Tag Archives: Top News

UPDATE 1-Pakistan appointed a fourth finance minister in two years in an overhaul of the economic team | Instant News


(Updates with more details, backgrounds, challenges for new finmins)

ISLAMABAD, April 16 (Reuters) – Pakistan appointed Shaukat Tarin as its fourth finance minister in two years on Friday, part of an overhaul of the government’s economic team as it enters a key period of budgeting and implementing IMF reforms.

Tarin, a former banker, held a portfolio of finance ministers for about a year in the previous government led by the Pakistan People’s Party (PPP), now against Prime Minister Imran Khan’s ruling party.

His predecessor, Hammad Azhar, has been in office for less than three weeks.

Khan also replaced other major economic-related ministries, his office said, including economic affairs and power portfolios.

Tarin took the job just weeks before the annual budget was due, with economists saying Pakistan was likely to post its biggest deficit as a result of uncertain government policies exacerbated by the coronavirus pandemic.

The third wave of COVID-19 currently hitting the country will create additional uncertainty in areas such as revenue collection, making budget forecasting more difficult.

Pakistan expects its economy to grow 3% in the current fiscal year ending June 30, after revising its forecast higher than a little over 2%. Last year, GDP contracted 0.4%.

The International Monetary Fund projects GDP growth for 2020/2021 of 1.5% and the World Bank sees a 1.3% expansion.

IMF head of state Ernesto Ramirez Rigo said on April 8 that good data in January and February had suggested growth could beat forecasts but the third wave of the pandemic meant “maybe we might … need to reduce our expectations a little bit”.

Pakistan also needs to adjust its annual budget, he said.

The IMF approved a disbursement of $ 500 million to Pakistan last month for budget support after competing to review the $ 6 billion Extended Fund Facility program.

GDP growth was 5.8% when Khan took power in 2018.

About $ 2.5 billion in loans on the international bond market and recent historically high remittances are giving the economy breathing room. (Reporting by Asif Shahzad; Editing by Toby Chopra and Catherine Evans)

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UPDATE 2-German yields rose, reversing after industrial output supported the rally | Instant News


* Eurozone suburban government bond yields tmsnrt.rs/2ii2Bqr (Adding details, updating prices)

LONDON, April 14 (Reuters) – German government bond yields climbed to a two-week high in late trading Wednesday, unleashing earlier rallies as manufacturing and industrial data in the eurozone and Japan hinted at hurdles ahead as the global economy battles the coronavirus pandemic.

Eurozone industrial output decreased in February after increasing in January, and Japanese machinery orders fell the most in about a year.,

Eurozone bond yields – which tracked US Treasury yields higher on hopes for a strong economic recovery later this year and higher inflation – initially fell.

But that turned around and the yield on German 10-year bond, the benchmark for the single currency bloc, rose to its highest level in more than two weeks in Wednesday night trading at -0.264%, above the level touched on Tuesday when a flurry of bond sales weighed on markets. . .

Bond yields also picked up, with a number of Federal Reserve speakers scheduled for Wednesday after the inflation data beat expectations slightly.

Dallas Federal Reserve Bank President Robert Kaplan reiterated his view that the Fed should start attracting support from the economy sooner than most of his colleagues thought.]

“The overall picture is for a hike in yield,” said ING rate strategist Antoine Bouvet.

“A lot of people believe that a strong recovery is in prices, but this is down to the Fed’s communications – the start of the tapering debate needs to take place this year given the potential strength of the recovery.”

The eurozone economy still stands on “two crutches” of monetary and fiscal stimulus, and this cannot be picked up before a full recovery, said European Central Bank president Christine Lagarde.

Some policymakers have expressed hope the ECB can start reducing bond purchases in the third quarter as the COVID-19 vaccination rate increases.

In the primary market, Ireland hired a syndicate of banks to sell 20-year bonds, which will raise 2-3 billion euros according to market sources.

The government resumed its long-term bond issuance after the issuance subsided with a February bond sell-off, with Austria and Spain selling 50 and 15-year bonds respectively on Tuesday.

The European Union also announced plans for an 800 billion euro recovery fund loan on Wednesday, which will raise about 150 billion euros per year from the end of this year.

Reporting by Abhinav Ramnarayan, additional reporting by Yoruk Bahceli; Edited by Ana Nicolaci da Costa, Kirsten Donovan and John Stonestreet

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UPDATE 2-New Zealand c. Banks remain on hold to keep the economy on a recovery path | Instant News


* RBNZ official cash rate is at 0.25%, as expected

* QE, funding for loans is maintained

* RBNZ says impact of new housing rules to watch (Adds details, analyst comments)

WELLINGTON, April 14 (Reuters) – New Zealand’s central bank left all current policy settings unchanged on Wednesday, saying monetary stimulus should continue to ensure inflation and employment targets are met.

The Reserve Bank of New Zealand (RBNZ) also said it would take time to observe the impact of the new housing market measures and the gradual revival of tourism on its economic recovery.

It keeps the official cash interest rate (OCR) at a record low of 0.25%, while also continuing the NZ $ 100 billion ($ 70.55 billion) quantitative easing tool and the Funding for Lending Program (FLP), both introduced last year to support a market hit by the COVID-19 pandemic.

‚ÄúThere is no reason for the RBNZ today to deviate from the ‘wait and see’ and ‘least regrettable’ strategy, or to sway the market price for an OCR hike, with markets on-board with the RBNZ message that tightening remains. prospects are distant, “said Sharon Zollner, chief economist at ANZ.

The central bank cut its cash rate by 75 basis points in March last year and pledged not to change for 12 months, while also introducing quantitative easing to support the economy. A Reuters poll expects the RBNZ to keep interest rates on hold and keep other tools of easing unchanged.

The RBNZ said inflation will surge in the near future, even exceeding the 2% target midpoint due to supply chain disruptions and rising oil prices, but this is temporary.

It reiterates that the prospect remains “very uncertain” and that meeting its targets will take a lot of time and patience.

“The committee agrees that medium-term inflation and employment will likely remain below its delivery target in the absence of a prolonged monetary stimulus,” said RBNZ.

HOUSING FOCUS

Business sentiment has faded in recent months despite a tremendous rebound in economic activity following the COVID-19 lockdown, and the economy contracting in the last quarter of 2020.

But these losses are offset by improving global prospects, and the return of Australian tourists to New Zealand next week via the COVID-19 ‘travel bubble’ arrangement.

The government, under pressure to cool the hot housing market, also introduced a series of measures in March that saddled investors with new taxes.

The RBNZ committee said housing measures are likely to dampen price growth but the extent of their influence will take time to observe.

It is recognized that stimulating monetary policy played a role in lifting house prices, along with other factors.

The government last year tasked the central bank with considering the impact of its monetary and financial policy decisions on housing prices, a move to help calm heating markets.

$ 1 = 1.4174 New Zealand dollars Edited by Jacqueline Wong

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REFILE-UPDATE 2-Austria follows Italy as the government continues ultra-long issuance | Instant News


(Clears repeating data about Austria)

* Austria will sell 50-year bonds, following Italy

* Spain will sell 15 year bonds

* Bond yields rise as investors digest the issuance

April 13 (Reuters) – Austria on Tuesday moved to lock in its current low borrowing costs with 50-year bonds, following a half-century issue from Italy, while Spain launched a 15-year newspaper.

Both deals are made through a syndicate of banks, with Austria to raise 1.75 billion euros and Spain six billion euros, according to a key manager’s memo seen by Reuters.

Last week’s Austrian and Italian bonds marked a resumption of a very long term, 50-year issuance.

After a strong start to the year with 50-year selling from France, Spain and Belgium, the bond selloff was driven by higher growth expectations and inflation weighed on bond buyers with losses and such issuance eased.

“European investors still rely on a lower narrative for the long term and therefore there is no fear on their part to buy longer term bonds as there is no fear of regime change in growth and inflation dynamics,” said Antoine Bouvet, senior pricing strategist. on ING.

“It is true that tariffs have moved higher, but in the grand scheme of things, they are still quite low.”

The European Central Bank has calmed the market by increasing its rate of asset purchases.

Ultra-long-dated bonds are considered to be one of the most risky government debt problems, because they are more sensitive to changes in the underlying interest rates. In addition, the ECB, which is pushing down euro area borrowing costs, has not bought bonds of more than 30 years.

Austria saw demand 13 billion euros and Spain 42 billion euros as both books shrank after the government cut offered yields.

That’s well below the 65 billion euros in offers Madrid received for a 50-year contract in February and 18 billion euros for Austria’s 100-year bonds last year.

Bouvet said the lower demand may descend to a large increase in yields this year meaning investors such as pension funds will no longer need to buy longer-term bonds. Some governments are also trying to get rid of bidders they believe will deliver an increased order

Euro area bond yields barely moved as data showed US inflation rose 2.6% year-on-year in March, slightly above forecasts.

But massive supplies weighed on the market, with German 10-year yields almost hitting a two-week high of -0.271% and Italian 10-year yields at their highest in more than a month at 0.78%.

Investors also digested the supply of bonds from the Netherlands, Italy, the UK and the sale of $ 24 billion worth of US 30-year bonds, all of which were sold at auction.

Reporting by Yoruk Bahceli; Edited by Catherine Evans, Alexandra Hudson and Giles Elgood

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UPDATE 1-Union Alitalia urges the Italian government to leave EU talks over an overhaul | Instant News


(Adding EU Commission commentary)

MILAN, April 13 (Reuters) – Representatives of the Alitalia trade union on Tuesday urged the Italian government to cancel negotiations with Brussels over an overhaul of the airline, saying the European Commission favors foreign airlines over the group.

Rome has been negotiating with EU executives for months over Italy’s plans to restructure the airline through the launch of a new state-owned company called ITA.

Speaking before the Italian parliament, UILT trade union chairman Claudio Tarlazzi rejected the idea that the new company could accept the European Union’s proposal for restructuring.

“We have to realize that the EU is supporting rival companies, and negotiations (with Brussels) must stop and the company created with all the necessary assets,” Tarlazzi told members of the two parliamentary committees holding joint hearings.

Criticism of the EU’s handling of Alitalia peaked last week, when Brussels approved a French contribution to a 4 billion euro ($ 4.8 billion) support package for Air France-KLM in exchange for a 4% reduction in take-off and landing slots at Paris-Orly Airport.

A Commission spokesman said the looser rules for state aid adopted during the pandemic through the EU’s “interim framework” could not be applied to Alitalia.

“Alitalia was constantly losing money and was in trouble at the end of 2019, prior to the COVID-19 outbreak, and so was excluded from … receiving assistance under an interim framework,” the spokesperson told Reuters. .

“On the other hand, Air France and Lufthansa will have no difficulties at the end of 2019, which is why they can be recapitalized.”

The commission is in contact with the Italian authorities, he added, without elaborating.

The EU has asked ITA to abandon its Alitalia brand, give up half of its slot at Milan’s city airport, and start without the handling and maintenance division of the old airline, sources said.

ITA management has planned to seek partnerships with rival operators using the negotiating power of the Milan-Linate Alitalia airport slot as a sweetener.

It was supposed to buy some of Alitalia’s old assets using part of the 3 billion euros injected by the government, and started flying on fewer than 50 jets in June.

Representatives from three other unions who attended the hearing agreed with Tarlazzi and said the ITA should start by doubling down on its planned fleet.

Alitalia has posted operating losses annually since 2012, and more than half of its 11,000 employees have been temporarily laid off due to the coronavirus crisis.

$ 1 = 0.8409 euros Additional reporting by Foo Yun Chee in Brussels; Edited by Jan Harvey

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