2024-05-15 19:21

Canadian dollar gains 0.3% against the greenback Touches strongest level since April 10 Price of U.S. oil settles 0.8% higher Bond yields tumble across the curve TORONTO, May 15 (Reuters) - The Canadian dollar strengthened to a five-week high against its U.S. counterpart on Wednesday as investors welcomed U.S. inflation data that could keep the door open to Federal Reserve interest rate cuts this year. Wall Street rose and the U.S. dollar (.DXY) New Tab, opens new tab fell against a basket of major currencies as U.S. consumer prices increased less than expected in April. "It is giving the market confidence that the Fed could be looking at cutting rates later in the year," said Darren Richardson, chief operating officer at Richardson International Currency Exchange Inc. Canada is a major producer of commodities, including oil, so the currency tends to be sensitive to shifts in investor sentiment. The price of oil settled 0.8% higher at $78.63 a barrel, while the Canadian dollar was trading 0.3% higher at 1.36 per U.S. dollar, or 73.53 U.S. cents. The currency touched its strongest intraday level since April 10 at 1.3592. Favorable winds are expected to push a major wildfire away from the Canadian oil sands city of Fort McMurray, officials said, less than a day after 6,000 people were ordered to leave. Canadian home sales declined 1.7% in April from March, and were up 10.1% on an annual basis, data from the Canadian Real Estate Association (CREA) showed. Canadian bond yields tumbled across the curve, tracking moves in U.S. Treasuries. The 10-year was down 10.3 basis points at 3.583%, approaching the bottom of the range in recent weeks. Sign up here. https://www.reuters.com/markets/currencies/c-notches-5-week-high-investors-cheer-us-cpi-data-2024-05-15/

2024-05-15 19:20

WASHINGTON, May 15 (Reuters) - A bipartisan group of senators, including Majority Leader Chuck Schumer, on Wednesday called on Congress to approve $32 billion in funding for artificial intelligence research to keep the U.S. ahead of China in the powerful technology. The senators, including Republicans Mike Rounds and Todd Young and Democrat Martin Heinrich, announced the goal as part of a legislative roadmap to address the promises and perils of AI. If China is "going to invest $50 billion, and we're going to invest in nothing, they'll inevitably get ahead of us. So that's why even these investments are so important," Schumer said Wednesday. The roadmap could help the U.S. address mounting worries about China's advances in AI. Washington fears Beijing could use it to meddle in other countries' elections, create bioweapons or launch muscular cyberattacks. U.S. officials flagged concerns over China's "misuse" of artificial intelligence in their first formal bilateral talks on the issue this week. Reuters reported this month that President Joe Biden's administration is poised to open a new front in its effort to safeguard U.S. AI from China and Russia. "This is a time in which the dollars related to this particular investment will pay dividends to the taxpayers of this country long term," Rounds said. "China now spends probably about 10 times more than we do on AI development. They are in a hurry." The funding would cover non-defense uses of AI, the lawmakers said. Senators are still considering how much Congress should dedicate to defense-related AI, "but it's going to be a very large number," Schumer added. Senators called for Congress to fund cross-government AI research and development including an all-of-government "AI-ready data" initiative and government AI testing and evaluation infrastructure. They also called for more money for the Commerce Department's export control division, which has barred the export of some advanced AI chips and tools to make them to China. The Biden administration and lawmakers have sought AI legislation but made little headway. The administration is separately moving to adopt rules. Schumer said he hoped Congress would pass some legislation by year-end. Sign up here. https://www.reuters.com/world/us/us-senators-unveil-ai-policy-roadmap-seek-government-funding-boost-2024-05-15/

2024-05-15 19:14

CHICAGO, May 15 (Reuters) - Tyson Foods (TSN.N) New Tab, opens new tab cannot predict exactly when U.S. ranchers will start rebuilding the cattle herd in a meaningful way, CEO Donnie King said on Wednesday, as tight supplies squeeze the meatpacker's beef business. Producers slashed the herd to its lowest level in decades due to high feed costs and drought in the western United States, increasing the prices Tyson must pay to buy livestock for processing. Lower costs for grains fed to cattle and improved conditions for grazing are encouraging factors for increasing the U.S. herd, though high interest rates are a headwind, King said at a BMO Global Farm to Market Conference. Tyson's beef business, its biggest segment, suffered an adjusted operating loss of $151 million in the six months to March 30, compared to income of $137 million a year earlier. Brazil's JBS SA (JBSS3.SA) New Tab, opens new tab, the world's largest meatpacker, also said on Wednesday that it continues to see reduced cattle availability in the United States and demand constrained by higher beef prices. Improvements in Tyson's chicken business are offsetting difficulties in beef, King said, after it shut six U.S. chicken plants since the start of 2023. Poultry diseases and other issues are constraining U.S. chicken production, he said. "We see today the industry trying to supply more birds but there's been a little bit of bumping our heads against the ceiling," said John R. Tyson, chief financial officer. That is "constructive for chicken margins," he added. Feed is generally the biggest cost for raising poultry, and corn and soy prices hit three-year lows this year. Farmers are now planting crops that will be harvested in the autumn, after a record corn harvest in 2023. "Even though we're still early in the planting season, I think everyone is comfortable and confident about where production is headed this year," John R. Tyson said. "It's possible that we're getting back into those pre-Covid levels or 10 years ago, where corn was trading $4 minus, as compared to where we were a year ago, above $6." Chicago Board of Trade December corn futures traded just below $5 per bushel on Wednesday. Sign up here. https://www.reuters.com/markets/commodities/tyson-foods-unsure-when-tight-us-cattle-supplies-will-expand-ceo-says-2024-05-15/

2024-05-15 18:39

BOSTON, May 15 (Reuters) - Two brothers who studied at the Massachusetts Institute of Technology were arrested on Wednesday on U.S. charges that they carried out a cutting-edge scheme to exploit the Ethereum blockchain's integrity and steal $25 million worth of cryptocurrency. Federal prosecutors in Manhattan called the scheme perpetrated by Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, "novel" and said the case marked the first time that such a fraud had ever been the subject of U.S. criminal charges. Authorities said they executed their elaborate heist in April 2023, stealing $25 million from traders in just 12 seconds by fraudulently gaining access to pending transactions and altering the movement of cryptocurrency. "As we allege, the defendants' scheme calls the very integrity of the blockchain into question," U.S. Attorney Damian Williams said. An indictment New Tab, opens new tab charged them with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. Anton Peraire-Bueno was arrested in Boston, while James Peraire-Bueno was arrested in New York. Their lawyers did not immediately respond to requests for comment. Both brothers had attended Cambridge, Massachusetts-based MIT, where according to prosecutors they studied computer science and math and developed the skills and education they relied upon to carry out their fraud. The indictment alleged that for months, the Peraire-Bueno brothers plotted to manipulate and tamper with the protocols used to validate transactions for inclusion on the Ethereum blockchain, a public ledger that records each cryptocurrency transaction. Prosecutors said they did so by exploiting a vulnerability in the code of software called MEV-boost that is used by most Ethereum network "validators," who are responsible for checking that new transactions are valid before they are added to the blockchain. Prosecutors said that after carrying out the heist, the brothers rejected requests to return the funds and instead took steps to launder and hide the stolen cryptocurrency. Sign up here. https://www.reuters.com/legal/us-charges-two-brothers-with-novel-25-million-cryptocurrency-heist-2024-05-15/

2024-05-15 18:19

May 15 (Reuters) - GameStop (GME.N) New Tab, opens new tab and AMC (AMC.N) New Tab, opens new tab shares slumped on Wednesday, as a two-day rally sparked by the return of "Roaring Kitty" Keith Gill, who was the central figure in the 2021 meme stock frenzy, cooled. Cinema chain AMC fell 16% after surging 135% in the past two sessions, while video game retailer GameStop tumbled nearly 20%, giving up nearly half of its gains from the same period. Trading in the retail investor darlings was halted multiple times during the session, with investors exchanging more than $3.4 billion worth of GameStop shares. "While the meme phenomenon generates a lot of market engagement, which is ultimately a good thing...the volatility in these stocks is extreme," said JJ Kinahan, CEO of IG North America. On Tuesday, "Roaring Kitty", the online persona of Gill, shared a clip from the movie "Braveheart" on X with the word "GameStop" flashing on the screen, as Mel Gibson, playing William Wallace, screams "freedom". Another video played Aerosmith's song "Back in the saddle again". It is the first time that Gill named a company after his return to X following a three-year gap, which set off a rally in the highly shorted stocks and reminded investors of the 2021 retail trading frenzy. In 2021, his YouTube streams and a string of Reddit posts helped attract a flood of retail cash into GameStop, burning hedge funds that had bet against the company. Gill did not respond to a Reuters request for comment on whether he was planning to resume posting about his trades on social media. Gill has "became a hero of the common man.. he's having fun putting up these memes and we're interpreting them.. there's no science here", said Andrew Left at Citron Research, a former GameStop short seller. Meanwhile, AMC disclosed in a filing New Tab, opens new tab that it would issue 23.3 million shares in exchange for its notes due 2026 for a principal amount of $164 million. ROBUST TRADING ACTIVITY Vlad Tenev, CEO of retail trading platform Robinhood (HOOD.O) New Tab, opens new tab, said on X that the app hit $5 billion in equities trading volume on Tuesday, among the highest in the past 12 months. AMC and GameStop were among the top 10 securities bought by retail investors on Tuesday, with $51 million and $16 million daily inflows, respectively, according to Vanda Research. The two stocks have also seen strong options trading this week, with much of the action concentrated in bullish call options, which profit when stock prices rise. Bill Gross, a billionaire once known as the "Bond King" after founding fixed income giant PIMCO, said New Tab, opens new tab the meme stocks frenzy was "definitely opportunistic" and his strategy was to "sell 400% annualised volatility", an options play. Rising interest rates had cooled the meme stock mania in the past two years, underlined by the shuttering of the Roundhill MEME ETF that invested in firms that exhibited a combination of elevated social media activity and high short interest. Sign up here. https://www.reuters.com/business/gamestop-amc-soar-frankfurt-meme-stock-rally-roars-2024-05-15/

2024-05-15 18:00

LONDON/FRANKFURT, May 16 (Reuters) - The U.S. Treasury has warned Austria's Raiffeisen Bank International (RBI) that its access to the U.S. financial system could be restricted because of its Russian dealings, according to a person who has seen a letter detailing the threat. The May 6 letter is the strongest warning yet to the biggest Western bank in Russia and follows months of pressure from Washington, and Europe, as they try to toughen up sanctions against Russia and further squeeze it financially. RBI (RBIV.VI) New Tab, opens new tab this month abandoned a $1.5 billion deal linked with a sanctioned Russian tycoon that the U.S. opposed. But the bank's ties to Russia run much deeper. Restrictions on its access to the dollar system would have potentially deeply damaging consequences. WHY IS THE U.S. CONCERNED? After Russia launched its full-scale invasion of Ukraine in February 2022, the U.S. responded with wide-ranging sanctions on Russia and its companies. Many Western companies, including banks, made a rush to exit. But several Western banks with a big presence in Russia including RBI and Italy's UniCredit (CRDI.MI) New Tab, opens new tab have remained. Both have been in Russia since the collapse of the Soviet Union more than three decades ago. RBI's reluctance to pull back has increasingly frustrated U.S. officials aware that their sanctions have not been as effective as hoped. Sanctions enforcement agency OFAC launched an inquiry into RBI at the start of 2023. The bank has been delaying plans to leave Russia. To unlock funds frozen in Russia, RBI had planned to buy a stake in construction group Strabag from a company the Vienna-based group identified as being controlled by Russian tycoon Oleg Deripaska. The move was opposed by the U.S. Treasury because Deripaska is sanctioned. After repeated U.S. warnings not to proceed, this month the bank dropped the bid. The European Central Bank is also stepping up pressure on RBI, and is expected to tell it to reduce business in Russia. Remaining in Russia has proven very profitable for banks, a disincentive to exit. WHAT DOES RBI SAY? An RBI spokesperson said on Wednesday the bank had significantly reduced activities in Russia and was working towards "de-consolidation" of its subsidiary there. Banks including RBI also say that exiting Russia is a complicated process, and that they cannot just sell up. For an international bank to spin off local operations, it would require the approval of Russia's central bank, finance ministry and even Russian President Vladimir Putin. Russian authorities last year made it clear to RBI, which has around 4 million local account holders and 10,000 staff, that they wish it to stay because it enables international payments, one source previously told Reuters. U.S. sanctions denied Russian banks access to the SWIFT global payment system. That has made lenders like RBI a payment lifeline to hundreds of Russian companies. RBI has also received support from Austria, where officials have pushed back against pressure on the bank. Austria and Russia maintain close ties going back decades and Vienna has long acted as a hub for cash from Russia and its former Soviet neighbours. WHAT COULD THE U.S. DO? In short, a lot. The dollar is the cornerstone of international finance and the United States is the world's most powerful regulator chiefly because it can end a bank's access to the currency. In its letter to RBI, Deputy Treasury Secretary Wally Adeyemo made reference to President Joe Biden's executive order authorising U.S. secondary sanctions on foreign financial institutions that conduct significant transactions involving Russia's military-industrial base. Losing access to the dollar would be likely to plunge any bank into a crisis. Richard Portes, a professor of economics at the London Business School who has studied sanctions, said curbing RBI's access would be "hugely damaging". Critics of sanctions say that the U.S. is accelerating the use of alternatives to the dollar, such as the Chinese buying Russian oil with payments in yuan. Yet the dollar remains the pre-eminent currency for international trade and is the dominant reserve currency - a status likely to endure, analysts say. WILL THE TREASURY DO IT? Washington has so far held back from using the new executive order to sanction foreign financial institutions. Secondary sanctions target foreign people or companies doing business with those already under U.S. sanctions. Washington's threat to hit foreign financial institutions with sanctions has made a significant difference in financial flows between Russia and countries such as Turkey, the United Arab Emirates, and Kazakhstan, Adeyemo said in February. HAS THE U.S. CURBED DOLLAR ACCESS BEFORE? Curbing a Western bank's access to the dollar system is extremely rare. French bank BNP Paribas in 2014 was banned for a year from conducting certain dollar transactions as part of a settlement to resolve accusations it contravened U.S. sanctions against Sudan, Cuba and Iran. In 2018, the U.S. accused Latvia's third-biggest bank, ABLV, of money laundering and breaching sanctions on North Korea. This effectively froze the banks out of dollar financial markets and triggered its closure. Sign up here. https://www.reuters.com/business/finance/austrias-raiffeisen-faces-us-wrath-over-russian-business-2024-05-15/