2024-09-23 20:09

Sept 23 (Reuters) - The U.S. Department of Labor has reached out to the United States Maritime Alliance ahead of a threatened Oct. 1 port strike on the East Coast and Gulf of Mexico by the International Longshoremen's Association, the employer group said on Monday. The Department of Labor's involvement suggests that President Joe Biden's administration is willing to help hammer out a deal before the existing contract covering 45,000 workers at three dozen ports expires at midnight on Sept. 30. The likelihood of an ILA strike is "on the rise as negotiations prove contentious, though action is unlikely to last long," TD Cowen analyst Jason Seidl said in a client note. Any work stoppages or slowdowns would come just weeks ahead of the Nov. 5 U.S. presidential election. The USMX employer group expressed willingness to collaborate with the Federal Mediation & Conciliation Service in contract negotiations - contingent on both parties agreeing to mediation. USMX said it has been unable to schedule a meeting with the ILA to continue talks on a new Master Contract. ILA disputed that in a statement on Monday, saying the two sides have communicated multiple times in recent weeks. "The stalemate remains in Master Contract negotiations because USMX continues to offer ILA longshore workers an unacceptable wage increase package," the union said. The ports affected by a potential strike stretch from Maine to Texas and handle about half of U.S. imports through facilities in cities such as New York/New Jersey, Houston and Savannah, Georgia. Any ILA action would mainly affect labor-intensive container shipments and have little to no impact on critical shipments of oil and gas. The five largest East and Gulf Coast ports each day in August handled a combined 49,532 20-foot equivalent units (TEUs) of cargo valued at $2.7 billion, said John McCown, senior fellow at the Center for Maritime Strategy. Any cargo backups from work disruptions would cascade through U.S. and global supply chains, stranding goods and sending costs surging. Echoing calls from industry groups representing retailers, manufacturers and farmers, 69 Republicans from the U.S. House of Representatives last week called on the Biden Administration to do everything in its power to prevent a port work stoppage that could lead to "dire impacts to our supply chains, our economy, and the American consumer." Biden recently said he did not intend to invoke a federal law known as the Taft-Hartley Act to prevent a port strike. He did, however, send Acting Labor Secretary Julie Su to negotiate a pivotal contract between U.S. West Coast seaport employers and union workers last summer, following labor disruptions at California ports. The resulting contract deal included a 32% pay increase that was anticipated to set a precedent for East and Gulf Coast labor talks. Sign up here. https://www.reuters.com/world/us/us-labor-department-reaches-out-employer-group-amid-possible-port-strike-2024-09-23/

2024-09-23 19:54

QUITO, Sept 23 (Reuters) - Power cuts in Ecuador will run nationwide for 12 hours per day, up from a planned eight, the government said on Monday, citing the country's urgent energy crisis caused by the worst drought in the Andean country's recent history. Authorities last week said power cuts would take place across the country for up to eight hours per day but adverse weather conditions continue in areas where the country's dams are located, Energy Minister Antonio Goncalves told journalists. "The important issue is that the climate is crazy, it has changed a lot," Goncalves said, adding that the dry season started two months early. "We depend a lot on hydrology. I can't predict something that only God knows." Earlier, speaking at the United Nations General Assembly, President Daniel Noboa said Ecuador was experiencing its worst drought in 61 years. "It's chaos and much worse than expected," he said. Electricity providers also updated timetables of planned cuts to go through Sunday; initially the cuts were planned to run through Thursday. Sign up here. https://www.reuters.com/business/energy/the-climate-is-crazy-ecuador-minister-says-country-faces-12-hour-power-cuts-2024-09-23/

2024-09-23 18:26

NEW YORK, Sept 23 (Reuters) - Palinuro Capital, a new global macro hedge fund, has received commitments of nearly $100 million and will start trading in January, its founder said, as investor appetite for hedge fund strategies is on the rise. Macro hedge funds typically trade a wide range of assets such as bonds, currencies, and commodities based on bets on economic growth, inflation, and geopolitics. Palinuro, managed out of Amsterdam, will target 10%-plus average annual returns for its investors, with a focus on outperforming the market in periods of high volatility, Alfonso Peccatiello, its founder and chief investment officer, told Reuters. "This is what we're there for, we are a diversifier for portfolios of investors," he said. Investors are bullish on hedge funds for the second half of this year, according to a recent BNP Paribas survey, which showed macro strategies as the third favorite strategy for allocations, preceded by equity and credit. "Discretionary macro is benefiting from the market effects of inflation and monetary policy surprises," said the survey. Surging inflation led to a rapid succession of interest rate increases across developed markets in 2022 that led to lockstep declines in bonds and stocks, a blow to traditional investment strategies that rely on a mix of bonds and stocks to take the sting out of market drops. "In years like 2022, when you think bonds should be your diversifier and all of a sudden you realise they're not ... that's when we kick in," said Peccatiello. Palinuro Capital has received nearly $100 million in commitments from investors including family offices, endowments, pension funds, and asset managers, he said. Starting next week, the Cayman-domiciled fund will have a three-month onboarding period before trading in January. Its prime broker will be Goldman Sachs (GS.N) , opens new tab, he said. The fund will trade mostly futures, options, and swaps, and while it will be investing in equities and commodities too, the focus will be rates and currencies across multiple geographies. Peccatiello is also the founder and chief executive of The Macro Compass, a global macro investment strategy firm, which came to prominence among investors by sharing macro investment research on social media channels since the beginning of 2022. "A lot of people invest in hedge funds ... also for the value they can get from you, from being able to access you and read your research and ask you questions," said Peccatiello. "It's not only about returns ... they see direct access to you as a big advantage." Sign up here. https://www.reuters.com/business/finance/new-global-macro-hedge-fund-palinuro-capital-start-trading-january-2024-09-23/

2024-09-23 15:13

Liquidity worsened following Fed rate hikes in 2022 But liquidity metrics such as bid-ask spreads have improved since mid-2023 Still, concerns remain about market vulnerabilities amid growing supply NEW YORK, Sept 23 (Reuters) - Liquidity in the $27 trillion U.S. Treasury market, the largest government bond market in the world, is back to levels seen before the Federal Reserve started hiking interest rates in 2022, according to a New York Fed report. Liquidity - or the ability to trade an asset without significantly moving its price - worsened over the past few years as U.S. government bond prices swung sharply since the U.S. central bank started hiking rates to tame inflation. But common measures to assess trading conditions "point to an improvement in Treasury market liquidity in 2024 to levels last seen before the start of the current monetary policy tightening cycle," Michael Fleming, head of Capital Markets Studies in the Federal Reserve Bank of New York’s Research and Statistics Group, said in a post on the New York Fed's Liberty Street Economics blog on Monday. Fleming observed improvements in the bid-ask spread, which is the difference between the highest bid price and the lowest ask price for a security. Spreads have been narrow and stable since mid-2023, after widening in the aftermath of the U.S. regional banking turmoil in March last year, he said. Order book depth, or the average quantity of securities available for sale or purchase at the best bid and offer prices, has also increased since March last year, he said, although it declined in early August this year when a weaker-than-expected jobs market report and a surprise rate hike by the Bank of Japan shook financial markets. Finally, Fleming observed an improvement in the price impact of trades, which assesses the price change that occurs when a buyer or seller begins a trade. After rising sharply during the March 2023 banking turmoil, price impact has been declining to levels last seen in late 2021 and early 2022, he said, before rising again in early August 2024. Regulators and the Treasury itself have in recent years launched a slate of reforms to improve trading conditions and avoid disruptions in the world's biggest bond market. Still, many market participants remain concerned that vulnerabilities that emerged in previous incidents, such as in March 2020 when liquidity rapidly deteriorated amid pandemic fears, could still reappear in case of spikes in volatility and as government debt supply continues to grow. Recent improvements in liquidity have been accompanied by a decrease in volatility, or price fluctuations, said Fleming. However, a proxy for Treasuries liquidity that measures deviations between certain Treasury yields has kept deteriorating, he added. "The market’s capacity to smoothly handle large trading flows has been of ongoing concern since March 2020 ... debt outstanding continues to grow, and recent empirical work  shows how constraints on intermediation capacity can worsen illiquidity," he said. "Close monitoring of Treasury market liquidity, and continued efforts to improve the market’s resilience, remain appropriate." Sign up here. https://www.reuters.com/markets/us/us-treasury-market-liquidity-back-pre-fed-tightening-levels-says-ny-fed-2024-09-23/

2024-09-23 14:35

Riksbank seen cutting policy rate to 3.25% from 3.50% Policy rate expected to be 2.75% at year end Rate announcement 0730 GMT, Sept. 25 Link to data: STOCKHOLM, Sept 23 (Reuters) - Sweden's central bank is expected to cut its policy rate by a quarter percentage point to 3.25% on Wednesday and then twice more before the end of the year as inflation pressures continue to ease, a poll of analysts by Reuters showed on Monday. All 20 analysts in the poll saw a 25 basis point cut this week, with the policy rate expected to end the year at 2.75% before falling to 2.00% in 2025. "Rate cuts are definitely in the pipeline. Inflation is low, the Swedish economy is still stagnant and unemployment has risen," Nordea said in a note. "We expect 25 basis points but see an increased likelihood of larger cuts later this year," it said. The central bank has cut rates twice this year, in May and August, the first easing in eight years. It said in August that it could make up to three more cuts before the end of the year as price pressures eased. Riksbank Governor Erik Thedeen said in the minutes of the August meeting that he thought three cuts were more likely than two and the minutes also indicated that a cut of half a percentage point was not off the table. Headline inflation has continued to ease from a peak of above 10% in 2022, coming in at 1.2% in September - below both the Riksbank's forecast and its 2% target. The economy has slowed with manufacturers, households and the construction sector all weakening in the second quarter. With the U.S. Federal Reserve cutting rates by half a percentage point last week, worries have eased that rapid Swedish rate cuts could hurt the crown and push inflation back up. After this week, the Swedish central bank makes two more rate decisions this year, in November and December. The Riksbank publishes its policy decision at 0730 GMT. Sign up here. https://www.reuters.com/business/finance/swedish-central-bank-set-cut-rates-this-week-twice-more-before-year-end-2024-09-23/

2024-09-23 14:16

BRUSSELS, Sept 23 (Reuters) - France will submit its plan to reduce public debt to the European Commission by the end of October, moving forward the submission date that was previously expected after the end of next month, EU officials said on Monday. The submission of France's medium-term fiscal-structural plan of reforms, investment and debt reduction is part of the European Union's new framework for keeping debt under control after the COVID-19 pandemic forced many countries to borrow massively and spend to stave off economic collapse. Under the new EU rules, which came into force in April, all countries with debt above the EU limit of 60% of gross domestic product have to agree with the Commission a four- to seven-year plan of reforms and consolidation to put debt on a sustainably downward path. According to the rules, all countries should have sent in their reform and consolidation plans to the Commission by Sept. 20. Last week only two - Malta and Denmark - had done so and the EU had received signals from Paris that the French plan would only come after October, because of a lack of government, EU officials said. On Saturday, however, French President Emmanuel Macron's office unveiled a new cabinet that will report to Prime Minister Michel Barnier. Sign up here. https://www.reuters.com/markets/europe/france-submit-debt-cutting-plan-eu-by-end-october-2024-09-23/