 per cent of respondents said they reduced visits to health practitioners during the pilot
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83 per cent reported improved mental health
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86 per cent said they improved their diets
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75 per cent said they were better prepared for financial emergencies
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69 per cent reported spending more time with loved ones
The new report identifies themes based on how interviewees said basic income changed their lives. Authors write it made participants feel more dignified, proud and confident, allowed them more agency in how they spent their time and money, and did not seem to disincentivize work.
Tom McDowell, who worked on this and other basic income reports, said he expected to hear more negative stories than he did. "Almost every single person we spoke with used basic income in a positive way to improve their lives … [the program] worked precisely as it was meant to."
For Kendal David, who worked on the report and is co-chair of the Basic Income Canada Youth Network (BICYN), "reading the volume of stories was impactful in a way that nothing else I have been involved with in basic income land ever has been."
These stories are evidence just like stats and numbers, she said. "You can really see the ways that basic income impacted the everyday nooks and crannies of people's lives."
In their interview, one participant told researchers: "It was nice for me to choose my own glasses with the basic income. The glasses I am wearing came from the opposite side of the optical store where the ODSP glasses were. I made damn sure that they were better quality."
David said often, conversation around basic income is limited to labour market impact, but what people really wanted to talk about was being able to afford things like nice glasses, their child's favourite food or a new mattress.
"A lot of the things that people talked about had to do with having real choices because they were able to survive and get by."
How basic income led to more opportunities for one participant
Topfer said she was privileged relative to other basic income recipients, but that basic income carried her farther than she could have gone without it. She's now the interim executive director of food security non-profit The Nourish and Develop Foundation, and says that although speaking about one's experience with social assistance can come with a lot of stigma, it's important to advocate.
Topfer contributed to a zine David and her BICYN co-chair Chloe Halpenny produced based on the new report and then distributed to schools, libraries and elected officials throughout the country.
"When I was receiving basic income, the cost of living wasn't nearly as bad as it is today," she said. "But as you see more and more folks unable to afford the basics to be able to live, it's becoming more pressing that we implement basic income and other income based solutions to poverty."
Calling for action
David said the BICYN worked closely with Senator Kim Pate on the basic income bill the senate finance committee is looking at. As CBC News has reported, NDP member of parliament Leah Gazan submitted an identical bill to the House of Commons, but neither bill would actually implement basic income if passed.
News Release: <a href="https://twitter.com/hashtag/SenCA?src=hash&ref_src=twsrc%5Etfw">#SenCA</a> Finance Committee Studies<a href="https://twitter.com/hashtag/GuaranteedLivableBasicIncome?src=hash&ref_src=twsrc%5Etfw">#GuaranteedLivableBasicIncome</a> this<br>International Day for the Eradication of Poverty <a href="https://twitter.com/LeahGazan?ref_src=twsrc%5Etfw">@LeahGazan</a> <a href="https://twitter.com/Kathleen_Wynne?ref_src=twsrc%5Etfw">@Kathleen_Wynne</a> <a href="https://twitter.com/evelyn_forget?ref_src=twsrc%5Etfw">@evelyn_forget</a> <a href="https://twitter.com/jiayingzhao?ref_src=twsrc%5Etfw">@jiayingzhao</a> <a href="https://twitter.com/hashtag/NFFN?src=hash&ref_src=twsrc%5Etfw">#NFFN</a> <a href="https://twitter.com/hashtag/cdnpoli?src=hash&ref_src=twsrc%5Etfw">#cdnpoli</a> <a href="https://twitter.com/hashtag/cdnmedia?src=hash&ref_src=twsrc%5Etfw">#cdnmedia</a> <a href="https://twitter.com/hashtag/IDEP2023?src=hash&ref_src=twsrc%5Etfw">#IDEP2023</a> <a href="https://twitter.com/hashtag/SDG1?src=hash&ref_src=twsrc%5Etfw">#SDG1</a> <a href="https://t.co/sxRjA6hCco">pic.twitter.com/sxRjA6hCco</a>—@KPateontheHill
At the event in Hamilton, one attendee, Ursula Samuels, put up her hand to call for action. "It brings tears to my eyes when I walk around Hamilton and see what's going on," she said, pointing to poverty and unaffordable housing. "I think we should stop all the talking and get back to basic income."
Brantford, Ont. resident Janette Strong says the need in Ontario is pressing, since current social supports are insufficient. She works as a wellness and lifestyle consultant and receives Ontario Disability Support Program payments. "It's not enough to meet the monthly needs of a person," she said (recipients can receive about $1,300 per month depending on their situation).
Recently, Strong called into CBC's Ontario Today to voice her support for basic income. Such a program could be less bureaucratic than existing social assistance, she told CBC Hamilton. And for her, it would offer a sense of security. Strong is about to age into provincial support for seniors, which she says will mean an additional $400 per month.
"I should be able to get by with that more comfortably," she said. "But still it's so modest that if something happens to my car or some other item that costs more to buy every now and then, I couldn't afford the payments."
"With a livable income across the board, it could be better," Strong said. "People can't wait anymore."
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Unemployment
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NEW DELHI, Oct 22 (Reuters) - Indian fiscal and monetary authorities must remain watchful even as the nation is one of the bright spots amid a "gloomy global scenario where the dark clouds of recession gather", the finance ministry said on Saturday."Inflation trajectory remains dependent on geopolitical developments," the report stated, adding risks to inflation were amplified by an appreciating U.S. dollar," the ministry said in its monthly economic review.The report noted the country had sufficient forex reserves despite a rapid fall in the value of the Indian rupee.Register now for FREE unlimited access to Reuters.comIndia's wholesale inflation has significantly reduced from its peak of 16.6% in May to 10.7% in September thanks to moderating commodity prices and government measures but retail inflation remains above the Reserve Bank of India's upper tolerance band due to an uptick in food prices, the report stated."Even as commodity prices have softened, elevated imported inflation is expected to be an upside risk with the outlook for crude oil remaining uncertain and significantly tethered to geopolitical conditions," it stated.However, food inflation is expected to moderate as the harvesting and procurement seasons progress, contributing to a falling headline retail inflation in the rest of the fiscal year.Measures undertaken by the government to reduce the burden of soaring inflation on consumers, including an increase in fertiliser subsidies other welfare measures, may stress finances, the report added.Register now for FREE unlimited access to Reuters.comWriting by Rupam Jain; Editing by Lincoln FeastOur Standards: The Thomson Reuters Trust Principles.
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Inflation
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President Joe Biden wants to build out the clean energy industry in Africa as part of a long-term strategy to help the region mitigate and adapt to the worst effects of climate change.
That is a pillar of the U.S.-Africa summit that started Tuesday in Washington. The event brought together leaders from 49 of Africa’s 54 countries to discuss climate, financial, health and political challenges faced by the region. Biden will host the group Wednesday at the White House.
The African continent is one of the most vulnerable regions in a warming world, even as it has contributed little to the carbon emissions driving climate change. The Biden administration is particularly focused on addressing food insecurity across the region — which is one of the most impoverished areas of the world — because it is being exacerbated by climate change. “We’re dealing now with a massive food insecurity crisis; it’s the product of a lot of things,” Secretary of State Antony Blinken told African leaders gathered at a convention center in downtown Washington on Tuesday. “As we all know, it’s the product of climate change … and so, we have an immediate emergency response, especially as we’re looking at historic droughts in different places, we’re looking at famine conditions in a number of countries.”
Biden has pledged $1.1 billion to support natural resource conservation, climate adaptation and a just energy transition in Africa since taking office.
That includes about $300 million through fiscal 2023 to support renewable energy projects. Some of the funding will be used to bolster a new U.S.-Africa Clean Energy Network to connect clean energy companies to market opportunities that will increase access to reliable clean electricity. On the first day of the summit, leaders announced a new $25 million loan to build the first solar power plant in sub-Saharan Africa, in Malawi.
The United States will support an effort to increase the number of women in Nigeria, Kenya and South Africa participating in the green energy industry. It will give out more than $4 million in grants to support a number of clean energy projects, including a biomass power plant in Cote d’Ivoire, a clean hydroelectric power project in Sierra Leone and a battery energy storage technology project in Zambia.
About 600 million people in Africa don’t have access to electricity, and one of the African Union’s main priorities entering the summit is to accelerate efforts to meet growing energy demands without sacrificing economic growth. For some countries, that means tapping all forms of energy.
Africa is still at a pivotal energy moment, where many countries are just discovering the extent of their natural gas resources, Emmanuel Marfo, chair of the Environment, Science and Technology Committee in the Ghanaian Parliament, told E&E News in a briefing. So, if western nations want to encourage a shift away from fossil fuels, there also needs to be a conversation on how to compensate those countries for leaving fossil fuels in the ground, he said.
“It comes down to the discussion about stranded assets. If we really want to move away from the dependence on fossil fuel, then the question is what happens to the prosperity or the development and industrialization of these countries that could have depended on the exploitation of their fossil fuels.”
Not all African countries have fossil fuels to tap. But they do have great potential for building out solar and other renewables to power the continent’s development, according to the International Energy Agency. What’s needed is investment.
In Africa, there is relatively little use of renewables, and as a result most countries don’t fully understand or appreciate their benefit, said Jacqueline Amongin, chair of the African Parliamentarians Network on Climate Action. Funding from the United States and other countries at the international climate talks can help shift that thinking, she said.
“Putting renewables in Africa is key because, as of now, Africa is still behind in adopting different technology,” said Amongin. “Africa contributes minimally to emissions, but we all have to act because the impacts are huge on the continent.”
With a growing population and a strong push for development, “the region is going to be critical for us in term of meeting global poverty alleviation goals, global growth goals, but also meeting our climate goals,” said Lily Odarno, director of energy and climate innovation for Africa at the Clean Air Task Force.
And that makes it critical that the United States recognizes the complexities of Africa’s energy transition. “It’s a mix of 54 different countries who are really at very, very different places, when you talk about everything, when you talk about economic growth, when you talk about the impacts of climate change, when you talk about energy endowment and the capability to be able to navigate the energy transition,” Odarno said. “So we need an Africa strategy that recognizes the uniqueness of all these countries if it’s going to be effective.”
Speaking at an event earlier this week hosted by the Carnegie Endowment for International Peace, Ervin Massinga, deputy assistant secretary for the State Department’s Bureau of African Affairs, said the United States is looking for ways to help Africa improve energy access through investments in cleaner energy production.
New deals, including some on energy, will be announced during an Africa business forum Wednesday, he said.
African leaders are seeking tangible investments in the continent’s future, “not promises of something to come,” Amani Abou-Zeid, the African Union’s commissioner for infrastructure and energy, said at the Carnegie event.
The world has greatly underinvested in the continent’s clean energy transition. Only around 2 percent of renewable energy investments have gone to Africa. Annual climate finance flow are just 11 percent of what’s required to prevent and respond to global warming, according to a study by the Climate Policy Initiative.
At the same time, the African Development Bank Group estimates that the continent loses between 5 percent and 15 percent of its gross domestic product each year to the impacts of climate change.
The United States has committed more than $1 billion from various government agencies to help accelerate South Africa’s clean energy transition. That money, part of a $8.5 billion package, helped kick off a Just Energy Transition Partnership program that the United States, United Kingdom, France, Germany, Japan and European Union are leading to help emerging economies shift from fossil fuels to renewables.
At climate talks last month Biden announced a $500 million deal to help the host country, Egypt, transition from natural gas to wind and solar. Under that deal, the United States, Germany and the European Union will pay Egypt to replace five gigawatts of power produced with natural gas with 10 gigawatts of renewable energy.
In return, Egypt agreed to quadruple its amount of installed renewable power by 2030 and take greater actions to cut emissions.
“Countries that are in a position to help should be supporting developing countries so they can make decisive climate decisions, facilitating their energy transitions, building a path to prosperity and compatible with our climate imperative,” Biden told a packed conference hall in Egypt last month.
The Biden administration also is looking to break its reliance on China and Russia for the critical minerals used in clean energy manufacturing, batteries and technology by ramping up production in Africa. Marfo, of the Ghanian parliament, said that won’t make sense for African countries unless they see direct benefits.
“In the past, Africa has not really benefited from our natural resources and to some extent there has been some exploitation of the continent’s resources and I think moving forward we need change that trajectory,” he said. “At the end of the day, if you have natural resources, that is going to give you good food on table, provide shelter for your people, good health for your people.”
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Africa Business & Economics
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Asian stocks sank again Wednesday while the dollar held gains against the yen and sterling as the volatility that has characterised markets for most of the year showed no sign of letting up.Angst-ridden investors are struggling to find some solace as they navigate a range of crises that threaten the global economy, from soaring prices and bumper interest rate hikes to the Ukraine war and China's Covid-induced growth slowdown.The gloom was summed up by the International Monetary Fund, which on Tuesday highlighted the risks of inflation and the conflict in Europe as it slashed its global growth forecast and warned: "For many people 2023 will feel like a recession".Later, US President Joe Biden admitted there was a chance the country could suffer a "slight" recession.The latest blow came Tuesday when the Bank of England announced it would stop its emergency bond-buying efforts on Friday, ignoring calls to extend the programme to allow markets to stabilise.Officials were forced last month to step into financial markets to prevent a collapse in pension funds caused by a spike in bond prices after a debt-fuelled, tax-cutting mini budget by new finance minister Kwasi Kwarteng sparked fears of a surge in borrowing.The move quelled the crisis -- after the pound hit a record-low $1.0350 -- but traders were spooked by the prospect of more selling when the BoE removes its support.Sterling, which had recovered to as high as $1.15 last week, came back under pressure to drop back below $1.10 Tuesday where it remained the next day in Asian business.Risk assets buckled after the announcement, with all three main indexes on Wall Street turning lower Tuesday, having been in positive territory earlier.- Fresh volatility warning -Most of Asia followed suit.Hong Kong led losses, shedding more than two percent, while Tokyo, Sydney, Shanghai, Singapore, Seoul, Wellington, Jakarta and Taipei were also down."And at least they did not allow the rug to get ripped from under pension funds," said SPI Asset Management's Stephen Innes. "But stepping away as the buyer of last resort is not great for risk or sterling."At the end of the day, UK economic issues, fiscal irresponsibility, and a hawkish Fed will linger. So do not be surprised by a pickup in pound volatility and for a continued move lower as well."Investors are now nervously looking ahead to Thursday's US inflation report, with observers warning that a strong reading could spark another rout.The desire to find a safe place to invest also pushed the greenback to a new 24-year high against the yen, breaking the level touched last week when Tokyo stepped into the market to support the Japanese unit.Investors will be keeping a close eye on developments in Japan, to see if there is another cash injection, though analysts said the yen could strengthen naturally."There is so much tension that duration time (above 146 yen) will be short," said Yoshio Iguchi, of Traders Securities. "The chicken race will continue with people wanting to test the upside but at the same time scared of being countered by intervention."And City Index's Matt Simpson added: "Traders are confident that the yen will weaken, despite comments from government officials that they are watching forex markets very closely."But the reality is that the (Bank of Japan) wants a weaker currency, and (is) happy to let it slide so long as its demise is not too volatile."As of yet we're yet to hear any comments from BoJ or (finance ministry) officials, but we suspect comments will surely follow -- not that they seem to care."Recession fears and China's Covid-linked economic woes also dragged oil prices back down, having surged last week on an outsized OPEC output cut, with many warning that demand will plunge as people refrain from spending.- Key figures around 0230 GMT -Tokyo - Nikkei 225: DOWN 0.1 percent at 26,364.25 (break)Hong Kong - Hang Seng Index: DOWN 2.3 percent at 16,451.44Shanghai - Composite: DOWN 0.9 percent at 2,952.74Pound/dollar: DOWN at $1.0938 from $1.0972 TuesdayDollar/yen: UP at 146.34 yen from 145.83 yenEuro/dollar: DOWN at $0.9688 from $0.9709Euro/pound: UP at 88.57 pence from 88.46 penceWest Texas Intermediate: DOWN 1.1 percent at $88.40 per barrelBrent North Sea crude: DOWN 0.9 percent at $93.43 per barrelNew York - Dow: UP 0.1 percent at 29,239.19 (close)London - FTSE 100: DOWN 1.1 percent at 6,885.23 (close)dan/qan
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Asia Business & Economics
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Opposition leader Peter Dutton has blamed the Albanese Government for the unfolding energy crisis on Australia's east coast, accusing Labor of "spooking" the market by shifting to renewables too quickly.Peter Dutton has accused Labor of “spooking” the energy market by transitioning to renewables “too quickly” forcing generators to switch off gas and electricity supplies early.Speaking at a press conference in Perth on Wednesday, the Opposition leader claimed the unfolding energy crisis was happened “on Labor’s watch”.“I just don’t think people should underestimate how precarious the energy market is at the moment,” Mr Dutton told reporters.“We’re coming into an energy crisis, and Labor is transitioning into renewables too quickly, that is very obvious.Stream more Australian news with Flash. 25+ news channels in 1 place. New to Flash? Try 1 month free. Offer ends 31 October, 2022“It’s obvious that they are spooking the market and that businesses are making the decision to close down their coal operations or their gas supply at a time where we shouldn’t be doing that, we should be encouraging that additional supply.“Everyone is in favour of renewables, but we have to have a sensible transition.”Under Labor’s Powering Australia plan, Prime Minister Anthony Albanese promised to turn Australia into a “renewable energy superpower” and set to cut emissions by 43 per cent by 2030. But the policies have been criticised for only targeting certain areas of the economy, slow uptake, and leniency on the fossil fuels sector.When asked by a reporter if Australia’s east coast energy crisis was of the Coalition’s making, Mr Dutton laid the blame squarely on newly-appointed Climate Change and Energy Minister Chris Bowen.“These were all pre-existing issues we were dealing with, and we were able to provide certainty around the supply of electricity in our country at the same time that we reduce prices,” he said.“That’s not an issue of making nine years ago or any nonsense like that.”“This is a problem Mr Bowen has created.“And Mr Bowen went to the election saying that he would reduce electricity prices and at the moment we’re seeing the complete opposite.”This comes as the Australian Electricity Market Operator indefinitely suspended the electricity spot market for the east coast from Wednesday afternoon.AEMO Chief Executive Daniel Westerman urged residents in New South Wales to conserve energy where it is safe to do so as supplies remain “tight” in the coming days.The electricity regulator said it was “near impossible” to continue operating the spot market in accordance with the rules while ensuring a secure and reliable supply of electricity for consumers in New South Wales, Queensland, Victoria, South Australia and Tasmania.Mr Bowen said Australians should not be turning off power needed for their comfort and safety but asked residents to be mindful of their consumption."Nobody should turn off any power usage that they need, that they're using for their comfort or their safety," he said.“Nobody should do that. Nobody's asking for that to happen.”
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Australia Business & Economics
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Wharton's Jeremy Siegel is calling for a 100 basis point rate hike, and says markets may be "close to the bottom."A 100 basis point rate hike by the Federal Reserve on Wednesday will be "medicine to stop this inflation," the Wharton professor of finance at the University of Pennsylvania told CNBC on Wednesday."The Fed needs to grab the narrative of inflation ... it knows it was way too late," Siegel said on "Squawk Box Asia.""[You] got to take your medicine now to get cured. If you just let it go, you're going to have to take more medicine later on."With annual inflation hitting a 40-year high of 8.6% annual inflation in May, the likelihood of sharper aggressive rate hikes has sent markets into a tailspin amid fears of a global recession.U.S. stocks tumbled into bear market territory earlier this week sending ripples across global markets.Jeremy SiegelDavid Orrell | CNBCSiegel said Fed chair Jerome Powell can justify such an aggressive move by bringing forward July's expected 50 basis point hike, and combining it with the expected 50 basis points for June.Anything less than a perceived forceful move by the Fed this week will indicate to markets it doesn't have inflation under control, Siegal said."If [Powell] only does 50 [basis points], I think there is going to be a big disappointment. Then [markets] are going to say he doesn't have control, he isn't going fast enough," he said.Markets will rallyIf the Fed nips the inflation problem in the bud, a markets rally will likely ensue as investors and firms factor in the higher rates and start to downgrade earnings forecasts.Instead of panicking and chasing more aggressive rate hikes after introducing this 100 basis point hike, the Fed should wait for it to massage into the economy, Siegel said. Too many aggressive moves could trigger a severe recession, he added.As it is, the financial markets have already factored in a mild recession for 2023, he added."I think you will get a rally, and [while] it is very hard to pick exact market bottoms, I think we are close to the bottom," Siegel said, adding that the rally will unravel within "hours" of the Fed's announcement. The Fed needs to grab the narrative of inflation. You got to take your medicine now to get cured. If you just let it go, you're going to have to take more medicine later on.Jeremy Siegelprofessor of finance, Wharton"And that would signal we are taking the medicine to stop this inflation. If we take it sooner, we will be better off later on and there is going to be less likelihood of a recession in 2023," he said. If the Fed moves strongly on Wednesday, inflation should cool by the end of the year and if commodity prices start to follow stock markets into bear territory, then the U.S. economy is on its way to reining in inflation, Siegel told CNBC.But as the U.S. economy is bloated with stimulus — and if the Fed moves prudently — a major recession can easily be averted, the professor said."There is still too much liquidity, too low unemployment, too much demand," he said.'Unprecedented burst of money'Excess liquidity and rising demand, driven mainly by government stimulus as a result of the pandemic, were responsible for forcing up prices even though supply chain constraints also played a part, Siegel added."We have [an] unprecedented burst of money," he said.For the first half of 2020 when the pandemic was at its height, a record $2 trillion surge in cash hit the deposit accounts of U.S. banks — a reflection of the amount of cash sloshing around in the U.S. economy.In April 2020 alone, deposits grew by $865 billion, more than the previous record for an entire year."That was really the kernel of the explosion of demand. Certainly we have Covid problems, we have the Russian invasion, I understand that," Siegel said."But what the Fed should have done ... is to say, [it] needed the first stimulus after Covid hit," he said. "Then it should have told the government you got to go to the bond market .. [it] cannot get a hand out from the Fed.""Then we would have interest rates go up much earlier and we would not have the inflation problem we have now," he added.
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Interest Rates
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Residential housing stretches to the horizon of Istanbul's skyline in Turkey June 13, 2018. REUTERS/Russell BoyceRegister now for FREE unlimited access to Reuters.comJuly 8 (Reuters) - Ratings agency Fitch downgraded Turkey's debt rating to "B" from "B+" on Friday, citing increasing inflation and broad concerns about the economy, from a widening current account deficit to interventionist policies.Inflation in Turkey shot to a 24-year high 78.62% in June, mainly due to a currency crisis at the end of last year and the lira's continued decline read more .The economic fallout from Russia's invasion of Ukraine has also stoked prices in import-dependent Turkey, especially due to rising energy and commodity costs.Register now for FREE unlimited access to Reuters.comIn a statement, the agency affirmed its ratings outlook at "negative", adding that it expects Turkey's consumption to slow given rising inflation, a weaker exchange rate and diminishing domestic confidence.Fitch forecast annual inflation to average 71.4% this year, the highest among sovereigns rated by the agency, adding that its trajectory remains highly uncertain. Average inflation is set to slow to 57% in 2023, Fitch said, due to overly accommodative policies until parliamentary and presidential elections scheduled for no later than June 2023.The lira lost 44% of its value against the dollar last year, mainly due to a series of rate cuts from the central bank, sought by President Tayyip Erdogan. The currency is down a further 23% so far this year.The government has taken steps to stem the lira's decline. A recent move by the BDDK banking watchdog to restrict lira lending to foreign currency-rich companies helped it rally briefly last week as corporates sold hard currencies.Referring to the move, Fitch said "policies are becoming increasingly interventionist as well as unpredictable."Last year's rate cuts were part of Erdogan's new economic programme, which prioritises exports, production and investments, while keeping lending costs low.The policy rate has stood at 14% since December, leaving real yields in deeply negative territory.One of the goals was to turn Turkey's chronic current account deficits to a surplus, but those plans were derailed as energy and commodity prices soared due to the Ukraine conflict, sharply widening Turkey's trade deficit."The government's focus on maintaining high growth feeds FX demand, depreciation pressures on the lira, decline in international reserves and spiralling inflation, and discourages capital inflows to fund the higher current account deficit," Fitch said.It forecast the current account deficit at 5.1% of gross domestic product this year, due to the higher energy prices and weakened external demand, despite a recovery in tourism.The agency also cited the continued pressure on the central bank's forex reserves despite measures introduced to replenish them. As of July 1, the central bank's net forex reserves remained near a 20-year low at $7.51 billion.Register now for FREE unlimited access to Reuters.comReporting by Vansh Agarwal in Bengaluru and Ali Kucukgocmen in Istanbul; Editing by Shailesh Kuber and william MallardOur Standards: The Thomson Reuters Trust Principles.
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Inflation
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December 14, 2022 04:00 AM President Joe Biden has a delicate diplomatic dance to perform as African leaders descend on the White House. Biden's foreign policy for Africa has been de-prioritized amid his deadly Afghanistan withdrawal, Russia's war in Ukraine, and the United States and China's increasingly adversarial competition. But eight years after the first U.S.-Africa Leaders Summit, the political spotlight will be shone on the continent once again this week as Biden hosts his iteration of the gathering. BIDEN'S GAY MARRIAGE WIN MAY LEAD DEMOCRATS TO RETOOL SUPREME COURT ATTACKS That Africa is strategically important to U.S. interests and likely to become even more so in the future is widely acknowledged, according to former U.S. Ambassador J. Peter Pham, a former State Department special envoy for the Great Lakes region of Africa. "Everything from the demographics of a growing younger population to the critical minerals needed not just to aspirations of the green energy transition but also to new technologies underscore this reality," he told the Washington Examiner. For Pham, an Atlantic Council fellow and a Vandenberg Coalition adviser, Biden and administration aides grappling with Africa have to unlearn "ingrained habits." He said, "They are used to an 'aid rather than trade' mindset, when what the times calls for is 'trade not aid' or, at the very least, 'trade in addition to aid.'" "One sees this playing out in the structure of the summit itself," he said. "While the top-line messaging might talk about 'engagement' with Africa, the program smacks of lecturing Africans with what seems like an endless succession of thematic panel discussions and civil society get-togethers rather than formal diplomatic parleys." National security adviser Jake Sullivan addressed these concerns this week, contending that the summit "is rooted in the recognition that Africa is a key geopolitical player." The U.S. is also appointing former Ambassador Johnnie Carson, who has served in several African nations and was the former assistant secretary of state for African affairs, to become the new special representative for U.S.-Africa Leaders Summit implementation. "Indeed, with one of the world's fastest-growing populations, largest free trade areas, most diverse ecosystems, and one of the largest voting — regional voting groups in the United Nations, African contributions, partnerships, and leadership are essential to meeting this era's defining challenges," a senior administration official added during a background briefing call. Pham underscored African leader frustration regarding the lack of bilateral meetings with Biden, at odds with the approach of China, India, Russia, and even the European Union, during their respective summits. Sullivan dismissed the complaints, countering that Biden will have the opportunity to "greet" every counterpart at a White House dinner. "If you look at the substance of this summit, the sessions that he is going to sit with those leaders around the table and deal with, it is the things that they have asked to talk about that he will be talking about with them," he said during a press briefing. Biden's outreach specifically coincides with overtures to the bloc from China through its Belt and Road soft diplomacy international infrastructure project, which aims to invest in almost 150 countries and organizations by 2049. Sullivan sought to distance Biden from speculation that the summit is about China, too, insisting it is a "positive proposition" about what the U.S. "can offer" the region. The summit is anticipated to culminate with three announcements, including U.S. support of the African Union joining the G-20 conference and the U.N. Security Council as a permanent member. The U.S. will also commit $55 billion to Africa during the next three years for development, economic growth, health, and security, in addition to presidential and Cabinet-level travel in 2023. The three-day schedule for delegations from all 49 invited African countries and the African Union opened Tuesday with discussions on trade and investment, health and climate, peace, security and governance, and space cooperation. CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER Wednesday will be dominated by the U.S.-Africa Business Forum, during which more than 300 American and African companies will converse with respect to two-way trade and investment, particularly in critical agriculture, digital, energy, infrastructure, and health sectors. After delivering remarks, Biden will host select leaders at the White House to speak about presidential elections to be held next year in Congo, Liberia, Madagascar, Nigeria, Sierra Leone, South Sudan, and Zimbabwe. He will then convene all 50 delegation heads and their partners at the executive mansion for dinner. In tandem with Vice President Kamala Harris and first lady Jill Biden's own events, Thursday will amplify Agenda 2063, the African Union's strategy framework, and food security amid the coronavirus pandemic and Russia's invasion of Ukraine.
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Africa Business & Economics
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Stark Logistics, a transport company partly owned by Prime Minister Kaja Kallas' (Reform) husband Arvo Hallik, has continued doing business with Russia since the start of the full-scale invasion of Ukraine. This is despite government criticism of companies that have done so.
Last week, Kristjan Kraag, CEO of Stark Logistics, told ERR that the company had practically stopped transporting freight to Russia, though had not completely ceased its operations.
"Customers in Estonia, our haulage partners, have dialed back. Our volumes have fallen so much that we've been forced to reorient our activities. We have trucks going to the Baltics, Scandinavia and Poland instead," Kraag said.
In addition to almost all goods groups being covered by sanctions, the company has not made an effort to maintain its business in Russia. The few trips we make now are largely the last loads. "A part of it is moving factory fittings out or bringing them back home so companies can wrap up," he remarked.
Deliveries to Russia, meanwhile, have been continuing since February 24, 2022.
The CEO did not want to say how many deliveries the company has made to Russia during that time.
Below, are the answers to questions, which were originally intended for company part-owner and board member Arvo Hallik, but were answered by CEO Kristjan Kraag.
At the same time, Hallik told ERR, that as CEO, Kraag follows the guidelines laid out by the company's supervisory board, including those related to the direction of the business.
Can you specify what type of deliveries Stark Logistics makes to Russia? And what kind of factory residuals are we talking about?
We are not able to specify the specifics of the deliveries by customer. It is a question of moving stock residues. That is, goods that are not subject to sanctions.
To what extent have you delivered to Russia between February 24, 2022 up to today?
I do not wish to comment.
Your company still has a separate logistics manager for Russia, why is this necessary? What are their current tasks? (Up until last week, Stark Logistics' website listed its business focus as Western Europe and Russia. Under this, it stated that the logistics manager for Russia was Kristina Ermakova, who is now listed under its Western Europe business line - ed.).
We do not wish to comment on the company's HR policy and assignment of people. We had outdated information up on the web. We have restructured our operations and made the necessary corrections for the time being.
After the start of the war in Ukraine, did you, as a member of the board and as an owner, not have the idea that you might completely stop doing business in Russia or with Russia? Please explain your response.
Historically, our deliveries to Russia have been related to the supplying of groups based in Estonia. As the beneficiaries of these deliveries are not Russian citizens, the deliveries we carry out do not involve spending any money in Russia. If these deliveries had been ordered by a local Russian carrier, the Estonian customer would have been paying directly to the beneficiaries in Russia for these services.
Up to two deliveries per week
In addition to the earlier response, within a few hours, Kraag sent an additional reply, which had been coordinated with the only customer the company still delivers to in Russia.
"We are a logistics company that previously exported or brought goods, products and equipment from Russia to our Estonian or international customers. Estonia's geographical location meant that, according to the Estonian Logistics and Transit Association (LTA), Western trade with Russia was an important part of our economy. Before the war, it was normal for us to make 60 to 70 deliveries a month to and from Russia. Today, this has been reduced to around one or two deliveries a week, all of which are related to one customer – the Estonian company AS Metaprint, which has also spoken publicly to the media about the progress of closing down its operations in Russia. This data and the content of the deliveries is also available to the Estonian Tax and Customs Board. This company is in the process of winding up its business in Russia, they have not signed any new contracts, and they are only fulfilling expiring contracts – producing aerosol containers, a significant part of the refining of which takes place in Estonia, and where the final customers are multinational groups. We have also set clear rules for supplying this one customer, with whom our company has a partially overlapping ultimate beneficiary, Martti Lemendik. No services will be bought from Russia, the trucks are only fueled in Estonia, and so on," the additional commentary reads.
Asked whether Stark Logistics has any plans to stop doing business with Russia, Kraag said, "We have only one Estonian customer that we are helping to fulfil its previous, valid and legal international contracts with Russia, and that is AS Metaprint. We are not creating new customer relationships for deliveries to Russia."
Metaprint is one of Europe's largest producers of steel aerosol containers. Founded in 1995, the Estonian-owned company has plants in Tallinn and Pärnu, as well as in the Netherlands and Russia.
Kaja Kallas' €350,000 loan to her husband
In early June, ERR reported that Estonian Prime Minister Kaja Kallas' (Reform) annual declaration to the Estonian Tax and Customs Board revealed that she had lent €350,000 to Arvo Hallik's company Novaria Consult. According to the Estonian business register, the company provides financial services.
Hallik told ERR in June that Novaria Consult was a holding company whose main activity relates to financial instruments and holdings. According to Hallik, together with his wife, the prime minister, he has invested in several companies via Novaria.
Hallik is the sole shareholder of Novaria Consult OÜ. The company owns 24.8 percent of Stark Logistics AS and 30 percent of Stark Warehousing OÜ.
Stark Logistics' 2021 annual report showed the company made sales to Russia worth €572,038 that year, and €572,474 in 2020.
The company's annual report for 2022 does not include figures on sales to Russia for that year or for 2021. The report states that in 2021, the company made €572,038 worth of sales to the U.K., the same amount as the sales to Russia as outlined in the company's 2021 annual report.
Kallas: There must be no business dealings with Russia
In December 2022, Prime Minister Kaja Kallas told news portal Delfi that there must be no business done between Estonia's state-owned companies and Russia. At that time, Kallas said that she did not consider it right for state-owned rail transport company Operail to want to start transporting Russian nickel, which is not subject to sanctions, in Finland. She noted that the government had also issued a directive to the company to this effect.
"[The government] has given clear instructions that neither Operail, nor any other Estonian state-owned company must have any business with Russia," the prime minister said.
Kallas: My husband has no clients from the Russian Federation
Early Tuesday morning, ERR forwarded a request for comment to Prime Minister Kaja Kallas via the government's communications office early. As of midday on Wednesday there had been no response.
On Wednesday afternoon, Kallas commented on the issue on social media.
"ERR published a news item today, suggesting a company connected to my husband was doing business in Russia. I would like to emphasize that my husband has no clients from the Russian Federation," Kallas said.
"I remain of the view that all trade and business with Russia must cease for as long as the Russian invasion of Ukraine continues. My husband has a stake in a logistics company. He has explained that this company is helping one of his Estonian clients to end its production activities in Russia, in accordance with the law and the sanctions. Any further questions will have to be addressed to those companies," Kallas wrote.
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Editor: Michael Cole
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Europe Business & Economics
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Oil prices have surged after several of the world's largest oil exporters announced surprise cuts in production.
The price of Brent Crude oil jumped by more than $5 a barrel, or 7%, to above $85 as trading began.
The increase came after Saudi Arabia, Iraq and several Gulf states said on Sunday they were cutting output by more than one million barrels a day.
Oil prices soared when Russia invaded Ukraine, but are now back at levels seen before the conflict began.
However, the US has been calling for producers to increase output in order to push energy prices lower.
High energy and fuel prices last year helped to drive up inflation - the rate at which prices rise - putting pressure on many households' finances.
Responding to news of the latest cuts, a spokesperson for the US National Security Council said: "We don't think cuts are advisable at this moment given market uncertainty - and we've made that clear."
The reduction in output is being made by members of the Opec+ oil producers. The group accounts for about 40% of all the world's crude oil output.
Saudi Arabia is reducing output by 500,000 barrels per day and Iraq by 211,000. The UAE, Kuwait, Algeria and Oman are also making cuts.
A Saudi energy ministry official said the move was "a precautionary measure aimed at supporting the stability of the oil market", the official Saudi Press Agency said.
Nathan Piper, an independent oil analyst, told the BBC the move by Opec+ appeared to be an attempt to keep the oil price above $80 a barrel in the medium term, given that demand could be hit by a weakening global economy and sanctions have had a "limited impact" on restricting Russian oil supplies.
A significant move
Analysis by Sameer Hashmi, Middle East business correspondent
This surprise announcement is significant for several reasons.
Despite price fluctuations in recent months, there were concerns that global demand for oil would outstrip supply, especially towards the end of the year. The increase in oil prices following Sunday's announcement could potentially put more pressure on inflation - worsening the cost-of-living crisis and raising the risk of recession.
Interestingly, this announcement comes just a day before the Opec+ meeting. There were indications from members that they would stick to the same production policy, meaning there would be no fresh cuts, which is why it has come as a huge surprise. There is a possibility that more members of the group could announce voluntary cuts - squeezing supplies even more.
The development will also likely further strain ties between the US and Saudi Arabia-led Opec+. The White House had called on the group to increase supplies to cool down prices and check Russian finances.
However, Sunday's announcement also underlines the close cooperation between oil-producing countries and Russia.
The latest reductions come on top of a cut announced by Opec+ in October last year of two million barrels per day (bpd).
However, last year's cut came despite calls from the US and other countries for oil producers to pump more crude.
When the Opec+ group announced its production cuts in October, US President Joe Biden said he was "disappointed by the short-sighted decision".
The Opec+ group includes the Organization of Petroleum Exporting Countries (Opec) as well as other countries including Russia.
Russia has said it will extend its already-announced production cut, of half a million barrels per day, until the end of the year.
The invasion of Ukraine by Russia in February last year sent energy prices soaring over worries about oil supplies. The price of Brent Crude hit a high of close to $130 a barrel at one point.
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Energy & Natural Resources
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As President Joe Biden prepared to preside over the second-ever U.S.-Africa Leaders Summit, the White House criticized China's growing inroads across the continent, even while Beijing adopted a nominally more diplomatic approach to the intensified competition there between the world's top two powers.Speaking to reporters Wednesday, National Security Council Strategic Communications Coordinator John Kirby said that U.S. officials "respect" and "understand" that the African countries with which Washington is engaging in the ongoing summit are "sovereign nations, and they get to choose for themselves what their bilateral or multilateral associations are going to be."But he asserted that "there's nothing inconsistent" about this position, and "shedding light on what is increasingly obvious to our African partners about China's malign influence on the continent.""Much of the agenda today and the next two days is really about African concerns, African opportunities, things that the African Union said they wanted to speak about," Kirby said."So, there's no there's no gap between, again, just highlighting the fact of China's malign influence on the continent with discussions broadly speaking about how African investment, African prosperity, African economic growth and development, African youth leadership, African approaches to climate change, and so many other security challenges can be furthered, not just by Africans, but by the United States in full partnership with them," he explained.The comment followed a trend of U.S. officials scrutinizing Chinese influence and investment in Africa, a decades-long effort pursued by Beijing. Defense Secretary Lloyd Austin warned Tuesday that both China and Russia were "not always transparent in terms of what they're doing, and that creates problems that will be eventually destabilizing, if they're not already."Hours later, and prior to Kirby's remarks, Chinese Foreign Ministry spokesperson Wang Wenbin responded to the criticism, saying that "supporting Africa's development is the common responsibility of the international community.""We are always happy to see Africa diversify its cooperation partners, and we welcome greater international focus on and investment in Africa, including from the U.S.," he added, "as well as cooperation with Africa, which is genuinely equal-footed and mutually-beneficial."Wang urged Washington not to prejudge Beijing's overtures in Africa and, echoing Kirby's words, said it would ultimately be up to African countries themselves to decide."We also hope that the U.S. will view China-Africa cooperation with an open mind. Africa is not a wrestling ground for major-country rivalry, still less a target of strong-arm tactic from a certain country or certain people," Wang said. "African countries and people have the wisdom and capability to choose cooperation partners who can help advance African interests. They themselves are best positioned to tell who wants what's best for the continent.""China is Africa's good friend, partner and brother," he added. "Our cooperation with Africa is equal-footed, win-win, aboveboard and fruitful. It is warmly welcomed by the people of Africa. The U.S. needs to respect the aspiration of the African people and take concrete actions to advance Africa's development, instead of being bent on smearing and attacking other countries."
U.S. President Joe Biden delivers remarks at the U.S.-Africa Leaders Summit in Washington, D.C. on December 14.
Kevin Dietsch/Getty Images
China has long viewed engagement with Africa as a priority. For 32 years, China's top diplomats have chosen the continent for their first stop abroad of the year. This year was no exception, as Chinese Foreign Minister Wang Yi made a three-country tour of Eritrea, Kenya and Comoros.In a similarly longstanding effort, the triannual Forum on China-Africa Cooperation has been held for the last 22 years, gathering Beijing and representatives of all African states with the exception of the Kingdom of Eswatini, the only African country to maintain relations with the disputed island of Taiwan. The most recent meeting took place last year in the Senegalese capital of Dakar.In recent years these meetings have been used as a platform to promote President Xi Jinping's Belt and Road Initiative, a historic intercontinental network of Chinese infrastructure projects, which also runs through nearly every African nation.Chinese Ambassador to the U.S. Qin Gang noted this focus on Africa in Beijing's foreign policy during a conference organized Monday by the news outlet Semafor. Addressing U.S. criticism, he said that "our relationship with Africa is sincere, is out of consideration to help Africa in its efforts for peace, security and development.""We are not interested in the views of any other countries on China's role in Africa," Qin said at the time. "And we believe that Africa should be a place for international cooperation, not for major-power competition for geopolitical gains."He expressed "hope that the forthcoming Africa-U.S. Summit will come up with more concrete and workable measures" for Washington's engagement with the continent as well.One of the longest-running accusations from U.S. officials toward China's financial relationship with developing countries, including those in Africa, is that it engages in so-called "debt trap diplomacy," through which poorer countries indebted to Chinese loans allegedly become beholden to Beijing's political interests."China's investment and financing assistance to Africa is not a trap, it's a benefit," Qin said Monday. "Over the past decades, China has provided loans to help Africa with economic and social development. Construction works are everywhere in Africa. You can see hospitals, highways, airports, stadiums. Obviously, there is no such trap. It is not a plot. It is transparent, it is sincere. This is obvious."He noted that China was not the world's biggest creditor of African debt, citing a study published in July by the United Kingdom-based campaign group Debt Justice. The study, which cited World Bank data, found that 12% of Africa's nearly $700 billion external debt was held by Chinese public and private lenders, while 35% was owed to other private creditors. A further 39% was due for multilateral institutions and the remaining 13% was claimed by other governments.The debate over Africa's external debt played out as U.S.-China relations have grown strained in recent years, with bilateral ties breaking down as differing geopolitical interests have increased tension between the two nations. After an explosive August saw cooperation between Washington and Beijing suspended on a number of fronts over House Speaker Nancy Pelosi's visit to Taiwan, Biden and Xi appeared to seek a de-escalation of tensions and demonstrate a willingness to manage their competition.Yet the two nations continue to strive to promote their national interests across the globe, with Xi recently traveling to Saudi Arabia to oversee a landmark meeting with Arab leaders. The trip came roughly five months after Biden traveled to the Kingdom amid tensions with Crown Prince Mohammed bin Salman, only to have Riyadh later back a deal among oil-exporting nations to cut production by around two million barrels at a time when the U.S. sought an increase in output to keep fuel prices down while maintaining sanctions on Russia.A number of U.S. officials have acknowledged a lack of attention given to diplomacy toward Africa. Speaking at that same conference Monday, U.S. Commerce Deputy Commerce Secretary Don Graves acknowledged that the U.S. had taken its "eye of the ball" over the past 10 years, "and U.S. investors and companies are having to play catch-up."But Biden vowed to change this when he addressed the U.S.-Africa Business Forum, part of the three-day summit being held in the nation's capital this week involving all African nations with the exceptions of Burkina Faso, Guinea, Mali and Sudan, which have witnessed sudden changes of government that garnered suspensions from the African Union, and Eritrea, with which the U.S. does not have diplomatic relations.Addressing African leaders, the U.S. president said that "the United States is all in on Africa's future," and offered an ambitious vision of both federal and private initiatives to support the continent in various fields, including in trade, infrastructure and innovation and entrepreneurship.The White House had earlier announced a three-year plan totaling some $55 billion in funding for Africa."This is just the beginning," Biden said Wednesday. "There's so much more we can do together and that we will do together."
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Africa Business & Economics
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XPO Logistics announced Thursday that Mario Harik will be taking over the role of chief executive from Brad Jacobs after the company's spin-off of its high-tech truck brokerage business in the fiscal fourth quarter. Harik was also named president of XPO's less-than-truckload business. He had served as acting president since last October.Jacobs will remain as executive chairman at XPO and non-executive chairman at the spun-off company."There's no better person to do it than Mario," he said of his successor. "Mario is the third person I hired back in 2011. It was love at first sight."The company also reiterated its plan to sell off its Europe business and become a company focused only on LTL trucking, which lets multiple customers transport goods in the same truck. When Cramer asked Harik how customers' concerns about the Federal Reserve's inflation policy and a possible economic recession has impacted business, the incoming CEO said that the feedback has been mixed."We're seeing slightly softer demand than what we saw last year," Harik said.He added that demand from industrial customers has been stronger, since they're dealing with pent-up demand from their own customers as supply shortages ease. Industrial companies make up two-thirds of XPO's customers, according to Harik.Sign up now for the CNBC Investing Club to follow Jim Cramer's every move in the market.DisclaimerQuestions for Cramer? Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer's world? Hit him up! Mad Money Twitter - Jim Cramer Twitter - Facebook - InstagramQuestions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com
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Workforce / Labor
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Since 2005, annual labour productivity growth (growth in output per hour worked) has been the best part of one percentage point below its long-term average in Australia and other developed countries.
The Productivity Inquiry that I helped conduct for the Productivity Commission found this will lead to much-slower improvements in Australians’ living standards than in the past.
In the search for a culprit, economists including Australia’s Competition Minister Andrew Leigh have pointed to reduced business competition resulting in decreasing dynamism, by which they mean:
- less entry and exit of firms
- less job-switching
- a significant reduction in business investment
- mergers leading to increased business concentration
- an increase in the markups businesses can sustain
- only few highly-productive firms, with the rest increasingly less so
A study that I have just published in Australian Economic Papers, reviews the evidence and finds that while most of these things have happened (and while many are undesirable) they aren’t sufficient to explain what’s happened to productivity.
The findings suggest that even if we did make our economy more competitive and businesses more dynamic (and we probably should) improving productivity growth depends on a much bigger set of policy reforms.
Here’s what we find.
Firm entry and exit has been slowing
In Australia, the rates of firm entry and exit (meaning companies either joining or dropping out of an industry) declined between 2005–06 and 2012–13.
While there’s been an increase in firm entry more recently, it’s been mainly among non-employing businesses – sole traders and independent contractors – rather than bigger businesses.
In the US (we don’t have an equivalent Australian study) red tape may be strangling dynamism. Investment in new profitable businesses has slowed at the same time as there has been a significant increase in regulation of those businesses.
In Australia, improvements in business survival rates at least partly seem to reflect improved conditions for both survivors and new entrants, rather than barriers that protect unproductive survivors at the expense of more-productive entrants.
Job-switching has slowed
Australian job mobility has declined dramatically over the past 30 years, in part because the population is ageing, and older workers are less likely to switch jobs than younger workers.
Another explanation might be that Australian businesses face a less volatile environment, suggesting job turnover does not have value in its own right.
While job churn tends to fall if barriers to job mobility rise, it also falls when businesses face fewer shocks, making any link between declining job turnover and diminished competition ambiguous.
Business investment has slowed
Non-mining business investment in Australia has stagnated over recent decades, as it has in a number of other advanced economies.
Among the suggested explanations are risk aversion and uncertainty, pessimism about the future and lower productivity growth. The role, played by competition – if any – is far from clear.
Business concentration has climbed
The average concentration of Australian businesses (the extent to which a few big firms dominate industries) appears to have been falling until the early 2000s, and climbing since then.
Most of the increased concentration appears to have been in already-concentrated industries, with technological advances and exposure to imports explaining a lot of it.
As an example, concentration has increased in “warehousing and storage”, but the industry has taken advantage of technological advances including parcel tracking and smart warehouses, meaning both concentration and competition have increased as firms have scaled up to install new technologies.
Businesses’ profit margins have climbed
Markups (profit margins) appear to have climbed by around 57% in Australia between 1980 to 2016, which is less than in the US, Canada and much of the European Union, but greater than in New Zealand and most Asian countries except for South Korea.
But markups at the level of the firm are difficult to measure because they depend on assumptions about the way the firm makes its products. Different assumptions can produce very different estimates.
There are only a few highly-productive firms
Globally and in Australia the most-productive firms seem to be three to four times more productive than the less productive, but, at least in Australia, there is little evidence to suggest the gap is widening.
What evidence there is suggests the gap between the most-productive Australian firms and the most-productive global firms is widening, suggesting all Australian firms are slower to adopt leading technologies than they were.
Put bluntly, Australian businesses as a whole appear to have become slow to adopt world best practice; which is a problem, but not necessarily a problem of highly-productive firms versus the rest.
There are a range of policies that can help to reverse the decline, but it is far from clear that competition plays much of a role.
We’re at risk of chasing the wrong target
The broader reasons for Australia’s declining productivity growth include changing demographics, changing international trade patterns and the changing nature of industries as Australia continues to moves towards a more service-based economy.
Fixing our productivity problem requires a suite of changes that address these and other issues. In March, the Productivity Commission laid out a roadmap.
Of course, we shouldn’t ignore competition. The government’s 2015 Competition Policy Review focused on updating competition and consumer laws.
Many of its recommendations remain on the shelf.
Further, new challenges are emerging. To pick one, Australia currently has three alternative ways to get competition clearances when businesses merge.
Unsurprisingly, they pick the path of least resistance.
The head of the Competition and Consumer Commission Gina Cass-Gottlieb has developed a proposal that would help.
Actually boosting productivity will require measures that cover education, technology, business regulation, taxation, carbon emissions, and more.
Blaming declining dynamism and declining competition for declining productivity is not just a diversion, it risks making us do the wrong things.
Stephen King, Professor, Monash University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
Local News Matters
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Australia Business & Economics
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Story at a glance Air travel accounts for a significant portion of carbon dioxide emissions and serves as a main contributor to climate change. New advances in aviation such as zero-emission planes can help curb the industry’s negative environmental impact. But to meet the ambitious targets laid out in the 2015 Paris climate treaty, immediate and aggressive action is needed, experts stressed. One highly touted way of reducing one’s carbon footprint is to cut down on fossil fuel use in everyday life. For many Americans, this can mean finding transportation alternatives to air travel. In 2018, commercial aviation accounted for 2.4 percent of global carbon dioxide emissions, equalling approximately 918 million metric tons, according to the International Council on Clean Transportation (ICCT). For years governments have strived to meet ambitious targets laid out in the 2015 Paris Agreement aimed at keeping global temperatures from rising 2 degrees Celsius above pre-industrial levels and ideally reduce warming to 1.5 degrees celsius. A new report from the ICCT found that to achieve the 2 degree Celsius goal, airline emissions must peak by 2030. However, aggressive policies must be implemented immediately to keep temperatures from rising above 1.75 degrees Celsius by the end of the decade, authors warned. “Cumulative targets, rather than an absolute emissions goal for a given year, would provide greater certainty that aviation contributes fairly to the Paris Agreement,” they explained. In the report, researchers laid out 3 scenarios to tackle decarbonization in the aviation sector. The Action, Transformation and Breakthrough scenarios vary in degrees of ambition and are built around six parameters: traffic, aircraft technology, operations, zero-emission planes (ZEPs), sustainable aviation fuels (SAF), and economic incentives. The roadmap laid out only includes international operations and compares each of the 3 scenarios to baseline emissions rates, or continuation of the status quo. America is changing faster than ever! Add Changing America to your Facebook or Twitter feed to stay on top of the news. For the Action scenario, researchers assessed government and industry efforts to deliver new technology capping emissions below levels recorded in 2019 by 2050, authors explained. But this would still use up the industry’s carbon budget allotted for a 2 degree warming by 2050. In comparison, the Transformation case shifts away from fossil fuels beginning in 2035 and halves 2050 levels compared with those recorded in 2005. “In the Breakthrough case, early, aggressive, and sustained government intervention triggers widespread investments in zero-carbon aircraft and fuels, peaking fossil jet fuel use in 2025 and zeroing it out by 2050,” researchers said. This route would achieve a 1.75 degree temperature increase following the peak of emissions in 2025. Should one of these three scenarios be adopted, by 2050 emissions will fall by nine to 94 percent below 2019 levels. This will be achieved through uptake of SAF, introduction of ZEPs powered by liquid hydrogen, and overall improvements in aircraft and operational efficiency. The latter parameter would account for a one-third reduction in carbon dioxide emissions while ZEPs would lead to between 4 and 5 percent reductions. Transitions to SAF yielded the highest emissions reductions out of all the interventions modeled, as this effort could lead to a 59 to 64 percent decrease in carbon dioxide emissions. Currently, these alternatives only make up less than 0.1 percent of all jet fuel use. Additional models shifting mass transportation to high-speed rails in certain areas and reducing air transportation use based on increased fuel prices revealed more limited emission reductions. “It’s exciting to see industry developing new technologies that can dramatically reduce aviation emissions,” said co-author and ICCT aviation program director Dan Rutherford in a statement. “But to fully meet the ambitions of the Paris Agreement, either atmospheric carbon removals or curbs to traffic growth will be needed.” Published on Jun. 14, 2022
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Energy & Natural Resources
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The Tory MP in charge of scrutinising the British media hosted a parliamentary drinks party for GB News, the Guardian has learned.
Caroline Dinenage sponsored an event for the rightwing television channel in a room on the parliamentary estate earlier this month.
Dinenage is chair of the House of Commons culture select committee, which is examining the government’s proposed media legislation, including changes to impartiality requirements.
In recent weeks her committee has questioned whether GB News should be allowed to employ four serving Conservative MPs as presenters. The Tory deputy chair, Lee Anderson, is under investigation for filming some of his £100,000-a-year show on the roof of parliament.
In a sign of GB News’ growing influence over rightwing politics in the UK, the summer drinks event was attended by the home secretary, Suella Braverman, and her predecessor in the post, Priti Patel. According to Politico, other MPs in attendance included Chris Heaton-Harris, Mark Francois, Graham Brady, Tanmanjeet Singh Dhesi and Jo Gideon. They were joined by GB News presenters including Dan Wootton.
Dinenage, the MP for Gosport, did not respond to multiple requests for comment on whether hosting an event for GB News in parliament raised questions about her impartiality as committee chair. Disclosure data suggests that she has hosted no events for other broadcasters in recent years.
Although the MP sponsored the event and helped book the room in parliament, the cost of hosting it was borne by GB News, a parliamentary spokesperson confirmed.
Dinenage, who was elected chair of the committee in May, has a family background in the news industry. She is the daughter of Fred Dinenage, the longstanding regional news presenter and former host of the ITV children’s show How. She has appeared on GB News to criticise other broadcasters and cross-examined the ITV boss, Carolyn McCall, in parliament.
Although GB News has faced financial challenges during its first two years on air, the channel now has a small but steadily growing audience for its mix of culture-war reporting and news discussion, with Tory MPs increasingly seeing it as a key way to reach a receptive audience.
Viewing figures for evening programmes such as Nigel Farage’s evening show can top 100,000 viewers. Although this is low by the standards of mainstream television channels, GB News sometimes beats traditional rolling news channels run by Sky and the BBC, and it is well ahead of Rupert Murdoch’s better-resourced TalkTV.
To get to this point, GB News has pushed the limits of the broadcasting code. So far this year it has been found to have breached broadcasting rules over Covid disinformation on two separate occasions, been accused by Jewish groups of stirring antisemitic conspiracies, been investigated over its policy of employing Tory MPs as presenters on large salaries, and has had to pause a petition against a “cashless society” over a potential rule breach.
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United Kingdom Business & Economics
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John Taylor, founder and chief executive officer at FX Concepts at the Reuters FX Summit in New York April 22, 2013. REUTERS/Brendan McDermid/File PhotoLONDON, Oct 18 (Reuters) - Veteran hedge fund manager John Taylor describes one of his favourite Gary Larson cartoons, where one vulture sitting on an animal carcass says to another as more descend: "good friends flying in from all over...this is the best of times".There is, he says jokingly, a resemblance to the hedge funds currently circling foreign exchange markets, where a sudden rise in volatility offers to boost returns for the few specialist investors who survived the decade-long period of calm that forced many from the sector.Taylor's former firm, FX Concepts, rode the financial crisis market volatility to its best year in 2008, when assets under management ballooned to over $14 billion, making it the largest currency hedge fund in the world at the time.Register now for FREE unlimited access to Reuters.comBut a post-crisis wash of central bank quantitative easing and developed-world interest rates barely above zero sapped the near $7 trillion-a-day global currency markets of the kind of flows that hedge funds thrive on.The so-called "carry trade" - where investors borrow a low-yielding currency and sell it to buy a higher-yielding one - was wiped out, ultimately leading to the demise of many such specialised funds, including FX Concepts after a run of 35 years.Now decades-high inflation is forcing central banks to aggressively hike interest rates again.The U.S. dollar has soared to 20-year highs as the Federal Reserve leads the tightening pack, the yen is at 32-year lows as the Bank of Japan in stark contrast sticks to its ultra-easy policy, and sterling plumbed record lows as government promises of unfunded tax cuts unnerved investors.Volatility is back, and with it the sort of currency fund performances not seen for years.Deutsche Bank's Currency Volatility Index has surged more than 100% so far this year and a BarclayHedge index tracking currency hedge fund performance rose 5.71% in the first half, on track for its best year since 2003.Similarly, HFR's HFRI 500 Currency Index, which also tracks these funds, is up 8.29%, its best performance since 2007 and soundly beating the 3.8% rise in a broader hedge fund index.Unable to resist the opportunities thrown up by the new inflationary environment, Taylor, at 78, has pulled himself out of investment retirement to set about raising the cash he needs to launch a new hedge fund - typically $100 million to $150 million.The trigger, he said, was listening to Fed Chair Jerome Powell speak on inflation and markets."No one has total power over the markets. The market goes where it goes. If he thinks he can (stop inflation and control the market), he'll make a mistake."Big players such as Brevan Howard, which too had a currency fund that fell victim to the post-financial crisis markets, have also upped their focus on forex. Its publicly traded group of funds, BH Macro, more than tripled its FX exposure in the past year and was up 18% at the end of August, according to a recent shareholder report. Brevan Howard declined to comment.Half year results since 1987ONCE BITTEN, TWICE SHY?The years of muted volatility culled existing currency hedge funds and deterred the creation of new ones, a process which typically takes 7-8 months.Fund liquidations and consolidations have outpaced inceptions by a significant margin for the last four years, according to BarclayHedge, and no new currency-focused hedge funds have launched this year, a first since the data provider started keeping records in 1990.No new funds launched as of September 2022A few stuck it out. BarclayHedge reckons there are now between 85 and 110 such funds, down from 450-550 a decade ago. But they are sitting on $1.3 trillion in assets under management, it notes, the most money entrusted to currency funds by pension funds, asset managers and wealth managers since their records began in 1990.Still, currency trading is hard, says Record Financial Group CEO Leslie Hill.Record, which oversees $83.1 billion of assets, has grown to be the biggest currency specialist in the world by hedging the currency risk of asset managers' more traditional portfolios alongside its own trading strategies.It has a $4.5 billion currency fund and a $4.4 multi-asset fund, recent public disclosures showed."Making a living from pure currency, not just hedging - where the fees are small but the risks are high - but also currency for return...has driven many currency managers out of business," said Hill.Adrian Lee, who founded Adrian Lee & Partners in 1999 and manages approximately $17 billion deployed simultaneously as a hedge fund and currency risk management, believes conditions should remain sweet for currency managers."Over the last 10 years as a currency manager, if you were offering to add 2% upside to people's portfolio when they were making 15% on their equities, you wouldn't get a look in," he said. "Now the equities part of the portfolio is losing money hand over fist."Lee's returns are running just shy of 20% this year, said a source who could not be identified because of financial regulations.While Taylor believes a rush of speculators could add to the resurgent volatility, he argues that a recession will bring fresh lows across stocks and some bond and currency markets - hedge funds or not.Markets reflect the rhythm of a baked-in cycle and traders are there to ride the wave, he said.Register now for FREE unlimited access to Reuters.comReporting by Nell Mackenzie; Editing by Kirsten DonovanOur Standards: The Thomson Reuters Trust Principles.
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Forex Trading & Speculation
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WASHINGTON — President Joe Biden, who has recently been focused on boosting oil production to reduce rising gasoline costs, turned his attention to climate change on Friday when he convened a virtual meeting of some of the world’s biggest economies.Among the participants are China, Germany, Saudi Arabia, the United Kingdom and the European Union. Also present is Egypt, which is hosting the next United Nations summit on climate change, and the U.N. secretary general, António Guterres.Biden reiterated his goal to lower gasoline prices that are averaging a record $5 a gallon in the U.S. while also shifting away from fossil fuels in order to limit climate change and the risks it presents.“I’m using every lever available to me to bring down prices for the American people,” Biden said. “But the critical point is that these actions are part of our transition to a clean and secure and long-term energy future.”The conference is known as the Major Economies Forum on Energy and Climate, and it began under President Barack Obama in 2009.Among the priorities are slashing methane leaks and getting more zero-emission vehicles on the roads.Biden administration officials, insisting on anonymity to discuss the event, said they expect some of the countries to announce more ambitious climate targets as part of the landmark agreement reached in Paris in 2015.Biden sounded the alarm on extreme weather events in an Oval Office interview on Thursday with The Associated Press.“We have more hurricanes and tornadoes and flooding,” he said. “People saw what — I took my kids years ago to Yellowstone Park. They call me, ‘Daddy did you see what happened at Yellowstone, right?’ Well, it’s unthinkable. These are 1,000-year kinds of events.”But the Russian invasion of Ukraine has scrambled Biden’s climate goals by driving up the cost of gas. Facing political pressure to get prices under control in a midterm election year, the Democratic president has urged U.S. oil refiners to produce more fuel even as companies say they lack the long-term incentives to do so because the administration is accelerating the move to clean energy.“Well, I say in the short term, do the right thing,” Biden said Thursday, stressing his view that energy companies should increase production instead of trying to maximize their profits.Biden is also expected to visit Saudi Arabia next month. The White House recently praised the kingdom after OPEC+ announced that it would pump more oil to boost the global supply.
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Energy & Natural Resources
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UK 'disappointed' EU has launched legal action over NI Protocol Away from the Commons, the prime minister's spokesman has been reacting to the EU launching legal action against the UK. Brussels has taken the move due to the UK publishing legislation to override parts of the Northern Ireland Protocol.Boris Johnson's spokesman has said the UK is "disappointed" with the EU's decision.He said the latest proposals from Brussels would lead to more checks and controls and make the situation in Northern Ireland worse."We will consider these documents carefully and respond formally in due course, however we are disappointed the EU has taken this legal action today," the PM's spokesman said."The EU's proposed approach, which doesn't differ from what they have said previously, would increase burdens on business and citizens and take us backwards from where we are currently."The infractions are related to the implementation of the protocol in our recently published Bill. "It is difficult to see how scrapping grace periods and adding additional controls and checks would be the situation better." People smugglers 'abusing legal protections meant for those trafficked for modern slavery' People being smuggled across the English Channel are abusing legal protections meant for those trafficked for modern slavery, one Tory MP has said. Conservative MP Peter Bone told the Commons earlier: "People who are trafficked into this country are duped or coerced, they are exploited for sexual or labour purposes, people who are smuggled into this country willingly pay to do so and come for economic purposes."The first are victims and deserve the protection of the Modern Slavery Act, the second are not and deserve no protection from the Modern Slavery Act."That is being abused by people who are coming across in small boats. I hope the home secretary can sort this out."Priti Patel replied that it was in the "national interest" to ensure there are safeguards to protect people, but "we cannot allow people to exploit [these protections] for the wrong reasons." PMQs word cloud analysis - 'Investment' and 'economy' dominate By Daniel Dunford, senior data journalistLabour’s Keir Starmer tried to press the prime minister on issues concerning the economy – poor growth, tax hikes and the rising cost of living. Meanwhile, Boris Johnson tried to steer the discussion to rail strikes and Britain’s low level of unemployment, as well as investment – both in the UK from abroad and in the NHS from the government.Word cloud analysis of today's session shows"investment" as the main focus of the prime minister's contributions and "economy" the most prominent term used by Sir Keir Starmer.Yesterday’s failed Home Office flight taking UK migrants to Rwanda was only mentioned obliquely at the close of Boris Johnson’s final answer to Mr Starmer, and not at all by the Labour leader himself, suggesting that the Conservatives still believe the policy is a vote-winner among the public.There was one mention of Jabba the Hutt, and one of Obi-Wan Kenobi, as Mr Starmer accused Mr Johnson of attempting to perform "Jedi mind tricks" on the country.And mercifully the phrase "the ick" was also only mentioned once, a reference to Love Island where contestants are booted out if the public stop liking them. What is the government position on the European Convention on Human Rights? Earlier this morning cabinet minister Therese Coffey and junior minister Guy Opperman both gave interviews that seemed to play down the idea that the government would now move to pull out of the European Convention on Human Rights following the failed Rwanda deportation flight.The Convention, to which the UK is a signatory, is the basis on which the European Court of Human Rights judges cases brought before it.But as our deputy political editor Sam Coates points out in his latest update, the prime minister's spokesman has now insisted "all options are on the table" when it comes to the Convention.Sam says this suggests that contrary to the comments of ministers earlier, Number 10 is preparing to "lean in into the idea of yet another very big fight."Watch his analysis here: Government will do 'whatever it takes' to ensure Rwanda flights take off As well as hearing from Priti Patel in the Commons, the prime minister's official spokesman has been fielding questions from journalists at a regular Westminster briefing.He has said the government will do "whatever it takes" to make sure that deportation flights to Rwanda go ahead.The spokesman said ministers would be considering the ruling from the European Court of Human Rights but stressed that "all options are on the table".Asked if the government could withdraw from the European Convention on Human Rights, the spokesman responded: "We are keeping all options on the table including any further legal reforms that may be necessary."We will look at all of the legislation and processes in this round."Asked if a flight could take off before legal proceedings in the UK are finished, he said: "That is my understanding." 'The home secretary has no one to blame but herself' Labour's shadow home secretary Yvette Cooper calls the immigration policy a "shambles and shameful, and the home secretary has no one but herself to blame". She says Priti Patel knew she was planning to send torture victims to Rwanda and did not have the proper screening processes in place.Ms Cooper asks: "Can she confirm that it was the Home Office itself that withdrew a whole series of these cases on Friday and yesterday because they knew there was a problem with these cases that even without the ECHR judgment, she was planning to send a plane with just seven people on board because she'd had to withdraw most of the cases at the last minute."She also asks the home secretary how much "she promised Rwanda for each of the people she was planning to end yesterday, and how many Rwandan refugees she promised to take in return.""If she was serious about tackling illegal migration she would be working night and day to get a better joint plan with France to crack down on the gangs going into the water in the first place," she continues. "But she isn't because her relationship with French ministers has totally broken down."Ms Cooper says Ms Patel spent half a million pounds chartering a plane "she never expected to fly", calling it "government by gimmick".SNP MP Stuart McDonald calls it an "unworkable, immoral and illegal policy that "does nothing to stop illegal people smugglers". He says "it's not the lawyers who caused this flight to be cancelled, or any courts" but "government illegality". Priti Patel says preparations for next Rwanda flights 'have begun' She says the flight was paused "following a decision by an out-of-hours judge" at the European Court of Human Rights.She says the European Court did not rule that the removal policy was unlawful.She tells the House of Commons: "These repeated legal barriers are very similar to those that we experience with all other removal flights."And we believe we are fully compliant with our domestic and international obligations and preparations for our future flights and next flights have already begun.""We are a generous and welcoming country, as has been shown time and time again. Over 20,000 people have used safe and legal routes to come to the UK since 2015," she says."Our capacity to help those in need is severely compromised by those who come here illegally."She says illegal immigration is "not fair on those who play by the rules", especially at the cost of £5m per day. Rwanda, she says, has "been vilified" and is "a safe and secure country with an outstanding track record of supporting refugees and asylum and seekers and we are proud that we are working together".She says she will not let the "usual suspects" or "mobs" prevent asylum seekers from being sent to the African country. Theresa May says case of missing journalist in Brazil must be be made a 'diplomatic priority' Former prime minister Theresa May used her question to ask Boris Johnson to make the case of missing British journalist Dom Phillips a "diplomatic priority." Mrs May said: "My constituent Dominique Davis is the niece of Dom Philips, the British journalist missing in Brazil, alongside the indigenous expert Bruno Pereira. "Will my Right Honourable friend ensure that the government makes his case a diplomatic priority and that it works to do everything it can to ensure that the Brazilian authorities put the resources necessary to uncover the truth, and find out what has happened to Dom and Bruno?" Mr Johnson responded: "Like everybody in this House we are deeply concerned about what may have happened to him. FCDO officials are working closely with the Brazilian authorities. The minister responsible has raised the issue repeatedly," he added. PM brushes away question about the critical comments made by new cost of living tsar Labour's Anna McMorrin has read out a criticism of the prime minister made by the government's newly appointed cost of living tsar.David Buttress, founder of Just Eat, was appointed yesterday - but in January he posted on Twitter: "Why is it that the worse people often rise to the highest office and stay there?"Ms McMorrin said: "If his own tsar doesn't have faith in him, tell me why those struggling should?"The prime minister brushed off the question, saying "this is a government that gets on and delivers on our promises to the people, in particular getting Brexit done."I read the other day that she wants to go back into the single market and the customs union, that's the real policy of the Labour Party, Mr Speaker." Sexual assault survivors having to 'choose between their mental health and justice' Labour's Sarah Champion brings up the case of a Rotherham survivor who reported her experience to the police and was told not to go for counselling as "it could be used against them in court".She asks the PM to stop the Attorney General from challenging the rules to it is even easy for defence teams to access victims counselling notes "having an immediate chilling effect". Survivors "shouldn't be forced to choose between their mental health and justice". The PM replies that he will "look at the evidence she has, but I think these are very tentative and very difficult issues, particularly as regards the defence cases".He says courts are starting to see a "gradual improvement" in the prosecution rate "and that is because governments across departments are working together to take account of victims' needs". "I agree that progress isn't everything that I would like, but we are seeing progress," he adds. 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United Kingdom Business & Economics
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New Zealand Prime Minister Chris Hipkins has conceded his Labour party lost Saturday’s election, as voters punished the government and took the country rightwards nine months after his predecessor Jacinda Ardern suddenly resigned.
The rising cost of living dominated campaigning with voters New Zealanders ending six years of Labour Party rule, the latter half of which was dominated by the country’s strict response to the coronavirus pandemic that successfully kept infections low but battered the economy.
With more than 98% of votes counted, the center-right National Party, led by former airline executive Christopher Luxon, had amassed around 40% of ballots, according to New Zealand’s Electoral Commission.
A dejected Hipkins told supporters that Labour did not have enough votes to form a government.
“The result tonight is not one that any of us wanted,” he said, according to RNZ. “I gave it my all to turn the tide of history but alas, it was not enough.”
Luxon said New Zealanders had “voted for change” and that his party would now get to work trying to form a coalition.
“Tonight you have given us the mandate to take New Zealand forward,” he told supporters.
Coalitions are the norm under New Zealand’s mixed-member proportional system, which was introduced in 1996.
The nationalist NZ First party and its leader Winston Peters could potentially become kingmaker in a coalition administration alongside the libertarian, right-wing Act Party.
The only party to win a majority of votes and govern alone in the current political system was Labour in 2020, when Ardern won a landslide second term buoyed by her success at handling the country’s coronavirus outbreak.
A progressive global icon, Ardern’s time in power was defined by multiple crises, including the Christchurch terrorist attack, a deadly volcanic explosion, and a global pandemic.
Overseas she became famous for being a leader unafraid to show empathy and compassion at a time when populist demagogues were coming to the fore in many other western democracies.
But back home her popularity ebbed amid a rising cost of living, housing shortages and economic anxiety. And she faced violent anti-lockdown protests in the capital Wellington, with threats made against her.
Ardern’s successor as Prime Minister, Chris Hipkins, inherited these issues which have since been compounded by a sluggish economy, an historically high inflation rate of 6% and an accounts deficit that has concerned ratings agencies.
It’s the first election in New Zealand following the end of strict coronavirus lockdown measures that have been a source of contention for many. The government’s “go hard and go early” approach to the pandemic saw New Zealand impose some of the world’s strictest border rules, separating families and shutting out almost all foreigners for almost two years.
It meant New Zealand suffered far fewer Covid infections and deaths compared to many countries, like the United States or United Kingdom. But many residents felt the government went too hard on its measures.
“They were damned if they did and damned if they didn’t,” said Alex Wareham, a bartender from Auckland, who added that because people didn’t “have the human toll to focus on they are thinking our economy was ruined, the country was shut down.”
“It was always going to be a lose-lose for Labour, no matter which way you look at it… but it feels a National government during Covid would have done it the same way,” she said.
The big issues
Saturday’s election took place the same day Australian voters struck down the first attempt at constitutional change in 24 years that would have recognized First Nations people in the nation’s founding document.
All the main New Zealand parties pledged to improve the economy, provide relief for the cost of living crisis, boost jobs, and improve health and education facilities, as well as housing.
Central to National’s 100-day plan is its promise for myriad tax cuts, including cutting a regional fuel tax. It also is pledging to change the Reserve Bank’s mandate to focus on inflation, remove what it calls red tape for businesses, extend free breast cancer screenings, crack down on crime and give police greater powers to search gang members, and roll back a raft of policies implemented by Labour over the past six years.
Labour’s policies include extending free dental care to under 30s, easing rising food prices by removing the goods and services tax from fruit and vegetables, teaching financial literacy in schools and expanding free early education, and extending financial support to working families.
Hipkins, 44, was first elected to Parliament in 2008 and spearheaded the country’s Covid-19 policies in 2020. Before becoming prime minister, he was minister of education, minister of police, minister for the public service, and leader of the house.
His campaigning was briefly hampered by a positive Covid-19 diagnosis at a critical juncture just two weeks out from the election, which prevented him from being on the road for five days.
Luxon, 53, is a businessman and former CEO of Air New Zealand who became leader of the National Party in 2021. Before becoming leader of the opposition, he was party spokesman for various government departments and a member of several select committees.
Voters get two votes on the ballot: one for a candidate in their local constituency and one for the party. A party needs at least 5% of the vote or a winning constituency candidate to claim a seat in parliament.
To form a government, a party or coalition needs 61 of the 120 seats in New Zealand’s single-house parliament – about 48% of the popular vote.
Official results will be announced by the election commission about three weeks after the vote.
CNN’s Angus Watson contributed reporting.
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Inflation
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More millionaires migrating to Canada amid immigration boom: Report
Immigration Minister Sean Fraser announced six changes to Canada’s immigration policy at the Collision tech conference in Toronto Tuesday.
The changes are all focused on attracting tech talent into Canada’s economy and range from clearing backlogs in existing programs to increasing the number of available visas to capitalize on layoffs in the U.S. tech industry.
“The reality is you've got the ideas, but you need the talent…We're going to do everything that we can to position Canada as the destination where your ideas can become a reality,” Fraser said during his announcement at the conference.
Firstly, Fraser announced the launch of a new dedicated pathway for permanent residents that is specifically available to workers in the STEM sector. Secondly, Fraser said pandemic-related delays to Canada’s Global Skills Strategy program, launched five years ago, will be eliminated.
“A new application that comes in today, we expect we can process that work permit in just two weeks, so companies can have access to the talent that they need when they need it,” Fraser said.
Fraser said flaws in the Start-Up Visa Program will be addressed, which is a way for entrepreneurs who create companies to gain permanent residency. He said the program has potential due to the number of applicants but design issues have weighed on its success.
“We've recently increased the number of spaces from 1,000 a year to 3,500. But going forward, we're going to prioritize applications within that system by focusing on features like whether a company has capital committed, or whether it's received an endorsement for a trusted partner,” he said.
“We're also going to issue open work permits for three years for them and their families to be in Canada while they wait for their applications to be completed.”
Additionally, Fraser said that through the year the federal government will look to create a specific stream for “some of the world’s most talented people” to come to Canada and work in the tech industry “whether they have a job offer or not.”
Fraser also announced a “digital nomad strategy,” which he said will allow those with an employer abroad to work in Canada for up to six months.
“And should they receive a job offer while they’re here, we’re going to allow them to continue to stay and work in Canada,” he said.
Fraser said the federal government has been monitoring the situation regarding layoffs in the U.S. tech sector and will make changes aimed at integrating newly available talent into Canada’s tech industry.
“As of July 16. We will have a stream that will allow 10,000 H1B visa holders in the United States to come and work in Canada,” he said.
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Workforce / Labor
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Business travel in the US and Europe is projected to reach over 50% of pre-pandemic levels in H1 2023, with full recovery expected by late 2024 or early 2025, Deloitte reports. Live events are anticipated to drive significant growth, as over half of travel managers in both regions foresee industry events spurring travel in 2023. International trips are set to increase, with US companies projecting a rise in international travel costs from 21% in 2022 to 33% in 2023. Factors such as flexible work arrangements and technology use have led to client-oriented travel taking precedence over team building and internal meetings. Sustainability is also a key focus, 40% of European companies must reduce travel per employee by over 20% to achieve their 2030 sustainability targets.
The European landscape: A phased recovery
In Europe, business travel is making a strong comeback, with recovery at 60% of pre-pandemic levels according to the Q1 2023 Global Business Travel Association (GBTA) outlook. Domestic business travel in Europe has returned to 63%, with regional and domestic travel expected to recover first, followed by international travel as government regulations and pandemic situations stabilise. The impact of technology on business travel is evident in the shift towards virtual meetings and events, reducing the need for certain types of travel.
Major industry events will likely be the last to return, requiring higher confidence in public safety. Events will adopt virtual, hybrid, or multilocal models with revised in-person schedules and physical distancing measures implemented in modified venues. The business travel recovery in Europe will be a phased process, with domestic and regional travel preceding international travel. Sales and client-related meetings will return first, while technology will replace many internal meetings, changing the landscape of business travel permanently.
Embracing technology and sustainable solutions
As European companies adapt to the changing business travel landscape, they must evaluate policies and practices considering increased travel and rising costs. Hybrid meetings offer cost savings by allowing employees to attend only the most important meetings in person.
Technology has played a significant role in shaping the future of business travel. Videoconferencing has replaced face-to-face meetings for 42% of businesses, but the appetite for business travel remains. As companies plan for increased travel, they must balance the benefits of in-person interactions with the capabilities of technology to meet a variety of business needs. Workplace flexibility and the expected rise in work-from-home rates will continue to impact how and when employees travel for work.
As sustainability becomes a key focus for businesses, travel suppliers and travel management companies must adapt to the changing priorities of their clients. Companies that take a long-term view and communicate their sustainability progress will be better poised to navigate ongoing shifts in travel priorities. By implementing sustainable solutions and embracing technology, businesses can ensure a more responsible and efficient approach to business travel in the post-pandemic world.
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Will Weissert, Associated Press
Will Weissert, Associated Press
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DUBAI, United Arab Emirates (AP) — Vice President Kamala Harris engaged in a speed round of diplomatic talks with Arab leaders on Saturday where she focused on shaping the outlook for a post-conflict Gaza while calling on Israel to do more to protect Palestinian civilians from the “devastating” bombardment.
Watch Harris’ remarks in the player above.
She made a hastily planned trip to the United Arab Emirates as the top American representative at the U.N. climate conference but the Israel-Hamas war was a main objective of her visit. She met with leaders of the United Arab Emirates, Egypt and Jordan and spoke by phone with Qatar’s emir.
Her efforts to focus on what Gaza will look like once the fighting ends played out against the backdrop of an overpowering attack that Israel has unleashed on the crowded southern area of the territory since fighting resumed Friday morning after a weeklong truce.
WATCH: War returns to Gaza after cease-fire between Israel and Hamas ends
“As Israel defends itself, it matters how. The United States is unequivocal: International humanitarian law must be respected,” Harris said after her meetings. “Too many innocent Palestinians have been killed. Frankly, the scale of civilian suffering and the images and videos coming from Gaza are devastating.’’
She added that as Israel “pursues its military objectives in Gaza, we believe Israel must do more to protect innocent civilians.”
Dubai is the first Arab nation to host an annual U.N. environmental gathering where world leaders discuss ways to best slow the effects of climate change. Harris said she had “productive” talks on the summit sidelines with Middle Eastern leaders.
She said she and President Joe Biden have repeatedly noted the brutality of the Hamas attack against Israel on Oct. 7 that triggered the war, while also hailing a recent pause in fighting to enable the release of more than 100 hostages taken by Hamas.
The vice president said that, at some point, the fighting will draw to an end and a plan must be ready for what comes next.
Since the pause in fighting ended, according to the Health Ministry in Gaza, Israeli strikes on houses and buildings have killed more than 200 Palestinians.
“There is a mutual desire to figure out how we are going to figure out and approach ‘the day after’ in ways that bring stability and peace to this region,” Harris said, referring to a time when fighting in Gaza subsidies.
Harris spent just one day at the conference and her Saturday schedule was so packed that the vice president wasn’t in the cavernous, IMAX-style conference room when her name was called to participate in a session with other leaders on the best ways to make a just and orderly transition to cleaner energy.
READ MORE: Israel-Hamas war casts long shadow over COP28 climate talks
Her chair sat empty on stage until her name was called again near the end of the meeting, when she was the only panelist who hadn’t spoken. Harris swept into the room and gave her speech, declaring that the U.S. planned to join 90-plus nations aiming to double their energy efficiency and triple renewable energy production by 2030.
When she was done, she dashed off the stage and was nearly out of the room when the moderator asked participants to pose for a photo. That prompted Harris to move quickly back for the picture.
Then she swept briskly through the hallway to a waiting motorcade to take her nearby for meetings with Arab leaders. Harris wouldn’t disclose the details of her conversations with Qatar’s emir about the potential for future pauses in fighting to secure the release of additional hostages. But she said the U.S. wants to see the release of all hostages.
The vice president said she also talked with Arab leaders about three key elements for a post-conflict Gaza: reconstruction, security and governance. She said she stressed that it will be up to the region’s key nations, as well as other nations and organizations, to “dedicate significant resources” to rebuilding hospitals and housing. Electricity and clean water must be available, while bakeries must be able to reopen, she said.
Harris said Palestinian Authority security forces “must be strengthened to eventually assume security responsibilities in Gaza” while stressing that terrorists cannot be allowed to continue to threaten Israel as a condition for security.
Lastly, Harris said the Palestinian Authority in control of the West Bank should also govern in Gaza to achieve a lasting peace, echoing similar sentiments to those of Biden.
“The Palestinian Authority must be revitalized, driven by the will of the Palestinian people,” the vice president said, adding that it would “allow them to benefit from the rule of law and a transparent responsive government.”
Associated Press writer Josh Boak in Washington contributed to this report.
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Middle East Business & Economics
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A Wall Street sign outside the New York Stock Exchange in New York City, New York, U.S., October 2, 2020. REUTERS/Carlo AllegriRegister now for FREE unlimited access to Reuters.comSummaryCompaniesBoeing rises on deal to sell jets to 777 PartnersJohnson & Johnson and IBM fall on dollar impact warningHasbro and Halliburton rise after profit beatIndexes up: S&P 2.5%, Dow 500 2.1%, Nasdaq 2.9%July 19 (Reuters) - The main U.S. stock indexes extended gains on Tuesday as more companies reported better-than-expected earnings, offering some respite to investors worried about higher inflation denting the corporate bottomline.Toy company Hasbro Inc (HAS.O) beat market estimates for quarterly profit, sending the toymaker's shares up 0.8%. read more Shares of Halliburton rose 1.2% after the oilfield services provider posted a 41% increase in quarterly adjusted profit. read more Register now for FREE unlimited access to Reuters.com"Earnings have come in better than lowered expectations," Said Paul Kim, CEO of Simplify Asset Management in New York."So we're not seeing the bite of tighter monetary policy and inflation impacting revenue as much as feared."Johnson & Johnson shares lost 1.6%, reversing earlier gains. The health care giant reported profit and sales that exceeded expectations but cut its earnings outlook for the year due to a soaring U.S. currency. read more A strong dollar also weighed on shares of IT hardware and services company IBM Corp , which beat quarterly revenue expectations on Monday but warned the hit from forex for the year could be about $3.5 billion.IBM's shares fell 6.5%.The U.S. dollar hovered just above a one-week low on Tuesday, marking its third straight day of declines as markets reduced the odds of a full percentage-point Federal Reserve rate hike this month.Spiraling inflation initially led markets to price in a 100-basis-point hike in interest rates at the upcoming Fed meeting later this month, until some policymakers signaled a 75-basis-point increase. read more Boosting the major indexes, Apple Inc (AAPL.O) gained 2.5%, recovering almost all its declines from the previous session, when a report said the company planned on slowing hiring and spending growth next year. read more Other high-growth stocks such as Tesla Inc (TSLA.O), Microsoft Corp (MSFT.O), Meta Platforms Inc (META.O) and Amazon.com Inc (AMZN.O) were also trading higher.In this earnings season, analysts expect aggregate year-on-year S&P 500 profit to grow 5.8%, down from the 6.8% estimate at the start of the quarter, according to Refinitiv data.At 1:56 p.m. ET, the Dow Jones Industrial Average (.DJI) rose 644.72 points, or 2.07%, to 31,717.33, the S&P 500 (.SPX) gained 93.71 points, or 2.45%, to 3,924.56 and the Nasdaq Composite (.IXIC) added 322.62 points, or 2.84%, to 11,682.67.All of the 11 major S&P 500 sector indexes gained, with at least eight of them adding more than 2% each.Boeing Co (BA.N) jumped 4.8% on plans by private equity firm 777 Partners to buy up to 66 more Boeing 737 MAX jets. read more Netflix Inc's (NFLX.O) shares rose 4.6% ahead of its results after market close.Advancing issues outnumbered declining ones on the NYSE by a 5.43-to-1 ratio while on the Nasdaq, a 3.97-to-1 ratio favored advancers.The S&P 500 posted one new 52-week high and 30 new lows; the Nasdaq Composite recorded 27 new highs and 39 new lows.Register now for FREE unlimited access to Reuters.comReporting by Echo Wang in New York; Additional reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Arun Koyyur, Shounak Dasgupta and Deepa BabingtonOur Standards: The Thomson Reuters Trust Principles.
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Stocks Trading & Speculation
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People walk past an electric board showing Japan's Nikkei share average in Tokyo, Japan September 14, 2022. REUTERS/Issei KatoRegister now for FREE unlimited access to Reuters.comSummaryChina property stocks bounce on hopes of official helpFed looms over broader markets; risk of 100 bp hike next weekIntervention risk keeps dollar short of 145 yen barrierSINGAPORE, Sept 15 (Reuters) - Asia's stock markets were mixed on Thursday, a day after their biggest slide in three months as investors weighed the risk of the Federal Reserve hiking interest rates by a jumbo 100 basis points next week to tackle sky-high inflation.The Japanese yen also began slipping again, getting only a limited boost from the strongest hints yet of possible market intervention by Japanese authorities.MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.1% and Japan's Nikkei (.N225) 0.2%.Register now for FREE unlimited access to Reuters.comEUROSTOXX 50 futures added 0.1% and FTSE futures firmed 0.4%. S&P 500 futures and Nasdaq futures were both near flat."Equity markets are presently in no-man's land," said Sean Darby, global equity strategist at Jefferies in Hong Kong."Better macro news to support earnings is discounted as (there is) the need for further tightening to quash growth – while CPI prints are not declining fast enough," he said."The best metaphor is that the Fed is not only driving the economy using a rear view mirror but is now being forced to press the 'rate rise' accelerator just as bond markets are discounting an overtightening."Fed funds futures , which were dumped along with stocks after Tuesday's stubbornly hot U.S. inflation reading, imply a 30% chance of a 100 basis point rate hike next week. They have the benchmark U.S. interest rate as high as 4.3% by February.Treasuries were calm in Tokyo trade on Thursday, but the U.S. yield curve is deeply inverted - often a signal of a looming recession - as investors believe that rate hikes through this year and next will take a bite out of future growth.Two-year yields , which track near-term rate expectations, edged up to 3.029%, bringing the rise for the week so far to 23 basis points in the seventh straight weekly gain.The benchmark 10-year yield was at 3.424%, having climbed 11 basis points this week."(There are) two opposing forces for the 10-year note – the upward pressure from Fed hikes and downward pressure from a potential economic downturn in the future," said NatWest Markets' U.S. rates strategist Jan Nevruzi."We are more firmly in the camp that more hikes today increase the odds for a deeper recession."LINE IN THE SANDOne bright patch on Thursday was China's beleaguered property sector, with news reports on forthcoming government support lifting a Hong Kong index of mainland developers (.HSMPI) 6.5%. The broader Hang Seng (.HSI) rose 0.8%.In currency markets, the U.S. inflation shock and expectation of rate hikes in response have sent the greenback up to re-test recent multi-decade highs.Thursday moves were modest, with the euro down a fraction at $0.9965 and the Aussie taking a small lift to $0.6758 after some mixed employment data.The yen , pounded some 20% lower against the dollar this year, eased anew to 143.55 per dollar. It had bounced as far as 142.56 on Wednesday when the Bank of Japan checked dollar/yen rates with banks around the 145 per dollar level - a possible prelude to outright yen buying.Japan has not intervened in forex markets since 2011 and back then it was to restrain an overly strong yen."I certainly don't want to be the one to stand here and suggest that this (145 yen per dollar) is the line in the sand," said Shafali Sachdev, head of FX, fixed income and commodities for Asia at BNP Paribas Wealth Management in Singapore."But what's clear is that the market is wary of the level, and has tried to test the level a few times which seems to suggest that if it breaks, it may overshoot quite rapidly."Data out on Thursday showed Japan had posted a record trade deficit in August, one aggravated by the yen's slide. That was also yet another weight on the currency. read more Later in the day European trade data is due and Chinese President Xi Jinping meets Russia's Vladimir Putin in Uzbekistan.In oil markets, Brent crude futures dipped 24 cents to $93.86 a barrel. Spot gold dropped 0.4% to $1,689 an ounce, having steadily slipped as the dollar and U.S. yields have gone up.Register now for FREE unlimited access to Reuters.comReporting by Tom Westbrook and Wayne Cole; Editing by Sam Holmes and Bradley PerrettOur Standards: The Thomson Reuters Trust Principles.
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Asia Business & Economics
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Israel’s War Aims Move South With Hamas Leadership In Crosshairs
Israel’s a third of the way to its goal — destroying Hamas — and is launched on the next phase of bombing the south.
(Bloomberg) -- More than 100 hostages are free. At least 5,000 Hamas fighters are dead. Some 500 tunnel shafts have been destroyed. The Israeli military controls two thirds of northern Gaza. It’s a third of the way to its goal — destroying Hamas — and is launched on the next phase of bombing the south.
Eight weeks into its war on Hamas and days since a week-long cease-fire ended, that’s the Israeli government’s assessment of where things stand in its longest war since the 1948 War of Independence. It’s bearing down on the city of Khan Younis where it says the Hamas leadership is entrenched deep inside tunnels, telling Palestinian civilians to move to a set of nearby “no-target” zones.
To much of the world, all of that sounds too tidy when more than 15,000 Gazans — according to the Hamas-run health ministry — have been killed, large sections of Gaza City have been reduced to rubble and 80% of the 2.2 million inhabitants, most of them poor, are displaced. Numerous governments want Israel to end the war — which began on Oct. 7 when several thousand Hamas operatives killed and kidnapped hundreds of Israelis — by declaring a permanent cease-fire.
Even Israel’s biggest backer, the US, says that far too many civilians have died in Gaza from Israel’s 10,000 strikes over almost two months.
The US hasn’t, however, joined the call for a permanent cease-fire. Instead, it’s used its influence with the government of Prime Minister Benjamin Netanyahu to increase humanitarian aid into Gaza and create the system of “safe zones” to reduce civilian casualties as the next phase of the war begins. It’s trying to create diplomatic space for Israel to eliminate Hamas, which it designates — as does the European Union — a terrorist group.
“As far as toppling the Hamas regime is concerned, Israel has completed about 30% of the task,” said Amos Yadlin, a retired general and former director of military intelligence. “We still have a long way to go to achieve the goal of destroying Hamas, but sometimes there is a breaking point for the enemy, where the stopwatch starts to advance at a faster pace.”
Weeks to Months
This is also the view of a senior official who said that the ground operation in the north had gone better than Israel expected. The rest of the war should take somewhere between weeks and months — and Khan Younis will be key. Another official said the assault on Khan Younis, already begun and set to intensify this week, will be difficult and bloody.
Israel also has to overcome Hamas’s strategy in which survival is itself a victory. They’ve prepared for years for this kind of invasion on their own turf, and are waging a complicated defense both on the ground — as well as under it — and for world opinion.
Many abroad are highly skeptical of Israel’s strategy. French President Emmanuel Macron said in Dubai over the weekend that Israel’s aim of eliminating Hamas would require a decade of war. “So this objective must be clarified,” he added.
Within Israel, there is deep support for the war but plenty of worry. Ben-Dror Yemini, a conservative author and columnist, said by phone that thus far it’s been “a failed policy” because Israeli forces don’t fully control Gaza City or the tunnel network. As soon as the cease-fire ended on Friday, Hamas fired off some 250 rockets from northern Gaza, the most since the first day of the war. On Saturday night, a dozen missiles were fired at Tel Aviv, sending hundreds of thousands into shelters.
The senior official said the rockets were a result of Hamas replenishing and reloading its launchers during the cease-fire.
‘Hammer Strategy’
Yemini, who embraces the goal of destroying Hamas, worries that Israel is using too blunt a set of instruments — what he called a “hammer strategy” involving huge bombs from the air, causing many abroad to assail Israel.
“We need to think more about commando operations,” he said.
The fate of the rest of the hostages remains a concern, both politically in Israel and as a goal of the war. A deal in which Hamas freed women and children in exchange for many Palestinian women and minor prisoners in Israel, along with a pause in fighting and more aid for civilians, lasted a week. It ended when, according to Israeli and US officials, Hamas declined to free the remaining women it holds.
Hamas blamed Israel for the breakdown and said the women are of military age and in a different category. Israeli officials denied that and speculate that the women may have been abused in captivity, hence the hesitation to free them.
Hostage Worry
Hamas now holds mostly men of various ages, and whether they’ll be freed remains a topic of intense concern in Israel. Officially, freeing the hostages is co-equal as a goal of the war to destroying Hamas, but now that about half of them have been freed, the focus is turning again to combat which may endanger the hostages.
The government has argued that pressuring Hamas militarily actually leads to hostage releases, something that many abroad, including in the US government, doubted before the last deal.
Now that scores of hostages have been freed following intense military action, the approach has fewer critics, though families in Israel remain worried about their loved ones still in Gaza, and street demonstrations have begun seeking to push the hostage issue back to the top of the agenda.
Some of those released have offered valuable information on the location and well-being of those still held. They confirmed, for example, that at least half a dozen hostages were dead, their bodies in Gaza. This has played a role in shifting attention from hostage negotiations to military operations.
In Gaza, all this talk of strategy — along with a map Israel has published with numerous zones — is a matter of life and death. Residents say missiles are raining down on Khan Younis and evacuation orders suggest the entire city has to move south, to Rafah, where bombings are also reported.
The map is vague, the warnings unclear and the danger overwhelming, they say.
Myasser Zaher fled her home in Jabaliya, a crowded area in northern Gaza, last month, for her daughter’s house in Deir Al-Balah, in the south. The house is in a numbered area she said wasn’t under evacuation orders. Nonetheless, bombs fell on an adjacent house.
“We don’t know what to do or where to go,” she said by phone. “They divided Gaza into blocks and they still struck everywhere the same way.”
She fled to a nearby hospital.
“They are pushing us into one tight place,” she added. “This is not a life. A tent on the ruins of my house would be better than this displacement.”
--With assistance from Fares Akram and Galit Altstein.
©2023 Bloomberg L.P.
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Middle East Business & Economics
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SummaryTruss had defended the policy, markets worried about costKwarteng now says it was a distractionU-turn made with 'humility and contrition' - KwartengCut in highest tax rate was small part of overall planLawmakers express alarm over government judgementBIRMINGHAM, England, Oct 3 (Reuters) - British Prime Minister Liz Truss was forced on Monday into a humiliating U-turn after less than a month in power, reversing a cut to the highest rate of income tax that helped spark turmoil in financial markets and a rebellion in her party.Finance minister Kwasi Kwarteng said the decision had been taken with "humility and contrition", after some lawmakers reacted with fury to suggestions that public and welfare spending could be cut to fund tax cuts for the richest.Elected by party members but not the broader public, Truss and Kwarteng are seeking to jolt the economy out of its decade of stagnant growth with a 1980s-style plan to cut taxes and regulation, all funded by vast government borrowing.Register now for FREE unlimited access to Reuters.comSignalling a break with "Treasury orthodoxy", they had also fired the most senior official in the government's finance department and released the tax cut plan without accompanying forecasts on how much it would cost.Investors - used to Britain being a pillar of the global financial community - were aghast. They sold British assets at such a rate that the pound hit a record low against the dollar and the Bank of England had to intervene to prevent pension funds from collapsing."It is astonishing," one Conservative lawmaker said, declining to be named. "The damage has already been done. We just look incompetent now, too."Another party insider said the Conservative government, in power under different leaders for 12 years but with Truss as prime minister only since Sept. 6, was already on "survive a day at a time" mode as confidence and credibility drained away.'HAPPY TO OWN IT'While the removal of the top rate of tax only made up around 2 billion out of the 45 billion pounds of unfunded tax cuts, it was the most divisive element of a package that also stumped up tens of billions of pounds to subsidise energy costs.Less than a day after Truss went on BBC television to defend the policy, Kwarteng released a statement saying he now accepted it had become a distraction."We listened to people and yes there is some humility and contrition," Kwarteng told BBC Radio. "And I'm happy to own it."He said he had not considered resigning.The decision to reverse course is likely to put Truss and Kwarteng under even greater pressure, the latest threat to political stability in a country that has had four prime ministers in the last six years.Asked if Kwarteng should resign or be fired, one Conservative lawmaker wavered: "My view is that he is significantly weakened."Truss and Kwarteng were elected into government in 2019 when former leader Boris Johnson secured a landslide victory on a very different manifesto, promising to increase government spending, particularly in Britain's more deprived areas.Johnson was driven from office after three years by a party rebellion over his conduct.British Prime Minister Liz Truss and Chancellor of the Exchequer Kwasi Kwarteng attend the annual Conservative Party conference, in Birmingham, Britain, October 2, 2022. REUTERS/Hannah McKayTruss won the race to replace him after vowing to reignite the economy. But while defending her tax cut policy on Sunday, she was unable to rule out public spending cuts and restrictions on welfare payments in order to balance the books.The Institute for Fiscal Studies said public spending would have to be cut unless Kwarteng reversed other unfunded policies too, an unpalatable prospect for many as the country's health service, schools and judiciary increasingly creak under pressure. Kwarteng speaks to the party's annual conference around 4 p.m. (1500 GMT) on Monday.Many Conservatives warned that tax and spending cuts risked taking them back to their "nasty party" image of 20 years ago.Ben Houchen, the Conservative mayor of Tees Valley in northeast England, said he understood the principle of cutting taxes but said such a move during a cost-of-living crisis for millions had been "very naive"."Would I have done it? Absolutely not," he said.Britain's opposition Labour Party said the government had destroyed its economic credibility and damaged the economy too.Showing how unpredictable Britain's dominant political party has become, one former minister, Nadine Dorries, who backed Truss as prime minister less than a month ago, now said she must call an election because she has no personal mandate to govern.HISTORIC LOSSESWhile the pound has recovered from the depths of last week, government bonds have mostly failed to recoup the historic losses incurred from the "mini-budget" - with the exception of long-dated debt which is subject to Bank of England support.Investors and economists said the reversal was a step in the right direction but the government needed to go further. It is not due to release a fiscal statement with the full scale of government borrowing and debt cutting plans until Nov. 23."The issue was not tax changes announced at the mini-budget but the institutional 'scorched earth policy' that preceded it," said Simon French, chief economist of brokerage Panmure Gordon. "UK risk premia will likely only pull back if that is addressed."S&P Global said the U-turn did not "materially affect" the economics behind Friday's move to put the UK's AA credit rating on a downgrade warning.Analysts said they were now having to weigh up the positive development that the government had been willing to reverse course, with the fact that its credibility has been damaged.Jane Foley, head of forex and rates strategy at Rabobank, said it would only become clear whether the government had gone far enough once the BoE intervention ends on Oct. 14."UK assets, the pound and gilts are not out of woods yet," she said.($1 = 0.8884 pounds)Register now for FREE unlimited access to Reuters.comWriting by Kate Holton, reporting by Elizabeth Piper, Andrew MacAskill and Alistair Smout in Birmingham, Kylie MacLellan, Dhara Ranasinghe, Andy Bruce, Lucy Raitano and Muvija M in London; editing by Andy Bruce, Gareth Jones and Hugh LawsonOur Standards: The Thomson Reuters Trust Principles.
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United Kingdom Business & Economics
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Roy Vandervegt/AP
toggle caption
Australian Prime Minister Anthony Albanese, foreground, walks past a "Yes" sign, referring to upcoming referendum, as he arrives for a press conference at South Australian Health and Medical Research Institute in Adelaide, Thursday, Sept. 21, 2023.
Roy Vandervegt/AP
Australian Prime Minister Anthony Albanese, foreground, walks past a "Yes" sign, referring to upcoming referendum, as he arrives for a press conference at South Australian Health and Medical Research Institute in Adelaide, Thursday, Sept. 21, 2023.
Roy Vandervegt/AP
CANBERRA, Australia — A record number of Australians enrolled to vote in a referendum that would create an Indigenous advocacy body, as the first ballots for constitutional change are set to be cast in remote Outback locations next week, officials said on Thursday.
The referendum to be held on Oct. 14 would enshrine in Australia's constitution an Indigenous Voice to Parliament. The Voice would be a group of Indigenous representatives who would advise the government and legislators on policies that effect the lives of the nation's most disadvantaged ethnic minority.
When enrollments closed on Monday, 97.7% of eligible Australians had signed up to vote, Australian Electoral Commissioner Tom Rogers said.
That was the largest proportion of any electoral event in the 122 years that the Australian government has existed. The previous record was 96.8% for the federal election in May last year.
Rogers said high public interest in the Voice was a factor in the large enrollment.
"There is a factor that where people are interested in the event and there's a lot of media coverage of the event, they're more likely to enroll and participate," Rogers told reporters.
Voting is compulsory in Australia so voter turnout is always high. Of Australia's population of 26 million, 17,676,347 are enrolled to vote in the referendum.
Early voting will begin on Monday at remote and far-flung Outback locations. Officials will use helicopters, boats and airplanes to reach 750 of these voting outposts in the three weeks before Oct. 14.
The referendum is Australia's first since 1999 and potentially the first to succeed since 1977.
Rogers said he was concerned by the level of online threats that staff at the Australian Electoral Commission, which conducts referendums and federal elections, were being subjected to.
"This is the first social media referendum in Australia's history," Rogers said.
"We've certainly seen more threats against AEC than we've seen previously which I think, frankly, is a disgrace," Rogers added.
Electoral officials were attempting to counter online disinformation, which appeared to be homegrown rather than coming from overseas, he said.
"Some of the stuff we're seeing still, frankly, is tin foil hat-wearing, bonkers, mad, conspiracy theories about us using Dominion voting machines — ... we don't use voting machines — erasing of ballots, that's a cracker," Rogers said.
"They deeply believe whatever they're saying. So what I think our job is to just put accurate information out there about what the facts are," Rogers added.
In the United States in April, Fox News agreed to pay Dominion Voting Systems $787.5 million to avert a trial in the voting machine company's lawsuit that would have exposed how the network promoted lies about how the machines cost former President Donald Trump the 2020 presidential election.
Australian elections and referendums use paper ballots marked with pencils.
The Voice referendum would be the first in Australian history to be passed without bipartisan political support. The center-left Labor Party government supports the Voice. The main conservative parties are opposed. Business, religious and sporting groups all support the Voice.
But opinion polls suggest that most Australians do not and that majority is growing.
Proponents see the Voice as a mechanism to reduce Indigenous disadvantage. Indigenous Australians account for 3.8% of the population and they die around eight years younger than Australia's wider population.
Opponents divide themselves into progressive and conservative "no" voters.
The conservatives argue the Voice would be a radical change that would create legal uncertainty, divide the nation along racial lines and lead to claims for compensation.
The progressives argue that the Voice would be too weak and Indigenous advice would be ignored.
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Australia Business & Economics
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On June 10, while visiting Los Angeles, President Biden pointed at big energy companies as the culprits for rising gasoline prices. He lambasted the industry by claiming they would rather use their record profits to buy back stock than to drill for oil. He also pressured domestic companies to ramp up production while simultaneously threatening them with a windfall profits tax. Pressure ramped up again on June 14 with a series of letters by the president to various companies asking for concrete solutions to increase supply. Contrary to Biden’s claim that the industry isn’t developing domestic leases, some oil and gas companies are planning to boost output in the Permian Basin alone by 25 percent this year, while expanding refining capacity by 250,000 barrels per day. That’s equivalent to building a medium-sized refinery. Other major and independent domestic oil companies are also planning to boost production. But this won’t happen overnight, especially in a regulatory and policy environment that remains basically hostile to fossil fuels. Recent examples include the curtailment of new leases for drilling; regulatory and legal obstacles for new pipeline development; increased mandates for ethanol blending; and environmental, social, and corporate governance (ESG) regulations designed to discourage new financing of fossil fuel projects. In addition, oil and gas companies face the same supply-chain constraints and rising costs as other industries. Against this backdrop, on June 14, Senate Finance Committee Chair Ron Wyden (D-Ore.) announced he would soon introduce legislation setting a 21 percent surtax on the excess profits of oil and gas companies with more than $1 billion in annual revenue and use those revenues to provide a gasoline subsidy for American consumers. Proponents of the tax allege it’s time for the industry to pay its fair share of the nation’s tax bill. What’s more, argue supporters, the current windfall is the result of geopolitical events — e.g., Russia’s war in Ukraine — and not an outcome of strategic company investment decisions. Those advocating for a windfall profits tax need to take a hard look at economic and fiscal realities. Forgotten in the debate is the fact that the oil and gas industry already contributes mightily to federal and state coffers. Prior to the pandemic, the industry paid $160 million in federal corporate income taxes along with another $4.2 billion in royalties from production on federal lands. That represented 19.3 percent of net income, compared to 10.6 percent on average for all industries. What is more, in some states the energy industry is the single largest taxpayer. For example, oil and gas companies paid $15.8 billion in state and local taxes and royalties to the state of Texas in 2021. Here are some more inconvenient facts. In 2021, U.S. energy firms were the 10th most profitable sector of the U.S. economy out of 11, according to S&P Global IQ. Energy firms listed in the S&P 500 stock index posted an 8.3 percent profit margin in 2021. That was below the median for all 11 sectors, which was 10.6 percent. Furthermore, prior to the recent run-up in oil prices, the average net profit for oil and gas drilling was only 4.7 percent. In short, high profits are an exception, not the rule, for the oil and gas industry. In practice, imposing a tax on the earnings of energy companies likely would backfire, leading to less — not more — oil and gas production. This was the case after enactment of the Crude Oil Windfall Profit Tax Act in 1980 (U.S. Public Law 96-223), under the Jimmy Carter administration, in response to the OPEC oil embargo and the Iranian Revolution of the previous decade that led to sharply higher gasoline prices and growing profits for domestic and international oil companies. It went into effect at a time when the American economy was on the verge of a recession — much like today — and the law’s implementation was expensive and revenues proved to be well below expectations. Domestic production dropped from 8.7 million barrels per day in 1980 to 7.5 million barrels per day in 1988, proving that if you want less of something, tax it! The tax was repealed in 1988, by which time oil imports had risen by almost 1 million barrels per day. After focusing for more than a decade on the need to reduce carbon emissions, we now face a new paradigm as the war in Ukraine has returned energy security to center stage. Though still pushing renewable energy and electric vehicles, Biden says he wants more domestic oil production while consumers and businesses are demanding lower energy prices. A revived windfall profits tax won’t get us there. Instead, it likely would raise prices, increase our reliance on imports, and do nothing to stimulate more domestic production. If the past is prologue, it will actually diminish America’s energy security. Bernard L. Weinstein is emeritus professor of applied economics at the University of North Texas, former associate director of the Maguire Energy Institute at Southern Methodist University, and a fellow of Goodenough College, London.
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Energy & Natural Resources
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Woman holds British Pound banknotes in this illustration taken May 30, 2022. REUTERS/Dado Ruvic/IllustrationRegister now for FREE unlimited access to Reuters.comSummarySterling and risk-sensitive currencies bounce in AsiaTraders eye BOE economist talk at 1100 GMTSYDNEY, Sept 27 (Reuters) - Sterling steadied on Tuesday, but was perched above its record low only thanks to soaring yields on British debt and the hope of a response from policymakers or politicians, with its gyrations unnerving markets to the benefit of the dollar.On Friday and again on Monday the pound plunged, finding a record low of $1.0327 as investors question Britain's economic gambit of unfunded tax cuts to spur growth.It has bounced back to $1.0770, helped by the Bank of England promising to monitor markets and hike if necessary, and a bloodbath in gilts that has driven an incredible 100 basis point rise for two-year yields in just two trading days.Register now for FREE unlimited access to Reuters.comBOE chief economist Huw Pill appears at a policy forum at 1100 GMT and his response to the turmoil will be closely watched and analysts are wary of the currency's recovery."We should expect the pound to remain volatile in the week ahead as market participants await to see how policymakers in the UK respond to the loss of confidence in the pound and gilts," said Lee Hardman, currency analyst at MUFG Bank."Without timely policy action this week cable could quickly fall below parity."Sterling has dropped 5% since Thursday and 21% this year against a backdrop of an ever stronger dollar.The greenback has climbed as expectations solidify for U.S. interest rates staying higher for longer, and as sudden moves like the pound's rattle traders. As the pound fell on Monday, the dollar surged to new highs on the euro and many more."Everyone's got this hope that the dollar is peaking and peaking and peaking, but it's just been far too premature," said Paul Mackel, global head of FX research at HSBC in Hong Kong."The Fed is firmly hawkish and global growth is weakening, and you put those forces together alongside higher elements of risk aversion - it's all pointing to a strong dollar if not a strengthening dollar."Japan intervened to support the battered yen for the first time in decades last week, which has been enough to stave off too many further losses for the yen, for now.The yen last traded at 144.39 per dollar.The U.S. dollar index , which measures the dollar against a basket of six majors, hit a 20-year high of 114.58 and was off that a bit at 113.87 on Tuesday.The euro made a two-decade low of $0.9528 and is weighed down by an energy crisis and new risks of war in Ukraine escalating. It was a cent above that at $0.9626 in Asia trade.The Aussie and kiwi hit 2-1/2 year lows on Monday and were attempting bounces on Tuesday, with the Aussie up 0.3% to $0.6479 and the kiwi up 0.8% to $0.5670.China's yuan also hit a 2-1/2 year low on Monday and was steady at 7.1639 on Tuesday.========================================================Currency bid prices at 0031 GMTAll spotsTokyo spotsEurope spotsVolatilitiesTokyo Forex market info from BOJRegister now for FREE unlimited access to Reuters.comReporting by Tom Westbrook; Editing by Sam HolmesOur Standards: The Thomson Reuters Trust Principles.
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Forex Trading & Speculation
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Zahawi has suggested people should consider cutting back on their energy consumption Photograph: Daisy-Daisy/Getty Images/iStockphotoZahawi has suggested people should consider cutting back on their energy consumption Photograph: Daisy-Daisy/Getty Images/iStockphotoJohnson: More cash coming to support consumersOutgoing prime minister Boris Johnson has said the government will announce further support next month for consumers struggling with energy bills.Johnson told reporters that previously announced support was coming this autumn - such as the £650 payment for the eight million most vulnerable households, and £300 cost of living payment for pensioners.That support is “clearly now going to be augmented, increased by extra cash that the government is plainly going to be announcing in September”, Johnson said.However, Johnson doesn’t give details of this extra cash – and as he has less than two weeks in office, we’ll have to wait for his successor to announce their plans.Johnson adds that the government can’t cap bills for ‘absolutely everybody’, and should focus on the most vulnerable, saying:“But what I don’t think we should be doing is trying to cap the whole thing for absolutely everybody, the richest households in the country.”UK PM JOHNSON: EXISTING ENERGY BILL SUPPORT SCHEMES ARE CLEARLY GOING TO BE AUGMENTED BY EXTRA CASH #News #Forex #JOHNSON— Capital Hungry (@Capital_Hungry) August 26, 2022
Johnson warns that the winter will be ‘tough’:This will go on for a few months, and it will go on over the winter, and it will be tough.He adds that the whole world is suffering an energy spike from Vladimir Putin’s aggression in Ukraine, but in the end Putin’s ability to impose economic blackmail will diminish over time, as countries cut their reliance on Russian energy.The UK, for example, didn’t import any energy from Russia in June, for the first time since at least 1997.Key events15m agoJohnson: More cash coming to support consumers39m agoLarry Elliott: Price cap hike could turn recession fears into reality1h agoOfgem had 'countless' meetings with the government2h agoZahawi: We should all look at our energy consumption2h ago‘I’m scared when anyone says winter’: shocking tales from UK energy crisis frontline2h agoWatch: Ofgem CEO says prices likely to rise higher4h agoAnalysts: Typical annual energy bill could hit £6,600 a year in April4h agoSturgeon: price cap rise cannot be allowed to go ahead5h agoMartin Lewis: lives will be lost this winter without more help5h agoZahawi says he is working flat out on energy support plan5h agoOfgem: government must act to tackle rising prices6h agoOfgem: prices could get significantly worse through 20236h agoOfgem lifts Britain's energy price cap by 80%6h agoTruss promises 'immediate support' to fight energy crisis, if she becomes PM6h agoStarmer: rising energy bills will be devastating for people and businesses6h agoFull story: Labour calls for emergency budget as energy cap set to top £3,5006h agoIntroduction: Ofgem to announce energy price cap todayEuropean wholesale electricity prices are hitting record levels again today, as the scramble to buy power intensifies:The German 1-year electricity forward has just traded above €800 per MWh for the first time ever. And my screen shows the French 1-year electricity contract with a €865-€1,000 per MWh bid-ask spread right now.— Javier Blas (@JavierBlas) August 26, 2022
Johnson: More cash coming to support consumersOutgoing prime minister Boris Johnson has said the government will announce further support next month for consumers struggling with energy bills.Johnson told reporters that previously announced support was coming this autumn - such as the £650 payment for the eight million most vulnerable households, and £300 cost of living payment for pensioners.That support is “clearly now going to be augmented, increased by extra cash that the government is plainly going to be announcing in September”, Johnson said.However, Johnson doesn’t give details of this extra cash – and as he has less than two weeks in office, we’ll have to wait for his successor to announce their plans.Johnson adds that the government can’t cap bills for ‘absolutely everybody’, and should focus on the most vulnerable, saying:“But what I don’t think we should be doing is trying to cap the whole thing for absolutely everybody, the richest households in the country.”UK PM JOHNSON: EXISTING ENERGY BILL SUPPORT SCHEMES ARE CLEARLY GOING TO BE AUGMENTED BY EXTRA CASH #News #Forex #JOHNSON— Capital Hungry (@Capital_Hungry) August 26, 2022
Johnson warns that the winter will be ‘tough’:This will go on for a few months, and it will go on over the winter, and it will be tough.He adds that the whole world is suffering an energy spike from Vladimir Putin’s aggression in Ukraine, but in the end Putin’s ability to impose economic blackmail will diminish over time, as countries cut their reliance on Russian energy.The UK, for example, didn’t import any energy from Russia in June, for the first time since at least 1997.Larry Elliott: Price cap hike could turn recession fears into realityLarry ElliottSoaring energy bills affect the economy in three key ways, our economics editor Larry Elliott writes:First, they push up the cost of living, with the new price figure adding about four percentage points to the annual inflation rate. The Bank of England has already factored the October increase into its forecast for inflation to reach 13.3%. Yet with the still rising global cost of gas now putting the price cap on course to breach the £5,000 a year threshold in January, the increase in price pressures could turn out to be much more significant. Earlier this week the US investment bank Citi predicted inflation would peak at more than 18% next year. Threadneedle Street has raised interest rates at the last six meetings of its monetary policy committee and further increases are likely over the coming months. Second, rising inflation depresses consumer spending. Wage rates have been picking up over the past year as workers have sought to maintain their living standards – but by almost as fast as prices have been rising. That gap is growing, and with consumers forced to spend more on energy they have less to spend on other things. Third, businesses are going to be hurt by increased costs and a reduction in consumer spending. The energy price cap only applies to consumers, and many small and medium-sized companies are going to face a triple whammy: higher fuel bills, higher wage bills, and falling demand.Here’s an explainer of how the price cap works, and how the 80% increase in October will affect consumers:Business groups fear that companies will go under, without a fresh package of support from ministers soon.Richard Burge, chief executive of London Chamber of Commerce and Industry “We are alarmed by today’s announcement of an energy price cap rise by Ofgem. High energy prices are pushing our firms to breaking point, particularly small and medium sized enterprises in London that cannot shoulder the meteoric rises with the ease of larger businesses. If an intervention is not made by the government, we will see a significant number of businesses go under due to unsustainable trading conditions.We reported yesterday that small firms feared for their future, with some seeing their bills quadruple, including: A hotel in Aberdeen which says it will be cheaper to close for the winter than heat rooms for guests. A fish and chip shop in Oswestry, Shropshire, where annual energy bills are rising from £9,000 to £35,000. A chicken takeaway franchisee in Peterborough who fears customers will desert him if he pushes up prices to pay his bills. An indoor mushroom farm in Bangor, Gwynedd, whose strong trading has been undermined by a “ridiculous” hike in its energy costs. UK bus users face “significant” price rises in 2023 since operators expect to lock in fuel purchases for next year at high rates, a senior executive at one of the largest companies has told the Financial Times.That would add to the cost of living squeeze for millions who rely on buses for transport, on top of surging energy bills.Go Ahead’s Phil Southall, a senior bus director, told the FT that the company may be forced to increase fares if it locks in higher rates for diesel in the months ahead.Here’s the details:Go Ahead, which operates 6,000 buses in the UK, usually secures half of its supply a year in advance, a quarter three years out and the final quarter four years early. The strategy means that it will be locking in prices for 2023 fuel later this year. “That’s when it will hit us, when you come to negotiate the price, then the only option is to pass that on to customers,” he said. “It will be at least a 10 per cent increase in fares, because you have no other option.”Ofgem had 'countless' meetings with the governmentThe boss of Ofgem has said the regulator has had countless meetings with the current government, as pressure mounts for a much wider package of support to help households through the winter misery.Jonathan Brearley told reporters this morning that soaring energy bills will be “a major issue for the country next year”. This is a major set of decisions that the new government will need to make, that the new prime minister and his or her ministerial team will need to make,” Brearley reiterated his call for urgent action from the government to “match the scale of the problem”, with average energy bills set to soar 80% from the start of October.“It’s not for me to comment on the proposals that are out there for politicians. “My point is very simple, it is going to need to be taken urgently and it’s going to need to be decisive. “And it’s going to need to match the scale of the problem that we see - which version of that that the Government chooses to pursue really is a matter for them.”Chancellor Zahawi added:Very few people anticipated war. Wars happen in far-flung places. It is now here with us. We have to remain resilient. My responsibility is to deliver that help.”Here’s some reaction to the suggestion we should all examine our energy consumption:Chancellor Nadhim Zahawi on energy consumption: "The reality is that we should all look at our energy consumption. It is a difficult time."First time a senior minister has suggested this?— Sam Coates Sky (@SamCoatesSky) August 26, 2022
Chancellor Nadhim Zahawi on today’s price cap announcement:“The reality is that we should all look at our energy consumption. It is a difficult time."PM’s spox only 3 days ago:“People should be confident they will have the electricity and gas they need."Change of tune?— Josh Gafson (@JoshGafson1) August 26, 2022
Zahawi: We should all look at our energy consumptionChancellor Nadhim Zahawi has now told broadcasters that people should try to cut back on energy use at this ‘difficult time’.Zahawi also repeated that he is working on options to support struggling households and businesses, as he said in a statement this morning.Reuters has the details:“We know we need to do more because actually the most vulnerable households have no cushion,” Zahawi told reporters. “More help is on its way ... I am doing the work to make sure that will be in place throughout next year.” Zahawi said Russian President Vladimir Putin was using energy as a weapon and would continue to do so, so Britain needed to remain resilient for the long term and make sure any help was not just a sticking plaster. Asked if people should reduce their energy use, Zahawi said: “The reality is that we should all look at our energy consumption, it is a difficult time.”NEW: Chancellor Nadhim Zahawi tells broadcasters: "The reality is that we should all look at our energy consumption. It is a difficult time".— Sophie Morris (@itssophiemorris) August 26, 2022
Nadhim Zahawi says help is on the way but suggests people should cut back on their energy use."The reality is we should all look at our energy consumption. It is a difficult time. There is war on our continent."— Lizzy Buchan (@LizzyBuchan) August 26, 2022
But, as the price cap will be almost triple its level last winter, it’s obviously not realistic for households to cut back enough to avoid bills rising very significantly, unless they simply turn off the heating and endure freezing temperatures this winter.Labour’s shadow chancellor Rachel Reeves has accused the government of a ‘dereliction of duty’ for not fronting up early this morning to respond to the price cap announcement.Reeves told BBC Breakfast that ministers were nowhere to be seen, at a time when people were “worried sick” about rising bills.“The fact that no Government minister is available to come on your programme today is just appalling. “They are not here to give assurances, they are not here to set out what they are going to do. “That is a dereliction of duty.”Ministers were unusually absent from the airwaves when the Ofgem announcement came, even though they had plenty of warning it was coming at 7am. The energy price cap from October will rise to £3,549 for an average bill in a typical household in England, Scotland and Wales.#BBCBreakfast had asked to speak to a Government minister about the increase but ‘no one was available’ pic.twitter.com/H6WsztiJPx— BBC Breakfast (@BBCBreakfast) August 26, 2022
Calum Macdonald of Times Radio thinks there was a ‘full house of no-shows’ on the early morning round across radio and TV:Same here - think that's a full house of no-shows across radio and TV this morning...— Calum Macdonald (@CalumAM) August 26, 2022
Kate Garraway, one of the presenters on ITV’s Good Morning Britain, urged the Government to put forward a representative to speak to them.“Who we’re not hearing from so far this morning is the Government themselves,” “And we would love you to come on and give us some guidance. “I know there is a leadership election currently there, so there will be issues about who is actually going to be at the helm come the week, 10 days when that decision is made, but we would love to hear from you this morning, because there is a lot of people that want clarity.”‘I’m scared when anyone says winter’: shocking tales from UK energy crisis frontlineAlex LawsonThe energy price cap rise is just one in a stack of mounting problems which are hitting households, as our energy correspondent, Alex Lawson, reports from Leicester:A tear rolls down Shama Omar’s face. She is describing the pain of her disabled daughter’s death last year, after 29 years of attentive care. It is a familiar tale of delays and stretched health service resources. “If the GP had seen her on that day, my daughter would have not died,” she says. Now, she is surviving on one cooked meal every two weeks, deciding on whether to pay for council tax, food or water next. “I need to take cancer medication, which gives me hot flushes but I can’t afford to have the fan on all the time,” says Omar. “I had to think whether to spend £4.60 for the bus here, that could have helped me make meals for two days.” Omar is among the millions waiting to see what further support government may offer for energy bills. On Friday, the industry regulator will announce yet another rise in the price cap, pushing average household bills to an expected £3,500 a year from October. By January, two-thirds of households in the UK are expected to be in fuel poverty. Omar sits across the table in a snug booth within a community centre in Leicester. The facility is run by the the Zinthiya Trust, which was founded by a charity worker, Zinthiya Ganeshpanchan, to alleviate poverty and provide support to survivors of domestic abuse. Its work is part-funded by the British Gas Energy Trust, which is increasingly working on helping its customers, and those of other suppliers, pay their gas and electricity bills, along with support in clearing debts and finding extra cash through benefits checks.Here’s the full piece:Watch: Ofgem CEO says prices likely to rise higherJonathan Brearley, Ofgem’s chief executive, has warned that prices are likely to keep rising:He told BBC News:‘It is possible that there may be peace between Russia and Ukraine, that things may change and indeed prices may stabilise or come down, but it is more likely that prices continue to rise.’Energy prices likely to rise even further, says Ofgem CEO – videoBrearley hasn’t given an estimate, but as we flagged earlier, consultancy Cornwall has warned average bills could surge to over £6,600 per year in April, based on current market prices.Terminally ill people could freeze to death this winter without further support, warns Matthew Reed, chief executive of end-of-life care charity Marie Curie.Reed explains that targeted support is needed, to help those who need energy for their care: “The need to stay warm to keep pain at bay and power specialist medical equipment means that energy bills for some terminally ill people will be thousands of pounds higher than the average household. “Many won’t be able to afford this. With 30% of excess winter deaths attributable to cold, damp housing, this could cost lives. “Our research shows that working age people are at a huge risk of falling into poverty after a terminal diagnosis. They often have to give up work. “They don’t qualify for their state pension. They cannot claim Winter Fuel Payments and do not automatically qualify for the Warm Home Discount scheme either. “Dying people are falling through the cracks. They need targeted Government support now.”Rupert JonesSome of Britain’s poorest families will see as much as 47% of their entire household budget swallowed up by energy costs this autumn, figures produced for the Guardian show.The calculations were done by investment platform Interactive Investor today, after the new energy price cap announcement, and are based on figures from Ofgem and Office for National Statistics (ONS) family spending data.Ofgem's price capAlice Guy, a personal finance expert at the platform, said: “The figures are truly terrifying. The rising energy price cap will have a disproportionate and devastating effect on poorer families who will spend a huge proportion of their budget on energy this autumn … Meanwhile, affluent families are better insulated from the effects of the energy crisis. While still painful, they will spend a much smaller proportion of their household budget on fuel this autumn.”Nearly nine million households will be in fuel poverty once bills surge in October, warns the fuel poverty charity National Energy Action. Adam Scorer, National Energy Action (NEA) chief executive, says the government has had ample time to prepare an intervention:Without bold action to support the most vulnerable and those on the lowest incomes, this will effectively prise their fingers from the cliff edge and push them over the precipice. The government needs to immediately upgrade the household support package it first announced back in May. Households need money in their pockets to weather this storm or we are going to see millions in dangerously cold homes, suffering in misery with unimaginable debt and ill health. NewestNewestPreviousNextOldestOldestTopicsBusinessBusiness liveEnergy billsHousehold billsEnergy industryUK cost of living crisis
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United Kingdom Business & Economics
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Australia's government would be collecting $70 billion a year in revenue if the emissions trading scheme was still in place, economist Ross Garnaut says.
The problems at Qantas, and the explosion in executive remuneration this century, reflect a much more general problem in our economy, he adds.
And Australians have been "in denial" about increasing oligopoly in the economy.
But all of these things are connected, and we have an opportunity to pursue "transformational economic reform" by tackling them all at once, he argues.
Are our leaders willing to do so?
What could we do with $70 billion a year?
Professor Ross Garnaut, a Professorial Research Fellow in Economics at the University of Melbourne, is one of Australia's most respected economists.
And he's been increasingly warning about the consequences of growing market concentration in our economy.
Earlier this month, he made another set of warnings when he delivered the keynote speech at the 2023 Henry George Commemorative Dinner in Melbourne.
Here's a summary of what he said.
He began his speech by saying Australia's government would now be collecting $70 billion a year in revenue if the emissions trading scheme (ETS) hadn't been dismantled.
The trading scheme existed in Australia between 2012 and 2014, but it was ended by Tony Abbott's Coalition government in mid-2014 before it was about to merge with the European ETS.
His calculation was based on today's European carbon price and exchange rate, and this year's expected Australian carbon volumes.
"That's not a tiny bit of money," Professor Garnaut said.
"We could pay for the nuclear submarines with five or six years of the carbon price. One year would pay for more than two years of Medicare.
"We could cut every personal tax rate by 30 per cent from the highest to the lowest.
"Some members of the Australian Parliament support raising the GST rate to pay for cuts in income tax rates. Re-introducing the European-linked carbon price would give all of the presumed benefits of a higher GST and efficiently reduce carbon emissions as a bonus," he said.
He said we wouldn't raise $70 billion a year from a carbon price forever, because the Albanese government wanted Australia to have net zero emissions by 2050, so the carbon price revenue would phase out over a generation.
But in the meantime, "it would pay for a lot of tax reform".
And we really needed to reform the tax system, he said, to fix a worrying and growing problem in the economy.
Telltale signs: Qantas, super profits, and rising executive remuneration
And this was the problem he highlighted.
He said Australia was increasingly dominated by powerful firms that were extracting "economic rents" from our economy and society.
"Australians have been in denial about the increasing oligopoly and the rise of rents," he said.
"The problem is much greater in Australia than the US, and has probably deteriorated more in recent times."
He said the results could be seen everywhere.
"The Qantas story that's become news over the last few weeks is one manifestation of a much more general problem," he said.
"Increased concentration of banking business is a large problem. Four big banks all putting up their interest rates or putting them down on adjacent days by the same amount. No effective competition. They know how to work together.
"The increased concentration of banking has its parallels in many sectors."
He said there had been an unprecedented increase in the share of national income going to profits this century, and it reflected the growing role of "economic rent" in Australia's economy.
"It began in the first decade of the century, and has gone much further and faster since then," he said.
"The only explanation for such divergence between the rate of return on competitive riskless capital and actual business rates of return as reflected in the profit share of GDP is a rise in rent," he said.
He said the explosion in executive remuneration this century was also a by-product of rising economic rents.
"The increase in the profit share and the fall in the wage share is actually bigger than the statistician makes it look," he told the audience.
"When Qantas paid CEO Alan Joyce tens of millions of dollars in recent times, that would mostly be classified in the wages and not profit share.
"The Joyce arrangements are not unique, or even unusual today. They were unknown in the twentieth century.
"There has been an explosion of executive remuneration this century, starting in finance and other high-rent parts of the private sector and extending into the public sector including the universities.
"It has gone much further in Australia than in Europe or Japan. It was apparent in the US before Australia, but it seems to have caught up in Australia over the last decade, and may have gone further when the size of enterprise is taken into account.
"It is really the sharing of rent between owners and managers of businesses in rent-rich sectors," he said.
So, what does Professor Garnaut mean by "economic rent"?
What is 'economic rent'?
Generally, "economic rent" is the money collected by an owner of a resource which exceeds that which is economically necessary.
It differs from the normal meaning of the word "rent," which refers to a payment you make for the temporary right to use a good, like renting a car.
In contrast, "economic rent" has to do with the abuse of one's power and privilege in the marketplace.
For example, when an individual or business has exclusive ownership over an asset and they use that positional advantage to extract more money from people than they otherwise could if they faced proper competition, they're extracting economic rent.
A few months ago, when he delivered the 2023 Bannerman Lecture, Professor Garnaut warned that an increasing proportion of Australia's national income was now coming from rent‐heavy sectors.
He mentioned urban real estate, information technology, financial services, media, and large‐scale retailing, but especially mining.
"Profits of mining, with economic rent contributing a considerable proportion, were larger than the whole of the rest of the economy in the final quarter of last year," he said.
He warned the growing problem of economic rent was now undermining our traditional methods of measuring how income was generated and distributed through the economy, and it was undermining our ability to understand the world around us.
A huge opportunity for 'transformational economic reform' in Australia
However, in his Henry George lecture this month, he said this also presented an opportunity for governments and policymakers.
He said if you added up all the opportunities for economic reform to reduce economic rents, or to tax them efficiently and equitably, you'd have a "transformational economic reform program" to increase productivity and equity.
He said such a reform project would be historically significant.
It would be comparable to the two other periods of major economic reform that Australia's seen in the post-World-War-II era: the full employment framework introduced by the Labor governments of John Curtin and Ben Chifley, and the reduction of Australian protection in the 1980s and 1990s.
"Resource rent taxation. Tax on carbon externalities. Tax on land and housing rent, and urban infrastructure and planning and immigration adjustments to reduce urban land rents. Increased competition," he said.
"Now is the time to focus on the rise of rents, policy to slow or reverse the increase, and taxation reform to secure for the public revenue part of the rents that cannot be removed by sound policy."
The erasure of land rent in neoclassical economics
Which brings us to the final section.
How did we allow this problem of rising economic rents to occur?
Garnaut suspects it's because important elements of economic theory took a wrong turn decades ago, particularly regarding how we think about land.
He said the problem could be partly traced to the influence of the American economist Paul Samuelson, who developed a neo-classical model that purported to represent the famous "Australian case" for trade protection that dominated official thinking in Australia in the early decades of our federation.
He said according to Samuelson's model, in a country that had an abundance of capital and a shortage of labour, relative to the rest of the world, protection from trade would shift the distribution of income towards workers.
But Samuelson's model was a "huge oversimplification", leaving out a crucial feature of the Australian argument.
"There was no land in the Samuelson model, yet the core of the Australian case was that protection operated as an indirect tax on land," Garnaut said.
"Samuelson omitted land from his simple and elegant model because the algebra didn't work if you included a fixed factor of production."
He said Samuelson was later joined at the Massachusetts Institute of Technology by a young economist called Robert Solow.
In the 1950s, Solow worked on a theory of growth based on the Samuelson-type neo-classical model — but still with no land — which later won him the Nobel Memorial Prize in Economic Sciences.
"It set economics on a wrong course," Garnaut said.
Solow's work developed what is now the standard way of measuring how capital and labour each contribute to growth in economic value in a given period.
However, Garnaut said a personal friend and colleague, the economist Max Corden, received a letter from Solow in 2017.
And it showed Solow had been rethinking, later in his career, the work for which he'd won the Nobel:
"We conventionally allocate all of the value added to either compensation of labour or return to capital, to capital as debt and equity.
"That would be fine if there were perfect competition. In reality, there is a third component, monopoly rent. It gets allocated to labour and capital in unknown proportions. What one would like to see is a three-way breakdown in market return to labour, market return to capital and rent," Solow wrote to Corden.
In other words, we have to include economic rent in our analyses of contemporary economic growth, otherwise we're deluding ourselves.
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Australia Business & Economics
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Two thousand rupee notes on display with an Indian flag in the background.Manish Rajput | SOPA Images | LightRocket via Getty ImagesThe Indian rupee has come under intense selling pressure due to a perfect storm of global headwinds which analysts say will continue to pummel the currency in the months ahead.In recent weeks, the Indian currency tested record lows and breached the 80 rupees per U.S. dollar level at least twice in July, recovering only after the Reserve Bank of India (RBI) stepped in to stem the slide.The currency has since regained some ground and was around 79.06 to the dollar on Thursday.The recent sharp declines prompted a swift response from policymakers to assuage concerns about a rupee sell-off, which could drive prices even lower.Finance Minister Nirmala Sitharaman attributed the rupee's depreciation to external reasons, in a written statement to parliament in late July. Global factors such as the ongoing Russia-Ukraine war, soaring crude oil prices and tightening of global financial conditions are among the key reasons for the weakening of the Indian rupee against the dollar, she said. Analysts agreed the currency is being buffeted from multiple fronts globally.Soaring energy prices India's exposure to high energy prices has had knock-on effects on the currency, with the rupee falling more than 5% against the dollar year-to-date.Soaring energy prices are especially challenging for India — the world's third largest oil importer — which typically buys oil in dollars. When the rupee weakens, its oil purchases become more expensive. According to Nomura analysts, for every $1 increase in the price of oil, India's import bill increases by $2.1 billion.There's been a "significant uptick" in Russian oil deliveries bound for India since March after Russia's invasion of Ukraine began — and New Delhi looks set to buy even more cheap oil from Moscow, industry observers say.Early data from June showed India's supply of Russian crude reached nearly 1 million barrels per day, up from 800,000 barrels per day in May, according to investment advisory firm Again Capital. "Usually, weaker currency acts as a pressure valve to restore external stability by making exports more competitive and reducing demand for imports by making them more expensive," said Adarsh Sinha, co-head for Asia-Pacific forex and rates strategy at the Bank of America Securities."Oil imports from Russia, if settled in rupee, would reduce dollar demand from oil importers. These rupees could be used to settle payment for Indian exports, and/ or invested into India – both could be beneficial," he told CNBC.Read more about energy from CNBC ProIn July, India's central bank put in place a mechanism for international trade settlements in Indian rupees. The measure allows traders to bill, pay and settle imports and exports using the Indian rupee, which will help a long-term goal to internationalize the Indian currency, analysts said."This move is constructive for the rupee in the medium-term as higher INR [Indian rupees] demand for settlements implies lower demand for forex for current account transactions," Radhika Rao, senior vice president and economist at DBS bank, said in a recent note.This will facilitate "trade with neighboring countries, with trading partners who are unable to access dollar funds and/are temporarily outside the international trading mechanism and those looking to broaden their pool of trade settlement currencies," she wrote.Remittances remain resilientWhile a weak rupee puts pressure on India's imports from other countries, it may help boost the country's remittances from abroad.Remittance flows to India grew by 8% to $89.4 billion in 2021, based on recovery in the United States, which accounts for a fifth of the country's remittances, according to World Bank data."Remittances could be determined by many factors but [a] weaker rupee helps increase domestic value of those remittances which would help offset inflationary pressures for the recipients," said Sinha from BofA Securities.Goldman Sachs also said in a recent note remittances to India "should remain resilient on the back of stable economic growth in the Middle East, benefiting from higher oil prices."Deficit problemsStill, India's widening current account deficit is expected to remain a continuing drag for the rupee, exacerbated by ongoing large capital outflows, analysts warned."India's external balances are deteriorating, driven by a terms-of-trade shock from elevated commodity prices, which is resulting in wider current account deficits," said Santanu Sengupta, India economist at Goldman Sachs.A current account deficit occurs when a country's imports exceed its exports.In a market environment that is not conducive for emerging market portfolio inflows, "we estimate a large balance of payments deficit. This has meant continued FX reserves drawdown across spot and forward books held by the RBI," he added.With global capital flows drying up in a Fed tightening cycle, US recession risks coming to the fore, and India's external balances becoming challenging, we are likely to see continued weakness in the INR going forward.Santanu SenguptaIndia economist, Goldman SachsAccording to Nomura's recent note, Indian equities have already experienced $28.9 billion of net foreign outflows year-to-date in July, the second most among Asian economies, excluding Japan. But India's large external buffers have "have provided confidence in RBI's ability to prevent tail risk scenarios from spilling over to domestic interest rates and impacting growth further when it is already going through a rough patch due to higher commodity prices and supply disruptions, along with tighter monetary policy," said Sinha."Our projection of balance of payment deficit indicates a shortfall of USD 30-50bn this year. RBI has adequate reserves to sustain intervention for at least another year," he added.In an attempt to defend the rupee, the central bank announced a slew of measures recently aimed at encouraging capital inflows. The measures include easing regulations on foreign deposits, relaxing norms for foreign investment flows into the debt market and for external commercial borrowing.'Taper tantrum'Despite the rupee's current underperformance, the currency's fall is still more contained today compared to the "taper tantrum" in 2013, analysts said, citing better fundamentals this time round.At that time, the Federal Reserve's decision to scale back its extraordinary monetary stimulus triggered a sell-off in bonds, which caused Treasury yields to surge and the U.S. dollar to strengthen. That led to an exodus of funds out of emerging markets."Much of [the Indian rupee's] depreciation pressure stems from sharp gains in the US dollar as the latter benefits from wide rate and policy differentials," said DBS's Rao in a recent note, explaining the high interest rate difference between the greenback and rupee as interest rates in the U.S. continue to rise.The pressure to defend the rupee's depreciation is not as high as back during the taper tantrum, she added. If pressures do intensify, the government has options such as deferring purchases of bulky defense items that would help to reduce the dollar demand, she wrote.Analysts also argued India's external balances, which is often cited as a source of vulnerability, has some inbuilt buffer against further rupee depreciation risks."Until now, even in the face of deteriorating external balances, the stock of FX reserves were limiting India's external sector vulnerability, and have allowed for a slow depreciation of the INR (vs. the USD)," said Sengupta from Goldman Sachs."Going forward, as FX reserves get depleted, and real rate differentials shrink, India's external vulnerability risks will increase — though they will likely compare better than the 'taper tantrum.'"Can rupee drop to 82 per dollar?As global conditions continue to remain in flux, the rupee will face further downside risks in the coming months, analysts said."With global capital flows drying up in a Fed tightening cycle, US recession risks coming to the fore, and India's external balances becoming challenging, we are likely to see continued weakness in the INR going forward," said Goldman Sachs' Sengupta.As a result, the bank forecasts the Indian currency could be around 80-81 rupees per dollar over the next 3 to 6 months, "with risks tilted towards even further weakness in the event of more acute dollar strength," he added.Other analysts even expect the rupee to test fresh new lows in the near term.Stock picks and investing trends from CNBC Pro:Craig Chan, Nomura's head of global FX strategy, said he does not believe the level "80 is sacrosanct.""We do not believe there is any particular market positioning factor that should lead to an accelerated move higher in USD/INR if 80 breaks – unlike in 2013," he added, referring to the "taper tantrum" period. "Our last call was INR [rupee] risks breaking the 80 to dollar level and overshoots to 82 by the end of August."Sinha from BofA Securities also expects the Indian currency to reach the 82 level by end-2022 due to continued volatility in the global environment."However, we see tails risks of larger depreciation contained by RBI's ample reserves buffer," he said.
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India Business & Economics
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The U.S. electric grid is an impressive but outdated system. Designed for a world that runs on fossil fuels, it caters to a network of giant energy producers, and the consumers dependent on them.But a greener world demands a more distributed system, where individuals or companies can generate, store and resell power.A smarter grid would help the U.S. adjust to the weather-dependent nature of solar and wind by managing consumer demand and enabling energy storage. Internet-connected smart meters and sensors could provide detailed usage analytics, and appliances could be controlled by both our smartphones and utility companies. Software would tie all the moving parts together, analyzing reams of data to ensure that supply and demand are balanced, even when the sun isn't shining or the wind isn't blowing. Here's what it will take to make this smarter grid a reality.
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Renewable Energy
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SINGAPORE, Oct 14 (Reuters) - The dollar slipped on Friday as risk appetite returned to global stock markets and investors appeared to shift their focus away from U.S. interest rate considerations, even as red-hot inflation data suggested more policy tightening was likely.Traders also remained on edge about prospect of intervention in the yen, which was hovering above three-decade lows.The dollar index fell 0.275%, extending the overnight session's 0.5% decline as investors seemingly brushed off data that showed U.S. consumer prices increased more than expected in September.Register now for FREE unlimited access to Reuters.comThe dollar has been on a tear as soaring inflation, recession fears and worries over central bank policies across the globe hit risk appetite.But on Friday, Asian shares tailed Wall Street in moving higher.Short-sellers in the stock market seemed to be driving the bounce in equities, which in turn pushed the dollar lower, said Bank of Singapore currency strategist Moh Siong Sim."I think the FX market is taking its cue from the equity market," he said.Despite this, the investment mood remained broadly cautious, which is likely to continue to support the dollar."I doubt the weaker dollar will sustain ... the dollar is the safe-haven currency currently," Commonwealth Bank of Australia strategist Carol Kong said.Analysts also pointed to Thursday reports of a possible U-turn by the UK government on its fiscal plans, which also supported risk sentiment.Sterling made steep gains overnight against the dollar as a result. It was last trading at $1.1311, down 0.15% on the day.British finance minister Kwasi Kwarteng cut short his trip to Washington amid reports that Prime Minister Liz Truss was considering reversing elements of the plan announced three weeks ago that triggered turmoil in financial markets.The Bank of England has had to step in to restore calm, announcing an emergency bond buying programme but is also adamant it will end the programme on Friday.Focus now shifts to next month's Federal Reserve policy meeting where it is expected to deliver another 75-basis-point rate increase. Futures prices also reflect about a one-in-10 chance of a full percentage-point rate hike next month.Elsewhere, the dollar was trading at 147.33 to the yen , below the 32-year peak of 147.665 it hit in the previous session.Investors remained on watch for intervention from the Japanese government to prop up the fragile currency. Finance Minister Shunichi Suzuki reiterated the government's readiness to take "appropriate action" against excessive currency volatility."Given the overnight CPI (consumer price index) shock and the fact that some economists are increasing their expectations for Fed hikes, the yen's relative stability is especially impressive," John Vail, chief global strategist at Nikko Asset Management in Tokyo. "MOF's efforts, therefore, have been successful."Last month, Japan intervened to buy yen for the first time since 1998, in an attempt to shore up the battered currency."There is still a risk of BOJ intervention just on the back of on how weak the yen is," Kong said, but cautioned that any intervention is unlikely to be successful.The Australian dollar was up 0.56% versus the greenback at $0.633, coming off a two and half year low it touched in the previous session. The kiwi was up 0.71% at $0.567 and was set for its first weekly gains in nine weeks.The euro nudged up 0.06% to $0.9779========================================================Currency bid prices at 0430 GMTAll spotsTokyo spotsEurope spotsVolatilitiesTokyo Forex market info from BOJRegister now for FREE unlimited access to Reuters.comReporting by Ankur Banerjee in Singapore, Tom Westbrook in Sydney and Kevin Buckland in Tokyo; Editing by Sam HolmesOur Standards: The Thomson Reuters Trust Principles.
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Forex Trading & Speculation
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ORLANDO, Fla., June 23 (Reuters) - If estimates that world markets face a record $4 trillion liquidity drain over the next 18 months are even close to accurate, hold on to your hats.That's how much analysts at Morgan Stanley reckon G4 central banks - the U.S. Federal Reserve, European Central Bank, Bank of Japan and Bank of England - will shrink their balance sheets by, via quantitative tightening (QT), by the end of next year.The estimate does not include the Swiss National Bank (SNB), one of the world's biggest liquidity providers of the last decade.Register now for FREE unlimited access to Reuters.comPerhaps even more significant than the SNB's 50 basis point interest rate increase last week was its admission that the franc is reasonably valued, suggesting that currency market intervention of recent years has ended.If this is the case, the SNB's role as a marginal but steady buyer of U.S. and euro zone bonds, and mega-cap Wall Street stocks, may be over.The SNB's balance sheet stands at around $1 trillion, up from around $200 billion in 2010. That's an average of around $70 billion injected annually into world markets that could now disappear.This is a strong signal that even the world's most dovish central banks are changing tack. While we're not there yet, an even bigger shock would be the Bank of Japan (BOJ) calling a day on its 'yield curve control' policy of buying unlimited government bonds to cap the 10-year yield at 0.25%.In some ways, Morgan Stanley's $4 trillion liquidity drain estimate is even more remarkable in that it predicts the BOJ's contribution will essentially be zero."The SNB and BOJ have contributed a very significant liquidity injection over the years that has led to large inflows into asset markets. If it were to stop, for whatever reason, that would be very dramatic," said Jens Nordvig, founder and CEO of Exante Data.Reuters ImageReuters Image'ZIRP' & 'NIRP'Japan's contribution to global market liquidity - via the BOJ's unparalleled balance sheet expansion, and Japanese investors' purchases of overseas assets - cannot be overstated.The BOJ has employed zero interest rate policy (ZIRP) and quantitative easing (QE) for years, and the country's large, accumulated current account surpluses have been plowed back into higher-yielding assets abroad.Japan has long been the world's largest creditor nation and its net stock of foreign assets, accumulated over the last few decades, especially, hit a record $3.24 trillion last year.The SNB, meanwhile, has gone one better on rates and pushed them below zero - 'NIRP', or negative interest rate policy - and has pumped hundreds of billions of dollars of cash accrued in sustained currency market intervention across swathes of the world's major bond and equity markets.Unique among major central banks, the SNB is a publicly-traded company, and also a huge investor in overseas stock markets. A quarter of its balance sheet is in foreign stocks, - a record share - much of it on Wall Street in multi-billion dollar stakes in companies like Apple (AAPL.O) , Microsoft and Amazon .Reuters ImageBREXIT & PLAZASome of the world's major stocks and bond markets are having one of their worst first-half-of-the-year performances since the Great Depression, as the Fed has raised rates, signaled more to come and just started reducing its balance sheet via QT.As the following chart from Exante Data shows, the total amount of bank reserves created by the BOJ and SNB to purchase financial assets towers over all others, as a share of GDP. The BOJ's bank reserves amount to 104% of GDP, and the SNB's 88%.Reuters ImageThe SNB's hawkish pivot will ultimately halt the build up of 'sight deposits' via franc-weakening currency intervention, and the Nasdaq's 30% slump this year could dampen its appetite for adding to its $177 billion equity portfolio.As far as Japan goes, investors' purchases of foreign stocks and bonds since 'Abenomics' was launched in 2013 have totaled around $15-$20 billion a month on a 12-month moving average basis, peaking in 2016.Last year, however, they were sellers of foreign stocks and their bond purchases slowed further. As Exante Data notes, they have resumed modest purchases of foreign equities again this year, but have become sellers of foreign bonds.Reuters ImageBut the yen has just hit a 24-year low against the dollar around 136 yen , and by some measures is the weakest in 50 years on a real effective exchange rate measure. If inflation pressures in Japan finally become embedded, the impact of a potential BOJ pivot would be huge."At some point, they are going to have to exit, and when they do it is going to be like one of these days that people remember in their careers, like Brexit, or for the older bears out there, Plaza," said Marc Chandler, managing director at Bannockburn Global Forex, referring to Britain's departure from the European Union in 2016 and the G5 coordinated effort to weaken the dollar in 1985.Related columns:- Full force of central banks siphoning world liquidity (June 17) read more - Nowhere to run, nowhere to hide as 'stagflation' bites (June 13) read more The opinions expressed here are those of the author, a columnist for ReutersRegister now for FREE unlimited access to Reuters.comBy Jamie McGeever; Editing by Susan FentonOur Standards: The Thomson Reuters Trust Principles.Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
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Interest Rates
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[1/5] South African President Cyril Ramaphosa looks on at the Francis Crick Institute during a state visit in London, Britain, November 23, 2022. REUTERS/Henry NichollsLONDON, Nov 23 (Reuters) - Britain and South Africa on Wednesday announced a new health and science partnership to mark the second day of President Cyril Ramaphosa's state visit to London, the first such official guest hosted by Britain's King Charles.Charles, 74, had rolled out traditional pomp and ceremony to welcome Ramaphosa, hosted a banquet in his honour on Tuesday. Ramaphosa also addressed lawmakers at the Houses of Parliament.On Wednesday, Britain announced a new set of research collaborations as Ramaphosa toured the Crick Institute, the biggest biomedical research facility in Europe, and Kew Gardens, with Charles' brother Edward.British foreign minister James Cleverly said the partnerships, on areas such as vaccine manufacturing, genome sequencing and climate change, will "benefit us all"."The UK and South Africa have shown global leadership in joining together to protect people by preventing the spread of dangerous diseases, and by working to halt climate change."Ramaphosa will meet Prime Minister Rishi Sunak later in the day, and attend a UK-South Africa business forum to discuss trade and investment. South Africa is Britain's biggest trading partner in Africa.Ramaphosa had highlighted the role that industrialised nations had to play in helping other countries cut emissions in his speech on Tuesday, and welcomed Britain's involvement in initiatives helping South Africa to decarbonise.Britain will support genome sequencing at South Africa's National Institute for Communicable Diseases (NICD), which played a key role in detecting COVID-19 variants such as beta and omicron, in a push improve antimicrobial resistance surveillance in Africa.Kew Gardens - a botanical garden in west London - will also work with South Africa's National Biodiversity Institute on preserving South Africa's plant diversity.Reporting by Alistair Smout, Editing by William MacleanOur Standards: The Thomson Reuters Trust Principles.
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United Kingdom Business & Economics
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Global Affairs travel advisory to India updated to include protests, 'negative sentiments' towards Canada
Canada has updated its travel advisory for India to include warnings about protests and "negative sentiments" towards Canadians in light of a recent breakdown in Canada-India relations.
Global Affairs Canada is urging travellers to exercise a high degree of caution when visiting the South Asian country.
"In the context of recent developments in Canada and in India, there are calls for protests and some negative sentiment towards Canada on social media," reads an update to the travel advisory. "Please remain vigilant and exercise caution."
The update comes after Prime Minister Justin Trudeau accused India last week of being involved in the killing of a Canadian citizen wanted for several years by authorities in that country.
Sikh activist Hardeep Singh Nijjar was gunned down in June outside a Sikh temple in suburban Vancouver. Trudeau called for India's help to investigate before revealing there were "credible allegations" India's government was involved in the killing. Last Tuesday, Canada expelled an Indian diplomat.
India called the allegations absurd and responded by expelling out a Canadian representative. The Indian government also halted all visa services for Canadian citizens.
– With files from The Canadian Press
CTVNews.ca Top Stories
BREAKING 'Deeply embarrassing for Canada's Parliament': Rota called to resign over Nazi veteran invite
House of Commons Speaker Anthony Rota is facing calls to resign, after apologizing to the House of Commons for inviting, recognizing, and leading the chamber in a standing ovation for a man who fought for a Nazi unit during the Second World War.
Global Affairs travel advisory to India updated to include protests, 'negative sentiments' towards Canada
Canada has updated its travel advisory for India to include warnings about protests and 'negative sentiments' towards Canadians in light of a recent breakdown in Canada-India relations.
Using the new and rapidly improving ability to piece together fragments of ancient DNA, scientists are finding that traits inherited from Neanderthals are still with us now, affecting our fertility, our immune systems, even how our bodies handled the COVID-19 virus.
Four out of ten child patients in Canada are facing unsafe spinal surgery wait times, which could cost the health-care system $44.6 million, according to a new report that was published Monday.
The last RCMP building is coming down at Roxham Road, which became an unofficial border crossing used by more than 100,000 migrants crossing into Canada from Upstate New York to apply for asylum since 2017.
Thousands of Armenians streamed out of Nagorno-Karabakh after the Azerbaijani military reclaimed full control of the breakaway region while Turkish President Recep Tayyip Erdogan was set to visit Azerbaijan Monday in a show of support to its ally.
Independent UN-backed human rights experts said Monday they have turned up continued evidence of war crimes committed by Russian forces in their war against Ukraine, including torture -- some of it with such "brutality" that it led to death -- and rape of women aged up to 83 years old.
A group of Canadian doctors, nurses and other health-care providers has issued recommendations on how to make health care more equitable for disadvantaged people.
A growing number of men are undergoing a radical surgery to become taller. CTV W5 goes inside the lucrative world of limb-lengthening surgery.
In 2013, Catherine Wreford Ledlow was told she had two to six years to live. She speaks to CTV W5 about winning 'The Amazing Race Canada,' nine years after her brain cancer diagnosis.
Post tropical storm Fiona showed how quickly Canadians can be displaced by climate change. W5 looks into whether more people living in vulnerable areas will have to consider moving in the years to come.
W5 Producer Shelley Ayres explains how she was in awe to meet what the Guinness Book of World Record's has named the World's Tallest Teenager, a 17-year-old from Quebec who plays for Team Canada.
W5 Investigates Daniel Jolivet insists he's not a murderer and says he has proof
Convicted murderer Daniel Jolivet, in prison for the past 30 years, has maintained his innocence since the day he was arrested. W5 reviews the evidence he painstakingly assembled while behind bars.
W5 Investigates Lebanese-Canadian family of 3-year-old killed in Beirut blast still searching for accountability, answers
More than two years after downtown Beirut was levelled by an explosion, a Lebanese-Canadian family of a 3-year-old girl killed in the blast is still searching for answers.
W5 goes deep into the narco heartland to interview a commander with one of Mexico's most brutal cartels.
CTV W5 investigates what authorities knew about plans to smuggle cocaine out of the Dominican Republic on a Toronto-bound Pivot Airlines flight. The airline's crew is demanding justice following their eight-month detention.
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BREAKING
BREAKING Charges dropped against construction company in Barrie, Ont. crash that killed 6 young adults
Charges against the company accused of criminal negligence in connection with an August 2022 collision that claimed the lives of six young adults in Barrie have been dropped.
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PHOTOS
Stargazers in Ontario got quite the show as the northern lights illuminated the skies overnight Sunday.
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A portion of Highway 400 through Innisfil, south of Barrie, is closed Monday morning for a collision.
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A small memorial of stuffed animals and signs sits outside a Donald Street apartment building, where a three-year-old boy died after falling more than 16 storeys on Sunday.
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BREAKING
BREAKING 'Deeply embarrassing for Canada's Parliament': Rota called to resign over Nazi veteran invite
House of Commons Speaker Anthony Rota is facing calls to resign, after apologizing to the House of Commons for inviting, recognizing, and leading the chamber in a standing ovation for a man who fought for a Nazi unit during the Second World War.
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Several Jewish advocacy organizations condemned members of Parliament on Sunday for giving a standing ovation to a man who fought for a Nazi unit during the Second World War.
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BREAKING
BREAKING Charges dropped against construction company in Barrie, Ont. crash that killed 6 young adults
Charges against the company accused of criminal negligence in connection with an August 2022 collision that claimed the lives of six young adults in Barrie have been dropped.
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A portion of Highway 400 through Innisfil, south of Barrie, is closed Monday morning for a collision.
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Several people are in hospital after a multi-vehicle crash in Innisfil on Sunday.
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'I will never stop': Joshua Bennett's mother still seeking answers on two-year anniversary of his murder
Felisha Bennett is holding onto hope that someone will come forward with information on the murder of her 18-year-old son, Joshua Bennett, who was found dead on a Kitchener trail in 2021.
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Waterloo regional police have arrested a man after reports of an assault with a conductive energy weapon in the University District Saturday afternoon.
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A special ceremony was held in Kitchener Sunday to honour fallen firefighters, including Michael Pearce. A helmet with his name on it is the 18th added to the memorial.
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A Scarborough man is facing multiple human-trafficking related charged after he allegedly broke into the victim’s London home, prompting an investigation.
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LIVE FROM COURT
The trial of Nathaniel Veltman, who has been accused of intentionally striking a London, Ont. Muslim family with his pick-up truck, enters its third week Monday as the Crown continues to call witnesses.
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A 33-year-old London resident has been charged with second degree murder in connection to a fatal stabbing Friday morning.
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LIVE FROM COURT
The trial of Nathaniel Veltman, who has been accused of intentionally striking a London, Ont. Muslim family with his pick-up truck, enters its third week Monday as the Crown continues to call witnesses.
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Chatham-Kent police are investigating a fatal collision in Tilbury involving a motorcycle and a boat trailer that claimed the life of a 70-year-old woman.
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Essex County OPP responded to a dangerous conditions report in Belle River Friday night after it was reported someone had been shining a laser at an airplane.
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The last RCMP building is coming down at Roxham Road, which became an unofficial border crossing used by more than 100,000 migrants crossing into Canada from Upstate New York to apply for asylum since 2017.
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Newfoundland and Labrador Premier Andrew Furey said he is open to negotiations with Quebec as long as he is "shown the money."
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A coroner's inquest opening in Montreal today will look into the deaths of three men seemingly killed at random over a 24-hour span last August.
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Four out of ten child patients in Canada are facing unsafe spinal surgery wait times, which could cost the health-care system $44.6 million, according to a new report that was published Monday.
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Digby RCMP are investigating a single-vehicle crash that took the life of one person in Plympton, N.S.
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There's been tremendous support for the 110 people displaced in a apartment fire in Fredericton, with members of the community donating clothes and opening their doors.
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Manitoba's party leaders stepped up their attacks over the weekend in a bid to gain momentum heading into the final full week of the provincial election campaign.
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'Everyone deserves to be who they are': Rally for Trans Youth in Winnipeg responds to anti-LGBTQ2S+ protests
Thousands gathered at the Manitoba Legislature Sunday in a massive show of support for Winnipeg's LGBTQ2S+ community.
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Four out of ten child patients in Canada are facing unsafe spinal surgery wait times, which could cost the health-care system $44.6 million, according to a new report that was published Monday.
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Calgary police are investigating the death of a man whose body was found in the community of Pineridge on Sunday.
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A 34-year-old man from Linden, Alta., is facing several charges in connection with a number of break-and-enters and thefts in Kneehill County.
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A southwest Calgary resident is raising the alarm after he snapped a photo of a cougar within city limits.
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One person is dead after a single-vehicle rollover on Saturday.
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WEATHER
Two more days with afternoon highs of 20 or 21 C in Edmonton. After a weekend that saw temperatures hit 22 C on Saturday and 20 C on Sunday, the warm spell sticks around for a few more days.
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Grande Prairie hit-and-run leaves pedestrian with broken bones; RCMP searching for driver of red SUV
A pedestrian suffered multiple broken bones after a hit-and-run crash in Grande Prairie last month.
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A special weather statement is in effect for Metro Vancouver due to a fall storm expected to bring strong winds and heavy rain, and residents are being warned to brace for falling branches and potential power outages.
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Four sailings between Metro Vancouver and Victoria were cancelled Monday morning due to 'adverse weather conditions,' according to BC Ferries.
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Emotions were raw as hundreds gathered at the B.C. Legislature Sunday afternoon to honour the police officers who were killed in the line of duty.
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BREAKING
BREAKING 'Deeply embarrassing for Canada's Parliament': Rota called to resign over Nazi veteran invite
House of Commons Speaker Anthony Rota is facing calls to resign, after apologizing to the House of Commons for inviting, recognizing, and leading the chamber in a standing ovation for a man who fought for a Nazi unit during the Second World War.
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Several Jewish advocacy organizations condemned members of Parliament on Sunday for giving a standing ovation to a man who fought for a Nazi unit during the Second World War.
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Two groups in the Canadian Sikh diaspora are calling for Canada's political parties to "present a united front" on India after Prime Minister Justin Trudeau announced a "potential link" between the shooting death of a local leader and the Indian government.
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Four out of ten child patients in Canada are facing unsafe spinal surgery wait times, which could cost the health-care system $44.6 million, according to a new report that was published Monday.
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A group of Canadian doctors, nurses and other health-care providers has issued recommendations on how to make health care more equitable for disadvantaged people.
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Using the new and rapidly improving ability to piece together fragments of ancient DNA, scientists are finding that traits inherited from Neanderthals are still with us now, affecting our fertility, our immune systems, even how our bodies handled the COVID-19 virus.
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Seattle-based Getty Images is taking a two-pronged approach to the threat and opportunity that AI poses to its business. First, it sued a leading purveyor of AI-generated images earlier this year for what it alleged was 'brazen infringement' of Getty's image collection 'on a staggering scale.' Now, it's embracing the technology.
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Seven years after OSIRIS-REx was sent into space to retrieve a sample of an asteroid, the NASA-led spacecraft has delivered its cargo into Earth’s orbit, and Canada is set to receive a piece.
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Travis Kelce put the ball in Taylor Swift's court, and she wound up bringing it to Arrowhead Stadium after all. Call it what you want. It's out of the woods now.
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Montreal conductor Yannick Nezet-Seguin says he employed a secret weapon in teaching Bradley Cooper how to conduct like Leonard Bernstein in the upcoming biopic 'Maestro' -- an earpiece.
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Film legend Sophia Loren has successful surgery after fracturing a leg in a fall at home, agent says
Film legend Sophia Loren is recovering from successful surgery for a leg fracture after she fell in her Switzerland home, an agent for the 89-year-old Italian actor said Monday.
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Top Thai officials welcomed hundreds of Chinese tourists at Bangkok's international airport on Monday, the first day of a new visa-free entry program that officials say will boost the country's tourism industry that was badly damaged by the coronavirus pandemic.
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The head of the European Central Bank said Monday that interest rates will stay high enough to restrict business activity for "as long as necessary" to beat back inflation because upward pressure on prices "remains strong" in the 20 countries that use the euro currency.
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The European Union's trade commissioner called for a more balanced economic relationship with China on Monday, noting a trade imbalance of nearly 400 billion euros ($425 billion), while also warning that China's position on the war in Ukraine could endanger its relationship with Europe.
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Denmark's Lego said on Monday that it remains committed to its quest to find sustainable materials to reduce carbon emissions, even after an experiment by the world's largest toymaker to use recycled bottles did not work.
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A lucky lottery player will be the winner of a record-breaking multi-million dollar prize on Wednesday.
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A sanctuary just outside of Estevan is giving some of Saskatchewan’s smallest equines with special needs the opportunity for a forever home.
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The nearly 300,000 fans descending on the Marco Simone club for the Ryder Cup this week will be able to see the 11th-century castle with the same name from various points of the course -- it's wedged between the sixth and eighth holes and has a big Italian flag waving from its tower -- but they won't be able to visit it.
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Two participants in Sunday's half-marathon in Montreal suffered cardiorespiratory arrest at the finish line, event organizers confirmed.
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Former NHL player Nicolas Kerdiles died Saturday after a motorcycle crash in Nashville, according to police. He was 29.
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Ford Motor has offered Canadian union Unifor wage increases of up to 25 per cent in its tentative agreement, the union said on Saturday. The agreement provides a 10 per cent wage increase for the first year followed by increases of two per cent and three per cent through the second and third year and a $10,000 productivity and quality bonus to all employees on the active roll of the company, Unifor said.
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Even after escalating its strike against Detroit automakers on Friday, the United Auto Workers union still has plenty of leverage in its effort to force the companies to agree to significant increases in pay and benefits.
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U.S. autoworkers expand their strike to 38 locations in 20 states. Biden plans visit to show support
The United Auto Workers union expanded its strike against major carmakers Friday, walking out of all 38 parts-distribution centres operated by General Motors and Jeep and Ram owner Stellantis in 20 states but sparing Ford from further shutdowns.
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Asia Business & Economics
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Australia-EU Trade Deal At Risk During Impasse Over Market Access
Australian Trade Minister Don Farrell said he is prepared to walk away from the talks if the EU fails to improve its position.
(Bloomberg) -- Australia and the European Union’s negotiations to conclude a free-trade agreement are at an impasse over Canberra’s concerns that the bloc is offering insufficient access to the nation’s agricultural exports.
Trade Minister Don Farrell, who arrived in Brussels this week for talks with EU counterpart Valdis Dombrovskis, is unhappy with the market entry offered by the EU for Australian beef, sheep and sugar. Farrell said he is prepared to walk away from the negotiations if the EU fails to improve its position.
“I will not go back to Australia with the offer that’s currently on the table,” Farrell said in a statement ahead of a second day of negotiations on Tuesday. Both Australia and the EU had said they wanted to see the FTA finalized by the end of the European summer, and negotiations had seemed to be nearing a conclusion.
Prime Minister Anthony Albanese backed his trade minister’s tough stance at a press conference with German Chancellor Olaf Scholz on Monday in Berlin.
“Ultimately, our negotiations with the EU will only be concluded when we have a good deal, and one that includes new market access for our agricultural products,” Albanese told reporters.
The EU was Australia’s third-largest two-way trade partner — worth A$97 billion ($65 billion) in fiscal 2022 — and second-largest source of foreign investment, according to the Department of Foreign Affairs and Trade.
National Farmer Federation Chief Executive Tony Mahar said that while he didn’t want to see “years of hard work” wasted, he backed Farrell’s readiness to end the talks if the EU’s offer wasn’t improved.
“We are better to walk away than to agree a dud deal. We’ve made that point clearly to Minister Farrell here in Brussels,” Mahar said in a statement on Tuesday. “We’d rather this take a few extra months if necessary.”
New Zealand signed a deal with the EU over the weekend, which aimed to boost bilateral trade by 30% within a decade and investment into New Zealand by 80%. However, Australia is understood to want an FTA similar to that secured by Canada in 2014.
--With assistance from Yoshihiro Sato.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
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Australia Business & Economics
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Australia will offer residency to people affected by climate change in the low-lying Pacific nation of Tuvalu, as part of a sweeping new treaty that also locks the two countries into close security ties.
At a time when many Pacific leaders are pressing Australia to take stronger action against its fossil fuel sector, the treaty explicitly recognises the vulnerability of Tuvalu to rising sea levels.
Tuvalu is a country of nine low-lying islands in the central Pacific, about halfway between Australia and Hawaii, with a population of about 11,200.
Australia will offer up to 280 people access to permanent residency each year, but it has also promised to help the citizens of Tuvalu “stay in their homes with safety and dignity”.
The Australian prime minister, Anthony Albanese, said the deal would also cement his country’s status as Tuvalu’s “security partner of choice” by offering it a form of security guarantee.
The new treaty, announced on Friday, states that Australia will act on requests from its partner to respond to major natural disasters, pandemics or “military aggression against Tuvalu”.
In return for this security guarantee, Tuvalu will be required to “mutually agree with Australia” if it wants to strike a deal with any other country on security and defence-related matters.
These topics are defined broadly to include “defence, policing, border protection, cybersecurity and critical infrastructure, including ports, telecommunications and energy infrastructure” – all of which are of interest to China.
Australia’s military could be granted access and have a presence within the country if such activities are deemed necessary to provide assistance that had been requested by the Pacific country.
The deal will be seen as a strategic win for the Australian government at a time when China has been vigorously pursuing closer ties with Pacific island countries.
Beijing’s signing of a security pact with Solomon Islands last year rocked the Australian defence establishment and prompted a pledge from Albanese’s Labor government to more vigorously pursue engagement with its Pacific neighbours.
Albanese announced the plans after three days of talks with fellow Pacific leaders at a key regional summit in Cook Islands, where the climate crisis was one of the biggest issues on the agenda.
Australia and Tuvalu’s relationship has been elevated to a new partnership to be known as the Falepili Union – a Tuvaluan word referring to good neighbourliness, care and mutual respect. Albanese said the new union recognised the “special and unique challenges” faced by Tuvalu and its exposure to climate change, including its geographical remoteness and scarce natural resources.
The elevated partnership was requested by Tuvalu, the prime minister said, “to safeguard the future of Tuvalu’s people, identity and culture”.
“That is why we are assisting on adaptation, but we are also providing the security that these guarantees represent for the people of Tuvalu, who want to preserve their culture, want to preserve their very nation going forward as well,” he said.
Government sources said it was not anticipated that all Tuvalu residents would move to Australia, with no expectation of “wholesale migration” – but instead “migration with dignity” for those who wanted to travel.
Albanese met two days ago with the Tuvalu prime minister, Kausea Natano, who described himself as “the leader of a country that is going to be under the water” if the world does not tackle the climate crisis.
The multifaceted agreement includes a “special mobility pathway” and visa category for 280 Tuvaluan citizens each year to gain permanent residency in Australia, with rights to live, study and work, as well as access services. The new pathway will sit under the existing Pacific engagement visa.
Australian government sources said Tuvalu would choose which citizens would be offered access to the new visa pathway.
Natano, appearing alongside Albanese in Cook Islands on Friday, said the system would be designed to avoid “brain drain” in the Pacific nation.
“The dedication of Australia to supporting the people of Tuvalu goes beyond words and it has touched our hearts profoundly,” Natano said.
Tuvalu is one of very few nations in the Pacific to have formal diplomatic relations with Taiwan, although Solomon Islands switched allegiance to China in recent years.
Natano told the press conference that Tuvalu would continue to maintain diplomatic relations with Taiwan, but said China had approached his country to seek ties.
He said he and Albanese had briefed the Pacific Islands Forum – the 18-member regional grouping - earlier in the day during the leaders’ retreat on the island of Aitutaki.
Australia’s pledge also includes further cooperation on the Tuvalu Coastal Adaptation Project, which would reclaim land in the capital, Funafuti, in the hopes of expanding the land mass by 6% to create more space for housing and other essential services and “enabling people to remain living in Tuvalu in the face of sea level rise”.
The climate crisis is repeatedly cited by Pacific countries as their top security threat and many within the region are concerned about Australia’s approval of new coal and gas projects.
The leader of the Australian Greens, Adam Bandt, responded to the announcement by saying it “would be even better if Labor didn’t cause the damage in the first place and stopped approving new coal and gas mines”.
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Australia Business & Economics
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Millions of Optus customers in Australia were left without phone and internet services after the telco giant’s network dropped out from about 4am on Wednesday.
Unable to make or receive calls for at least nine hours, hospitals, schools, financial institutions and government departments were among those affected, along with some people’s ability to call triple zero.
Wednesday’s outage occurred a year after the Singaporean-owned telco was subjected to a cyber-attack that compromised the personal data of up to 9.8 million customers.
People queued outside the stores of other telco providers, while others gathered at fast food restaurants and public libraries in search of wifi.
The federal communications minister, Michelle Rowland, said Optus customers were experiencing a “high level of anxiety and frustration” and suggested some might leave the company.
Optus has apologised to customers and said at 5.30pm on Wednesday that services had been restored.
But if you were caught up in the outage, here’s what you can do and what might happen next.
Shop around
The Optus chief executive was asked on 3AW radio on Wednesday if she expected an “exodus” of customers. Kelly Bayer Rosmarin was very sorry for customers but pointed out that nationwide outages were “highly unusual”.
“I believe at Optus that we are customer champions and we go to great lengths to give our customers great value for money, excellent service and coverage and unique features they can’t get anywhere else,” she said.
Mariam Gabaji, a telco expert at the financial comparison site Finder, said the Optus outage was “unfortunate” but it was a good opportunity to explore other phone and internet plans to get best value for money.
Gabaji said people wanting to switch mobile phone plans should check whether they were using all the data they’d signed up for, as well as the coverage offered by the networks that the different providers use.
Gabaji encouraged people to shop around for broadband or NBN home internet packages that could be better value. As an example, she pointed to NBN 50 – the most common internet plan in Australia.
She said there was a $450 difference in price between the cheapest NBN 50 plan and the most expensive, with the less expensive option supplied by a smaller provider and the costlier option supplied by one of the big telcos.
Refunds and compensation
The Telecommunications Industry Ombudsman advised affected customers to contact them if they’d already contacted Optus and were unhappy with the response.
The ombudsman, which mediates disputes between the telco industry and customers, said it could also forward complaints to Optus if people had not yet contacted the company or were unable to contact it.
The ombudsman said it could help affected customers with refunds for the time they had not been able to use their internet or phone services, as well as compensation schemes and any disputes about contracts.
However, the University of Sydney’s chair of market regulation and private law, Prof Yane Svetiev, said it was too early to say whether customers would be eligible for compensation.
“It’s not just that because people have had interruptions they will be automatically entitled to some sort of redress,” he said. “A lot will depend on the reason for the interruption, which is not really understood as yet.”
Svetiev said most telco companies put terms in their contracts that said they didn’t “actually guarantee continuous service” because there were “factors outside of their control” that could cause disruptions.
“It depends whether Optus has done everything a reasonable, competent provider of that service would have done, and done it in a timely way,” he said.
Parliamentary inquiry
The Greens have called for a federal parliamentary inquiry to examine what went wrong.
The Greens communications spokesperson, Sarah Hanson-Young, said it was “not good enough” that Optus management had failed to publicly explain the outage.
“It’s unacceptable for this prolonged outage to occur without basic accountability from this huge corporation,” she said.
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Australia Business & Economics
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SINGAPORE, Nov 14 (Reuters) - The U.S. dollar held firm on Monday following last week's bruising dive as Federal Reserve Governor Christopher Waller said that the central bank was not softening its fight against inflation.A slightly cooler-than-anticipated inflation data on Thursday sent the greenback on a tailspin, with the dollar index sliding 3.6% over two sessions last week, its biggest two-day percentage loss since March 2009.Global equities soared as investors poured into risky assets on hopes that peaking inflation means less aggressive rate hikes from the Fed.But Fed's Waller on Sunday said that the inflation print last week was "just one data point" that would have to be followed with other similar readings to show convincingly that inflation is slowing.Waller, however, did add that the Fed could now start thinking about hiking at a slower pace."I think the market got a little bit ahead of itself," said Carol Kong, a currency strategist at Commonwealth Bank of Australia, adding the market will likely get a reality check from Fed officials, helping the dollar to recoup some of its recent losses.U.S. inflation will likely remain high and keep the Fed on its monetary tightening path, Kong said.U.S. consumer sentiment fell in November, pulled down by persistent worries about inflation and higher borrowing costs, a survey showed on Friday.The U.S two-year yield , which reflects rate move expectations, edged up to 4.41%, after diving as deep as 4.29% on Friday.Meanwhile, cryptocurrencies remained under pressure from ongoing turmoil in the crypto world after the fall of crypto exchange FTX. FTX's native token, FTT , was last down 4% at $1.36, taking its month-to-date losses to nearly 95%.Bitcoin fell about 1% at $16,170.The Japanese yen weakened 0.24% versus the greenback to 139.12 per dollar, having strengthened 5.4% last week against the dollar. The euro was last down 0.2% at $1.0331.Sterling was last trading at $1.1798, down 0.31% on the day ahead of British Chancellor's Autumn Statement on Thursday where he is expected to set out tax rises and spending cuts.The dollar index fell 0.094% at 106.610, not far off Friday's low of 106.27.The offshore Chinese yuan fell 0.23% versus the greenback to stand at $7.0723 per dollar on the day. The yuan had jumped on Friday after Chinese health authorities eased some of the country's heavy COVID-19 curbs.On Sunday, Reuters reported that Chinese regulators have told financial institutions to extend more support to property developers to shore up the country's struggling real estate sector.========================================================Currency bid prices at 0147 GMTAll spotsTokyo spotsEurope spotsVolatilitiesTokyo Forex market info from BOJReporting by Ankur Banerjee in Singapore; Editing by Ana Nicolaci da CostaOur Standards: The Thomson Reuters Trust Principles.
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Forex Trading & Speculation
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Chris Bowen says Australia is through the worst of the energy crisis, which he claims was “written and authorised” by predecessor Angus Taylor.Chris Bowen has announced that Australia is “through the worst” of the energy crisis which plagued most of the nation.In an unprecedented move the AEMO indefinitely was forced to suspend the electricity spot market for the east coast from last Wednesday afternoon.The decision came amid skyrocketing power prices which led AEMO to set an energy price cap on Sunday, limiting the price of wholesale electricity to $300 a megawatt per hour.Stream more local news live & on demand with Flash. 25+ news channels in 1 place. New to Flash? Try 1 month free. Offer ends 31 October, 2022.“The National Energy Market continues to function under pressure but nevertheless we are in a situation where more generation has come back on board,” Mr Bowen told reporters on Monday.“The system has avoided any black outs and any load shedding.”Mr Bowen was also quick to blame the previous government’s 10 years of “denial and delay” for manufacturing the crisis.“This is a Taylor-made crisis. Made by a former minister and government which wasn’t up to the job,” he said.“This is a crisis written and authorised by Angus Taylor, Goulburn.“This is a crisis that has been brought about by a government which refused to make the difficult decisions, to provide the framework, to get the investments in storage, in renewables, in transmission."The previous minister was out to lunch for eight years.”The Energy Minister was also forced to concede the importance of coal in the short term when quizzed about fossil fuels.“In the short-term, they play a very important role, absolutely,” he said.“And their failure has been by and large. There have been many factors including geopolitical, by and large what is driving the factors in recent weeks.”His comments come following Labor’s pledge to legislate its target to reduce emissions by 43 per cent by 2030.Prime Minister Anthony Albanese on Thursday announced the nation was changing its target to achieve a more substantial emissions cut by the end of the decade compared to what was previously committed to by the Coalition."When I've spoken with international leaders in the last few weeks, they have all welcomed Australia's changed position. Our changed position of 43 per cent, up by 17 to 15 per cent, from the 26 to 28 per cent target that has remained there since Tony Abbott determined it in 2015," he said."Scott Morrison went to the Glasgow Conference last year and gave an empty speech to an empty room with no changed position."We saw a pamphlet released by a former government rather than a policy framework and we continued to see arguments, even during the election campaign, about the science of climate change, let alone the need to act."The Opposition has signalled it won’t be supporting it when parliament returns in July.
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Australia Business & Economics
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The Swiss National Bank (SNB) logo is pictured on its building in Bern, Switzerland June 16, 2022. REUTERS/Arnd WiegmannRegister now for FREE unlimited access to Reuters.comSummaryCompaniesSight deposits fall by biggest amount since 2012Rising sight deposits had signalled interventions to weaken CHFDecline could mean less REPO market activity, analysts sayEconomists don't believe SNB is trying to strengthen francZURICH, June 27 (Reuters) - Cash held overnight by the Swiss National Bank fell last week by its largest amount in more than a decade, according to data published on Monday, signalling the end of the central bank's forex purchase campaign to weaken the Swiss franc.In recent years, the level of sight deposits had increased on an almost weekly basis as the SNB bought foreign currencies from commercial banks with newly created francs.As a result, commercial banks' sight deposit accounts expanded, increasing by 29 billion francs this year alone as the SNB fought to stem the rise of the safe-haven franc.Register now for FREE unlimited access to Reuters.comBut data showed the total level of sight deposits fell by 3.37 billion francs to 748.46 billion francs last week, the biggest weekly drop since early 2012.The SNB declined to comment on reasons for the decline.Analysts said the decline indicated the SNB had halted interventions and accepted the franc's recent strengthening since the central bank hiked its interest rate on June 16. read more "After increasing interest rates two weeks ago, the increases of the franc's value were be expected," said Maxime Botteron, an economist at Credit Suisse."As inflation is getting close to 3% in Switzerland preventing the Swiss franc from appreciating through FX purchases would not be an appropriate policy. Foreign currency purchases should therefore be a thing of the past."Analysts do not believe the SNB has been buying francs from sight deposit-holding commercial banks using foreign currencies it holds, one way sight deposits could be reduced.An even stronger franc could help dampen Swiss inflation, while the SNB has also said it would consider selling foreign currencies if the franc were to weaken."We don't think that at EURCHF 1.01 the SNB is going to actively strengthen the Swiss franc. This would be the case at 1.10," said Alessandro Bee, an economist at UBS.Sight deposits could also have dipped as the SNB likely reduced the number of liquidity-providing repurchase operations (REPOs) after it lowered the threshold above which its negative interest rate applies.This means more banks' reserves are covered by the -0.25% interest rate, giving them less of an incentive to borrow money from the SNB via REPOs.The amount of money held via sight deposits will have declined as banks borrow less using REPO operations and pay back the SNB for REPOs that are already outstanding, said Credit Suisse's Botteron.Another factor could be an increase in cash withdrawals from banks by holidaying customers, which are deducted from their sight deposits."We also cannot rule out seasonal fluctuations," said Karsten Junius, an economist at J.Safra Sarasin. "It could be that commercial banks reduced their deposits as households need more cash for the travel season."Register now for FREE unlimited access to Reuters.comReporting by John Revill
Editing by Bernadette BaumOur Standards: The Thomson Reuters Trust Principles.
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Forex Trading & Speculation
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Mohammed Abed/AFP via Getty Images
toggle caption
A Palestinian man carries a child wounded during an Israeli bombardment in Rafah, on the southern Gaza Strip, on Saturday.
Mohammed Abed/AFP via Getty Images
A Palestinian man carries a child wounded during an Israeli bombardment in Rafah, on the southern Gaza Strip, on Saturday.
Mohammed Abed/AFP via Getty Images
TEL AVIV, Israel — The Israeli military says it attacked more than 400 targets throughout Gaza in the 24 hours since the end of a week-long cease-fire with Hamas sparked a resumption of combat operations.
The Israel Defense Forces released video and photos of Israeli soldiers conducting ground operations and aerial footage showing airstrikes on buildings and infrastructure. One video, that appeared to target a human figure walking in a street, was described by the IDF as "a strike on terrorists" in western Jalalia, an area in Gaza's north.
In a statement, the IDF said that air force fighter jets had struck more than 50 targets around Khan Younis, a city in the southern part of the Gaza Strip.
The heavy bombardment and ground operations across Gaza killed nearly 200 Palestinians and wounded hundreds more in the first day of fighting, according to the Health Ministry in Hamas-controlled Gaza.
The temporary truce that collapsed early Friday followed seven weeks of fighting in Gaza sparked by simultaneous attacks on southern Israel by Hamas militants on Oct. 7. The attacks killed 1,200 people, Israel says. The militants also seized around 240 captives, more than 100 of whom were subsequently freed in a series of hostages-for-prisoners swaps during the cease-fire. Israel released nearly 250 Palestinian prisoners and detainees as part of the deal.
Israel has notified at least five Israeli families that their loved ones taken hostage by Hamas are no longer alive. More than 100 others remain in captivity, according to Israel's military.
A United Nations official tells NPR that about 50 aid trucks managed to enter Gaza via a border crossing with Egypt and were waiting to be unloaded Saturday morning. However, the vehicles did not reach Gaza's hardest-hit north. The number of trucks delivering aid on Friday was also far fewer than the around 200 per day during the week-long pause in fighting — a number that relief officials have said is far too small to meet the needs of Gaza's 2.2 million people.
Even so, a senior official of the U.N. Office for the Coordination of Humanitarian Affairs (OCHA) said the cease-fire "offered a glimpse of what can happen when the guns fall silent."
Jack Guez/AFP via Getty Images
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A picture taken from southern Israel near the border with the Gaza Strip on Saturday, shows smoke billowing over the Palestinian territory as a result of Israel's bombardment of the Palestinian territory.
Jack Guez/AFP via Getty Images
A picture taken from southern Israel near the border with the Gaza Strip on Saturday, shows smoke billowing over the Palestinian territory as a result of Israel's bombardment of the Palestinian territory.
Jack Guez/AFP via Getty Images
"We need to maintain – and build on – the progress in aid delivery," Martin Griffiths, OCHA's under-secretary-general for humanitarian affairs and emergency relief coordinator, said. "We need civilians and the life-sustaining infrastructure they rely on to be protected. We need the remaining hostages to be released immediately and unconditionally. We need a humanitarian ceasefire. We need the fighting to stop."
Amid what international groups have described as a growing humanitarian crisis in besieged Gaza, Israel says it will not renew the visa of the top U.N. aid official for the Palestinian territories.
Nearly three years ago, Canadian-born Lynn Hastings was named deputy special envoy for the Middle East peace process and the resident coordinator for the West Bank and Gaza Strip.
But a spokesman for U.N. Secretary-General António Guterres said on Friday that the U.N. had been informed by Israeli authorities "that they would not renew the visa of Miss Hastings past its due date at some point later this month," according to Israeli media.
In a statement to NPR, Israel's foreign ministry confirmed that Hastings' visa would not be renewed. Citing what it calls the U.N.'s "one-sided and biased attitude" in the conflict in Gaza, the foreign ministry said it had decided " not to automatically approve the granting of visas to U.N. representatives in Israel and to examine each case individually."
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Middle East Business & Economics
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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 7, 2022. REUTERS/Brendan McDermidRegister now for FREE unlimited access to Reuters.comSummaryCompaniesTech, consumer discretionary lead sectoral advanceCasinos jump as Macau allows tour groups after nearly 3 yearsIndexes: S&P up 0.09%, Nasdaq up 0.96%, Dow down 0.40Sept 26 (Reuters) - The Nasdaq index moved higher in early session on Monday as beaten-down growth stocks tried to stage a comeback from a steep selloff that was triggered by worries of a central bank-induced recession.The benchmark S&P 500 index (.SPX)also showed signs of steadying after briefly falling below its mid-June closing low of 3,666 on Friday that almost erased a sharp summer rebound.Hints from the U.S. Federal Reserve that high interest rates could last through 2023 sent the three major stock indexes tumbling between 4% and 5% last week, with the Dow Jones index (.DJI) coming within spitting distance of a bear market in the previous session.Register now for FREE unlimited access to Reuters.comSectors housing megacap growth companies, including technology (.SPLRCT), consumer discretionary (.SPLRCD) and communication services (.SPLRCL), led the gains.Apple Inc (AAPL.O), Microsoft Corp (MSFT.O), Amazon.com Inc and Tesla Inc (TSLA.O)rose between 0.9% and 2.0%, boosting the Nasdaq index (.IXIC)."You're just seeing a relief rally after a very tough stretch of performance for the Nasdaq and growth stocks," said Jeffrey Schulze, investment strategist at ClearBridge Investments."You have obviously seen a lot of pain in the growth areas of the market over the course of the last month as investors reprice higher Fed funds rates and ultimately a terminal rate or this hiking cycle."Shares of casino operators Wynn Resorts (WYNN.O), Las Vegas Sands Corp (LVS.N) and Melco Resorts & Entertainment jumped between 11.6% and 30.4% after Macau planned to open to mainland Chinese tour groups in November for the first time in almost three years.At 10:09 a.m. ET the Dow Jones Industrial Average (.DJI) was down 119.29 points, or 0.40%, at 29,471.12, the S&P 500 (.SPX) was up 3.43 points, or 0.09%, at 3,696.66 and the Nasdaq Composite (.IXIC) was up 103.91 points, or 0.96%, at 10,971.84.Defensive parts of the market, including sectors such as the S&P 500 utilities (.SPLRCU) and real estate (.SPLRCR), fell more than 1% each, suggesting a risk-on move.Trading sentiment earlier in the day was dictated by dramatic moves in the global forex market as the sterling briefly touched an all-time low on worries that the new British government's fiscal plan threatened to stretch the country's finances to their limits. read more The CBOE Volatility index (.VIX), also commonly known as Wall Street's fear gauge, hovered near three month highs.Declining issues outnumbered advancers for a 1.29-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.67-to-1 ratio on the Nasdaq.The S&P index recorded no new 52-week high and 37 new lows, while the Nasdaq recorded nine new highs and 183 new lows.Register now for FREE unlimited access to Reuters.comReporting by Shreyashi Sanyal and Ankika Biswas in Bengaluru; Editing by Anil D'Silva and Shounak DasguptaOur Standards: The Thomson Reuters Trust Principles.
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Stocks Trading & Speculation
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Banknotes of the euro, Hong Kong dollar, U.S. dollar, Japanese yen, GB pound and Chinese yuan are seen in this picture illustration, in Beijing, China, January 21, 2016. REUTERS/Jason Lee/File PhotoSummaryYen 3-month implied volatility at 11.9, vs 13.26 on Sept. 22Japan watching volatility, not specific levels, analyst saysBoE signals to private group it may extend bond buys, FT saysU.S. producer prices rise in SeptemberFed minutes had dovish elementsNEW YORK, Oct 12 (Reuters) - The dollar climbed to a fresh 24-year peak versus the yen on Wednesday, holding above levels that prompted intervention by Japanese officials last month, while sterling rose after a sharp fall in the previous session as investors pondered the Bank of England's next steps.The greenback pared gains after minutes from the last Federal Reserve meeting showed some dovish undertones. Several participants noted the importance of calibrating the pace of further tightening to mitigate the risk on the U.S. economy, the minutes said. The Fed though remained committed to raising interest rates in order to bring down inflation. read more "Maybe there is a bit of hope within the minutes that basically officials are weighing the risk of going too hard or going too high on hiking," said Juan Perez, director of trading at Monex USA in Washington.Register now for FREE unlimited access to Reuters.com"That's not the number one concern right now. Number one concern continues to be inflation."The pound, on the other hand, rose following a drop to a two-week low versus the dollar and euro late on Tuesday, after the Financial Times reported that the BoE has signaled privately to lenders it is prepared to prolong its bond purchases.Data showing U.S. producer prices increased more than expected in September, further boosted the dollar against the yen. The producer price index for final demand rebounded 0.4%, above the forecast for a 0.2% rise. In the 12 months through September, the PPI increased 8.5% after advancing 8.7% in August. read more In the wake of the U.S. PPI data, the greenback rose as high as 146.98 yen , its strongest since August 1998. It was last up 0.7% at 146.85, marking a fifth straight session of gains.Japan staged its first yen-buying intervention since 1998 on Sept. 22, when the dollar was at 145.90 yen."This just reaffirmed that the BoJ (Bank of Japan) did not defend a particular level, but was addressing volatility," said Marc Chandler, chief market strategist, at Bannockburn Global Forex in New York, adding that the three-month yen volatility was lower on Wednesday than when Japan intervened last month.Three-month implied volatility on the yen was 11.9% , compared with a high of 13.26% on Sept. 22 when Japan stepped in to prop up the Japanese unit.Officials have reiterated they stand ready to take appropriate steps to counter excessive currency moves, though whether they wish to defend particular levels is less clear.Yields outside Japan have been pushed higher by spillover from the turmoil in Britain's bond market.Long-dated gilt yields jumped again, with the 20-year hitting a 14-year high a day after BoE Governor Andrew Bailey reiterated late Tuesday that the central bank would end its emergency bond-buying programme on Friday, telling pension fund managers to finish rebalancing their positions by then.Sterling fell to a two week low of $1.0925 after Bailey's remarks, which were reiterated by a central bank spokesperson on Wednesday. The currency later rebounded to stand 1.2% higher at $1.1083, after the FT report which said the BoE had suggested to private lenders that it was open to extending its bond purchases.Against the euro, the pound gained. In afternoon trading, the euro was down 1.2% at 87.40 pence .Elsewhere, the euro remained under pressure, down 0.1% at $0.9696.The risk-sensitive Australian dollar sank to a 2 1/2-year low of US$0.6236, and was last flat at US$0.6274.========================================================Currency bid prices at 3:12PM (1912 GMT)Register now for FREE unlimited access to Reuters.comReporting by Gertrude Chavez-Dreyfuss; Additional reporting by Amruta Khandekar in Bengalaru, Alun John in London, Kevin Buckland in Tokyo, Georgina Lee in Hong Kong, and Vidya Ranganathan in Singapore; Editing by Paul Simao and Nick ZieminskiOur Standards: The Thomson Reuters Trust Principles.
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Forex Trading & Speculation
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Australia is banning entry to anyone found guilty of domestic violence anywhere in the world
"Australia has no tolerance for perpetrators of violence against women and children." 👏👏👏
Australia is sending a strong message to domestic abusers worldwide: You're not welcome here.
Australia has recently broadened a migration law to bar any person who has been convicted of domestic violence anywhere in the world from getting a visa to enter the country. American R&B singer Chris Brown and boxing star Floyd Mayweather had been banned from the country in the past, following their domestic violence convictions. Now the ban applies to all foreign visitors or residents who have been found guilty of violence against women or children.
Even convicted domestic abusers who already have visas and are living in Australia can be kicked out under the new rule. The government is using the rule, which took effect on February 28, 2019 to send a message to domestic violence perpetrators.
“Australia has no tolerance for perpetrators of violence against women and children," Federal Minister for Immigration, Citizenship and Multicultural Affairs David Coleman said in a public statement. “The message is clear: if you've been convicted of a violent crime against women or children, you are not welcome in this country, wherever the offence occurred, whatever the sentence."
The ban is supposed to make Australia safer, but not everyone is happy about it.
“By cancelling the visas of criminals we have made Australia a safer place," Coleman said. “These crimes inflict long lasting trauma on the victims and their friends and family, and foreign criminals who commit them are not welcome in our country."
However, Australia's neighboring country of New Zealand has long taken issue with Australia's policy of exporting convicts, and this new policy highlights why. Under the new rule, New Zealanders who have already served their sentences for domestic violence and lived in Australia most of their lives could be kicked out and sent to live in New Zealand. Such circumstances raise questions about when justice has been served and the role of rehabilitation in domestic violence convictions.
Australia, like many other countries, is trying to come to terms with its domestic violence problem.
Barring domestic violence perpetrators from other countries sends a strong message, but it's only meaningful if the country also tackles the problem among its own citizens. According to a Personal Safety Study conducted by the Australian Bureau of Statistics, about 17% of Australian women and 6% of Australian men have experienced partner violence since the age of 15. And the numbers have remained relatively stable since 2005.
That may seem to indicate that little progress has been made; however, as Australian law professor Heather Douglass points out, the numbers only tell part of the story. Since most people in abusive relationships don't report the abuse until after they've left, it could simply be that more are leaving, which is a good thing. There has also been a marked increase in people seeking domestic violence services in some areas, which, again, is a good thing. For far too long, domestic violence was swept under the rug while victims were often too afraid or embarrassed to seek help. More calls for help could mean that the stigma associated with domestic violence is starting to fade.
This story originally appeared on 04.01.19
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Australia Business & Economics
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Millions more Brits can now live and work in Australia after the age limit for working holiday visas went up to 35.
The age limit has been extended from 30 for all British citizens making 16 million more people eligible to apply.
Popular with backpacker tourists, the changes are a key part of the free trade agreement struck between the two countries last year.
It will also be easier for Australians to work and travel in the UK.
It follows an agreement between New Zealand and the UK to expand working holiday visas up to 35-year-olds.
The scheme will allow Brits to work and live in Australia for up to three years, with various restrictions on the type of work that visitors are allowed to do lifted by 2024.
In a rule going back more than a decade, British working holiday makers had to complete 88 days of agricultural work if they wanted to stay in Australia, for every additional year they would like to stay on.
These rules are now being eased, allowing visitors to work more freely across industries.
The three-year allowance does not have to be consecutive and can be taken at any time up until the age of 35.
Sally Cope, UK regional general manager for Tourism Australia, said there had been lots of interest from foreign travellers recently in the big sporting events coming up in Australia over the next few years.
"It's an exciting time and these big sporting events, like the FIFA woman's football world cup and Olympics in Brisbane in 2032, offer the temporary contract type work that young visitors want."
According to Tourism Australia, there are around 35,000 arrivals from the UK on working holiday visas each year and many stay on. `
Restrictions are also easing for Australians, who from July this year will be able to apply for UK working holiday visas up to the age of 35, instead of 30, and stay for three years instead of two.
Australia is a popular destination for young people, among Europeans.
Aside from lifestyle attractions, wages are slightly higher than many European countries.
Australia's minimum wage is currently $21.38 (£11.22) with the UK's minimum wage standing at £10.42, for those aged over 23 years old.
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Australia Business & Economics
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TL;DR: Livestream the Asian Games for free with ExpressVPN. This high-speed service is the best option for unblocking free streaming services from around the world.
The Asian Games only come around every four years, so we really don't want you to miss out. Fortunately, we know how you can follow almost all the action from this special event. And you don't even need to spend anything.
If you want to watch the Asian Games for free from anywhere in the world, we have all the information you need.
What is the Asian Games?
The Asian Games is a continental multi-sport event held every four years, with athletes from all over Asia welcomed to participate in the event. The Asian Games is the second largest multi-sport event after the Olympics.
When is the Asian Games in 2023?
The 19th edition of the Asian Games was originally scheduled to take place in 2022, but was postponed due to the COVID-19 pandemic. The Asian Games will now take place from Sept. 23 to Oct. 8 in Hangzhou, China.
How to watch the Asian Games for free
SBS will provide free coverage of several high-profile events from the Asian Games, with SBS On Demand delivering live action, full replays, and highlights. SBS On Demand will begin its coverage with the swimming finals on Sept. 24, followed by live athletics, cycling, and football. Its coverage will end on Oct. 7 with the break-dancing final.
The catch is that you can only connect to SBS On Demand from Australia. You'll be blocked if you attempt to stream on SBS On Demand from anywhere else in the world, unless you're equipped with a VPN.
VPNs can hide your real IP address and connect you to a secure server in Australia, meaning you can stream on SBS On Demand from anywhere in the world. This process of unblocking SBS On Demand is actually really straightforward:
Subscribe to a streaming-friendly VPN (like ExpressVPN)
Download the app to your device of choice (the best VPNs have apps for Windows, Mac, iOS, Android, Linux, and more)
Open up the app and connect to a server in Australia
Sign in to SBS On Demand
Watch the Asian Games from anywhere in the world
The best VPNs for streaming are not free, but most leading VPNs do tend to offer free trials or money-back guarantees. By using these offers, you can watch the Asian Games without actually spending anything. This obviously isn't a long-term solution, but it does mean you can watch the Asian Games on SBS On Demand, and then recover your investment after the event.
If you want to retain permanent access to SBS On Demand from anywhere in the world, you'll need to subscribe to a service. Fortunately, the best service for streaming is on sale for a limited time.
What is the best VPN for streaming?
There are multiple VPNs that can reliably unblock free streaming sites from around the world, but ExpressVPN leads the way. ExpressVPN is the top choice for SBS on Demand, for a number of reasons:
Servers in 94 countries including Australia
Easy-to-use app available on all major devices including iPhone, Android, Windows, Mac, and more
Strict no-logging policy so your data is always secure
Fast connection speeds
Up to five simultaneous connections
30-day money-back guarantee
A one-year subscription to ExpressVPN is on sale for £82.82 and includes an extra three months for free — 49% off for a limited time. This plan also includes a year of free unlimited cloud backup and a generous 30-day money-back guarantee.
Watch the Asian Games for free with ExpressVPN.
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Asia Business & Economics
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NEWYou can now listen to Fox News articles! One of President Biden's top economic advisers was pressed Friday on his campaign pledge to go to war with the American oil industry as he now calls on them to produce more and self-reduce their "exorbitant profits."During a brief gaggle, Biden told reporters that if "you just base it on what a barrel of oil costs then actually it should not be this high … they're making exorbitant profits.""They could drill, but they're not doing it," he said. "I think we're going to be in a position where --" he began to conclude before first lady Jill Biden appeared, and he turned away.Biden economic adviser Jared Bernstein told Fox News on "The Story" Friday that Biden has indeed reached out to oil executives as he seeks cooperation: "He is fighting for the middle class at the pump and that's exactly what he should."ALASKA GOVERNOR SAYS BIDEN SEARCHING FOR OIL ‘ANYWHERE ON THE PLANET EXCEPT AT HOME’ President Biden has blamed Putin and others for inflation and high gas prices. (Drew Angerer/Getty)However, the adviser was later pressed on Biden's past pledges to confront the oil industry, including an exchange with a woman in New Castle, N.H., where he said, "Kiddo, I want you to just take a look at my eyes – I guarantee you we're going to end fossil fuels and I'm not going to cooperate…"In a debate, Biden pledged to end subsidies for the industry, drilling on federal lands or offshore areas, adding "…no ability for the oil industry to continue to drill, period."On the first day of his administration, he also ended the Keystone XL pipeline, which would have transported oil from Alberta, Canada to Port Arthur, Texas.BIDEN CALLED OUT OVER WARNING TO BIG OIL AS ENERGY SECRETARY EXERCISES STOCK OPTIONS A sticker of President Joe Biden is placed on a gas pump at an Exxon Station (Photo by RJ Sangosti/MediaNews Group/The Denver Post via Getty)"The policies that have led to that -- We have not built a new refinery in this country since 1970. It goes back a long way on the war against this industry – So now the president is saying do more, refine more, get more product to the market," Fox News host Martha MacCallum said.Citing a response to the administration from Chevron, MacCallum reported the oil industry wants sensible retraction of recently-imposed regulations on their work so that they can produce more in the United States and bring down costs that way.Chevron said in a statement the Biden administration had been messaging its intent to place "obstacles" in the way of its mission to provide for global energy needs.CLICK FOR FOX NEWS APPBernstein replied Biden rightly wants to negotiate with energy executives, while also keeping his eye on what the administration considers the future of American energy – green power."I think when it comes to policy, we've got to walk and chew gum at the same time. We have to make sure that these companies have the support they need right now," Bernstein said. "And frankly, the fact that they're pumping more than they ever had before and they have so many leases available to them, suggests that they have the ability to pump more."He added that people who don't believe the green energy sector is the right way to ostracize foreign "petro-states" and their "toxic impact on global politics" are not paying proper attention. Charles Creitz is a reporter for Fox News Digital.
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Energy & Natural Resources
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To view past editions of The Hill’s 12:30 Report, click here: https://bit.ly/30ARS1U To receive The Hill’s 12:30 Report in your inbox, please sign up here: https://bit.ly/3qmIoS9 –> A midday take on what’s happening in politics and how to have a sense of humor about it.* *Ha. Haha. Hahah. Sniff. Haha. Sniff. Ha–breaks down crying hysterically. NEWS OF THE MORNING This is another day to be glued to your TVs: The House committee investigating the Jan. 6, 2021 attack on the U.S. Capitol is holding its second hearing today. But unlike the first: Today’s hearing is a more standard, day-time hearing — instead of Thursday’s prime-time testimony. The theme of today’s hearing — the ‘Big Lie’: The committee will try to prove that former President Trump knew he had lost the 2020 presidential election, but still pushed the false narrative that it had been stolen. Who is testifying?: Former Fox News political editor Chris Stirewalt, who was part of the team to call Arizona for President Biden on election night in 2020. C-SPAN hearing livestream Live blog of hearing updates ➤ NEWS RIGHT BEFORE THE HEARING — A MAJOR WITNESS WON’T TESTIFY TODAY: Former President Trump’s campaign manager Bill Stepien, a key witness in today’s testimony, canceled right before the start of the hearing, citing a “family emergency.” Instead: Stepien’s lawyer will make a statement on his behalf. What is the family emergency?: Stepien’s wife is in labor. ➤ SIGHTS AND SOUNDS: View from the hearing room: Photo from Vice’s Elizabeth Landers Fox News IS airing today’s hearing: Unlike Thursday’s prime time hearing, Fox News is airing today’s hearing live — along with the other cable and TV networks (Via CNN’s Brian Stelter) Former Attorney General William Barr described election night: “Right out of the box on election night, the president claimed that there was major fraud underway. I mean, this happened, as far as I could tell, before there was actually any potential of looking at evidence.” (Via NBC’s Allan Smith) A Trump aide said Giuliani was drinking on election night: “[Former Trump campaign manager] Bill Stepien testified to the Jan. 6 committee that he believed [Trump’s lawyer] Rudy Giuliani had had too much to drink on election night. [Former Trump aide] Jason Miller also testified Giuliani was ‘intoxicated.’ Stepien said Giuliani was trying to talk to Trump but was initially directed his way instead.” (Via CNN’s Kaitlan Collins) Ah, Monday mornings: Journalist Matt Laslo tweeted, “Lots of milling about, yawning, and cursing life decisions going on in the press corps outside the Jan. 6 hearing.” Photos Op-ed: “The Jan. 6 hearings are exposing just how divided America has become.” IT’S A BEAUTIFUL MONDAY IN DC. I’m Cate Martel with a quick recap of the morning and what’s coming up. Did someone forward this newsletter to you? Sign up here. 🐻 Inflation We’re not talking about a cute and fuzzy teddy-type bear: U.S. stocks fell this morning, reaching “bear market” territory. What makes a bear market?: A fall of 20 percent or more. This morning, the market dipped to a 20 percent decline since January. Plus: “Markets around the world tumbled, as higher-than-expected inflation and lower-than-expected economic growth upend the outlook for interest rates and corporate profits. Stocks in Asia and Europe fell, investors dumped government bonds, oil prices slipped and cryptocurrencies crashed.” Context, numbers and explanation, via The New York Times’sAlexandra Stevenson andJason Karaian Keep in mind about bear markets: “Bear markets, or when stocks drop at least 20 percent from their most recent peaks, are relatively rare and signal that investors are viewing the economy with serious pessimism.” More on what this means, via The New York Times’s Melina Delkic How the economy got to be this way: Via The Hill’s Sylvan Lane, “President Biden’s bet on a rapid rebound from the coronavirus recession may have backfired.” How we got here — in 2021: “The president and his top economic officials rallied Democrats around a $1.9 trillion stimulus bill in March 2021, urging Congress not to repeat the mistakes of the Great Recession and cut off support for the economy too soon.” Where we stand now — the good: “U.S. unemployment rate is nearly at pre-pandemic levels, the economy has added more than 10 million jobs, and gross domestic product is well above where it was when COVID-19 shattered the economy.” And the bad: “Consumer prices rose 1 percent in May alone and by 8.6 percent over the past 12 months.” What happened?? Here’s an explainer: “Top Biden administration and Fed officials — along with dozens of economists — expected inflation to cool off last year as the world adjusted to life after COVID-19 … But COVID-19 adjusted quicker. The emergence of the delta and omicron variants didn’t curb consumer spending or cost the economy jobs. Instead, it shifted a glut of saved-up money toward goods, which had been in high demand since the start of the pandemic, instead of services … The new variants also led to factory shutdowns, port backlogs and other pandemic-related snarls, making it even harder for manufacturers and suppliers to meet even higher demand powered in part by federal stimulus.” More on the risky gamble Biden took and backfired 📝In Congress Hey, a bipartisan gun deal could actually pass the Senate: A group of 10 Democratic senators and 10 Republican senators agreed to a gun deal over the weekend (!) Why the number of Republicans is significant: To overcome a filibuster, 60 votes are needed. If all 50 Democrats vote “yes” on this gun proposal, at least 10 Republicans are needed. The gist of the deal: “The nine-point bipartisan plan would send federal resources to set up red flag laws to keep guns out of the hands of people deemed dangerous to the community, invest billions of dollars in children and family mental health services, fund school-based mental health services, fund new safety measures at schools and strengthen criminal background check requirements for gun buyers younger than 21.” What we know about the agreement Where’s the text?: That is still being worked out. Senators agreed to measures and are now drafting text. ‘Here are the 10 Senate Republicans who are backing the bipartisan bill.’ ➤ HELPFUL READ — ‘WHAT’S IN THE BIPARTISAN GUN DEAL AND WHAT’S NOT’: Via CNN’s Lauren Fox and Devan Cole ➤ SOME CONTEXT — ‘GUN DEAL IS LESS THAN DEMOCRATS WANTED, BUT MORE THAN THEY EXPECTED’: Here is some analysis to the meat of the deal, via The New York Times’s Carl Hulse ➤ WHAT ELSE IS HAPPENING ON CAPITOL HILL THIS WEEK: Via The Hill’s Mychael Schnell 🦠 Latest with COVID Interesting read — ‘Covid is making flu and other common viruses act in unfamiliar ways’: Via The Washington Post’s Frances Stead Seller, “More than two years into the coronavirus pandemic, familiar viruses are acting in unfamiliar ways. Respiratory syncytial virus, known as RSV, typically limits its suffocating assaults to the winter months.” How doctors are rethinking things: “The upheaval is being felt in hospitals and labs. Doctors are rethinking routines, including keeping preventive shots on hand into the spring and even summer.” An interesting side effect: “Researchers have a rare opportunity to figure out whether behavioral changes like stay-at-home orders, masking and social distancing are responsible for the viral shifts, and what evolutionary advantage SARS CoV-2 may be exercising over its microscopic rivals.” The full story ➤ BY THE NUMBERS Cases to date: 85.3 million Death toll: 1,006,451 Current hospitalizations: 20,589 Shots administered: 590 million Fully vaccinated: 66.8 percent of Americans CDC data here. 🐥Notable tweets ⏱On tap The House and Senate are in. President Biden and Vice President Harris are in Washington, D.C. 11:10 a.m.: Biden left Delaware and returned to the White House. 12:30 p.m.: Biden receives the President’s Daily Brief. 3 p.m.: The Senate meets.Today’s Senate schedule 6:30 p.m.: First and last votes in the House. Today’s House schedule All times Eastern. 📺What to watch 2 p.m.: Biden signs the “Commission To Study the Potential Creation of a National Museum of Asian Pacific American History and Culture Act” into law. Harris also attends. Livestream 3 p.m.: White House press secretary Karine Jean-Pierre holds a press briefing. Livestream 🧁 In lighter news Today is National Cupcake Lover’s Day. And to leave you on a happy note, I want to you meet Rico. He’s currently eating an ear of corn.
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Inflation
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Several of the world's largest oil exporters have announced surprise cuts in production in a move which is expected to push up prices.
Saudi Arabia, Iraq and several Gulf states said they were cutting output to support market stability.
Oil prices soared when Russia invaded Ukraine, but are now back at levels seen before the conflict began.
However, the US has been calling for producers to increase output in order to push energy prices lower.
Responding to news of the latest cuts, a spokesperson for the US National Security Council said: "We don't think cuts are advisable at this moment given market uncertainty - and we've made that clear."
The cuts - which amount to more than one million barrels per day - are being made by members of the Opec+ oil producers. The group accounts for about 40% of all the world's crude oil output.
Saudi Arabia is reducing output by 500,000 bpd and Iraq by 211,000. The UAE, Kuwait, Algeria and Oman are also making cuts.
A Saudi energy ministry official said the move was "a precautionary measure aimed at supporting the stability of the oil market", the official Saudi Press Agency said.
The latest reductions come on top of a cut announced by Opec+ in October last year of two million barrels per day (bpd).
However, last year's cut came despite calls from the US and other countries for oil producers to pump more crude.
When the Opec+ group announced its production cuts in October, US President Joe Biden said he was "disappointed by the short-sighted decision".
A significant move
Analysis by Sameer Hashmi, Middle East business correspondent
This surprise announcement is significant for several reasons.
Despite price fluctuations in recent months, there were concerns that global demand for oil would outstrip supply, especially towards the end of the year. Analysts expect oil prices to shoot up following today's announcement, which could potentially put more pressure on inflation - worsening the cost-of-living crisis and raising the risk of recession.
Interestingly, this announcement comes just a day before the Opec+ meeting. There were indications from members that they would stick to the same production policy, meaning there would be no fresh cuts, which is why it has come as a huge surprise. There is a possibility that more members of the group could announce voluntary cuts - squeezing supplies even more.
The development will also likely further strain ties between the US and Saudi Arabia-led Opec+. The White House had called on the group to increase supplies to cool down prices and check Russian finances.
However, today's announcement also underlines the close cooperation between oil-producing countries and Russia.
The Opec+ group includes the Organization of Petroleum Exporting Countries (Opec) as well as other countries including Russia.
Russia has said it will extend its already-announced production cut, of half a million barrels per day, until the end of the year.
The invasion of Ukraine by Russia in February last year sent energy prices soaring over worries about oil supplies. The price of the Brent Crude - an international benchmark - hit a high of close to $130 a barrel at one point.
This increase pushed up energy and fuel prices around the world, and in turn, helped to drive up inflation - the rate at which prices rise - which has put pressure on households' finances.
However, the price of Brent has since fallen back to about $80 a barrel.
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Energy & Natural Resources
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Glenmark Pharma Q1 Results: Profit Falls 22%, Misses Estimates
However, the company's revenue rose 23% to Rs 3,402 crore in Q1 FY24.
Glenmark Pharmaceuticals Ltd. reported a fall in net profit in the first quarter of fiscal 2024, missing analysts' estimates.
The Mumbai-based bulk and generic drugmaker's net profit declined 22% over last year to Rs 150 crore in the quarter ended June. That compares with the Rs 220-crore consensus estimate of analysts tracked by Bloomberg.
The company incurred a net loss of Rs 428 crore in the previous quarter.
Glenmark Pharma Q1 Highlights (YoY)
Revenue rose 23% to Rs 3,402 crore (Bloomberg estimate: Rs 3,181 crore).
Ebitda rose 46% to Rs 631 crore (Bloomberg estimate: Rs 560 crore).
Margin stood at 18.6% versus 15.5% (Bloomberg estimate: 17.6%).
Other Highlights (YoY)
India reported a growth of around 3% in sales at Rs 1,064 crore.
U.S. formulation business rose 22% to Rs 809 crore.
Revenue from Europe grew by 74%, while rest-of-the-world revenue rose 30%.
Its subsidiary, Glenmark Lifesciences recorded an 18% growth in revenues including captive sales.
"The robust growth in sales was led by our branded markets in RoW region. Our Europe business performed significantly well on the back of a strong generics portfolio and continued gains in market share, in our leading respiratory brands. Our North America business remained stable, and our India business continued to significantly outperform industry growth rates," Glenn Saldanha, chairperson and managing director at Glenmark Pharmaceuticals, said in the exchange filing.
“Going forward, our goal remains to sustain the momentum, as Ryaltris continues to meaningfully contribute across all the covered markets. We also remain on track to achieve our objectives for FY24.”
Shares of Glenmark Pharma ended 1.09% lower ahead of the results announcement on Friday, as compared with a 0.56% decline in the benchmark Sensex.
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India Business & Economics
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[1/2] Banknotes of Chinese yuan and U.S. dollar are seen in this illustration picture taken September 29, 2022. REUTERS/Florence Lo/IllustrationSINGAPORE, Nov 8 (Reuters) - The dollar was kept on the back foot on Tuesday by strength in the Chinese yuan and other currencies sensitive to China's growth, as markets clung to hopes that China's restrictive zero-tolerance approach to COVID-19 will eventually ease.The yuan had its best day in two years on Friday and managed to hold most of its gains through a choppy Monday. It was firm at 7.2200 per dollar in offshore trade on Tuesday .The euro , linked via German exports to China's economy, regained parity on the dollar overnight and hovered at $1.0026. The New Zealand dollar climbed 0.2% to touch a seven-week high of $0.5951 in early Asia trade.U.S. voters go to the polls in midterm elections later in the day, with a Republican victory and consequently gridlock in Congress forecast. A conclusive result could take days, but is unlikely to move currency markets if it meets expectations.China's strict virus policy includes lockdowns, quarantining and rigorous testing, and officials said over the weekend the measures are "completely correct" and will stay. But incremental adjustments have been enough to keep traders' hopes alive."Where there's smoke, eventually there's fire, so the market is pricing in improved optimism, though at the moment it's all based on hopes," said Rodrigo Catril, senior currency strategist at National Australia Bank in Sydney."It's very CNY and pro-growth supportive," he said."This idea that maybe in 2023, we'll see a gradual reopening in China means that growth prospects in China should improve significantly, against a backdrop where most expect the U.S. economy to start slowing down."The growth-sensitive Australian dollar is up two sessions in a row and last bought $0.6486, within range of its 50-day moving average at $0.6516.The South Korean won rose 1%.The Japanese yen hit a one-week high of 146.35 per dollar. Japanese foreign currency reserves posted the second-sharpest monthly decline on record in October as authorities spent 6.35 trillion yen intervening to support the yen.Bank of Japan policymakers debated the need to look out for the side-effects of prolonged monetary easing and the potential impact of a future exit from ultra-low interest rates, a summary of opinions at their October policy meeting showed on Tuesday.Sterling held sharp overnight gains made as a disappointing auction lifted gilt yields a bit. It was last at $1.1531, though traders are wary of chasing it too much higher ahead of a fiscal update expected on Nov. 17.========================================================Currency bid prices at 0045 GMTAll spotsTokyo spotsEurope spotsVolatilitiesTokyo Forex market info from BOJReporting by Tom Westbrook; Editing by Stephen CoatesOur Standards: The Thomson Reuters Trust Principles.
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Forex Trading & Speculation
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A projection shows a 100 franc banknote in a window in Zurich, Switzerland December 16, 2021. REUTERS/Arnd Wiegmann/File PhotoRegister now for FREE unlimited access to Reuters.comSummaryCompaniesCentral bank no longer sees Swiss franc as "highly valued"Had invested FX bought to weaken the currencyMay start unwinding its huge stock and bond holdingsSNB says would seek to minimise any market impactLONDON, June 24 (Reuters) - From Silicon Valley shares to U.S. and European government bonds, securities that are already under heavy pressure stand to lose a major buyer as Switzerland ends its long-standing policy of recycling euros and dollars into foreign markets.The Swiss National Bank recently delivered a surprise half-point interest rate hike and for the first time in years omitted references in its statement to the franc being highly valued.The shift is a momentous one, suggesting the SNB will no longer prioritise weakening the currency by purchasing foreign exchange - a policy that enabled it to build a reserve pile of nearly $1 trillion.Register now for FREE unlimited access to Reuters.comUnlike most central banks, it recycled these proceeds of intervention into world markets rather than holding them at home, making it a huge stock and bond investor. In recent years it ranked among the top shareholders in the likes of Apple, Amazon and Microsoft. read more Any reduction in its purchases, or an eventual move towards selling - a possibility after the bank said it is also ready to check a weakening of the franc - risks heightening volatility on already shaky markets."The SNB's departure from its previous approach to keep the franc weak means they will unwind their large U.S. stock holdings, particularly in FAANGS, which should increase selling pressure on these mega-cap names," said Kaspar Hense, senior portfolio manager at Bluebay Asset Management, referring to the tech quintet of Facebook (Meta), Apple, Amazon, Netflix and Google.The SNB had already cut back forex buying in recent weeks, as evidenced by a drop in "total sight deposits" at Swiss banks that are seen as a proxy for intervention. These deposits declined by 1.3 billion Swiss francs in the week ending June 17, versus a rise of 756 million francs a month earlier and an increase of nearly 6 billion francs in early April.The SNB said it would seek to minimise the market impact whether it were to let existing bonds expire or actively sell assets, with the focus remaining on the overall liquidity of the portfolio.With inflation above the SNB's target, the franc has been allowed to rise to seven-year highs against the euro , briefly pushing beyond one franc per euro in March. It has performed less well against the dollar , which has soared on expectations of aggressive policy tightening by the U.S. Federal Reserve.FAANGsThe SNB's recent policy shift is not quite on a par with its shock decision in 2015 to ditch the franc's euro exchange rate peg. But tighter policy and its potential step back from markets coincides with a deepening market selloff that has sent global stocks to a 21% loss this year.Bond yields have also surged as inflation hits multi-decade highs, prompting steep rate hikes."In isolation, the impact (of potential asset sales) would have been limited but it comes in the middle of a sharp re-pricing and lower market liquidity so the effect will likely be magnified," said ING senior rates strategist Antoine Bouvet.It is difficult to gauge accurately the impact of any investment pullback, as the SNB does not provide a breakdown of exactly which assets it holds in each currency.SNB data does show that a quarter of its FX reserves were in equities as of end-March.At that time, U.S. regulatory filings show the SNB's U.S. equity portfolio was worth $177 billion, including $12.4 billion in Apple shares, $9.5 billion in Microsoft and $6.4 billion in Amazon. Other holdings included $1.5 billion in Exxon Mobil and $1.1 billion in Coca Cola.The SNB also holds 600 billion francs in foreign government bonds, making up 64% of FX reserves, according to Reuters calculations from SNB data.Assuming bonds make up the same share of holdings in each currency as they do across its entire FX portfolio, Reuters calculations show that might include some $248 billion of U.S. Treasuries and 221 billion euros of euro zone government debt - most of it likely to be in top-rated bonds like Germany's."Their activities have been quite large over the last few years, and we did see in general increased euro holdings by central banks, and the SNB is one of them," BofA strategist Sphia Salim said. She predicted pressure on short-dated German bonds.Unsurprisingly, last week's policy pivot sent euro zone and U.S. bond yields surging. read more If the SNB were to wind down bond holdings, it would first stop reinvesting the proceeds of maturing bonds, Lyn Graham-Taylor, senior rates strategist at Rabobank said. That could see the SNB drop nearly 5 billion euros of German government debt by year-end, he estimates.In 2023, "you'll get those concerns around the SNB potentially selling bonds, merged with higher issuance next year and the potential for ECB QT," BofA's Salim said - a reference to expectations the European Central Bank may eventually start reducing its own balance sheet, a process known as Quantitative Tightening.Register now for FREE unlimited access to Reuters.comAdditional reporting by John Revill in Zurich and Noel Randewich in New York
Editing by Sujata Rao and Catherine EvansOur Standards: The Thomson Reuters Trust Principles.
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Forex Trading & Speculation
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BENGALURU, Oct 3 (Reuters) - India's factory growth dipped to a three-month low in September due to a moderation in demand and output, despite easing inflationary pressures and strong business confidence, a private survey showed.The Manufacturing Purchasing Managers' Index (INPMI=ECI), compiled by S&P Global, fell to 55.1 in September from 56.2 in August, below the 55.8 predicted by economists in a Reuters poll. The pace of growth was still solid, however, and was above the 50-mark separating growth from contraction for a 15th straight month."The Indian manufacturing industry remains in good shape, despite considerable global headwinds and recession fears elsewhere," said Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.Register now for FREE unlimited access to Reuters.com"There were softer, but substantial, increases in new orders and production in September, with some leading indicators suggesting that output looks set to expand further at least in the short-term."Input costs rose at the slowest pace since October 2020 and most firms reported no change in purchasing prices.But a separate Reuters poll showed inflation wouldn't fall to within the Reserve Bank of India's (RBI) target band of 2-6% until the first quarter next year. Consumer price inflation accelerated to 7.00% in August, driven by a surge in food prices and snapping a three-month downward trend.Optimism about future output was at the highest level in seven and a half years and international demand was the strongest since May, led by robust external demand for goods amid a weak Indian rupee ."Currency risks and the impact of a weaker rupee on inflation and interest rates could derail optimism during October," added De Lima.The RBI has been selling dollars to stem the currency depreciation and raised rates by 190 basis points since May, including Friday's 50 basis points hike, yet it has not been very successful in arresting the fall.But forex reserves are being depleted and were seen falling to $523 billion by the end of this year from a high of $642 billion in October 2021.Register now for FREE unlimited access to Reuters.comReporting by Anant Chandak; Editing by Kim CoghillOur Standards: The Thomson Reuters Trust Principles.
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India Business & Economics
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Godrej Consumer Products Q1 Review - Transformation Delivering Good Results Overall: Systematix
Africa, USA and Middle East grew 16% in constant currency terms.
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Systematix Research Report
Godrej Consumer Products Ltd.’s Q1 FY24 had an operationally strong quarter with 10% organic volume growth in India, double-digit volume growth in household insecticide category for second consecutive quarter and accelerated growth in both Indonesia and Africa.
Sharp margin expansion in India was partly offset by losses on account of Nigeria currency devaluation and Raymond Consumer business restructuring. Key result takeaways:
YoY, India revenue grew 9%, with 12% overall and 10% organic volume growth,
home care business grew 14% (double digit volumes), given a strong performance in HI from good season (weak summer), strong growth in premium formats of electrics and aerosols and double digit growth in air fresheners,
personal care grew 2% (high single digit volumes), with mid-single digit growth in hair color, high single digit volume growth in personal wash and hygiene,
Indonesia business grew 15% in constant currency terms,
Africa business grew 16% in CC terms,
gross margin grew 715 bps YoY to 53.7% due to softening raw material inflation,
consolidated Ebitda margin expanded 197 bps YoY led by 230 bps increase in India business, 410 bps increase in Indonesia and 370 bps rise in Godrej Africa, U.S., and Middle East.
Capex of Rs 9 bn to be incurred over a period of three years in in India to increase capacity by ~20%.
Godrej Consumer Products’ aggressive category development initiatives seem to be working well in air and hair segments and have started showing better growth in the HI space as well.
Business simplification initiatives have also started delivering strong cost savings and cash generation. We see the strong momentum especially in India to drive a high single digit volume growth in FY24 while Ebitda should grow ~20% plus led by better gross margins partially offset by higher media spends.
We build in flattish revenue and Ebitda in FY24 for the acquired business of Raymond Consumer which should stabilise from H2.
We now build in a 12%/20% revenue/earnings per share compound annual growth rate over FY23-25E and maintain our 'Hold' rating with target price of Rs 1,116 (versus earlier target price Rs 1,015) based on 45 times FY25E earnings.
While the Raymond business and Nigeria currency issues will be an overhang for FY24, we view the better shape of profit and loss (higher margins despite higher advertising and promotion and lower gross margins), strong cash generation and improving growth trajectories across geographies and businesses (led by aggressive category development) as key long-term positives.
Click on the attachment to read the full report:
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This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
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India Business & Economics
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Figurines are seen in front of displayed stock graph and word "Inflation" in this illustration taken June 13, 2022. REUTERS/Dado Ruvic/IllustrationRegister now for FREE unlimited access to Reuters.comA look at the day ahead in markets from Dhara RanasingheCentral banks' challenge -- hiking interest rates to contain soaring inflation without wrecking their economies -- has just got harder.From stocks to crypto and emerging markets, risk assets are reeling from the likelihood of aggressive U.S. interest-rate increases that raise recession risks for the global economy.Register now for FREE unlimited access to Reuters.comMonday's Wall Street Journal report, from a correspondent viewed as close to the Fed, flagged a hefty 75 basis-point hike and persuaded markets to further price in such a move for the Federal Reserve's Tuesday-Wednesday meeting read more Chances of a such a move, the scale of which has not been seen since 1994, have grown since Friday's red-hot inflation reading. It inflicted the worst day on two-year U.S. Treasury bonds since 2009 on Monday ; taken together with Friday's post-CPI jump, yields rose around 54 bps, the biggest two-day move since just after the 2008 Lehman collapse, Deutsche Bank points out.A rout in US bond marketsAn inversion of Treasury yield curve, which typically is seen as a recession harbinger, kicked the S&P 500 (.SPX) almost 4% lower, while the tech-heavy Nasdaq (.IXIC) slid over 4.5%.A semblance of relief has now crept in, lifting U.S. and European stock futures.But be in no doubt that sentiment remains fragile. With a bear market confirmed for Wall Street, all the assets that benefited from an era of flush liquidity continue to suffer.Crypto currencies Bitcoin and ether hit new 18-month lows on Tuesday while many emerging market currencies are at multi-year lows. read more Due soon, the German ZEW survey could further fan growth worries if it shows a sharp decline in sentiment.Focus remains very much on central banks - whether that's what the European Central Bank's Isabel Schnabel, speaking later on, says about containing fragmentation risks in the euro area, to just how the Fed will navigate the ructions in U.S. markets.Key developments that should provide more direction to markets on Tuesday:- BOJ ramps up bond buying to defend yield cap, undermining jawboning read more - No let up in crypto slide as Celsius halt leaves investors 'panicking' read more - UK unemployment rises in the three months to April. read more - JPMorgan European Insurance Conference- Final German CPI/HICP- U.S. May producer pricesRegister now for FREE unlimited access to Reuters.comReporting by Dhara Ranasinghe; editing by Sujata RaoOur Standards: The Thomson Reuters Trust Principles.
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Inflation
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Trading Forex is the buying and selling of currencies. This article helps you understand how Forex Trading works, how you can trade Forex in the right way, and what are some of the best Forex Trading platforms out there will make your trading experience better.
Forex trading is the process of buying and selling currencies in the foreign exchange market. The market is open 24 hours a day, five days a week, and currencies are traded around the world.
Investors can trade forex through brokerages, banks, or retail forex dealers. Trading can be done online or over the phone. Online trading platforms offer real-time quotes and charting tools, as well as other features such as news and analysis.
When you trade forex, you're essentially betting on the value of one currency rising or falling against another. For example, if you think the euro will rise against the US dollar, you would buy euros and sell dollars. If the euro falls against the dollar, you would do the reverse.
Most investors trade forex through leverage, which means they only have to put up a small amount of money to control a much larger position. Leverage can help you make bigger profits – but it can also lead to bigger losses if your trade goes against you.
Before you start trading forex, it's important to understand the risks involved and develop a risk management strategy.
What is Forex Trading?
The foreign exchange market is a global decentralized market where currencies are traded. Currencies are bought and sold based on their exchange rate. The exchange rate is determined by the supply and demand for a particular currency.
Forex trading can be done online through a broker or dealer. Online brokers offer a variety of platforms and tools to help you trade effectively. They also provide research and analysis to help you make informed decisions.
When you trade forex, you are essentially speculate on the movement of currency pairs. You buy a currency pair if you think the price of the base currency will appreciate against the quote currency. Conversely, you sell a currency pair if you think the price of the base currency will depreciate against the quote currency.
Most forex traders use leverage to trade. Leverage allows you to trade with more money than you have in your account. This can increase your potential profits, but it also increases your risk. You should only trade with money that you can afford to lose.
Forex trading is not for everyone. It takes time, effort, and dedication to become a successful trader. If you are not willing
The basics of Forex Trading
If you're looking to get started in forex trading, this blog section is for you! Here, we'll cover the basics of what forex trading is and how it works.
Forex trading is the buying and selling of foreign currencies on the currency market. The currency market is a global, decentralized market where currencies are traded. Currencies are traded against each other in pairs, and the value of a currency pair is determined by the relative value of the two currencies involved.
Forex trading is conducted 24 hours a day, 5 days a week, so you can always be sure to find a market that's open for business. The foreign exchange market is the largest financial market in the world, with a daily turnover of over $5 trillion.
When you trade forex, you're effectively betting on the value of one currency pair against another. If you think the value of one currency will go up against another, you'll buy that currency pair. If you think it will go down, you'll sell it.
It's important to note that forex trading involves significant risk. Prices can move rapidly and unexpectedly, and losses can quickly mount up if you're not careful. That's why it's
How to Trade Forex?
Forex trading is the simultaneous buying of one currency and selling another. Currencies are traded through a broker or dealer, and are traded in pairs. For example, the EUR/USD pair represents the value of one Euro in U.S. dollars. When you buy a currency pair, you buy the base currency and sell the quote currency. In the EUR/USD pair, you would buy Euros and sell U.S. dollars.
Most forex brokers offer leverage on their trades, which means that you can control a large trade with a small amount of money. Leverage can be a great tool but it can also lead to quick losses if the market moves against you.
When you trade forex, you will need to use a broker that offers a trading platform where you can place your trades. Many brokers also offer other services such as mobile trading and demo accounts where you can practice trading before risking real money.
Types of Charts
There are different types of charts that you can use when you are forex trading. The most popular type of chart is the candlestick chart. This type of chart shows the price movement of a currency pair over a period of time. Each candlestick represents the opening and closing prices for that particular period of time.
Another type of chart that is commonly used is the bar chart. This type of chart shows the high and low prices for a currency pair over a period of time. Each bar represents the trading range for that particular period of time.
The last type of chart that we will discuss is the line chart. This type of chart simply shows the closing prices for a currency pair over a period of time. This is the simplest type of chart and is often used by beginner forex traders.
Technical Analysis Techniques
Forex trading technical analysis can be used in a variety of ways. Fundamental and technical analysis are the two main types of analysis used by forex traders. Technical analysis is the study of price action in the market, using charts and other tools, in order to identify patterns and make predictions about future market behavior.
There are many different technical analysis techniques that forex traders can use, but some of the most popular include:
1) Support and resistance levels: These are key levels where the price has a tendency to reverse or stall. Traders watch for these levels and look for opportunities to enter or exit trades.
2) Trend lines: These are used to identify the direction of the current market trend. Traders look for breakout opportunities when the price breaks above or below a trend line.
3) Fibonacci levels: These are mathematical levels that are derived from the Fibonacci sequence. They are often used as potential support and resistance levels.
4) Candlestick patterns: Candlestick charting is a popular form of technical analysis that looks at specific patterns formed by candlestick bars. These patterns can be used to predict future market direction.
5) Moving averages: These
Risk Management Principles and Techniques
When it comes to forex trading, one of the most important things that you need to keep in mind is risk management. After all, even the most experienced and successful traders can lose money if they don't manage their risks properly.
There are a few different techniques that you can use to help you manage your risks when trading forex. One of the most important is to always use stop-loss orders. This means setting up an order with your broker that will automatically sell your currency if it falls to a certain price. This way, you can limit your losses if the market moves against you.
Another risk management technique is to trade using a margin account. This allows you to trade with leverage, which means you can control a larger position than with your own capital alone. However, it's important to remember that this also means your losses could be amplified if the market moves against you.
Finally, another useful tool for managing your risks is to practice using a demo account before putting any real money on the line. This way, you can get a feel for how the forex market works without risking any of your hard-earned cash.
By following these risk management principles, you can help ensure that your
Key External Influences on the Forex Market
When it comes to the forex market, there are a number of external influences that can have an impact on currency prices. These can include economic indicators, political events, central bank actions, and even natural disasters.
Economic indicators are perhaps the most closely watched of all the external factors affecting the forex market. This is because they can give traders an idea of where a country's economy is heading, and how this might impact its currency. Political events can also have a big impact on currency prices. For example, if there is a change in government or a major policy announcement, this can cause currencies to rise or fall.
Central bank actions are another important factor to keep an eye on. Central banks often intervene in the forex market in order to stabilize their own currencies or to influence exchange rates. And finally, natural disasters can also have an impact on currency prices. If a country is hit by a hurricane or earthquake, for example, this can cause its currency to drop in value as investors become less confident in its economy. Forex trading is a great way to make money, but it's important to understand how it works before getting started. This article has given you a basic introduction to forex trading and how it works. Remember to do your own research and consult with a financial advisor before making any trades. With the right approach, forex trading can be a profitable and exciting investment opportunity.
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Forex Trading & Speculation
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Bottles of Cointreau, the orange-flavoured triple sec liqueur, are displayed in the Carre Cointreau at the Cointreau distillery in Saint-Barthelemy-d'Anjou, near Angers, France, February 8, 2019. REUTERS/Stephane Mahe/File PhotoSummaryCompaniesQ2 sales 457.2 mln euros, up 16.2% l-f-l vs est. 14.3%Group says second half growth will be slower than first halfShares slide 6.3%FY 2022/23 to be another year of strong organic sales growthStrong Mid-Autumn Festival in China in Q2PARIS, Oct 25 (Reuters) - Shares in Remy Cointreau (RCOP.PA) slid more than 6% on Tuesday after the premium drinks maker indicated sales and profit growth would slow in the second half as consumption trends return to normal after two "outstanding" years.The group's cautious outlook overshadowed a better-than-expected 16.2% rise in second quarter sales, boosted by a recovery in demand for its top cognac brands in China during the Mid-Autumn festival late last month.The maker of Remy Martin cognac and Cointreau liquor reiterated that for the full year 2022/23 it expected another year of strong organic sales growth and improving operating margins, helped by strict costs control and price increases to mitigate inflationary pressures.Register now for FREE unlimited access to Reuters.comFinance Chief Luca Marotta, however, talked down full-year 2022/23 consensus expectations of organic sales and operating profit growth of 12.7% and 15.3%, telling analysts that previous expectations of 11.2% and 13.8% were "more the right ones".By 0921 GMT, Remy Cointreau shares were down 6.3% at 154.40 euros, after falling nearly 8% at one point."Remy Cointreau Q2 sales were solid and forex verypositive but the second half outlook is tinged with caution," Bernstein analysts said in a note.Sales for the three months to Sept. 30 came in at 457.2 million euros ($451.4 million), marking a like-for-like rise of 16.2% which beat analysts' expectations for 14.3% growth.Cognac sales rose 15.6% to 345.9 million euros reflecting double-digit sales growth in China, with strong demand for Club and XO cognac during the Mid-Autumn festival in a market still impacted by stop and start COVID restrictions.Cognac inventories were very low at the end of September in China and Marotta said the company was "reasonably bullish" onChina and did not see consumers in China or elsewhere downtrading because of economic conditions.Remy Cointreau's fiscal year starts on April 1 and ends on March 31.Remy shares are down around 23% this year after rising 40% last year.The pandemic accelerated Remy Cointreau's long-term drive towards higher-priced spirits to boost profit margins, speeding a shift towards premium drinks, cocktails and e-commerce as people drank more expensive drinks at home."Ideally positioned to take advantage of new consumption trends and buoyed by its advance on roll-out of its strategic plan, Remy Cointreau is looking to 2022/23 with confidence," the company said in a statement.For the full year Remy forecast a positive currency effect with reported sales now seen at 110-120 million euros compared with 90-100 million previously, and current operating profit at 55-60 million compared with 50-60 million.($1 = 1.0129 euros)Register now for FREE unlimited access to Reuters.comReporting by Dominique Vidalon; editing by Sudip Kar-Gupta, Jason Neely and Susan FentonOur Standards: The Thomson Reuters Trust Principles.
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Europe Business & Economics
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I’m a Gunditjmara woman and the cofounder of Clothing The Gaps, a Victorian Aboriginal social enterprise. I spearheaded the #FreeTheFlag campaign after we received a cease and desist notice for using Aboriginal flags on our clothes. After two and half years of community support, we finally freed the flag and put it back in the public domain where it belonged.
With this background in advocacy, you may be surprised to hear that I’ve never been doorknocking before. But last weekend I decided to get out of my comfort zone and give it a go and I urge you to do the same.
I’m not a big fan of confrontation. I’ve always favoured respectful dialogue and a well thought-out social media post or blog, and I assumed doorknocking would mean butting heads with people who aggressively shared different values. I decided to give it a go anyway. A referendum on an Indigenous voice to parliament was too important to lose.
On Sunday, I drove out to Fawkner, an area in Melbourne that the yes campaign said needed attention. In the safety of my inner-north Melbourne “Brunswick bubble” I’m usually quite comfortable in my red, black and yellow Aboriginal slogan T-shirt and my trusty fluro crocs. Today, I felt the need to impress, I didn’t want to put anyone off with my political fashion. So, I levelled up with a smart lime-green blazer, my white ‘History is calling’ T-shirt and woven Aboriginal earrings.
My anxiety about what to wear was fuelled by what I didn’t know would greet me when I knocked on an unknown door. I also knew, in these conversations, my identity would be judged more than ever.
Fawkner is a suburb I haven’t spent much time in. My trips there have mainly consisted of visits to the cemetery, a morbid reality for many in the Victorian Aboriginal community.
The local shops were unexpectedly delightful. There was a cute florist and the local cafe had a mural painted with flags from all around the world. This included the Aboriginal flag – the same flag I fought tirelessly and successfully to “free”. Fawkner suddenly felt safer.
You couldn’t miss the group of yes volunteers at the park in all their yes paraphernalia and we gathered in a circle before we began doorknocking. We heard from elected representative of the First Peoples Assembly of Victoria – the voice for Treaty in Victoria – about why they were there and their personal reasons for backing a yes vote.
We then partnered off, one person who had experience doorknocking paired with one of us newbies. The yes campaign provided maps, materials and scripts so we knew how to answer any curly questions that came our way.
We had our scripts. We had our buddies beside us. I took a moment to complete my outfit with a yes badge. Our armour was on and we were ready to go.
What I encountered was better than I could have imagined. It was definitely not as scary as I thought, and people approached our conversation with curiosity and respect.
We spoke to a man who didn’t know the referendum was even happening. This man had a vast understanding of Indigenous rights, particularly international Indigenous rights focusing on climate change.
He said he would be voting yes and sent us on our way with cups of delicious lentil soup. This interaction nearly moved me to tears. We had uncovered a human gem – who will no doubt go on to influence his friends and family to vote yes too.
We doorknocked a share house, they answered the door bleary-eyed and hungover from the night before. They assured us they were voting yes and we left them to rehydrate and eat something greasy.
We came across a strong no voter. His opposition came from his distrust of politicians and the idea that there were already First Nations politicians in Canberra.
We explained those politicians were there to represent their political parties, their constituents and not their Aboriginal community. He ended up taking a yes pamphlet from us and I thanked him for having the conversation. I knew we gave him a different perspective to consider. It was a fascinating interaction because I would usually never talk to someone who shared polar opposite views to myself. One thing is certain, this man softened in his short interaction with us and dare I say, I think he liked us! My buddy explained to me that no matter what you must leave every house with a positive impression. So, if someone does slam the door in your face you reply: “Thanks. Have a lovely day”.
A lovely Nepali man we spoke to said he would vote yes to support our country because he knew we would support his. We gave him a pamphlet and told him where to get further information in Nepali. He then had to take his children to taekwondo training, where he would see his good friend who was also voting yes.
A jet-lagged woman who had just returned from overseas answered the door and said she was likely to vote no because she had heard the voice would have veto power. We explained this wasn’t the case and I believe we swung her around to yes.
These interactions show the power of conversation, whether it was alerting people to the referendum happening, directing someone to where they could get information in a language other than English, clarifying mistruths or just simply giving another perspective. It was a couple of hours well spent.
What’s abundantly clear is that, for this referendum to succeed, we need to face our fears and have those tough and uncomfortable conversations.
Every conversation and impression right now really does count.
Laura Thompson is a cofounder of Clothing The Gaps, a Victorian Aboriginal social enterprise
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Nonprofit, Charities, & Fundraising
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U.S. Dollar banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/IllustrationRegister now for FREE unlimited access to Reuters.comHONG KONG, Aug 11 (Reuters) - The euro and Japanese yen held onto most of their overnight gains on Thursday, having been boosted by U.S. inflation data coming in less hot than feared and sending the dollar tumbling.The European common currency was trading at $1.0285, with its 0.14% loss on the day, though it came after a 0.84% jump on Wednesday - its biggest daily percentage gain since mid-June.Similarly one dollar was worth 133.15 yen up 0.2% on Thursday, after a 1.6% tumble the previous day .Register now for FREE unlimited access to Reuters.comThe dollar plunged overnight after U.S. consumer prices were unchanged in July compared with June, when prices rose a monthly 1.3%. The July result was lower than expectations due to a sharp drop in the cost of petrol, causing markets to reposition on hopes that inflation was peaking. read more If price rises have reached their zenith, investors expect the U.S. Federal Reserve will not have to maintain its eye-wateringly steep pace of interest rate hikes, which had been supporting the dollar.Analysts at Standard Chartered said the decline in the dollar seemed to be driven by improvements in investors' attitude to riskier assets - except for the move against the yen, which they said was more of a yield play."The surprise downward (inflation) move takes out much of the fear that the market had of a 75bps Fed hike or even inter-meeting moves," they wrote in a note."We suspect that many investors did not want to put on positions ahead of an important number that could have gone either way, so some of the post-CPI moves probably reflect delayed buying of risk-correlated positions."U.S. shares and short dated treasuries also rallied on the news, which pushed the Nasdaq more than 20% above its June low and the two-year treasury yield down to 3.2141%, seven basis points lower than its previous close.U.S. Treasuries were not trading in Asia due to a holiday in Japan.Markets are currently pricing in a 57.5% chance of a 50 basis point interest rate rise at the Fed's next meeting, according to the CME's Fedwatch tool, though another 75 basis point increase remains possible.Fed policy makers were also warning in public remarks after the data that they would continue to tighten monetary policy until price pressures were fully broken. read more The Australian dollar , another commonly used proxy for risk sentiment, was at $0.7066, down 0.2% after a 1.7% overnight gain, and sterling , was slightly softer at $1.2192.Bitcoin , which has also traded in line with risk assets, was up 2.6% at $24,577. A break past $24,676 would be a two month high for the world's largest cryptocurency.========================================================Currency bid prices at 0523 GMTAll spotsTokyo spotsEurope spotsVolatilitiesTokyo Forex market info from BOJRegister now for FREE unlimited access to Reuters.comReporting by Alun John; Editing by Simon Cameron-MooreOur Standards: The Thomson Reuters Trust Principles.
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Forex Trading & Speculation
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Victorian Premier Daniel Andrews has confirmed the state will no longer host the Commonwealth Games in 2026.
Follow our coverage live.
Key events
Live updates
Not a difficult call to cancel the games says Premier
Daniel Andrews has been pretty clear about the value for money - or lack of it - provided by the Commonwealth Games in his press conference this morning.
"I've made a lot of difficult calls, a lot of very difficult decisions in this job. This is not one of them. Frankly, $7 billion for a sporting event, we are not doing that," he said.
"We will instead deliver all and more of the legacy benefits in housing, sporting infrastructure, tourism and we will unpack all that tomorrow and throughout the week and there will be further details of all of that as well as the process to deliver that."
Regional sporting facilities to be upgraded
The government is committed to improving sporting facilities across regional Victoria and says the planned upgrades that were to accompany the Games will still go ahead.
That includes upgrading Eureka Stadium in Ballarat to seat 10,000 spectators and upgrades to Bendigo Stadium.
Regional spending package to replace Games funding
The premier has announced a $2 billion spending package for regional Victoria to make up for the loss of the Games, which was to act as a boost for facilities in the host centres.
That money includes a $1 billion Regional Housing Fund to build 1,300 new homes across regional Victoria.
Daniel Andrews confirms cancellation of Commonwealth Games
The premier has just confirmed the Games will not be hosted by Victoria due to financial issues.
"What's become clear is that the cost of hosting these Games in 2026 is not the $2.6 billion which was budgeted and allocated," he said.
Mr Andrews said the true cost was likely to be closer to $6 billion or $7 billion and the state simply could not afford it.
"I will not take money out of hospitals and schools to host an event that is three times the cost estimated and budgeted for last year."
Press conference due shortly
2026 Games was supposed to showcase regional Victoria
The government announced in 2022 that the Games would be hosted across regional Victorian centres, including Ballarat, Bendigo and Shepparton.
It was hoped the Games would leave a legacy for regional sport, with new facilities to be built in the host centres.
At the time of the announcement, Premier Daniel Andrews said it would be "a Commonwealth Games like no other", but now it looks like there won't be a Games at all — not in Victoria anyway.
Victoria axes 2026 Commonwealth Games
The ABC understands the Victorian government will shortly announce that the 2026 Commonwealth Games will not go ahead in regional Victoria and will be scrapped completely.
We'll have the latest on the shock announcement and reaction to it here this morning.
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Australia Business & Economics
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Image source, Getty ImagesUnemployment in Scotland is still at a record low, according to the latest figures.Office for National Statistics (ONS) data showed the unemployment rate for those aged 16 and over was 3.2% between February and April this year - the same rate as the previous quarter. Across the UK, the unemployment rate was 3.8%.In Scotland, the employment rate rose by one percentage point on the previous quarter, to 75.5%.Separate early estimates from the HMRC showed there were 2.42 million payrolled employees in Scotland in May. That is 37,000 more than in February 2020, before the pandemic. However, the ONS data showed that regular pay across the UK fell during the last quarter at the fastest rate in more than a decade, when taking into account rising prices.Between February and April, pay excluding bonuses was down 2.2% from a year earlier when adjusted for inflation.Prof Mairi Spowage of Strathclyde University's Fraser of Allander economic research institute said the latest figures "continued the story of a really, really tight labour market".She added: "This what what we would call full employment. Basically, everyone who is wanting a job can find one, but what we are hearing from employers is that they are just having more and more difficulty finding staff."Image source, Getty ImagesScotland's Employment Minister Richard Lochhead said the latest labour market figures showed that "the resilience of the Scottish economy is clear".He added: "While today's figures show a strong recovery in Scotland's labour market, we continue to face economic challenges with the rising cost of living, the continued impact of Brexit, and recovery from the effects of the pandemic and the economic consequences of Russia's illegal invasion of Ukraine."The Scottish government is firmly focused on delivering the ambitious National Strategy for Economic Transformation, which will help us build an economy of secure, sustainable and satisfying jobs."'Strong labour market'The UK government's Scottish Secretary Alister Jack said: "With more Scottish workers on the payroll than before the pandemic and unemployment at historically low levels, today's figures show a strong Scottish labour market."During the pandemic, UK government loans to businesses saved up to 500,000 UK businesses and 2.9 million jobs. "Now, as global issues put pressure on the cost of living, we are helping people into work and to progress in work, and to keep more of what they earn. "We are also putting in place a £37bn financial support package."
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Unemployment
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SINGAPORE, Oct 14 (Reuters) - The dollar took a breather on Friday after a volatile overnight session as red-hot U.S. inflation data pointed to more aggressive interest rate hikes, while traders were on edge about intervention as the yen wallowed near a three-decade low.The dollar index was little changed after falling 0.5% in the previous session as investors digested data that showed U.S. consumer prices increased more than expected in September.The temporary fall in the dollar was partly driven by the sharp recovery in Wall Street stocks, Commonwealth Bank of Australia strategist Carol Kong said.Register now for FREE unlimited access to Reuters.comWall Street indexes made a dramatic recovery, closing sharply higher after an earlier sell-off on Thursday as investors rushed back into riskier bets.However, the investment mood remained broadly cautious, which is likely to continue to support the dollar."I doubt the weaker dollar will sustain ... the dollar is the safe-haven currency currently," Kong said.Focus now shifts to next month's Federal Reserve policy meeting where the it is expected to deliver another 75-basis-point (bps) rate increase.The dollar was trading at 147.43 to the yen , not far off from the 32-year peak of 147.665 it hit in the previous session.Investors remained on the watch for an intervention from the government to prop up the fragile currency. Japanese Finance Minister Shunichi Suzuki reiterated the government's readiness to take "appropriate action" against excessive currency volatility.Last month, Japan intervened to buy yen for the first time since 1998, in an attempt to shore up the battered currency.Rodrigo Catril, a currency strategist at National Bank of Australia, said any intervention from here will be about the speed of depreciation rather than a specific level.Meanwhile, sterling last traded at $1.1309, down 0.18% on the day, reversing earlier steep gains against the dollar following reports of a possible U-turn by the UK government on its fiscal plans.The Australian dollar was up 0.22% versus the greenback at $0.631, coming off two and half year low it touched in the previous session.========================================================Currency bid prices at 0136 GMTAll spotsTokyo spotsEurope spotsVolatilitiesTokyo Forex market info from BOJRegister now for FREE unlimited access to Reuters.comReporting by Ankur Banerjee in Singapore; Editing by Sam HolmesOur Standards: The Thomson Reuters Trust Principles.
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Forex Trading & Speculation
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Register now for FREE unlimited access to Reuters.comSummaryCompaniesBoeing rises on deal to sell jets to 777 PartnersJohnson & Johnson and IBM fall on dollar impact warningHalliburton, Hasbro, Truist rise after profit beatIndexes Up: Dow 2.43%, S&P 500 2.76%, Nasdaq 3.11%Biggest one-day percentage gain for Nasdaq since June 24July 19 (Reuters) - U.S. stocks closed with sharp gains on Tuesday as more companies joined big banks in reporting earnings that beat forecasts, offering respite to investors worried about higher inflation and a tightening Fed denting the corporate bottomline.The S&P 500 (.SPX) gained 2.8%, the highest close since June 9. The tech-heavy Nasdaq Composite (.IXIC) added 3.1%, marking the biggest one-day percentage gain since June 24.Shares of Halliburton(HAL.N)rose 2.1% after the oilfield services provider posted a 41% increase in quarterly adjusted profit. read more Toymaker Hasbro Inc (HAS.O)gained 0.7% after reporting quarterly profit ahead of expectations. read more Register now for FREE unlimited access to Reuters.comTruist Financial Corp also beat market estimates for quarterly profit, sending the bank's shares up 2.6%."Earnings have come in better than lowered expectations," said Paul Kim, CEO of Simplify Asset Management in New York."So we're not seeing the bite of tighter monetary policy and inflation impacting revenue as much as feared."Johnson & Johnson shares lost 1.5%, reversing earlier gains. The healthcare giant reported profit and sales that exceeded expectations but cut its earnings outlook for the year due to a soaring U.S. currency. read more A strong dollar also weighed on shares of IT hardware and services company IBM Corp (IBM.N), which beat quarterly revenue expectations on Monday but warned the hit from forex for the year could be about $3.5 billion.A Wall Street sign outside the New York Stock Exchange in New York City, New York, U.S., October 2, 2020. REUTERS/Carlo AllegriThe U.S. dollar marked its third straight day of declines as markets reduced the odds of a full percentage-point Federal Reserve rate hike this month.Spiraling inflation initially led markets to price in a 100-basis-point hike in interest rates at the upcoming Fed meeting later this month, until some policymakers signaled a 75-basis-point increase. read more The Dow Jones Industrial Average (.DJI) rose 754.44 points, or 2.43%, to 31,827.05, the S&P 500 (.SPX) gained 105.84 points, or 2.76%, to 3,936.69 and the Nasdaq Composite (.IXIC) added 353.10 points, or 3.11%, to 11,713.15."The macro picture hasn't changed," said Kim. "We still have falling earnings, high inflation pressures and a tightening Fed. So longer term, I don't think this type of rally has staying power."In this earnings season, analysts expect aggregate year-on-year S&P 500 profit to grow 5.8%, down from the 6.8% estimate at the start of the quarter, according to Refinitiv data.Volume on U.S. exchanges was 10.95 billion shares, compared with the 11.76 billion average for the full session over the last 20 trading days.Advancing issues outnumbered declining ones on the NYSE by a 4.88-to-1 ratio and on the Nasdaq, a 3.40-to-1 ratio favored advancers.The S&P 500 posted one new 52-week high and 30 new lows; the Nasdaq Composite recorded 31 new highs and 56 new lows.Register now for FREE unlimited access to Reuters.comReporting by Echo Wang in New York; Additional reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru; Editing by Arun Koyyur, Shounak Dasgupta and Deepa BabingtonOur Standards: The Thomson Reuters Trust Principles.
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Stocks Trading & Speculation
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HONG KONG, Oct 31 (Reuters Breakingviews) - Bank of Japan (8301.T) Governor Haruhiko Kuroda is playing with forex fire. The yield-curve control policy in which the central bank attempts to hold down interest rates by buying – or threatening to buy - unlimited amounts of sovereign bonds, is breaking down and risks freezing the market over, a bad look for an international reserve currency.Kuroda’s interventions to put a floor under the plunging yen, which at nearly 150 per U.S. dollar is at its weakest since 1990, appear to be losing traction. He could make tweaks to the bank’s unorthodox monetary policy, but they might not accomplish much given fundamentals. The root of the issue is the profound gap between American and Japanese economic conditions.With consumer costs spiking in Western economies, the Federal Reserve has been hiking borrowing rates, but in Japan inflation remains relatively tepid and growth anemic. September economic data for Japan was grim, with the import bill spiking and factory activity slowing. Credit austerity could profoundly inhibit economic activity.Annual consumer inflation, at 3%, is subdued by global standards, but it is not the kind of demand- and wage-driven price rises the Bank of Japan has been trying to deliver. Instead, it reflects temporary rises in food and energy costs. So Tokyo is trying to stick with plan A and keep its rates ultra-low. In the meantime, officials hope a $65 billion stimulus package announced Friday will paradoxically cool the consumer price index by over a full percentage point via subsidies for electricity bills and petrol; there is talk of slashing consumption taxes.But given 10-year U.S. bonds yield 4% while their Japanese equivalents pay next to nothing, investors have unsurprisingly moved money into dollar assets and out of yen, prompting Kuroda to reluctantly intervene. The bigger problem, however, is in the bond market.While Kuroda has enough firepower to keep the 10-year Japanese government bond yields below the self-imposed 0.25% cap, the market has pushed up yields along the rest of the curve; the 8-year now yields more. Traders are repeatedly testing the cap on the 10-year, and short positions against the yen are at their highest since May.The central bank could tweak its policy by targeting a shorter tenor, for example. But with the entire curve creeping upwards, it’s hard to believe this would make much difference. And as Kuroda tries to force the market to trade sovereign bonds at rates investors don’t want, liquidity is drying up. The central bank already owns roughly half of the total sovereign market; its holdings of long-term government bonds have risen to 560 trillion yen ($3.8 trillion) in 2022 from 40 trillion yen in 2008.A deep, liquid sovereign pool is critical to the functioning of any international currency, and the yen, thanks to its low borrowing rates and easy convertibility, is one of the most popular. Passivity could do permanent damage to the yen’s global stature.Reuters GraphicsFollow @petesweeneypro on TwitterCONTEXT NEWSJapan on Oct. 28 unveiled a stimulus package with spending worth 39 trillion yen ($265 billion) that it said would boost gross domestic product by around 4.6%, mostly in fiscal year 2023. An official said the measures also would suppress consumer price inflation by around 1.2 percentage points. Japan’s annual consumer inflation rate was 3% in September.The country’s import bill grew more than 40% for a fifth straight month to hit the largest value on record, as a slumping exchange rate aggravated fuel import costs. Factory output fell for the first time in four months as manufacturers took a hit from rising costs for raw materials and the global economic slowdown.Calculations by Reuters and U.S. Commodity Futures Trading Commission data show net short positioning on the yen has ballooned to 102,618 contracts, the highest level since May. The Bank of Japan has begun to intervene in currency markets as the yen slides toward 150 per dollar, a plunge caused by widening interest rate spreads between the United States and Japan. The yen is currently at its weakest level since 1990.Editing by Una Galani and Thomas ShumOur Standards: The Thomson Reuters Trust Principles.Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.Pete SweeneyThomson ReutersAsia Economics Editor Pete Sweeney joined Reuters Breakingviews in Hong Kong in September 2016. Previously he served as Reuters' chief correspondent for China Economy and Markets, running teams in Shanghai and Beijing; before that he was editor of China Economic Review, a monthly magazine focused on providing news and analysis on the mainland economy. Sweeney came to China as a Fulbright scholar in 2008, and in that role conducted research on the Chinese aviation industry and outbound M&A. In prior incarnations he helped resettle refugees in Atlanta, covered the European Union out of Brussels, and took a poorly timed swing at craft-beer entrepreneurship in Quito even as the Ecuadorean currency collapsed (not his fault). He speaks Mandarin Chinese, at the expense of his Spanish.
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Forex Trading & Speculation
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The operator of Australia’s main electric grid plans to conduct a “detailed investigation” into the breakdown of the country’s wholesale power market that triggered an unprecedented suspension during last week’s energy crisis.The Australian Energy Market Operator said on Wednesday it plans to resume trading in a two-stage process starting with the market setting prices again from 4am AEST on Thursday. After monitoring conditions for 24 hours, Aemo will decide whether the market suspension will be formally lifted.“We will absolutely be working very closely with the regulator and Australian Energy Markets Commission on a series of actions … to prevent this from happening again,” Daniel Westerman, Aemo’s chief executive, told journalists, adding that it would be looking “to make sure that that dysfunctional behaviour doesn’t reoccur”.“It’s not a place where the market operator wants to be in suspending the market, Westerman said. “So we’re looking at obviously undertaking a detailed investigation … to understand comprehensively the lessons learned and put in place actions so it doesn’t happen again.” He did not give a date when the investigation would be completed.The federal energy minister, Chris Bowen, said he wouldn’t comment on individual generators but said it was up to generators to bid into the market “as they’re required to do as a matter of law”.Bowen said he supported the restart to energy trading as “a prudent and carefully managed approach to return to more normal market conditions”.An unusually widespread and prolonged cold snap at the start of winter combined with many coal-fired power units going offline to strain power supplies in five states. Temperatures have warmed in most places, easing demand, while some 4,000 megawatts of generation capacity has returned to operation since Aemo suspended the market.Several energy ministers complained about what they saw as anti-competitive behaviour by some generators that threatened blackouts in some states. The federal government has asked the competition watchdog to join the hunt for possible gaming actions in the market.But Westerman downplayed claims the generators had made conditions worse.“At an operational level, we have exceptional working relationships with each generator,” he said. “We have been able to reduce the amount of generation that is under direction from Aemo from about 5,000MW down to less than 1,000MW”Aemo had operated since 1998 without needing to suspend its main electricity market. Normally it would identify a potential future supply gap, announce it in a market notice, and generators would respond.One complication was that soaring wholesale prices – mostly caused by an unusual reliance on costly gas – had triggered price caps, starting in Queensland. At $300 a MW-hour, some generators dropped out of the market, waiting to be instructed back in by Aemo, with the prospect of compensation in the future for any price gap.Both Westerman and Bowen spoke out in favour of further work on the development of a so-called capacity market that would pay generators and other electricity suppliers to have a certain amount of energy on standby. On Monday Aemo and other members of the Energy Security Board released a design paper on the plans for consultation. Sign up to receive an email with the top stories from Guardian Australia every morning Sign up to receive an email with the top stories from Guardian Australia every morningWesterman said a capacity market would help enable the transition of the grid away from fossil fuels, namely gas and coal. It would ensure “that we do have sufficient dispatchable capacity on hand at any time. That sort of mechanism will prevent in future these types of things [including the market suspension] from happening.”Bowen said he and the state and energy ministers wanted the work on a capacity market “to focus primarily on new technology”, such as storage.“I want to see this done and I want to sit down right,” Bowen said. “This is a massive transformation which we need to get cracking on.“We need to make faster progress on the transformation, and we need the capacity mechanism to help us do that to provide that safety net underneath as we engage in this significant transformation to a more renewable economy, a more renewable energy system with more storage.”
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Australia Business & Economics
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Congress is likely to quash the White House effort to back a suspension of the federal gasoline tax. The White House has flirted for weeks with the idea of temporarily halting the 18-cent tax as one way to bring relief to drivers amid record gas prices — and President Biden is expected to officially announce support for it on Wednesday. But with skepticism spanning the ideological spectrum — from Speaker Nancy Pelosi (D-Calif.) to swing vote Sen. Joe Manchin (D-W.Va.) to much of the GOP — the idea is unlikely to make it across the finish line. Biden’s position on the gasoline tax issue had been unclear for weeks, but the president will call on Congress to suspend the federal gasoline and diesel taxes. White House Press Secretary Karine Jean-Pierre affirmed on Tuesday, prior to the announcement, that if Biden supported the measure, he’d be looking at an act from Congress. “The way we see it is there would be congressional action,” Jean-Pierre told reporters during a press briefing. “The president is looking at an array of options to figure out how he is going to help give relief to the American public, especially as they are looking at gas prices at the pump,” she said. “This is a No. 1 priority for the president.” Doubts about pausing the federal gasoline tax are coming from both allies and foes of the White House. Democrats have expressed concerns that some of the savings may get passed to oil companies rather than consumers and have also raised worries about a reduction in federal highway spending that is funded by the tax. “We have a situation where there’s money coming out of the Highway Trust Fund, it’s going to the oil companies, they may not give it to the consumer, and it has to be paid for. … That’s the con,” Pelosi, who is among those who have expressed reservations, said during a March press conference. Pelosi’s office declined to comment further for this story. Other Democrats, such as House Transportation and Infrastructure Committee Chairman Peter DeFazio (Ore.), have made similar points. “As discussions on possibly suspending the federal gas tax continue, I urge my colleagues to see this for what it is: a short-sighted proposal that relies on the cooperation of oil companies to pass on miniscule savings to consumers,” DeFazio said in a statement to The Hill prior to the administration’s announcement. “Suspending the federal gas tax will not provide meaningful relief at the pump for American families, but it will blow a multi-billion-dollar hole in the highway trust fund putting funding for future infrastructure projects at risk,” he added. Manchin, the Senate’s key swing vote, also expressed opposition to the idea in February. He said at the time that suspending the gas tax “just doesn’t make sense” because it would take money out of highway funding. “People want their bridges and their roads, and we have an infrastructure bill we just passed this summer, and they want to take that all away,” Manchin said. Manchin separately remains in talks with Senate Majority Leader Charles Schumer (D-N.Y.) about advancing another bill containing significant pieces of Biden’s agenda for climate, drug prices and tax reform. It’s not clear whether Democrats would be willing to expend additional political capital convincing him to support something that many members of the caucus also aren’t behind. Even if Biden could get all of the members of his own party to back a gas tax suspension, he’d likely need to convince 10 Republicans given the Senate’s filibuster rule. But many Republicans are also skeptical of a gas tax suspension. They meanwhile are using the high gas prices as a cudgel to go after Biden’s energy policies. “A potential gas tax holiday subsidizes demand,” tweeted Sen. Chuck Grassley (R-Iowa) on Tuesday. “We don’t have a demand issue we [have] a SUPPLY issue since Pres Biden has waged war on fossil fuel production.” Most of the policies Biden has pursued are more likely to encourage a long-term shift from fossil fuels rather than a short-term shift towards them that would have a big effect on raising prices. The main reasons for higher gas prices are rising demand and changes in supply. Over the past few days, the national average gasoline price has hovered around $5 per gallon, exacerbated by Russia’s invasion of Ukraine, reduced capacity at refineries that turn oil into gasoline and high gasoline demand amid the summer driving season. Swing-state Democrats have been among the loudest voices calling for a suspension of the gas tax as a way to reduce prices for consumers ahead of this year’s midterm elections. Earlier this year — when gas prices were averaging around $3.50 per gallon nationwide — Sens. Mark Kelly (D-Ariz.) and Maggie Hassan (D-N.H.) introduced legislation in February to temporarily halt the tax. In a statement, Marisol Samayoa, a spokeswoman for Kelly’s office, stressed that the senator has worked on building support for the tax suspension — but didn’t directly address questions about whether the proposal currently has the votes to pass. “Since November, Senator Kelly has pushed Washington and the Biden administration to take immediate steps to bring down gas prices, like supporting his bill to suspend the federal gas tax through the end of the year and boosting domestic energy production,” Samayoa said. Morgan Chalfant contributed.
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Energy & Natural Resources
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NEWYou can now listen to Fox News articles! Last week marked a new devastating milestone for millions of Americans — gas prices have more than doubled since President Joe Biden took office in January 2021. And if that wasn’t enough, last week, we reached yet another difficult milestone — the national average of gas is now $5 per gallon for the first time in U.S. history. "Milestone" is really the wrong word. The current energy disaster is better described as a "millstone" around the neck of the American economy, who are now struggling to meet their most basic needs. Unfortunately, Biden has refused to budge from the war on American energy that got us here. Even worse: he appears to be doubling down on it. Early in his campaign, then-candidate Biden made the rapid end of fossil fuels a top priority. And he has consistently matched this with action, from canceling critical infrastructure projects like the Keystone XL pipeline and preventing new oil and gas drilling on federal lands to depriving the American energy sector of much-needed capital through the embrace of dangerously woke environmental policies. In fact, Biden’s open hostility toward U.S. energy production has become the hallmark of his presidency. Unsurprisingly, this hostility has cast what my friend and Fox Business host Larry Kudlow likes to call a "wet blanket" over-investment in the American energy industry. Instead of the lofty "green" promises he peddled to Americans, Biden’s war on American energy has financed Putin’s aggression in Ukraine, outsourced production to our adversaries like Iran and Venezuela, and saddled Americans with sky-high energy prices. RECORD-HIGH GAS PRICES DRAIN TEXAS COUNTY'S FUEL BUDGET, PUT PRESSURE ON FIRST RESPONDERS Solar panels are seen next to a Southern California Edison electricity station in Carson, California March 4. Currently, solar energy makes up only 2.8% of U.S. energy production. (REUTERS/Lucy Nicholson)Despite political pushback due to rising prices, this administration has stayed the course. Just last week, the Biden Administration proposed its latest addition to its regulatory assault on American energy infrastructure through another reversal of key Trump Administration permitting reforms, this time reversing reforms under Section 401 of the Clean Water Act. This reversal will make it more difficult to build any kind of infrastructure project and makes it easier for a single state or interest group to block critical interstate infrastructure that America desperately needs — not just basic infrastructure like roads and bridges, but ironically, also infrastructure related to the administration’s most-favored energy sources like wind and solar. With build-nothing activists running the show, the Biden Administration’s posturing on energy infrastructure is clearly just a load of double-talk. Instead of unleashing the vast potential of U.S. energy production at home, we are turning back the energy independence clock. The U.S. is now begging OPEC to increase production, and the administration is easing sanctions on Venezuela. But perhaps Americans shouldn’t worry. Biden’s cavalry is coming — all the way from China. Just this week, President Biden waived tariffs on solar imports from countries likely serving as safe havens for China’s circumvention of U.S. tariffs — blatantly undermining an investigation by his own Department of Commerce. It seems environmental and social justice don’t apply to slave labor when our "renewable" future is on the line. Meanwhile, solar only amounts to 2.8 percent of U.S. electricity production and suffers from very real challenges. While solar will continue to be a good contributor to our energy mix, overly relying on an intermittent energy source will only make the threat of rolling blackouts more severe and frequent. President Biden will find it hard to "Build Back Better" when America is in the dark. Instead of empowering competition and innovation at home, the Biden Administration continues to send our tax dollars and jobs to China for expensive, unreliable energy. It would take a lot of doublethink to insist that this is the way to restore American energy independence. CLICK HERE TO GET THE OPINION NEWSLETTERDespite the administration doubling down with desperate attempts to spin the narrative as "[Russian President Vladimir] Putin’s price hike" or "price-gouging" and "war profiteering" by American companies, the American people know when they are being double-crossed. Actively discouraging American energy production plays into the hands of our adversaries at the expense of American families, workers, and small businesses. President Biden often repeats his story about growing up "in a family where it mattered when the price of gas or groceries rose," but when the rubber meets the road, the Biden administration’s continued embrace of anti-energy policies is driving up costs for American families around the country. And it matters an awful lot to the future of our great Nation that we reverse course and once again embrace our Nation’s vast energy potential. CLICK HERE TO GET THE FOX NEWS APPUnfortunately, this requires the Biden administration and progressive policymakers to stop doubling down on the war on American energy and get out of the way of American energy investment, infrastructure, and production. In the meantime, Americans suffering through the consequences will likely find themselves in need of a stiff drink if they can afford it. Make it a double. CLICK HERE TO READ MORE FROM RICK PERRY Rick Perry is the former governor of Texas and 14th secretary of energy.
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Energy & Natural Resources
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The Fair Work Commission has decided to lift the minimum wage by 5.2 per cent to meet Australia's growing cost of living crisis affecting the lowest paid workers around the country.The Fair Work Commission (FWC) has increased Australia's minimum wage by 5.2 per cent to "protect the real value of the wage of the lowest paid workers".FWC President Iain Ross said the decision will see the minimum wage lift from $20.33 per hour ($772.60 per week) to $21.38 per hour ($812.60 per week) or the equivalent of an extra $40 to household budget.He highlighted the major changes since last year's wage increase was the spike in the cost of living, the strengthening of the labour market and the may unemployment rate dropping to 3.9 per cent in 2022 compared to 5.5 per cent in April 2021.Stream more finance news live & on demand with Flash. 25+ news channels in 1 place. New to Flash? Try 1 month free. Offer ends 31 October, 2022Mr Ross said the findings from the Annual Wage Review for 2021/22 led the commission to lift the minimum wage."The increased cost of non-discretionary items will particularly impact low income households and many low paid workers," he said."We have concluded that the changes in the economic context weigh in favour of an increase in the national minimum wage and in modern award minimum wages."The review in 2019 resulted in a 3 per cent pay increase, while in 2020 the increase was 1.75 per cent, and in 2021 the increase was 2.5 per cent. The wage increase news will be well received by Prime Minister Anthony Albanese who repeatedly called for a hike in wages to fall in line with surging inflation during his final weeks of the Federal Election campaign.In May, he said he "absolutely" backs lifting the minimum wage of $20.33 per hour ($772.60 per week) to $21.35 or 5.1 per cent - which is the current inflation rate."We think no one should go backwards. People should be at least keeping up with the cost of living," Mr Albanese said at the time.Unions argued for a 5.5 per cent lift to prevent a further real wage cut for one quarter of workers and amid rising fuel, power and grocery prices."We submit that minimum and award wages must grow to ensure that award-reliant households can both meet the rising cost of living pressures facing them and enjoy their fair share of productivity growth,” the ACTU said in its submission.“Yet employees are facing a rate of inflation almost twice that of anticipated wage growth by the end of 2022 according to the RBA. And it is the low paid who have been hit the hardest.”The Australian Industry Group pushed for a smaller increase of 2.5 per cent, saying it would put pressure on inflation and interest rates.Reserve Bank Governor Philip Lowe warned inflation could hit 7 per cent by Christmas and it would not begin to fall until the first quarter of 2023.He declared the RBA will do "what's necessary to return inflation back to 2 to 3 per cent."It's unclear at the moment how far interest rates will need to go up to get that," Dr Lowe told ABC's 7:30 on Tuesday."I'm confident that inflation will come down over time but we'll have to have higher interest rates to get that outcome."
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Australia Business & Economics
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Published June 15, 2022 1:09PM What causes inflation? There are three factors that could lead to inflation which include demand-pull inflation, cost-push inflation and built-in inflation. WASHINGTON (AP) - The Federal Reserve on Wednesday intensified its drive to tame high inflation by raising its key interest rate by three-quarters of a point — its largest hike in nearly three decades — and signaling more large rate increases to come that would raise the risk of another recession. The move the Fed announced after its latest policy meeting will increase its benchmark short-term rate, which affects many consumer and business loans, to a range of 1.5% to 1.75%. The central bank is ramping up its drive to tighten credit and slow growth with inflation having reached a four-decade high of 8.6%, spreading to more areas of the economy and showing no sign of slowing. Americans are also starting to expect high inflation to last longer than they had before. This sentiment could embed an inflationary psychology in the economy that would make it harder to bring inflation back to the Fed’s 2% target. The Fed’s three-quarter-point rate increase exceeds the half-point hike that Chair Jerome Powell had previously suggested was likely to be announced this week. The Fed’s decision to impose a rate hike as large as it did Wednesday was an acknowledgment that it's struggling to curb the pace and persistence of inflation, which has been worsened by Russia’s war against Ukraine and its effects on energy prices. Borrowing costs have already risen sharply across much of the U.S. economy in response to the Fed’s moves, with the average 30-year fixed mortgage rate topping 6%, its highest level since before the 2008 financial crisis, up from just 3% at the start of the year. The yield on the 2-year Treasury note, a benchmark for corporate borrowing, has jumped to 3.3%, its highest level since 2007. A view of the United States Federal Reserve building, in Washington DC, USA on October v, 2021. (Photo by Yasin Ozturk/Anadolu Agency via Getty Images) Even if a recession can be avoided, economists say it’s almost inevitable that the Fed will have to inflict some pain — most likely in the form of higher unemployment — as the price of defeating chronically high inflation. RELATED: Inflation reaches new 40-year high in May with no sign of slowing down Inflation has shot to the top of voter concerns in the months before Congress’ midterm elections, souring the public’s view of the economy, weakening President Joe Biden’s approval ratings and raising the likelihood of Democratic losses in November. Biden has sought to show he recognizes the pain that inflation is causing American households but has struggled to find policy actions that might make a real difference. The president has stressed his belief that the power to curb inflation rests mainly with the Fed. Yet the Fed’s rate hikes are blunt tools for trying to lower inflation while also sustaining growth. Shortages of oil, gasoline and food are propelling inflation. The Fed isn’t ideally suited to address many of the roots of inflation, which involve Russia’s invasion of Ukraine, still-clogged global supply chains, labor shortages and surging demand for services from airline tickets to restaurant meals. Expectations for larger Fed hikes have sent a range of interest rates to their highest points in years. The yield on the 2-year Treasury note, a benchmark for corporate bonds, has reached 3.3%, its highest level since 2007. The 10-year Treasury yield, which directly affects mortgage rates, has hit 3.4%, up nearly a half-point since last week and the highest level since 2011. Investments around the world, from bonds to bitcoin, have tumbled in recent months on fears surrounding high inflation and the prospect that the Fed’s aggressive drive to control it will cause a recession. Even if the Fed manages the delicate trick of curbing inflation without causing a recession, higher rates will nevertheless inflict pressure on stock prices. The S&P 500 has already sunk more than 20% this year, meeting the definition of a bear market. Other central banks around the world are also acting swiftly to try to quell surging inflation, even with their nations at greater risk of recession than the U.S. The European Central Bank is expected to raise rates by a quarter-point in July, its first increase in 11 years. It could announce a larger hike in September if record-high levels of inflation persist. On Wednesday, the ECB vowed to create a market backstop that could buffer member countries against financial turmoil of the kind that erupted during a debt crisis more than a decade ago. The Bank of England has raised rates four times since December to a 13-year high, despite predictions that economic growth will be unchanged in the second quarter. The BOE will hold an interest rate meeting on Thursday. The 19 European Union countries that use the euro currency endured record inflation of 8.1% last month. The United Kingdom notched a 40-year high of 9% in April. Though debt service costs remain contained for now, rising borrowing costs for indebted governments threatened the eurozone with a breakup in the early part of the last decade. Last week, the World Bank warned of the threat of "stagflation" — slow growth accompanied by high inflation — around the world. A key reason why a recession is now likelier is that economists increasingly believe that for the Fed to slow inflation to its 2% target, it will need to sharply reduce consumer spending, wage gains and economic growth. Ultimately, the unemployment rate will almost certainly have to rise — something the Fed hasn’t yet forecast but could in updated economic projections it will issue Wednesday.
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Inflation
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The building of the Swiss National Bank (SNB) is pictured in Bern, Switzerland June 16, 2022. REUTERS/Arnd Wiegmann/File PhotoRegister now for FREE unlimited access to Reuters.comSummaryCompaniesSNB raises policy rate by three-quarter point to 0.5%Says cannot rule out more hikes if neededStill ready to intervene on currency marketsZURICH, Sept 22 (Reuters) - Switzerland exited the era of negative interest rates on Thursday when its central bank joined others around the world in tightening monetary policy more aggressively to combat resurgent inflation.The Swiss National Bank (SNB) raised its policy interest rate by 0.75 of a percentage point, ending the country's seven-and-a-half year experiment with negative rates which sparked opposition from its financial sector and fears of asset bubbles.The increase to 0.5%, from minus 0.25%, followed a 50 basis point hike in June from minus 0.75%, the SNB's first rate hike in 15 years.Register now for FREE unlimited access to Reuters.comSwiss government bond yields fell after Thursday's move, reversing course following an initial spike, while the franc dropped broadly, falling against the dollar, euro and pound as markets had priced in a 100 basis point rate hike by the SNB. read more The central bank did not exclude more rate rises to come."It cannot be ruled out that further increases in the SNB policy rate will be necessary to ensure price stability over the medium term," SNB Chairman Thomas Jordan told a news conference.Jordan declined to give details of the timing or size of any future hikes.The SNB would also still use forex interventions, purchasing foreign currencies to rein in an "excessive appreciation" of the Swiss franc or selling them to prop up the currency, Jordan said.He said there was no set exchange rate which would push the SNB into action.The SNB's decision to increase rates followed rising prices in Switzerland and hawkish moves by other central banks that are trying to keep a lid on resurgent inflation caused by spiralling energy costs, tight labour markets and supply chain bottlenecks.The U.S. Federal Reserve lifted its benchmark rate by another 75 basis points on Wednesday, its third straight hike of that magnitude, and Norway's central bank on Thursday hiked by half a point. The Bank of England is expected to increase its rate by 50 basis points later on Thursday. read more The SNB will use SNB bills and repo transactions to absorb liquidity to ensure short-term money market rates remain close to the now-positive policy rate, governing board member Andrea Maechler said. It is also rolling out tiered remuneration of sight deposits that banks hold at the SNB.Karsten Junius, an economist at J.Safra Sarasin, said the SNB's hike was accompanied by a more dovish message compared to other central banks."The language by the SNB together with an inflation forecast that remains below 2% in 2024 make it quite unlikely that the SNB is planning for another 75 bp rate hike in December again," Junius said.The SNB originally imposed negative rates in December 2014 and lowered them again in January 2015 to minus 0.75%. Over the years it said the world's lowest central bank rate was needed to curb the rise of the safe-haven Swiss franc.But the SNB's focus has switched to inflation, which hit 3.5% in August, the highest in 29 years although lower than most other European countries.Negative rates were unpopular among Swiss banks, who saw them as a charge on their activities and also reduced lending margins.The Swiss financial sector paid out 11.8 billion francs ($12.05 billion) in negative rates to the SNB during the past seven and a half years.There were fears that ultra-low rates would fuel dangerous asset bubbles as investors bought up property to seek higher returns, although this did not happen, economists said."The risks to the financial system didn't materialize and the economy learned to live with the stronger franc," said UBS economist Alessandro Bee.The Swiss Bankers Association said negative rates meant the country's lenders had borne the brunt of the fight against the appreciating franc."Sometimes you need tough medicine to get better, but the banking sector will certainly be relieved that negative rates have ended," said Martin Hess, chief economist at the Swiss Bankers Association.($1 = 0.9793 Swiss francs)Register now for FREE unlimited access to Reuters.comReporting by John Revill; editing by Michael Shields, Mark Heinrich and Susan FentonOur Standards: The Thomson Reuters Trust Principles.
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Interest Rates
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SummaryJapan intervened on Sept 22 to stem excessive yen weakeningJapan seeks to win backing from U.S., others for its actionDollar broke above level seen before Japan's last interventionDifficult for Japan to intervene again unless excess volatilityTOKYO, Oct 12 (Reuters) - Japan's policymakers continued to warn investors on Wednesday against selling the yen, as the dollar rose to a fresh 24-year high on the Japanese currency while hurdles to directly intervene remain high.The U.S. currency rose to 146.35 yen , a level not seen since August 1998 during the Asian financial crisis, moving above levels that triggered intervention by Japanese authorities last month to stem excessive yen weakening.Currency intervention is costly and could fail to influence the yen's value in the huge global foreign exchange market. Investors also doubt the efficacy of intervention given that the dollar's strength has been driven by interest rate differentials due to widely divergent U.S. and Japanese monetary policy.Register now for FREE unlimited access to Reuters.comThe yen was trading around 146.20 to the dollar on Wednesday afternoon as traders braced for U.S. inflation data and its implications on future U.S. rate hikes."We are closely watching foreign exchange moves with a high sense of urgency, and ready to take appropriate steps on excess moves," Chief Cabinet Secretary Hirokazu Matsuno told reporters.The comment came after Finance Minister Shunichi Suzuki was quoted by Jiji Press as saying there was no change in the country's stance that it would take necessary steps in the foreign exchange market as needed."What was important was the speed of forex moves," not any levels, when deciding on any need to take action, Jiji quoted Suzuki as saying as he was traveling to Washington to attend a gathering of financial leaders from the Group of 20 major economies.Market players were closely watching how Suzuki might seek backing from other countries at the G20 meeting, after he said Japan won understanding "to a certain extent" from the United States on its recent foray in the market.Analysts say Japan may face difficulty winning backing for intervention unless volatility becomes highly excessive."Japanese authorities may continue verbal intervention but when it comes to actual action, intervention cannot be justified except smoothing operations aimed at curbing excess volatility," said Yasunari Ueno, chief market economist at Mizuho Securities. "Otherwise, you cannot win understanding from other countries."Japanese officials have repeatedly stressed the importance of seeking U.S. understanding, which is seen as lending them legitimacy for any intervention involving the dollar. Investors see solo action by Japan being far less effective than concerted intervention.Last month, Japanese authorities sold dollars and bought yen in a market intervention for the first time since 1998, spending 2.8 trillion yen ($19.2 billion) to slow a rapid slide in the yen that was considered a threat to the economy. read more As for dollar-buying, yen-selling intervention, Japan has stayed out of the market since 2011 when the devastating earthquake and tsunami triggered the worst nuclear disaster in Fukushima since Chernobyl.($1 = 146.2100 yen)Register now for FREE unlimited access to Reuters.comReporting by Tetsushi Kajimoto, Kaori Kaneko and Mariko Katsumura; Editing by David Dolan and Jacqueline WongOur Standards: The Thomson Reuters Trust Principles.
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Forex Trading & Speculation
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In northern California's Stanislaus County, next to a landfill, there's a company managing waste in a very different way: by burning trash instead of burying it.The energy recovery facility run by New Jersey-based Covanta harnesses steam to make enough electricity to power 18,000 homes in the area. A portion of the waste comes from companies including American Airlines, Quest Diagnostics, Sunny Delight and Subaru."When a major car manufacturer like Subaru says they're zero landfill, they have done the reduce, the reuse, recycle, and what's leftover they send to a facility like a waste-to-energy facility," said Paul Gilman, chief sustainability officer for Covanta, which has more than 40 sites across the globe.Major retailers like Amazon also use this combustion method to dispose of returns they deem unfit to recycle, resell, or donate. Amazon told CNBC that it sends some returns to energy recovery as a "last resort," though the company declined to say which facilities it uses. Covanta said it doesn't handle Amazon returns.About 10% of the 270,000 tons of waste Covanta burns at its plant in Crows Landing, California, a two-hour drive east from San Francisco, comes from companies. The rest mostly comes from waste collection in nearby municipalities.Corporations account for "the fastest growing part of the business," Gilman said, as an increasing number of companies try to reduce their environmental footprint.In Covanta's energy recovery facility, waste is burned at temperatures around 2,000 degrees Fahrenheit. There are 21 miles of pipes around the combustor, where the intense heat converts water into steam that turns a turbine, which powers a generator. The process also creates carbon and toxic ash, but unlike landfills, it doesn't emit any methane.The U.S. is one of the most wasteful developed countries in the world. Of the record 292 million tons of waste generated by Americans each year, more than half is landfilled, about a third is recycled, and 12% is incinerated at waste-to-energy facilities, according to the World Bank.Online commerce poses a particular problem.Not only are internet purchases breaking records in terms of volume, but roughly 20% of items get returned, which is a higher number than for in-store purchases. Returns solutions provider Optoro says U.S. returns generate an estimated 5.8 billion pounds of landfill waste each year. Amazon told CNBC it sends no items to landfills."There are a number of items that we can't recover or are not recyclable, for reasons such as legal reasons, or reasons for, you know, hygienic reasons, or even product damage," said Cherris Armour, Amazon's head of North American returns. "In those cases, we do pursue energy recovery for those items."The claw picks up about seven tons of garbage and dumps it into the boiler, where it's burned to make energy at the Stanislaus County waste-to-energy plant on April 13, 2022.Katie SchoolovKeeping growing waste out of landfills In parts of Europe and Asia, the picture looks quite different.Countries like Japan, Denmark and Germany rely on energy recovery far more than landfills. In the EU, waste incineration doubled from 1995 to 2019.But burning waste is still a carbon-intensive process, and critics like Neil Tangri of the Global Alliance for Incinerator Alternatives (GAIA) argue some countries have come to rely on it too heavily."Denmark now realizes that it incinerates too much waste and if it is going to meet its greenhouse gas emissions targets it's going to need to reduce waste incineration," Tangri said.In the U.S., the first incinerator was built in New York in 1895. A decade later, the city was using it to generate enough electricity to light the Williamsburg Bridge.More than half of U.S. states define waste-to-energy as a renewable energy source. Unlike landfills, many governments and non-governmental organizations consider it a source of greenhouse gas mitigation. That includes the U.S. Environmental Protection Agency, where Susan Thorneloe leads research on materials management.In terms of burning or burying waste, "it was hands down better to combust it because you get energy value from it, you get metals from it, and you're not producing methane," Thorneloe said. U.S. climate experts say these are the three reasons the burning process produces a net reduction of greenhouse gasses. First, it keeps waste out of landfills, which emit methane that the EPA estimates is 86 times greater than carbon dioxide over a 20-year period.Second, waste-to-energy facilities reduce the need for mining because they recover 700,000 tons of metal each year. And finally, they produce energy, reducing the need to burn fossil fuels."For every ton of garbage that you burn, you save a ton of CO2 that you would otherwise create from, say, burning a fossil fuel," said Marco J. Castaldi, director of the Earth System Science and Environmental Engineering Program at the City College of New York.The steam can also be captured and piped up to a mile away to heat or cool entire buildings, like Target Field in Minneapolis.While landfills can harness energy from rotting organic material, they're far less efficient for production purposes. Landfill gas generates enough power for 810,000 U.S. homes per year, compared to 2.3 million homes powered by far fewer waste-to-energy facilities.Covanta chief sustainability officer Paul Gilman stands in front of the Stanislaus County switchyard on April 13, 2022, where the incineration of waste generates enough electricity to power 18,000 homes in the area.Katie SchoolovCarefully monitored emissions and toxic ashCovanta's public data shows emissions coming out of the stack in its northern California facility are far below U.S. federal standards. That's because Covanta cleans toxins out of its combustion gasses using an intense filtration process, with activated carbon and limestone "scrubbers.""The air pollution control systems, they weren't present on old-fashioned incinerators, the object of a lot of people's ire," Gilman said.The EPA estimates that for every megawatt-hour of electricity generated, waste-to-energy emits an average of just over half a metric ton of carbon dioxide equivalent gasses. Landfills emit six times that, and coal plants emit nearly double.Dioxin and mercury are some of the most dangerous emissions that concern critics of the process. GAIA points to facilities like one in the Netherlands, which regulators found was emitting so much dioxin it was contaminating grass and chicken eggs in the surrounding area."Despite the air pollution control equipment and the monitoring, there are still a lot of toxins in that smoke plume, from particulates to heavy metals, lead, mercury, arsenic, cadmium," Tangri said. "Here in the U.S., our monitoring systems and our standards are much lower than in Europe."But other scientists say air pollution technology has come so far in the last two decades that most common toxins have largely been eliminated."The amount of dioxin that's emitted from all waste-to-energy facilities in one year is less than a fraction of what gets formed from forest fires," Castaldi said.Still, the incineration process does produce a lot of toxic ash, which Covanta tests regularly to make sure hazardous materials aren't able to leach out. "Happily, we've always passed our tests," Gilman said.In Europe, facilities separate the more toxic "fly ash" and use the safer "bottom ash" to make things like concrete for road construction. In the U.S., the fly and bottom ash are usually mixed together, making it too toxic to be reused, so it's buried in a monofill on site."There's probably more municipal solid waste ash that we can use, but because of the negative connotation, I just don't see that occurring," said Thorneloe of the EPA. 'Arguing for last place'Landfills in the U.S. are big business. While Castaldi estimates waste-to-energy is a $10 billion industry, the overall waste management industry is measured at $208 billion. Landfill companies like Waste Management and Republic Services have outperformed the market since 2015, allowing them to keep prices down as they grow.There are approximately 1,450 active landfills today, compared to 76 waste-to-energy plants, said Bryan Staley of the Environmental Research Education Foundation. That makes it tough for many businesses to participate."We've got to haul it by rail halfway across the United States to get it there, because you typically find most waste energy facilities located in the northeast part of the United States, in Florida, and Minnesota and then a smattering of facilities elsewhere," Staley said. The transport creates an additional carbon footprint for companies choosing energy recovery over landfill. The Covanta facility is one of only two energy recovery plants in California. Europe has more than 400. "There's a real question about why California and why most of the U.S. for that matter, are so in love with our landfills," Gilman said. "But it's a fact. It happens that we have a lot of land, something Europe didn't have that luxury with."But turning waste into energy is lucrative business. Each ton of waste generates $20 to $30 of revenue, according to the EPA. Covanta was on a big upward swing before a Swedish investment firm took the company private last year in a $5.3 billion deal. In fact, incineration is one of the most expensive commercial ways to generate energy and to handle waste, more than double the costs of sending it to a landfill.Giant companies like Amazon can often negotiate special rates. Burning waste instead of sending it to landfills helps them fulfill sustainability targets. Tangri said it can also help with optics."If Amazon sends all of its returns to a landfill, somebody could go to the landfill and see them, and that would be a horrifying visual," Tangri said. "When you burn something, you hide the evidence."Tangri said that companies and consumers need to be focused more on truly cutting emissions through reducing, reusing and recycling."You're arguing for last place," Tangri said. "We know that the important thing to do is to keep as much material and particularly organics out of the waste stream...If Amazon returns were being repackaged and sold to people at discount instead of being disposed of, then we wouldn't have to have this question about whether it's better or worse to bury plastic or burn it."Amazon doesn't provide much by way of specific details. But the company has been adding programs to make sure more returns are resold as used, refurbished, or liquidated. And while there's no target date for its lofty objectives, Amazon says it's "working toward a goal of zero product disposal."WATCH: How Amazon plans to fix its multi-billion dollar returns problem
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Energy & Natural Resources
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Mandatory closing hours, slower spin times and smaller spending limits will be used to minimise gambling harm in sweeping gambling reforms across Victoria.
The Victorian premier, Daniel Andrews, and the gaming minister, Melissa Horne, announced a series of reforms for electronic gaming machines in the state on Sunday.
Under the changes, pokies in Victoria will require mandatory pre-commitment limits and carded play.
Load-up limits – how much money an individual can put into a gambling machine at a time – will be capped at $100, down from the current limit of $1,000. The changes are expected to be in place by the end of the year.
By mid-2024, mandatory closure periods will be enforced for all gambling machine areas in a venue between 4am and 10am – excluding Melbourne’s Crown casino.
The state government will also make it mandatory for all new poker machines to spin at a rate of three seconds a game, slowing the pace of the game down and limiting the amount that can be lost.
Caroline Crawford – a reformed gambler whose addiction led to her spending time in jail because she stole $400,000 from her employer to feed her habit – praised the changes. She said mandatory closing hours were an important part of the plan.
She said in her area there were two gaming venues: one closed at 8am and the other opened at 8am. That effectively made it possible for locals to gamble 24 hours a day.
“No one needs to be behind a machine at two or three in the morning. I’ve been there, I’ve seen what happens … it’s not pretty,” she said. “These changes just blow my mind.”
Andrews said it was important for his government to make the changes.
“These reforms will provide the strongest gambling harm preventions and anti-money laundering measures in Australia,” he said. “We owe it to all Victorians to take this stance and help those experiencing harm turn their lives around.”
Horne said everyone lost when it came to gambling.
“It’s not confined to money. People lose their relationships, their jobs and their wellbeing,” she said on Sunday.
“Our previous reforms have delivered stronger oversight of the gambling industry in Victoria with a regulator unafraid to hold venues to account. Now we’re doing more important work to reduce gambling-related harm.”
Alliance for Gambling Reform spokesperson Tim Costello said Victorians had waited a long time for meaningful change.
“These reforms appear to be very significant, especially the introduction of mandatory carded play with set loss limits of no more than $100 a day,” he said.
“We still need to see all of the details, but this will go a long way towards minimising gambling harm in our community as well as reducing the huge amounts of dirty money being laundered through poker machines.”
NSW is also looking to crack down on gambling harm and will begin trialling cashless gaming on poker machines within months.
The government will also ban gambling-related signage from outside pubs and clubs.
It has also vowed to reduce the number of pokies in the state and impose a ban on political donations from clubs with gaming operations.
And since 1 July in NSW, players are only able to put $500 cash into machines at a time, down from $5,000.
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Australia Business & Economics
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When Leon Yang was 16, he moved by himself from Xi'An, China to the US, to study in a country where he believed that, if he worked hard every day, he could get where he wanted.
Fascinated by airplanes and everything else that flies in the air, he developed a passion for aerospace that took him from high school in Greenville, South Carolina to New York University (NYU).
With a mechanical engineering degree under his belt, he is now responsible for the soil compactor line at a construction equipment company in Atlanta, Georgia.
But nine years on from his life-altering decision, he has lost faith that he is still competing on a level playing field.
"For the past three years, I've had recruiters from major companies reach out to me, 10 to 20 a week," he claims.
As soon as they find out he is on a visa in the H1-B specialty occupation category, however, "most of them walk away", he said.
The H1-B allows foreign-born, US-educated individuals to work in the country for three to six years, but requires sponsorship by an employer and often provides no meaningful path to permanent residency.
This week, Mr Yang, now 25, submitted his application for a new Canadian programme that offers open work permits, for up to three years, to H1-B visa holders and their immediate family members.
The measure, a temporary effort to attract skilled and high-tech US workers to the country, only opened on Monday morning. By Tuesday, it had already reached its initial cap of 10,000 applicants.
The burst of applications is a sign of mounting frustrations among skilled workers in the US who feel trapped in the limbo of a legal immigration system that they see as outdated and unfriendly.
When his visa expires, Mr Yang says he will have few options. He fully intends to move to Canada if he is accepted by the programme.
"I will be treated not equal, but fair compared to other competitors in the job market and that's one of the things I've missed so much in the past three years," he told the BBC.
Mr Yang is hardly alone in feeling that way. Thousands of skilled foreign nationals either fail to make the cut for the H1-B visa or, when chosen, spend years waiting for a chance at the permanent residency green card.
Demand for the visa category "massively" outstrips supply, said Madeline Zavodny, a University of North Florida economics professor who studies immigration and the future of the US labour market.
When it was established by the US Congress in the year 1990, only 65,000 foreign nationals could apply for the visa each year.
That limit has since been raised only once - to 85,000 - which Ms Zavodny says is "way too small".
"Employer demand has risen, immigration has become much more common and the US workforce hasn't grown enough to keep up with employer demand," she said.
The crush of applicants also prompted US immigration authorities in 2014 to switch from a first-come, first-serve process to a randomised lottery system.
The result, according to Ms Zavodny, is that the US is losing graduates of its own universities who want to stay but are forced to return to their home countries or go elsewhere for employment.
"The impressive thing about Canada is how nimble and flexible they are," she said. "They are constantly innovating their immigration policies, while the US has not for decades."
It remains to be seen whether Canada will extend the cap for its work permit programme or seek to make it permanent.
But a spokesperson for its ministry of immigration told the BBC it believed there were likely more than 400,000 eligible applicants at any given time.
"This temporary policy is intended to facilitate career development and mobility for tech workers, expanding the range of opportunities available for skilled workers to advance their career in the North American tech sector," communications advisor Julie Lafortune said.
"The immense interest in Canada's new H1-B application stream is a strong indication of just how competitive Canada is on the global stage."
Ron Hira, a research associate with the non-partisan Economic Policy Institute think tank, says the H1-B programme is "a mixed bag" that sometimes rewards "the best and brightest" but largely benefits workers with skills already abundantly available in the US.
His research also suggests employers, like technology and outsourcing companies, are exploiting the visa category to hire migrant workers they routinely underpay and place in poor working conditions.
And if terminated, workers on the visa have only 60 days to secure new employment.
"It's not a big surprise that some H1-B workers want to escape and maybe think that Canada will be a better option for them," Mr Hira said.
"If we want immigrants," he added of the US, "we should be offering them green cards, not placing people in situations where the employer controls them."
He warns that it is far too early to know if Canada has made a good decision, in spite of the optics, and points to its lack of screening criteria for the open work permit as well as mass layoffs in the US tech industry.
"We don't know what mix of workers have applied," he said.
"It could be that some of them are very highly skilled. It could be that some of them have ordinary skills and they're just trying to escape a bad situation."
In fact, the longer that H1-B visa holders remain in the US, the more their concerns of getting a raw deal may intensify.
Those who seek green cards run up against the limited quotas allotted by nationality.
"The wait is so long now that, functionally, a new applicant from India is not going to get a green card in their lifetime," said David Bier, the associate director of immigration studies at the libertarian Cato Institute think tank.
The problem is compounded for those with families, as their children lose eligibility for the green card as dependents when they reach the age of 21 and must leave the country.
"If your kids are having to leave the country, you might want to consider going to a country that would welcome you and your family," said Mr Bier.
"The Canadian offer is: you come, immediately get to work for any employer you want and you're going to have a clear path to permanent residency to stay. That is a very attractive offer."
Soumya, 42, a financial services employee in New Jersey, is one Indian national who has applied for the Canadian work permit.She claims the stress and anxiety borne out of the green card "waiting game" is "killing a lot of the enthusiasm that people initially came [to the US] with".
"If people live in a country for 10 years, and they're still not sure whether they'll get to stay, that's not the feeling someone should have," she said.
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Workforce / Labor
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BUENOS AIRES, Oct 19 (Reuters) - Jose Zegarra, a Peruvian tourist in Argentina's capital Buenos Aires, found out the hard way that the value of the country's peso isn't always what it seems as tough capital controls spawn an array of wildly diverging exchange rates.Charged near the official 150 pesos per U.S. dollar when he paid for a meal by credit card, he discovered his dollar fetched him twice as many pesos at one of the city's flourishing money changers at what locals know as the "blue" exchange rate."It made me feel a bit foolish," Zegarra told Reuters.Register now for FREE unlimited access to Reuters.comThe South American country imposed controls in 2019 to protect its beleaguered currency, limiting access to dollars and sparking a boom in informal foreign exchange markets where the peso is valued at far below the official rate.In recent months the government has introduced various additional levies for converting to foreign currency, leading to an explosion of different rates from a so-called "Qatar" World Cup rate for travel to a so-called "Netflix" rate for overseas services like streaming.The blossoming of parallel foreign exchange rates has gained pace in recent weeks, becoming the target of memes online, one calling the array a "tutti-frutti". But it also reflects a serious risk the government faces to protect dwindling dollar reserves needed to pay back debt.Investment bank Morgan Stanley estimated in a September report that the central bank's liquid net forex reserves had dropped to negative $3.5 billion, something the government has looked to reverse with faster grains sales.The government and central bank argue that the controls are needed to protect foreign reserves and stabilize the economy. It wants to avoid a sharp devaluation, though the peso has slowly but surely lost some 50% against the dollar this year anyway."It is clear that the central bank has a duty to preserve its reserves and that is why it is working hard to do so," said a central bank source who asked not to be named, adding parallel rates were simply caused by market "supply and demand".The bank declined to comment.Reuters Graphics'COLDPLAY' DOLLARArgentines have long mistrusted their own currency, often choosing to save in dollars to protect against inflation - heading towards 100% this year - and devaluation. Previous tough and sudden capital controls have also made savers wary.Swirling economic crises in recent years, including a debt default and a major deal with the International Monetary Fund (IMF), has put more pressure on the currency and reserves."All these different exchange rates shows a political desperation for dollars," said Eduardo Maehler, 37, a self-employed worker in Buenos Aires.The government has tightened access to the dollar and added levies, especially on overseas travel and luxuries. It created a temporary "soy" dollar in September to boost soy exports by giving producers more pesos for their dollar-based sales.Some have popped up more organically: a so-called "Coldplay" dollar for paying sports stars or music performers in the country. The British band is performing ten concerts later this month. A "Netflix" dollar, meanwhile, refers to a rate elevated by various taxes on overseas streaming services.Reuters Graphics Reuters GraphicsThis month, the government added a 25% levy on monthly spending over $300 on overseas trips, goods in foreign currencies and luxury goods, on top of an existing 45% rate and 30% tax. The timing of the move ahead of the soccer World Cup next month led to it being dubbed the "Qatar" rate."Clearly this has made travel more expensive in local currency," said Federico Rossi, owner of a travel agency in the city, adding some people would give up their trips as a result.Aldo Abram, executive director of consultancy Fundación Libertad y Progreso, said measures to keep the peso "artificially cheap" were not sustainable and would feed inflation."We know the cost of imposing these controls over time: it always ends in a very deep crisis," he said.Pedro Cristino, a grandfather in Buenos Aires, was stoical. He blamed persistently high debt levels going back decades for putting the current center-left government in a bind."The government is looking for many ways to solve things, some are healthy some are wrong," he said. "All I know is I wouldn't want to be trying to govern right now."Register now for FREE unlimited access to Reuters.comReporting by Lucila Sigal; Additional reporting by Jorge Otaola and Walter Bianchi; Editing by Nicolas Misculin, Adam Jourdan and Deepa BabingtonOur Standards: The Thomson Reuters Trust Principles.
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Forex Trading & Speculation
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The logo of Irish services and consulting company Accenture is seen at an temporary office during the World Economic Forum 2022 (WEF) in the Alpine resort of Davos, Switzerland May 25, 2022. REUTERS/Arnd WiegmannRegister now for FREE unlimited access to Reuters.comJune 23 (Reuters) - IT services company Accenture Plc forecast fourth-quarter revenue below expectations and tempered its fiscal 2022 profit forecast on Thursday, threatened by rising inflation and the impact of a stronger dollar on its overseas earnings.Foreign exchange headwinds have also forced companies such as Microsoft (MSFT.O) and Salesforce (CRM.N) to temper their expectations for the year.A hawkish Federal Reserve and heightened geopolitical tensions have driven gains in the dollar against a basket of currencies over the last year.Register now for FREE unlimited access to Reuters.comTypically, a stronger dollar eats into the profits of companies that have sprawling international operations and convert foreign currencies into dollars.Accenture, which makes more than half of its revenue from outside the United States, said it now expects a negative foreign-exchange impact of 4.5% in fiscal 2022, worse than its previous forecast of a 3% forex hit.Shares of the company fell 2.8% in trading before the bell. They were down about 31% so far this year as fears of aggressive interest rate hikes by the U.S. Fed to tame red-hot inflation led to a sell-off in the tech sector.After years of muted forex volatility, many companies are now scrambling to protect their earnings from the impacts of currency fluctuation, leading to increased corporate hedging.Accenture cut the higher end of its annual profit forecast range. It expects fiscal 2022 earnings per share to be in the range of $10.61 to $10.70, compared with its previous estimate of $10.61 to $10.81.It also forecast fourth-quarter revenue to be in the range of $15.0 billion to $15.5 billion, compared with analysts' average expectation of $15.70 billion, according to IBES data from Refinitiv.The forecast reflects the company's assumption of a negative 8% foreign-exchange impact, Accenture said.Revenue for the quarter ended May 31 was $16.16 billion. Analysts on average had expected $16.03 billion in revenue.Register now for FREE unlimited access to Reuters.comReporting by Chavi Mehta in Bengaluru; Editing by Shinjini GanguliOur Standards: The Thomson Reuters Trust Principles.
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Forex Trading & Speculation
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A specialist trader works on the floor of the New York Stock Exchange (NYSE) in New York City, October 17, 2022.Brendan McDermid | ReutersHere are the most important news items that investors need to start their trading day:1. Let's see if this holdsStocks jumped again Tuesday, cementing a strong start to the week, although futures didn't look too bright Wednesday morning. The tech-heavy Nasdaq looked set to be buoyed by Netflix and its strong earnings report (more on that below). Overall, even though its early in earnings season, companies' reports have been pretty solid so far, even though fears of a Fed-driven recession linger. Investors will have more earnings to chew on Wednesday, with Procter & Gamble reporting before the bell and IBM and Tesla set for after the close. Read live market updates here.2. Netflix changes things upThe Netflix logo is seen on a TV remote controller, in this illustration taken January 20, 2022.Dado Ruvic | ReutersNetflix came through with a strong earnings report Tuesday, easily beating expectations on its top and bottom lines. But its strongest metric was the number of subscribers it added in the third quarter. The stock surged in off-hours trading, as it appeared that Netflix had managed to turn things around after losing subscribers for consecutive quarters. There was a plot twist, though: Netflix said it would no longer provide quarterly forecasts for subscriber additions. Instead, as the company moves toward selling a new ad-supported tier, and its competitors bulk up, Netflix wants to put more emphasis on profit and revenue. "Focusing on subscribers in our early days was helpful, but now that we have such a wide range of price points and different partnerships all over the world, the economic impact of any given subscriber can be quite different," Netflix executive Spencer Wang said during the company's earnings call.3. Turning back the clockSeinfeldCarin Baer | NBCUYou want to feel old? The last time mortgage demand was this low, according to the Mortgage Bankers Association, was 1997. "Seinfeld" was the top TV show, and Jewel dominated the music charts with "You Were Meant for Me." Also that year, mortgage rates were consistently above 7%. This time, depending on which organization is keeping track, rates are now hovering near or above 7%. Affordability in the housing market was a concern even before rates started surging this year, but builders and sellers remained bullish since demand was so robust. Now sellers are getting a little warier, and homebuilder sentiment is well into negative territory, as buyers are in no rush to lock in a high mortgage age rate. 4. Flying high againA United Airlines Boeing 777-200 lands at San Francisco International Airport, San Francisco, California.Louis Nastro | ReutersUnited Airlines is bullish on fourth quarter air travel, as people shake off two years of Covid restrictions and head out for the holidays. Even with inflation at four-decade highs and Wall Street warning of a recession. "Looking forward through the end of the year, the airline expects the strong Covid recovery trends to continue to overcome the recessionary pressures in the macroeconomic environment," the company said in its earnings release Tuesday. United's outlook follows a similar rosy report from rival Delta Air Lines, which projected a profit during the fourth quarter. American Airlines is set to report before the bell Thursday.5. P&G's forex warningDaniel Acker | Bloomberg | Getty ImagesProcter & Gamble, the consumer goods giant known for producing Tide detergent and Crest toothpaste, said it expects foreign exchange to weigh on its results during the fiscal year. The U.S. dollar has strengthened considerably against other nations' currency in recent months as the Federal Reserve has jacked up interest rates to fight surging inflation. The company's earnings and revenue, by the way, topped expectations in the most recent quarter, as price increases offset a decline in sales volumes.– CNBC's Tanaya Macheel, Sarah Whitten, Alex Sherman, Diana Olick, Leslie Josephs and Amelia Lucas contributed to this report.— Sign up now for the CNBC Investing Club to follow Jim Cramer's every stock move. Follow the broader market action like a pro on CNBC Pro.
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Stocks Trading & Speculation
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