2023-11-01 21:52

OTTAWA, Nov 1 (Reuters) - Spending by federal and provincial governments in Canada will start feeding into inflation next year if current spending plans are maintained, Bank of Canada (BoC) Governor Tiff Macklem said on Wednesday. If governments follow through with spending plans for 2024, it would mean "government spending is starting to get in the way of getting inflation back to target" of 2%, Macklem told members of a Senate committee. Inflation was clocked at 3.8% in September, but the BoC said last week it may not come down to target until the second half of 2025. "We have built that into our forecast. We do get back to target but it takes some time," he added. If governments spend less, "it would be easier to reduce inflation," Macklem said. The federal government's Fall Economic Statement (FES) could come as early as next week. The FES updates fiscal and economic forecasts, but it also often includes new spending plans. It looks like there could be more federal spending on the way because Finance Minister Chrystia Freeland has said she will unveil measures in the FES to help Canadians tackle housing and affordability. As Canada grapples with a possible recession and its highest debt costs in more than two decades, economists say Prime Minister Justin Trudeau should curb spending to ensure future policy choices are not forced on him. BoC Senior Deputy Governor Carolyn Rogers told the Senate committee about 40% of households had already renewed mortgages at a higher rate after the bank hiked rates to a 22-year high of 5.0% between March of last year and July 2023. "Certainly there's pressure (on households), and we wouldn't want to minimize it, but we're not seeing anything in the data that would suggest that households are under a significant increased amount of stress" from mortgages, Rogers said. https://www.reuters.com/business/canada-govt-spending-feed-inflation-next-year-central-banker-says-2023-11-01/

2023-11-01 21:48

Nov 2 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. Asian markets are set to open higher on Thursday, lifted by Wall Street's surge the day before as investors' dovish interpretation of Fed chief Jerome Powell's post-meeting press conference pushed U.S. Treasury yields to a two-week low. The Asian and Pacific economic calendar on Thursday is light on quantity but fairly heavy on significance - South Korean inflation and Australian trade are the main indicators, while the policy highlight is the Malaysian central bank's interest rate decision. Investors will also continue to digest the fallout from the Bank of Japan's decision to scrap its 1% ceiling for the 10-year bond yield - on Wednesday the BOJ waded into the bond market, the yen recouped some ground after hitting a one-year low and the Nikkei leaped 2.4% for its third best day of year. Wednesday's global market action should set the tone for Asia on Thursday. The MSCI World equity index rose just over 1%, its best day since August while the Nasdaq jumped 1.6%, its fourth rise in a row, for its best day since August too. The 10-year Treasury yield plunged 14 basis points, its biggest fall since March. While Powell kept the door open to further tightening, markets judged he was not quite as hawkish as he might have been. If that is still the prevailing mood in Asia on Thursday, markets across the continent should benefit. Sentiment toward Chinese markets may be less bullish, however. China's short-term money rates have soared, notably among non-bank financial institutions, and overnight borrowing costs for some Chinese financial institutions have jumped to as high as 50% as a month-end scramble for cash squeezed liquidity and stressed money markets. On the economic front, China's factory activity unexpectedly contracted in October, renewing concerns over the state of the country's fragile economic recovery at the start of the fourth quarter, despite the better-than-expected third-quarter GDP figures a few weeks ago. Uncertainty continues to swirl around the creaking property sector, where developer Evergrande has proposed a new debt restructuring plan for offshore bondholders, offering to swap their debts into about a 30% equity stake in each of the developer's two Hong Kong-listed subsidiaries. In South Korea, figures on Thursday are expected to show annual inflation eased back to 3.60% in October from 3.70%, which would offer some relief to policymakers after it accelerated from July's two-year low of 2.30%. Malaysia's central bank is expected to keep its key interest rate at 3% and through 2024, despite a weakening ringgit, amid stable domestic inflation and a steady growth outlook. Inflation is currently 1.9%, its lowest since March 2021 and far below the government's estimate of 2.5% to 3% for this year, so the central bank has a bit of room to stay on hold, and wait and see. Here are key developments that could provide more direction to markets on Thursday: - Malaysia interest rate decision - South Korea CPI inflation (October) - Australia trade (October) https://www.reuters.com/markets/asia/global-markets-view-asia-graphics-pix-2023-11-01/

2023-11-01 21:47

NORTHFIELD, Minnesota, Nov 1 (Reuters) - U.S. President Joe Biden on Wednesday said consolidation in meat processing and retail chains over the decades has hurt U.S. farmers and announced $5 billion in new investments benefiting rural Americans during a visit to a family farm in Minnesota. The trip, the first stop in what the White House is billing as a two-week "barnstorming" tour, will also see 13 top administration officials visit rural places in 15 states, including election battlegrounds like Michigan, Pennsylvania and Arizona. They will highlight investments in rural communities, where one in five Americans live. "When rural America does well, when Indian country does well, we all do well," Biden said during a visit to Dutch Creek Farms, a hog, soybean and corn farm now being run by a third generation of the Kluver family. Biden said just four big companies control "more than half the market in beef, pork and poultry," and when one of these companies shut, it causes large supply chain disruptions and hurts farmers. "Because of these investments we're making, family farms are going to stay in the family," Biden said, highlighting his efforts to improve market competition and invest in internet and rural electrification. The Minnesota event also allowed top Democratic officials from the state to show their support for Biden just days after Minnesota lawmaker Dean Phillips launched a primary challenge to a sitting president, sources familiar with the plans said. Biden will participate in a fundraiser in Minneapolis after the farm visit. A Biden campaign official noted that Democrats improved their margins in rural areas in 2022 compared to 2020, winning over former supporters of former President Donald Trump. "We are treating these 2022 newly Democratic voters as key persuasion targets for 2024 and are not taking any vote (rural/suburban/urban) for granted," the official added. White House spokesperson Karine Jean-Pierre did not link the president's visit to Phillips' long-shot challenge, but said the administration was "thankful" to Phillips for voting nearly 100% with Biden over the past two years. "Minnesota is an important state that the president wanted to go and visit," she said, adding that Biden planned to speak directly with rural Americans about how his legislation is creating jobs in their communities and other urgently needed investments. Biden beat former president Donald Trump in Minnesota by 52.4% to 45.3%, winning the state's 10 electoral college votes. The Democratic president arrived in Minnesota amid mounting criticism by Muslim and Arab Americans over his support for Israel's bombardment of the Gaza Strip. Jaylani Hussein, executive director of the Council of American Islamic Relations (CAIR) for Minnesota, said Arab and Muslim American leaders and their allies planned protests of Biden's Israel policy at the Minneapolis-St Paul International Airport, at the farm he is visiting, and in downtown Minneapolis. White House officials had no immediate comment on the protests. Reuters reported in September that the White House and Biden's campaign planned an aggressive outreach to rural voters, who account for 30% of the electorate in highly contested North Carolina, Georgia and Wisconsin, and around 22% in Pennsylvania. Biden's campaign is actively targeting Black farmers with a new television ad that will run in Raleigh, North Carolina and on national cable news, the third campaign ad targeting Black Americans. It's part of a 16-week, $25 million advertising campaign targeting key voters in battleground states, that are hotly contested because their voting preferences can swing either to Republicans or Democrats. Getting credit for economic gains is crucial to Biden's 2024 reelection, but many rural voters feel frustrated and disengaged after decades of industrial decline and job losses in the face of globalization and declining agriculture. The more than $5 billion in new investments for rural America Biden announced on Wednesday will be drawn from the Inflation Reduction Act, a $1 trillion bipartisan infrastructure law and reprogramming of existing funds. The money includes $1.7 billion to support climate-smart agriculture practices, $1.1 billion for clean water and other infrastructure, and $2 billion for economic development projects in nine states and Puerto Rico, along with additional investments for expanding broadband access. https://www.reuters.com/world/us/biden-kicks-off-rural-america-tour-minnesota-2023-11-01/

2023-11-01 21:44

Nov 1 (Reuters) - Boston Properties (BXP.N) on Wednesday forecast full-year funds from operations (FFO) per share below Wall Street estimates as high interest rates pressure office mortgages. The company, which is the largest publicly-traded developer of premier workplaces in the United States, expects full-year FFO between $7.25 and $7.27 per share, compared to analysts' estimates of $7.29 per share as per LSEG data. Office occupancy levels across the United States remain well below pre-pandemic levels, leading to a rise in loan defaults and delinquencies. Many office owners have billions of dollars of floating- and low-interest-rate mortgages that will likely need to be refinanced at much higher rates in the coming years. The company, which owns about 194 properties in cities such as New York, San Francisco and Seattle, reported third-quarter FFO of $292.8 million, or $1.86 per share, down from $299.8 million, or $1.91 per share last year, hit by higher interest expenses. Revenue increased 4.3% to $824.3 million for the quarter ended Sept. 30 from a year ago. Shares of the company were down about 1% in trading after the bell. https://www.reuters.com/business/boston-properties-forecasts-weak-full-year-ffo-higher-interest-expenses-2023-11-01/

2023-11-01 21:42

HOUSTON, Nov 1 (Reuters) - The U.S. Department of Energy (DOE) has warned New Fortress Energy (NFE.O) if any portion of its Altamira floating liquefied natural gas (LNG) project is located onshore Mexico, the company will have to resubmit its application for an export permit. New Fortress's $1.3 billion Altamira LNG project was expected to start shipping the superchilled gas this month under an export permit issued in June. If the company must reapply for a U.S. export permit, it could further delay the two-phase project. New Fortress did not immediately reply to a request for comment submitted through its website. The company has received a U.S. license to export Altamira's LNG to Free Trade Agreement (FTA) countries, but not the larger set of non-FTA countries. New Fortress has proposed many LNG projects that use converted offshore oil production rigs to support LNG processing. Altamira was originally designed with two facilities - Fast LNG1 on converted oil platforms and Fast LNG2 on three fixed platforms. The entire project is set to be Mexico's first producing and exporting LNG facility. It would use U.S.-sourced gas, the DOE wrote. "If the project site and design have been modified such that FLNG2 will be located onshore in Mexico instead of offshore, NFE Altamira is required ...to request an amendment of its FTA order," the department wrote on Oct. 30. The DOE's letter pointed to a corporate press release and an Oct. 16 securities filing that suggested the project was a hybrid, with FLNG1 located offshore and FLNG2 set onshore. The configuration requires clarification, the DOE added, since it might not meet the terms of the export license that governs both parts. In June, Mexico's government granted NFE a permit to export up to 7.8 million metric tons through April 2028. Its existing U.S. FTA authorization allowed it to supply LNG to Mexico and other countries with free trade pacts. The project awaits a decision on its application for a non-FTA export permit. https://www.reuters.com/business/energy/new-fortress-energy-may-need-reapply-mexico-lng-permit-us-2023-11-01/

2023-11-01 21:30

Nov 1 (Reuters) - Insurer Allstate Corp (ALL.N) on Wednesday posted a quarterly profit, compared to a year-ago loss, on the back of higher premiums in its property-liability unit. The company said it was pursuing the sale of Allstate's Health and Benefits businesses and expects a sale would likely be completed in 2024. Demand for insurance products has remained resilient in an uncertain economy and the sector is typically considered recession-proof as many policies are often guaranteed by employers, while some are mandated by the government. The insurer posted a profit of 81 cents on an adjusted basis in the third quarter, compared to a loss of $1.53 per share a year earlier. Analysts on an average had expected a profit of 46 cents per share, according to LSEG data. Premiums in the property-liability business increased 10% to $12.3 billion in the third quarter, driven by rate increases, the company said. Net investment income was nearly flat at $689 million. https://www.reuters.com/business/finance/allstate-swings-quarterly-profit-higher-premiums-eyes-health-benefits-units-sale-2023-11-01/