2024-07-08 06:08

NEW YORK/WASHINGTON, July 7 (Reuters) - Boeing (BA.N) New Tab, opens new tab has agreed to plead guilty to a criminal fraud conspiracy charge and pay a fine of $243.6 million to resolve a U.S. Justice Department investigation into two 737 MAX fatal crashes, the government said in a court filing on Sunday. The plea deal, which requires a judge's approval, would brand the planemaker a convicted felon in connection with crashes in Indonesia and Ethiopia over a five-month period in 2018 and 2019 that killed 346 people. The settlement drew swift criticism from victims' families who wanted Boeing to face a trial and suffer harsher financial consequences. The Justice Department's (DOJ) push to charge Boeing has deepened an ongoing crisis engulfing Boeing since a separate January in-flight blowout exposed continuing safety and quality issues at the planemaker. A guilty plea potentially threatens the company's ability to secure lucrative government contracts with the likes of the U.S. Defense Department and NASA, although it could seek waivers. Boeing became exposed to criminal prosecution after the Justice Department in May found the company violated a 2021 settlement involving the fatal crashes. Still, the plea spares Boeing a contentious trial that could have exposed the company's decisions ahead of the fatal crashes to even greater public scrutiny. It would also make it easier for the planemaker, which will have a new CEO later this year, to try to move forward as it seeks approval for its planned acquisition of Spirit AeroSystems (SPR.N) New Tab, opens new tab. A Boeing spokesperson confirmed it had "reached an agreement in principle on terms of a resolution with the Justice Department." As part of the deal, the planemaker agreed to spend at least $455 million over the next three years to boost safety and compliance programs. Boeing's board will have to meet with relatives of those killed in the MAX crashes, the filing said. The deal also imposes an independent monitor, who will have to publicly file annual progress reports, to oversee the firm's compliance. Boeing will be on probation during the monitor's three-year term. Lawyers for some of the victims' families said they planned to press Judge Reed O'Connor, who has been overseeing the case, to reject the deal. In a separate document filed to the court, they cited O'Connor's statement in a February 2023 ruling: "Boeing's crime may properly be considered the deadliest corporate crime in U.S. history." The deal is a "slap on the wrist," said Erin Applebaum, a lawyer at Kreindler & Kreindler LLP representing some of the victims' relatives. DEEPENING CRISIS AT BOEING The DOJ on June 30 offered a plea agreement to Boeing and gave the company until the end of the week to take the deal or face a trial on a charge of conspiring to defraud the Federal Aviation Administration (FAA), which the DOJ in its Sunday court filing said was "the most serious readily provable offense". The fraud centered around knowingly false representations Boeing made to the FAA about new software that saved money by requiring less intensive training for pilots. The Maneuvering Characteristics Augmentation System (MCAS) software feature was designed to automatically push the airplane’s nose down in certain conditions. It was tied to the two crashes that led to the FAA grounding the MAX fleet for 20 months, an action that cost Boeing $20 billion and was lifted by the government in November 2020. A panel blew off a new Boeing 737 MAX 9 jet during a Jan. 5 Alaska Airlines flight, just two days before the 2021 deferred agreement that had shielded the company from prosecution over the previous fatal crashes expired. Boeing faces a separate ongoing criminal probe into the Alaska Airlines incident. The agreement only covers Boeing's conduct before the fatal crashes and does not shield the planemaker from any other potential investigations or charges related to the January incident or other conduct. The deal also does not shield any executives, the DOJ filing said, though charges against individuals are seen as unlikely due to the statute of limitations. A former Boeing chief technical pilot was charged in connection with the Boeing fraud agreement but acquitted by a jury in 2022. The agreed penalty will be Boeing's second fine of $243.6 million related to the fatal crashes — bringing the full fine to the maximum allowed. The company paid the fine previously as part of 2021's $2.5 billion settlement. The $243.6 million fine represented the amount Boeing saved by not implementing full-flight simulator training for MAX pilots. Families of the victims last month pressed the Justice Department to seek as much as $25 billion. The DOJ and Boeing are working to document the full written plea agreement and file it in federal court in Texas by July 19, the DOJ said in the court filing. Sign up here. https://www.reuters.com/business/aerospace-defense/boeing-plead-guilty-us-probe-fatal-737-max-crashes-says-doj-official-2024-07-08/

2024-07-08 05:57

July 8 (Reuters) - The euro slipped on Monday, but came off of overnight lows against the dollar after France's election pointed to a hung parliament. The U.S. dollar crept up from a more than three-week low after U.S. payrolls data on Friday boosted bets that the Federal Reserve will soon start cutting interest rates. French President Emmanuel Macron on Monday asked his prime minister to stay in the role for now, pending what will be difficult negotiations to form a new government after a surprise left-wing surge in elections that delivered a hung parliament. “We're still waiting to see if the coalition can get the 240 to 250 lawmakers together to have any semblance of a, what is it, I think in France, a working government. We're in wait-and-see mode there,” said Garth Appelt, Head of Foreign Exchange & Emerging Markets Derivatives, Mizuho Americas in New York. Some concerns about a potential French exit from the eurozone were also eased after eurosceptic Marine Le Pen’s National Rally failed to win a majority, said Helen Given, FX trader at Monex USA in Washington DC. "There was a small risk that France would actually start to move towards exiting the Eurozone" if the National Rally had won, Given said. "People are just happy to have it off the table." The euro was last down 0.11% at $1.0824. It briefly reached $1.0845, the highest since June 12, after dipping to a low of $1.07915 earlier in the day. The dollar index , which measures the U.S. currency against the euro, sterling, yen and three other major rivals, gained 0.04% to 104.99. It earlier fell to 104.80, the lowest since June 13. The greenback fell on Friday after June's employment report showed solid jobs gains in the month, but softer details under the hood. Government and healthcare services hiring made up about three-quarters of the payrolls gain and the unemployment rate hit a 2-1/2-year high New Tab, opens new tab of 4.1%. The economy also created 111,000 fewer jobs in April and May than previously estimated, while annual wages increased at the slowest pace in three years. Traders will pay close attention to comments by Fed Chairman Jerome Powell when he testifies before Congress on Tuesday and Wednesday for signs that a rate cut is getting closer. Traders see two cuts this year as likely and are pricing in a 76% likelihood of this first rate cut at the Fed's September meeting, with a subsequent cut expected by December, according to the CME Group's FedWatch Tool. This week's main U.S. economic release will be consumer price data for June on Thursday. The dollar gained slightly against the Japanese yen, following data earlier on Monday showing that Japanese workers saw their average base pay climb 2.5% in May, the fastest pace in 31 years. The Bank of Japan said wage hikes were broadening across the economy due to tight labor market conditions, signaling its confidence the country was making progress toward durably achieving its 2% inflation target. The optimistic assessment may heighten the case for the central bank to raise interest rates as soon as its next meeting on July 30 to 31. “You're starting to see more and more discussions about the BOJ lifting off a little bit in terms of hiking policy. They're thinking that the BOJ is getting much closer to the hiking window, whether it be this month or the next meeting," said Appelt. The dollar was last up 0.02% at 160.76 yen , after last week reaching a 38-year high of 161.96. Sterling was steady, after earlier reaching a 3-1/2 week top versus the dollar and the euro. The British currency has gained since the Labour Party's landslide election victory last week, which ended 14 years of Conservative rule. It was last up 0.02% at $1.281. The Aussie dollar fell 0.18% versus the greenback at $0.6737, having earlier reached $0.67615, the highest since Jan. 3. In cryptocurrencies, bitcoin fell 0.08% to $56,312. Sign up here. https://www.reuters.com/markets/currencies/euro-eases-french-poll-gridlock-dollar-sluggish-after-us-payrolls-2024-07-08/

2024-07-08 04:55

MUMBAI, July 8 (Reuters) - The Indian rupee was mildly stronger on Monday, tracking a rise in its Asian peers, which were aided by a decline in U.S. bond yields after fresh economic data boosted hopes of rate cuts by the Federal Reserve later this year. The rupee was at 83.44 against the U.S. dollar as of 10:15 a.m. IST, up slightly from its close at 83.4850 in the previous session. U.S. Treasury yields and the dollar declined after data on Friday showed that the unemployment rate rose to 4.1% in the United States, while annual wages increased at the slowest pace in three years, pointing to a slackening of the labour market. The data follows a string of economic indicators that pointed to a cooling of the U.S. economy, which has helped push up the odds of a September rate cut by the Fed to nearly 76%, from about 64% a week earlier, according to CME's FedWatch tool. "Asian FX took a breather on the back of broad US dollar weakness ... the risk for Asian currencies, though, remains skewed to the downside, with the Fed staying patient," Lloyd Chan, senior currency analyst at MUFG Bank, said in a note. Asian currencies were under pressure last week, with the Japanese yen falling to its lowest in 38 years, while the offshore Chinese yuan touched its weakest level since November. Fed policymakers have largely maintained a wait-and-see stance on the future path of interest rates despite recent weakness in U.S. economic data. Asian currencies were mostly higher on the day, while the dollar index was at 104.9 after falling 0.2% on Friday. Traders expect the rupee to continue seeing mostly sideways price action between 83.40 and 83.55. Sign up here. https://www.reuters.com/markets/currencies/rupee-up-slightly-asia-fx-takes-breather-dip-us-bond-yields-2024-07-08/

2024-07-08 04:47

JAKARTA, July 8 (Reuters) - At least 12 people died and 18 are missing after a torrential rain caused a landslide in an illegal gold mine over the weekend in Indonesia's Sulawesi island, officials said on Monday. The landslide on Sunday morning in Suwawa district, Gorontalo province, killed miners and residents living near the illegal mine, said Heriyanto, head of the local rescue agency (Basarnas). Five survivors had been evacuated, he said, adding that a rescue team was searching for 18 missing people on Monday. "We have deployed 164 personnel, consisting of the national rescue team, police and military personnel, to search for the missing people," Heriyanto said. However, rescuers must walk about 20 kms (12.43 miles) to reach the landslide site and were being hampered by thick mud over the road and continuing rain in the area, Heriyanto said. "We will try to use an excavator once it's possible," he said. Photos of the affected village shared by the agency showed some houses were flattened by the landslide. Indonesia's disaster agency (BNPB) said the landslide has damaged several houses and one bridge. BNPB also warned residents that rain is still expected in some areas in Gorontalo province on Monday and Tuesday and urge people to be alert in case there's a further disaster. A landslide in South Sulawesi killed at least 18 people in South Sulawesi in April, caused by high-intensity rains. Torrential rain which triggered flash floods and mud slides killed more than 50 people in Indonesia's West Sumatra province in May. (This story has been refiled to correct the name of the district to Suwawa from Sumawa, in paragraph 2) Sign up here. https://www.reuters.com/world/asia-pacific/landslides-kill-12-indonesias-sulawesi-island-18-missing-2024-07-08/

2024-07-08 04:35

July 8 (Reuters) - A look at the day ahead in European and global markets from Wayne Cole. All the hand-wringing about a far-right victory in France looks to have been premature, with polls suggesting the leftist New Popular Front alliance gained the most seats, though well short of a majority. Polling agencies - which are generally accurate - forecast the left would get 184-198 seats in the 577-seat assembly, with President Emmanuel Macron's centrist alliance at 160-169 and Marine Le Pen's nationalist, eurosceptic National Rally (RN) and its allies on 135-143. Analysts assume Macron will try to govern with the cooperation of the left, though exactly what that will look like in practice is uncertain. The crunch will come in the autumn when the new government has to present the 2025 budget, and analysts suspect it will do little to address France's fiscal deficit and a debt load worth 112% of GDP. That outlook tempered the initial relief that the far right did not take power, and left the euro down around 0.1% at $1.0826 . French bond futures were also a fraction lower, with the market reaction limited so far. Equities were generally underpinned by a growing confidence the Federal Reserve will cut rates in September following the soft June payrolls report. Futures now imply a 76% chance of an easing on Sept. 18, with 53 basis points of easing priced in for this year, up from around 40 basis points a month ago. Fed Chair Jerome Powell will have chance to offer his outlook when he appears before Congress on Tuesday and Wednesday, while several other Fed officials are speaking this week. Earnings season also kicks off this week with JPMorgan Chase (JPM.N) New Tab, opens new tab, Citigroup (C.N) New Tab, opens new tab and Wells Fargo (WFC.N) New Tab, opens new tab reporting on Friday. PepsiCo (PEP.O) New Tab, opens new tab and Delta Air Lines (DAL.N) New Tab, opens new tab also report. The S&P 500 is trading at about 21 times forward earnings estimates, but if the top 10 stocks by market value are excluded that figure drops to 16.5 on average for the rest of the index. Key developments that could influence markets on Monday: - Bank of England Monetary Policy Committee member Jonathan Haskel gives a speech - Spain's Economy Minister Carlos Cuerpo to speak at Europa Press event - German trade figures for May, Euro Zone Sentix Index for July Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2024-07-08/

2024-07-08 03:10

MUMBAI, July 8 (Reuters) - The Indian rupee is likely to nudge higher on Monday, supported by a rise in expectations that the U.S. Federal Reserve may begin to ease policy rates in September but weakness in the Chinese yuan may limit the local currency's gains. Non-deliverable forwards indicate the rupee will open flat or slightly higher against the U.S. dollar, compared with 83.4850 in the previous session. The rupee is likely to "trend sideways around 83.45 with a slightly positive bias", a foreign exchange trader at a private bank said. Asian currencies were mostly rangebound, while the offshore Chinese yuan weakened slightly to 7.29. Data released on Friday showed that U.S. nonfarm payrolls grew by 206,000 jobs in June, slightly higher than economists' forecasts, but the unemployment rate rose to 4.1%, while annual wages increased at the slowest pace in three years. Odds of a September rate cut rose above 75% after the data, weighing on the dollar and U.S. bond yields. The dollar index was at 104.9, while the 10-year U.S. Treasury yield inched up to 4.30% in Asia after falling 7 basis points on Friday. Federal Reserve Chair Jerome Powell's semi-annual monetary policy testimony to U.S. lawmakers will be in focus on Tuesday and Wednesday. India and the U.S. will also report their consumer inflation readings this week. Powell's testimony "could be an opportunity for him to share whether the odds of a September rate cut have improved with the latest data", ING Bank said in a note. KEY INDICATORS: ** One-month non-deliverable rupee forward at 83.56; onshore one-month forward premium at 8 paisa ** Dollar index at 104.91 ** Brent crude futures down 0.1% at $86.4 per barrel * Ten-year U.S. note yield at 4.3% ** As per NSDL data, foreign investors bought a net $660.1mln worth of Indian shares on July 4 ** NSDL data shows foreign investors bought a net $231.4mln worth of Indian bonds on July 4 Sign up here. https://www.reuters.com/markets/currencies/rupee-aided-by-growing-fed-rate-cut-hopes-yuan-slip-may-limit-gains-2024-07-08/