2024-08-19 12:54

BENGALURU, Aug 19 (Reuters) - The U.S. Federal Reserve will cut interest rates by 25 basis points at each of the remaining three meetings of 2024, one more reduction than predicted last month, according to a slim majority of economists polled by Reuters who said a recession is unlikely. The change in Fed rate cut calls follows a weaker-than-expected July U.S. jobs report, which encouraged interest rate futures traders to price in as much as 120 basis points of reductions in 2024 earlier this month. That pricing has reduced to roughly 100 now. Investors also said a violent, but brief market sell-off also was a driver of aggressive rate cut calls, related to the unwinding of large leveraged positions as a result of a sudden, sharp rise in the Japanese yen. Although some Fed officials have hinted rate cuts are coming, most economists in the Aug. 14-19 Reuters poll were not expecting a rapid series of rate cuts. Recent data, including last week's strong retail sales report, suggests the economy is performing relatively well even as inflation recedes. The U.S. central bank will cut the federal funds rate by 25 basis points in September, November and December taking the range to 4.50%-4.75% by end-2024, according to 54% of those polled, 55 of 101. Markets, which were earlier betting on a half-percentage-point cut in September, are currently pricing around 70% probability of a quarter percentage point cut next month. Over a third, 34 of those polled, predicted two rate cuts this year and one respondent forecast only one rate reduction. Eleven economists expected the Fed to cut rates by 100 basis points or more. "The basis for the cuts that we have is mostly because inflation is coming down. It's not so much that activity is slowing ... We see a pretty resilient economy that's growing near trend and with that, we think inflation only ebbs gradually," said Jonathan Millar, senior U.S. economist at Barclays. "The labor market is hanging in there just fine. It's gradually cooling, but we don't expect it to have really material weakening. The unemployment rate is maybe going to add another 10th or so from where it is. There's not really any reason for them (the Fed) to panic." The unemployment rate is forecast at around the current 4.3% through 2026. Inflation is forecast to ease only slightly over the coming two years, according to median forecasts in the poll. All measures of inflation polled - the Consumer Price Index, core CPI, personal consumption expenditures price index and core PCE - are expected to stay above 2% until at least 2026. Despite recent easing, wage growth has remained above the 3.0%-3.5% range seen as consistent with the Fed's 2% inflation target. The Fed was expected to deliver a 25 basis point cut each in the four quarters of 2025. Markets are currently pricing around 200 basis points of reductions by end-Q3 2025. RECESSION UNLIKELY The U.S. economy grew 2.8% annualized in the second quarter, much faster than the 2.0% expected by economists. Growth is seen in the poll as averaging 2.5% this year, faster than what Fed officials currently see as the non-inflationary growth rate of 1.8%. Two thirds of common contributors upgraded their 2024 growth outlook from last month. The economy was predicted to grow 1.8% next year. Economists in the poll broadly expect the economy to expand at around its trend growth rate at least until 2027. The median forecast from a smaller sample who provided a view showed the probability of a recession at just 30% - an outlook which has not changed much since the start of this year. "We're not convinced there's a downdraft in activity around the corner that's going to prompt large rate cuts from the Fed," said Michael Gapen, chief U.S. economist at Bank of America. "There's reason to believe the July employment report was adversely affected by weather and therefore was a false signal about the health of labor markets and the economy. We're counting on subsequent data validating that story." Markets and economists will keep a close eye on Fed Chair Jerome Powell's remarks on the economic outlook on Friday, the first full day of the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming. (Other stories from the Reuters global economic poll) Sign up here. https://www.reuters.com/markets/rates-bonds/fed-deliver-three-25-quarter-point-rate-cuts-this-year-recession-unlikely-2024-08-19/

2024-08-19 12:33

BEIJING, Aug 19 (Reuters) - China's cabinet has approved five nuclear power projects in a cabinet meeting hosted by Premier Li Qiang on Monday, state news agency Xinhua reported. The approved projects include the first phase of Jiangsu Xuwei developed by a subsidiary under China National Nuclear Power (601985.SS) , opens new tab. That project, with designed capacity of 2,866 megawatts, is in the preparation stage, the company said in a filing on Monday. Sign up here. https://www.reuters.com/business/energy/china-approves-five-nuclear-power-projects-state-media-reports-2024-08-19/

2024-08-19 12:04

CHENNAI, India, Aug 19 (Reuters) - A group of Indian port workers' unions has called for a strike from Aug. 28 to demand immediate settlement of pay revisions and pension benefits, according to a note signed by its members. A strike by India's port workers could exacerbate the existing congestion issues at Asian and European ports, leading to further delayed shipments, which have a global impact on trade and commerce. The shipping ministry formed a bipartite wage negotiation committee in March 2021, and the workers submitted their demands six months later, ahead of the expiration of the previous agreement in December of that year, according to the note. Although the wage negotiation committee met seven times, it failed to meet the port workers' demands, the note said. The workers' group agreed to call for a strike after a meeting this month in Thoothukudi, a port city in the southern state of Tamil Nadu. Around 20,000 workers are part of the group of port workers' unions, and all of them would join the strike, said Sathya Narayanan, a senior union member who sits on the board of the V. O. Chidambaranar Port Trust in Thoothukudi. The immediate impact of the strike might not be grave, but if it goes on for more than two to three days, the ramifications would be severe, he said on Monday. The government and port management should consider demands such as pay scale revisions, payment of arrears and protection of exiting benefits to help avoid the strike, the workers' group said in the note. India's federal shipping ministry did not immediately respond to a request for comment. The annual cargo handling capacity of major Indian ports such as Chennai, Cochin and Mumbai totalled 1.62 billion metric tons, according to the shipping ministry. In the fiscal year to March 31, 2024, India exported goods worth $437 billion, with imports estimated at $677 billion. Sign up here. https://www.reuters.com/world/india/india-port-workers-go-strike-demand-better-wages-benefits-2024-08-19/

2024-08-19 12:00

SIOUX FALLS, South Dakota, Aug 18 (Reuters) - U.S. Crop Watch corn and soybeans finally received good rains last week, mostly maintaining crop potential ahead of what looks to be a dry finish to August. Many areas have received below-average rains over the last several weeks, but cooler-than-normal temperatures have helped preserve soil moisture and have been beneficial for filling corn kernels. Nine of the 11 Crop Watch locations received between 1 and 3 inches of rain over the last seven days. Nebraska had a half inch and Ohio, which has grappled with drought this summer, received a couple tenths of an inch. The next two weeks could feature well-below-average rainfall across much of the Corn Belt, though most Crop Watch producers were not particularly concerned given last week's rain and continued mild temperatures for at least the next few days. Crop Watch producers have been rating yield potential on a 1-to-5 scale. Yield potential incorporates both visible and non-visible elements where 3 is around farm average yield, 4 is solidly above average and 5 is record or close to it. The 11-field, average corn yield dropped to 3.27 from 3.3 in the previous week based on a 0.25-point trim in southeastern Illinois, which is now rated 4.5 due to some inconsistencies in the field related to the wet spring. Average soybean yield fell to 3.57 from 3.64 in the prior week. Despite 0.25-point boosts in both Iowa fields, dryness clipped North Dakota beans by 0.25-point and Ohio by a full point. Nationally, Illinois, Iowa and Indiana account for 39% of corn and 37% of soybean production, and the five I-state Crop Watch locations carry soybean yield scores between 4.25 and 5. The other six locations are cumulatively a tad below average, reinforcing the role of the I-states in the U.S. Department of Agriculture's record soy yield outlook. That same idea holds true for corn, though the mid-July storm took away high yield potential in the Crop Watch field in western Illinois. Other I-state producers are feeling good about their corn but hesitate to declare new records. For example, the western Iowa producer is unsure his corn will beat 2021's record as that crop underwent perfect planting and timely, well-spaced rains, though there is some unevenness in this year's crop because of early wetness. The Minnesota and South Dakota producers expect average yields in their corn fields, but the recent cool weather has slowed crop development, causing both to raise concerns about reaching maturity on time. The following are the states and counties of the 2024 Crop Watch corn and soybean fields: Kingsbury, South Dakota; Freeborn, Minnesota; Burt, Nebraska; Rice, Kansas; Audubon, Iowa; Cedar, Iowa; Warren, Illinois; Crawford, Illinois; Tippecanoe, Indiana; Fairfield, Ohio. The North Dakota soybeans are in Griggs County and the corn is in Stutsman County. Karen Braun is a market analyst for Reuters. Views expressed above are her own. Sign up here. https://www.reuters.com/markets/commodities/crop-watch-rains-quench-crops-ahead-upcoming-dry-stretch-2024-08-19/

2024-08-19 11:47

Violent storm struck in the early hours of Monday One man confirmed dead, six people missing Tech entrepreneur Mike Lynch among the missing Morgan Stanley International chairman is also missing PALERMO, Sicily, Aug 19 (Reuters) - One man died and six people were missing, including British tech entrepreneur Mike Lynch and his daughter, after a luxury yacht was struck by an unexpectedly violent storm and sank off Sicily early on Monday. The British-flagged "Bayesian", a 56-metre-long (184-ft) sailboat, was carrying 22 people and was anchored just off shore near the port of Porticello when it was hit by ferocious weather, the Italian coast guard said in a statement. Eyewitnesses said the yacht vanished quickly beneath the waves shortly before dawn. Fifteen people escaped before it went down, including Lynch's wife, Angela Bacares, who owned the boat, and a one-year-old girl. The names of the dead and missing were not immediately released, but a person familiar with the rescue operation confirmed that Lynch and his 18-year-old daughter, Hannah, were not accounted for. Salvatore Cocina, head of the Civil Protection in Sicily said Jonathan Bloomer, chairman of Morgan Stanley International (MS.N) , opens new tab and Chris Morvillo, a lawyer at Clifford Chance were also among the missing people. Italian media said the dead man was the yacht's onboard chef. Morgan Stanley did not immediately respond to a phone call and email seeking comment after hours. Clifford Chance did not return a request for comment. The Italian coast guard said the missing had British, American and Canadian nationalities. Survivors said the trip had been organised by Lynch for his work colleagues. "The wind was very strong. Bad weather was expected, but not of this magnitude," a coast guard official in the Sicilian capital Palermo told Reuters. The captain of a nearby boat told Reuters that when the winds surged, he had turned on the engine to keep control of his vessel and avoid a collision with the Bayesian, which had been anchored alongside him. "We managed to keep the ship in position and after the storm was over, we noticed that the ship behind us was gone," Karsten Borner told journalists. The other boat "went flat on the water, and then down," he added. He said his crew then found some of the survivors on a life raft - including a baby girl and her mother - and took them on board before the coast guard picked them up. Lynch, aged 59, is one of Britain's best-known tech entrepreneurs. He built the country's largest software firm, Autonomy, from his ground-breaking research at Cambridge University, and became known as Britain's Bill Gates. He sold the firm to HP for $11 billion in 2011, before the deal unravelled spectacularly following the acquisition, with the U.S. tech giant accusing him of fraud. Once lauded by academics, scientists and politicians, Lynch spent much of the last decade in court defending his name. He was acquitted by a jury in San Francisco in June, after he spent more than a year living effectively under house arrest. He said at the time that he was "elated" to be cleared in the criminal trial in which he denied any wrongdoing and blamed HP for botching the integration of the two companies. DIVERS INSPECT WRECK The coast guard said divers were inspecting the wreck of the Bayesian, which was lying at a depth of 49 metres. Prosecutors in the nearby town of Termini Imerese have opened an investigation to look into what had gone wrong. Storms and heavy rainfall have swept down Italy in recent days after weeks of scorching heat, which had lifted the temperature of the Mediterranean sea to record levels, raising the risk of extreme weather conditions, experts said. "The sea surface temperature around Sicily was around 30 degrees Celsius (86 Fahrenheit), which is almost 3 degrees more than normal. This creates an enormous source of energy that contributes to these storms," said meteorologist Luca Mercalli. "We can't say that this is all due to global warming but we can say that it has an amplifying effect," he told Reuters. The Bayesian was built by Italian shipbuilder Perini in 2008 and was last refitted in 2020. Its 75-metre mast is the tallest aluminium mast in the world, Perini said on its website. The shipspotting.com website said the boat was owned by a firm called Revtom Limited. Lynch's wife Bacares is named as the sole shareholder of the firm on company documents. The yacht's name would resonate with Lynch because his PhD thesis and the software that made his fortune was based on Bayesian theory. The ship won a string of awards for its design and can accommodate up to 12 guests in six suites and a crew of 10, according to online specialist yacht sites. The boat left the Sicilian port of Milazzo on Aug. 14 and was last tracked east of Palermo on Sunday evening, with a navigation status of "at anchor", according to vessel tracking app Vesselfinder. Sign up here. https://www.reuters.com/world/europe/seven-missing-15-rescued-after-sailboat-sinks-off-sicily-2024-08-19/

2024-08-19 11:41

Aug 19 (Reuters) - A story on Maersk from Aug. 19 has been withdrawn after the company withdrew its statement saying it was inaccurate. There will be a replacement story. STORY_NUMBER: L4N3K60QT STORY_DATE: 19/08/2024 STORY_TIME: 1128 GMT Sign up here. https://www.reuters.com/markets/commodities/maersk-stop-accepting-some-canada-bound-cargo-ahead-possible-rail-strike-2024-08-19/