2023-12-06 20:26

KYIV, Dec 6 (Reuters) - Ukraine's shipments of food by road decreased 30.6% in the first four days of December amid difficulties on the Polish border caused by a drivers' strike, brokers said on Wednesday. Spike Brokers, which regularly tracks and publishes export statistics in Ukraine, said on the Telegram messaging app that 50,000 metric tons of agricultural goods were exported by truck from Dec. 1-4, versus 72,000 tons in same period in November and 71,000 tons in October. Polish truckers have blocked roads to three border crossings with Ukraine to protest against what they see as government inaction over a loss of business to foreign competitors since Russia's invasion of Ukraine in February 2022. Before the protest, which started on Nov. 6, Polish border crossings accounted for about 50% of all Ukrainian land road freight traffic. Brokers said the overall average daily throughput of agricultural products across the border in December decreased to 12,538 tons compared with 18,012 tons in November and 17,886 tons in October. "The largest decrease of up to 50% occurred at the border crossings with Poland - from 6,400 tons in November to 3,200 tons per day on average in December," Spike Brokers said. Ukraine's government is expected to harvest 79 million tons of grain and oilseed in 2023, with the 2023/24 exportable surplus totalling about 50 million tons. https://www.reuters.com/world/europe/ukraine-december-road-food-exports-fall-306-amid-polish-drivers-strike-2023-12-06/

2023-12-06 20:18

GENEVA, Dec 6 (Reuters) - Global aviation industry leaders will meet in January to discuss safety concerns around increased GPS interference by cyberattackers steering planes off course, an International Air Transport Association executive said on Wednesday. Global Positioning System (GPS) spoofing has spiked in recent months, using counterfeit signals to alter perceptions of time or location, posing a threat to planes, ships and the military. A spoofed plane's navigation system will show it as being in a different place - a security risk if a jet is guided to fly into a hostile country's airspace. Spoofing is common around conflict zones and areas with sensitive military targets. "Because it has spiked, we have urgency to find a resolution for this," said Nick Careen, IATA's head of operations, safety and security at a media event in Geneva. He did not specify a date for the industry meeting, but said talks between governments, the military and planemakers have become more pressing. Airline manufacturers have issued guidance in recent months as aviation advisory body OPSGROUP flagged a surge in spoofing targeting private and commercial jets around the Middle East, including Iraq, Iran and Israel, and the Black Sea region. https://www.reuters.com/business/aerospace-defense/airline-industry-meet-january-over-gps-spoofing-spike-2023-12-06/

2023-12-06 20:12

Brent prices fall to lowest since June Gasoline stocks rise by 5.4 mln barrels last week - EIA Crude inventories fall by 4.6 mln barrels - EIA Russia's Vladimir Putin flies to UAE, Saudi Arabia on Wednesday U.S. data showed a wider trade deficit in October HOUSTON, Dec 6 (Reuters) - Oil prices fell about 4% on Wednesday to their lowest settlements since June, as a larger-than-expected rise in U.S. gasoline inventories exacerbated worries about fuel demand. Brent crude futures settled down $2.90, or 3.8%, at $74.30 a barrel. U.S. WTI crude futures fell by $2.94, or 4.1%, to $69.38 a barrel. Brent fell below $75 a barrel for the first time since early July. U.S. crude dipped below $70 for the first time since July. "There is demand destruction coming in from the fuel side. The market is more demand focused than supply focused right now," Dennis Kissler, senior vice president of trading at BOK Financial. Concerns over China's economic health also weighed on prices, a day after rating agency Moody's lowered the outlook on China's A1 rating to negative from stable. U.S. gasoline stocks rose by 5.4 million barrels last week, the Energy Information Administration said, more than quintuple the 1 million-barrel rise that analysts had expected. U.S. gasoline futures plummeted to their lowest in two years. Crude inventories fell by 4.6 million barrels, far exceeding the 1.4 million-barrel drop analysts had expected. OPEC+, the Organization of the Petroleum Exporting Countries and allies such as Russia agreed late last week on voluntary output cuts of about 2.2 million barrels per day (bpd) for the first quarter of 2024. This week, Saudi and Russian officials said the cuts could be extended or deepened. On Wednesday, Russian president Vladimir Putin traveled to the United Arab Emirates and Saudi Arabia to meet with the UAE's President Sheikh Mohammed Bin Zayed Al Nahyan and Saudi Crown Prince Mohammed bin Salman. Oil and OPEC+ were on the agenda. Forward prices for U.S. crude were at their steepest premium to prompt barrels, a sign of ample supply and growing fears of slow demand. In the U.S., a drop in exports caused the trade deficit to widen in October, which could drag economic growth in the fourth quarter. "Clearly traders were already feeling bearish and now oil is back at a five-month low and heading for a fifth day of losses," OANDA analyst Craig Erlam said. The U.S. dollar also touched a two-week high, which pressures demand by making oil more expensive for holders of other currencies. https://www.reuters.com/business/energy/oil-prices-fall-china-concerns-scepticism-opec-cuts-2023-12-06/

2023-12-06 19:17

LONDON, Dec 6 (Reuters) - Blackstone's Mortgage Trust (BXMT.N) shares fell as much as 9% on Wednesday after short-selling hedge fund Muddy Waters said that it had taken out a short position in Blackstone's (BX.N) real estate investment trust. Carson Block, the CEO of Muddy Waters, told attendees at the Sohn Conference in London that Blackstone's real estate investment trust (REIT) faced issues of over supply, under-funded loan commitments, expiring leases and that its net operating income was compromised. "It is at a good risk of a liquidity crisis," said Block. Blackstone said in a statement that it believed the report was "self-interested and misleading" designed at negatively impacting BXMT’s share price. It said it had "a conservative liquidity posture". The trust which is publicly traded, borrows money and lends it onward to commercial mortgage borrowers. Because these are interest-only loans, this model relies on borrowers being able to refinance to repay the loans, explained a report which accompanied the short presentation that Block made at the conference. Blackstone's REIT will likely significantly cut its dividend as soon as the second half of next year, the shortseller said. Even considering rate cuts, the Blackstone Mortgage Trusts losses on the book value of its loans could reach between $2.5-4.5 billion of the almost $4 billion market cap of the REIT, said Muddy Waters. The losses would be in addition to BXMT's existing loss provisions, the shortseller said. "This is not a story where bad people have done bad things, they are just unlucky," he said, talking about problems in the property sector which has meant less income to service debt. Block said that next year large numbers of borrowers would be unable to refinance and repay the mortgages and loans that Blackstone's trust oversees. Even if Blackstone tried to modify them to make them weather economic troubles, the company would not be successful, he said. "Blackstone may modify the loans but it's such a big number of loans terminating next year that (they) will not be able to be swept under the rug," said Block. Its shares at 1846 GMT were down almost 7%. The statement from Blackstone said: "We will respond in greater detail – however the steps we have taken on both sides of our balance sheet, including proactive asset management, a conservative liquidity posture, and a patient approach to new investments, leave us well positioned to navigate this environment." The company also said that liquidity on the REIT was at record levels and pointed to its recent third quarter results, where it said it covered its dividend by 126%. https://www.reuters.com/business/finance/muddy-waters-is-short-blackstone-mortgage-trust-reit-2023-12-06/

2023-12-06 19:06

MEXICO CITY, Dec 6 (Reuters) - U.S. Treasury Secretary Janet Yellen on Wednesday announced new sanctions against 15 individuals and two Mexican companies linked to the Beltran Leyva drug cartel as she seeks to improve cooperation with Mexico in stemming the flow of the deadly opioid fentanyl to the U.S. Yellen unveiled the sanctions on her first trip to Mexico since taking office in 2021. They are aimed at disrupting the Beltran Leyva Organization, which the Treasury describes as "one of the most powerful drug trafficking organizations in the world," and a major supplier of cocaine and now fentanyl, to the U.S. The Treasury has previously sanctioned members of the cartel, but the latest designations were issued under a 2021 executive order that broadens the scope of drug-related activities to include transactions that have "materially contributed to, or pose a significant risk of materially contributing to" illicit drugs proliferation. "We have authorities now that I think make it easier for us to go after middlemen who are not actually trading fentanyl itself but goods like pill presses and pharmaceuticals that aren’t export controlled," Yellen told reporters. "But when used as part of a cartel to facilitate the drug trade, we can now come down and put sanctions on those entities," she added. During her visit to Mexico, Yellen is aiming to sharpen cooperation with the government and businesses to find and cut off the flow of financing to drug cartels and their front companies. "Of course the United States cannot do this alone," she said in remarks on the Treasury's anti-fentanyl efforts. Yellen toured a Mexican government crime lab that is pioneering the training of dogs to detect fentanyl precursor chemicals. She will meet with Mexico's finance minister and central bank chief to discuss ways to improve information sharing. On Thursday, she is scheduled to meet with Mexican President Andres Manuel Lopez Obrador. She said that opioid overdoses, including fentanyl, are killing more than 1,500 people in America per week, making fentanyl the biggest killer of people aged 18-49 in the United States. The trip follows Treasury's announcement on Monday of a counter-fentanyl "strike force" that will bring together the department's resources, including the Office of Terrorism and Financial Intelligence and the Internal Revenue Service's Criminal Investigation unit, to disrupt illicit drug trafficking, including through cryptocurrencies. U.S. President Joe Biden and Chinese President Xi Jinping last month agreed to deepen cooperation to stem the flow of fentanyl precursor chemicals from China, which are often mixed by Mexican drug gangs before distribution in the U.S. Yellen said the drive for Mexico's cooperation in enforcing sanctions is an important part of making good on the Biden-Xi anti-fentanyl pledge. The Treasury has been imposing sanctions - which aim to cut illicit actors off the U.S. dollar-based financial system - for years, disrupting individual cartels, but the actions have failed to slow the overall flow of illicit drugs to the United States. INVESTMENT CHALLENGES Jeffrey Schott, a senior fellow with the Peterson Institute for International Economics in Washington, said the U.S.-Mexico drugs trade and its associated security concerns have also become an impediment to business investment in Mexico. Inhibiting the production and distribution of fentanyl, cocaine, heroin and other drugs is important, "but part of it needs to be to dampen the U.S. demand for the drugs. And we don't seem to be doing a good job of that." Yellen told business executives that Mexico was well positioned to participate in the 'friend-shoring' diversifications of U.S. supply chains, but it would require the government to "create a strong investment and operating environment for the private sector." Companies looking to invest in Mexico "need to be able to count on adequate infrastructure and other public services," along with trained workforces and rule of law. https://www.reuters.com/world/americas/yellen-mexico-announce-new-actions-stemming-fentanyl-flows-2023-12-06/

2023-12-06 18:19

Unit labor costs fall at 1.2% rate in third quarter Worker productivity growth raised to 5.2% pace Private payrolls increase 103,000 in November WASHINGTON, Dec 6 (Reuters) - U.S. unit labor costs were much weaker than initially thought in the third quarter amid robust worker productivity, providing a boost to the Federal Reserve's fight against inflation. The inflation outlook was further brightened by other data on Wednesday showing a moderation in wage growth in November. The reports followed news on Tuesday that job openings dropped to a more than 2-1/2-year low in October. They strengthened financial market expectations that the U.S. central bank was done tightening monetary policy and could pivot to cutting rates as early as the first quarter of 2024. "The decline in labor costs points to a further slowdown in services inflation, the last front in the Fed's effort to bring inflation back to 2%," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York. "Our baseline forecast assumes that rate cuts don't start until the third quarter of next year, although the risk may be growing that the Fed starts sooner." Unit labor costs - the price of labor per single unit of output - fell at a 1.2% annualized rate in the third quarter, the Labor Department's Bureau of Labor Statistics (BLS) said, revised down from the previously reported 0.8% pace of decline. That was the first drop since the fourth quarter of 2022. Economists polled by Reuters had expected that the decrease in unit labor costs would be revised down to a 0.9% rate. Growth in unit labor costs was lowered to a 2.6% rate in the second quarter from the previously reported 3.2% pace. Unit labor costs rose at a 1.6% rate from a year ago in the third quarter, the smallest year-on-year increase since the second quarter of 2021. The moderate growth in annual labor costs bodes well for the Fed's efforts to lower inflation to its 2% target. It is expected to leave interest rates unchanged next Wednesday. The Fed has raised its benchmark overnight interest rate by 525 basis points to the current 5.25%-5.50% range, since March 2022. Nonfarm productivity, which measures hourly output per worker, increased at a 5.2% rate last quarter. That was the fastest pace since the third quarter of 2020 and was revised up from the previously reported 4.7% rate. The upgrade was telegraphed last week by revisions to gross domestic product data, which showed the economy growing at a 5.2% rate in the July-September quarter, instead of the previously reported 4.9% pace. Productivity grew at an unrevised 3.6% pace in the second quarter. It expanded at a 2.4% pace from a year ago in the third quarter, revised up from the previously estimated 2.2% rate. With economic growth appearing to have significantly slowed down at the start of the fourth quarter, the brisk pace of productivity growth is unlikely to be sustained. A separate report from the Commerce Department's Census Bureau showed the trade deficit widening 5.1% to $64.3 billion in October as exports declined, suggesting that trade could subtract from GDP growth this quarter. "There are good reasons to believe this is a pro-cyclical acceleration in productivity growth rather than a catch-up story as productivity is now accelerating above the 2007-2019 trend," said Gregory Daco, chief economist at EY-Parthenon in New York. "Still, we see limited upside for productivity growth as economic activity is expected to downshift." Stocks on Wall Street were trading higher. The dollar fell against a basket of currencies. U.S. Treasury prices rose. WAGE GROWTH COOLING Hourly compensation rose at an unrevised 3.9% pace last quarter, but increased at a downwardly revised 4.0% rate from a year ago. Annual compensation was previously reported to have risen at a 4.2% rate. Slowing wage pressures were underscored by the ADP National Employment Report, which showed pay increases for workers remaining in their jobs at 5.6% year-on-year in November, the smallest gain since September 2021. Wages for people changing jobs rose 8.3%, the smallest year-on-year increase since June 2021. The ADP report also showed private payrolls increased by 103,000 jobs last month after rising 106,000 in October. The ADP report, jointly developed with the Stanford Digital Economy Lab, was published ahead of the release on Friday of the BLS' more comprehensive and closely watched employment report. The labor market is steadily cooling in the aftermath of the hefty rate hikes. According to a Reuters survey of economists, the employment report is expected to show private payrolls increased by 153,000 jobs in November as about 33,000 striking United Auto Workers union members returned to work. Private payrolls rose 99,000 in October. Total nonfarm payrolls are estimated to have increased by 180,000 in November after rising 150,000 in the prior month. "The softer turn of recent labor market releases reduces the risk that inflation pressures revive due to wage-price issues, making it easier for the Fed to pivot to rate cuts in 2024," said Bill Adams, chief economist at Comerica Bank in Dallas. https://www.reuters.com/markets/us/us-third-quarter-productivity-revised-higher-labor-costs-much-weaker-2023-12-06/