EMERGING MARKETS-Brazil leads Latam rally; Argentina extends debt deadline

    * Brazil's real at over 6-week high
    * Mexican, Colombian pesos buoyed by strong oil prices
    * Argentina extends debt restructuring deadline to June 12
    * Analysts see Mexican peso outperforming in near-term

 (Adds details, updates prices)
    By Susan Mathew and Ambar Warrick
    June 2 (Reuters) - Latin American currencies rallied on
Tuesday with Brazil's real and stocks leading gains as hopes for
a recovery from a deep recession buoyed sentiment.
    Brazil's Bovespa index scaled 12-week highs, while
the real jumped more than 3% to the dollar as the
country's government launched a new emergency credit line of 20
billion reais ($3.73 billion) to help small and mid-size
companies.
    While easing coronavirus lockdowns, and no immediate fallout
from escalating U.S.-China tensions, have helped Latin American
assets recoup some of their losses this year, there are still
concerns over the full extent of the COVID-19 pandemic.
    The economic outlook for Latam's largest economy remains
bleak, with the country's treasury department expecting Brazil
to end 2020 with debt at 94% of GDP unless the government shows
commitment to fiscal reforms. 
    An ongoing federal investigation into Brazilian President
Jair Bolsonaro has added to woes. The speaker of Brazil's lower
house of Congress on Monday did not dismiss the possibility of
opening impeachment proceedings against Bolsonaro.
    Mexico's peso rose 2%, touching an 11-week high
against a weaker dollar. The peso has gained about 10% over past
12 sessions with analysts expecting the currency to outperform
regional peers in the short term.
    Given that monetary and fiscal measures have postponed
near-term funding distress, it is possible to position for a
recovery in emerging markets from March lows, said Goldman Sachs
analysts, pointing to the Mexican peso and the Bovespa as Latam
beneficiaries. 
    Rising oil prices also helped the Mexican peso, while crude
exporter Colombia saw its peso come near three-month
highs. 
    Argentina, meanwhile, extended the deadline to restructure 
$65 billion in debt to June 12 and said it may sweeten its most
recent offer to creditors. The country is already in default
after having missed an interest payment extension on May 22.

    The government may improve its offer less than what
creditors expect, given the International Monetary Fund's
backing for its current deal terms, Citigroup analysts said. 
    "But this argument is unlikely to be very effective as the
IMF's debt sustainability assessment treats Argentina's
macroeconomic policies as exogenous, which is obviously not the
case." 
    Concerns also stem from the widening gap between the
official and black market rate of the Argentine peso. The
currency is being held artificially high by strict currency
controls, even as fears over the economy and demand for dollars
drive unofficial rates to record lows.
    
    Key Latin American stock indexes and currencies:
    
    Stock indexes             Latest        Daily % change
 MSCI Emerging Markets          967.19                    1.65
                                        
 MSCI LatAm                    1889.43                    3.74
                                        
 Brazil Bovespa               90390.25                       2
                                        
 Mexico IPC                   37426.52                    1.21
                                        
 Chile IPSA                    3748.69                    1.71
                                        
 Argentina MerVal             41424.63                   3.518
                                        
 Colombia COLCAP               1115.74                   -0.11
                                        
                                                              
       Currencies             Latest        Daily % change
 Brazil real                    5.2187                    3.12
                                        
 Mexico peso                   21.7808                    1.12
                                        
 Chile peso                      780.2                    1.70
                                        
 Colombia peso                 3635.26                    2.06
 Peru sol                       3.3947                    0.74
                                        
 Argentina peso                68.7100                   -0.12
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru; Editing by Tom Brown)
  

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US consumer spending tanks; savings hit record high

WASHINGTON (REUTERS) – US consumers cut spending by the most on record for the second straight month in April while boosting savings to an all-time high, and the growing frugality reinforced expectations the economy could take years to recover from the Covid-19 pandemic.

The report from the Commerce Department on Friday (May 29), together with news that monthly exports collapsed, left economists anticipating the largest contraction in gross domestic product in the second quarter since the Great Depression of the 1930s.

Data has also been dismal this month on the labour market, manufacturing production and homebuilding.

The Commerce Department said consumer spending, which accounts for more than two-thirds of US economic activity, plunged 13.6 per cent last month, the biggest drop since the government started tracking the series in 1959. It eclipsed the previous all-time decrease of 6.9 per cent in March.

Economists polled by Reuters had forecast consumer spending would plummet 12.6 per cent in April. Spending was depressed by a decrease in outlays on healthcare as dental offices closed and hospitals postponed elective surgeries and non-emergency visits to focus on patients suffering from Covid-19.

The disease has killed over 100,000 people in the United States, the highest death toll in the world.

Spending declined at restaurants, which have shifted to delivery and pick-up service only, and hotels and motels.

Spending on food and beverages fell in April.

But the Covid-19 crisis boosted incomes for consumers in April as the government’s historic fiscal package worth nearly US$3 trillion (S$4.2 trillion) doled out one-time US$1,200 cheques to millions of people and boosted unemployment benefits for the roughly 31 million out of work to cushion against economic hardship wrought by the pandemic.

Personal income surged a record 10.5 per cent last month after falling 2.2 per cent in March. Savings soared to a historic US$4 trillion, with the saving rate hitting a record 33 per cent. But business closures weighed on wages, which dropped 8 per cent in April after falling 3.5 per cent in March.

“The saving rate represents both opportunity and a warning,” said Chris Low, chief economist at FHN in New York.

“If the economy reopens quickly without consequence these savings represent considerable spending power in the second half. If it takes longer to reopen the economy, these savings will be used for sustenance over the next few months.”

The economy is gradually reopening after nonessential businesses were shuttered in mid-March to slow the spread of Covid-19, raising hope economic slump was nearing a bottom.

Stocks on Wall Street were trading lower as investors braced for a US response to China’s national security law on Hong Kong. The dollar fell against a basket of currencies, while US Treasury prices rose.

TRADE COLLAPSES

In a second report on Friday, the Commerce Department said goods exports tumbled 25.2 per cent to US$95.4 billion in April, a 10-year low. The broad decline in exports was led by a 65.9 per cent collapse in shipments of motor vehicles and parts. That outpaced a 14.3 per cent tumble in imports. As a result, the goods trade deficit widened 7.2 per cent to 69.7 billion last month.

The wider goods trade deficit is likely a drag on second quarter gross domestic product, which economists expect could drop at as much as a 40 per cent rate, a pace not seen since the 1930s.

The economy contracted at a 5 per cent annualised rate last quarter, the deepest pace of decline in GDP since the fourth quarter of 2008. Consumer spending tumbled at a 6.8 per cent rate, the sharpest drop since the second quarter of 1980.

With consumer spending depressed in April, inflation pressures were weak, with the personal consumption expenditures (PCE) price index excluding the volatile food and energy components falling 0.4 per cent. That was the largest drop since September 2001 and followed an unchanged reading in March.

In the 12 months through April, the so-called core PCE price index rose 1 per cent, the smallest gain since December 2010 which followed a 1.7 per cent increase in March. The core PCE index is the Federal Reserve’s preferred inflation measure. The US central bank has a 2 per cent inflation target.

“The core PCE decline reflects some big collapses in the prices of a limited number of the most-affected services,” said Andrew Hunter, a senior US economist at Capital Economics.

“It is not evidence of a widespread Japanese-style deflation ensnaring America.”

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W SKRÓCIE-KGHM: Sierra Gorda podpisała umowę pożyczki z Bankiem Gospodarstwa Krajowego

29 maja (Reuters) – KGHM Polska Miedz SA:

* SIERRA GORDA PODPISALA UMOWE POŻYCZKI Z BANKIEM GOSPODARSTWA KRAJOWEGO

* POŻYCZKA ZOSTANIE PRZEZNACZONA NA WSPARCIE BIEŻĄCEJ DZIAŁALNOŚCI SIERRA GORDA W ODPOWIEDZI NA OBECNĄ SYTUACJĘ MAKROEKONOMICZNĄ WYWOŁANĄ PRZEZ COVID-19

* WARTOŚĆ GWARANCJI UDZIELANEJ PRZEZ KGHM WYNIKA Z POSIADANYCH UDZIAŁÓW W SIERRA GORDA (55% UDZIAŁÓW) ORAZ CAŁKOWITEJ KWOTY KREDYTU (200 MILLION USD) I WYNOSI 110 MILLION USD Pełny komunikat spółki w serwisie Eikon jest dostępny tutaj: Aby zobaczyć pozostałe depesze na temat spółki, kliknij tutaj (Gdansk Newsroom)

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Germany's Scholz sees "very high" chances for EU compromise deal on Recovery Fund

BERLIN, May 27 (Reuters) – German Finance Minister Olaf Scholz on Wednesday welcomed the European Commission’s plan for a 750 billion-euro ($824.55 billion) Recovery Fund and said he was confident member states would find a compromise deal to help countries most hit by the coronavirus pandemic.

“The discussion is not over yet, there needs to be an agreement among 27 member states. But it’s safe to say already now that the chances are very high that there will be a good and sound agreement,” Scholz told reporters.

The European Union’s executive on Wednesday unveiled its plan to prop up economies hammered by the coronavirus crisis, hoping to end months of squabbling over how to fund a recovery that has exposed faultlines across the bloc. ($1 = 0.9096 euros) (Reporting by Michael Nienaber Editing by Michelle Martin)

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Alberta survey to ask businesses, commercial landlords about COVID-19 challenges

The Alberta government is urging commercial landlords and tenants in the province to fill out a survey on its website to get a better sense of challenges businesses are facing in meeting their “financial obligations during the COVID-19 pandemic.”

In a news release issued Monday, the government said such challenges could include paying rent or developing payment schedules.

“We expect businesses and landlords to work together in a respectful and fair manner during this challenging time,” said Economic Development, Trade and Tourism Minister Tanya Fir.

“We strongly encourage landlords to participate in the CECRA (Canada Emergency Commercial Rent Assistance) program and to be flexible and understanding of their tenants’ financial circumstances.

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“We are asking businesses to pay their rent as fully and consistently as possible, if they can. This isn’t an easy time for anyone, but by working together, we will get through these tough times.”

The CECRA program, which is administered by the Canada Mortgage and Housing Corporation, began accepting applications on Monday.

The government said it hopes survey responses will help it gauge whether people and businesses have been able to access supports that are already available and then help inform whether more measures are needed to help businesses pay rent during the pandemic.

The leader of the Official Opposition issued a statement on Monday afternoon, saying she believes businesses need more support right away.

“Rent is due in seven days,” said NDP Leader Rachel Notley. “These businesses need real support — not a survey.

“Our caucus started hearing from businesses over two months ago, they don’t need to wait another two months while (Premier) Jason Kenney asks questions he should already know the answer to.”

According to the provincial government, Alberta businesses paid an average monthly rent of almost $650 million in 2016.


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CANADA FX DEBT-Canadian dollar sticks to tight range ahead of Poloz speech

    * Canadian dollar rises 0.1% against the greenback
    * Loonie trades in a range of 1.3972 to 1.4007
    * Price of U.S. oil increases 0.6%
    * Canadian bond yields trade mixed across a flatter curve

    TORONTO, May 25 (Reuters) - The Canadian dollar strengthened
against the greenback on Monday as global stocks rose, but the
loonie traded in a narrow range as U.S. financial markets were
closed for a public holiday and ahead of a speech by Bank of
Canada Governor Stephen Poloz.    
    A survey showing German business morale rebounded in May
boosted investor sentiment. Shares globally          gained
0.4%, while U.S. crude futures        were up 0.60% at $33.45 a
barrel.
    Oil is one of Canada's major exports.
    The Canadian dollar        was trading 0.1% higher at 1.3985
to the greenback, or 71.50 U.S. cents. The currency, which rose
0.8% last week, traded in a range of 1.3972 to 1.4007. 
    Poloz, who is retiring next Monday, will speak on monetary
policy at 1:30 p.m. (1530 GMT). Last week, he said Canada was
still on track to meet the best-case scenario for recovery that
the central bank released in April.             
    Since March, the Bank of Canada has slashed its benchmark
interest rate to a record low of 0.25% and begun its first ever
large-scale bond-buying program.
    Canadian government bond yields were mixed across a flatter
curve, with the 10-year yield             down 1.1 basis points
at 0.496%.

 (Reporting by Fergal Smith
Editing by Nick Zieminski)
  

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Quebec sends 1,000 prevention agents to workplaces to boost coronavirus safeguard measures

Quebec is sending teams of prevention agents to offices, retail stores and other worksites to inform employers and workers on health measures to limit the spread of the novel coronavirus.

The measure, which was announced on Monday by the province’s labour ministry, comes as confinement rules designed to contain COVID-19 are loosened and thousands of people head back to work.

The government is redeploying 1,000 workers from other departments — including the Health and Social Services Ministry and the City of Montreal — to visit workplaces.

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The teams will be deployed across the province, including hard-hit Montreal. They were trained by the province’s workplace health and safety board (CNESST).

As part of the plan, the agents will visit different workplaces or do followups. They will inform people about physical distancing and answer questions on health measures implemented to contain COVID-19.

“This initiative will provide concrete support to employers and workers so that the health standards set by the public health department are respected,” Labour Minister Jean Boulet said in a statement.

The teams will do visits and followups in more than 20 fields, including retail stores, spas and construction companies. The province will continue to send prevention workers to other sectors as they reopen.

Quebec, which leads the country in caseload and deaths attributable to the respiratory illness, is gradually reopening parts of the economy and education sectors.

With files from the Canadian Press

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Italy's daily coronavirus death toll dips, new cases steady

ROME (Reuters) – Italy recorded 130 new deaths from the COVID-19 epidemic on Friday against 156 the day before, the Civil Protection Agency said, while the daily tally of new cases rose marginally to 652 from 642 on Thursday.

The total death toll since the outbreak came to light on Feb. 21 now stands at 32,616, the agency said, the third highest in the world after those of the United States and Britain.

However, statisticians believe Italy, like many other countries, has suffered considerably more deaths from the virus than its official data suggest, because many casualties were never tested.

A study this week by Italy’s social security agency INPS showed that there were almost 47,000 more deaths between March 1 and April 30 than in the average for the same period in the five years from 2015 to 2019.

Of these, around 28,000 were officially counted as COVID-19 fatalities, leaving around 19,000 deaths unaccounted for. INPS said it was reasonable to suppose that “a large part” of these excess deaths were due to the coronavirus.

The Civil Protection Agency said the total number of confirmed cases in Italy since the start of its outbreak now amounts to 228,658, the sixth highest global tally behind those of the United States, Russia, Spain, Britain and Brazil.

People registered as currently carrying the illness dipped to 59,322 on Friday from 60,960 the day before.

There were 595 people in intensive care on Friday, down from 640 on Thursday, maintaining a long-running decline. Of those originally infected, 136,720 were declared recovered against 134,560 a day earlier.

The agency said 2.122 million people had been tested for the virus as of Friday, against 2.079 million on Thursday, out of a population of around 60 million.

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How one Indian company could be world's door to a COVID-19 vaccine

PUNE (Reuters) – If the world is to gain access to a vaccine for COVID-19, there’s a good chance it will pass through the doors of Serum Institute of India.

Serum Institute, the world’s largest manufacturer of vaccines by volume, is working on several candidates for the novel coronavirus – including potentially mass-producing the AstraZeneca/Oxford university one that has garnered global headlines – as well as developing its own.

The efforts are partly being shepherded by Umesh Shaligram, the head of research and development. His employer is a private company but every day, shortly before midnight, he receives a WhatsApp message from the government asking for updates, and about any new hurdles he faces.

The message is usually from K. VijayRaghavan, Prime Minister Narendra Modi’s top scientific adviser – an indication of the critical, and even strategically important, nature of the race to develop the vaccines the whole world is waiting for.

Shaligram promptly responds with a progress report and details any bottlenecks.

“Any delays, you just tell them,” said Shaligram, adding the government has been doing everything it can to fast-track clearances, and resolve import delays and other issues.

“We have begun to see approvals come through in days, even on a Sunday night, for trials and things like that,” he said, noting some of these processes typically took 4 to 6 months.

While most of the attention regarding vaccines typically goes to the pharmaceutical developer, India quietly plays a key role in manufacturing 60%-70% of all vaccines sold globally with the Serum Institute playing a lead role, said the company’s Chief Executive Adar Poonawalla.

At the company’s sprawling, 150-acre campus in the western Indian city of Pune, Shaligram and his team are working flat-out. Dozens of buses ferry in hundreds of workers each day to the grounds, which are buzzing with activity even as the city around it remains largely under lockdown.

The push comes as the number of cases of COVID-19, both globally and domestically, continue to surge and world leaders look to vaccines as the only real way to restart their stalled economies, even though none have yet been proven to be effective against the coronavirus.

Poonawalla, whose family owns he vaccine maker, said scientists, drugmakers and manufacturers were collaborating at an unparalleled scale to spur development and availability.

“We are all in a race to battle the disease, there is no one-upmanship here,” he told Reuters, sitting in his office beside his family’s 74-year-old stud farm.

VACCINE CANDIDATES

Serum, founded in 1966 by Adar’s father Cyrus Poonawalla, has partnered with U.S. biotech firm Codagenix, its U.S. rival Novavax (NVAX.O) and Austria’s Themis to potentially manufacture three COVID-19 vaccine candidates that are still in development.

Another candidate in the works is the experimental vaccine developed by a team at the University of Oxford and now licensed to drugmaker AstraZeneca (AZN.L), with whom Serum are in talks to mass produce the vaccine, which is now in the clinical trial stage.

The United States has secured almost a third of the first 1 billion doses planned for the potential vaccine, initially known as ChAdOx1 and now as AZD1222, by pledging up to $1.2 billion.

Poonawalla aims to initially produce 4-5 million doses a month, beginning from June, and then gradually ramp up to 350-400 million doses a year.

“Hopefully we will build a stock of a few million doses to give to our country and other high-risk areas across the globe come October-November when the trials ought to be concluded,” the 39-year-old said, while giving Reuters rare access to tour his facilities.

He added he had been given to understand by the development team that the trials had an 80% chance of success, given that the vaccine is based on a tried-and-tested platform.

Based on the information currently available, Poonawalla also said he anticipated AZD1222 would be a single-dose vaccine and not require a booster dose.

He sees AZD1222 potentially priced at about 1,000 rupees ($13) per dose in India, but expects it will be procured and distributed by governments without charge.

Serum is also working on developing its own in-house vaccine options to tackle the disease, Poonawalla said.

VIALS, TUBES, CHEMICALS

Even if a vaccine does succeed, a treatment to fight COVID-19 would still be required, said Poonawalla, noting some people do not get the desired immune response, even if vaccinated.

“You may get mild symptoms, you may get severe symptoms. It depends on your system, but there is a chance,” he added. “Not all vaccines are fully effective.”

The Serum Institute produces more than 1.5 billion doses of vaccines every year, for everything from polio to measles.

Poonawalla says that gave the company an edge in securing supplies of vials and high-quality chemicals required to make a vaccine in bulk once all approvals are in place.

“We have partnered with many of our suppliers to have one to two-year inventories of glass vials and tubing glass stocked in advance, so luckily for us that won’t be an issue.”

Any successful vaccine is however bound to be in short supply at first, he stressed.

India recorded more than 6,000 new cases of the coronavirus on Friday, bringing its total to over 118,000 cases with more than 3,500 deaths, even as it gradually begins to ease its nearly two-month long nationwide lockdown.

There have been more than 5 million infections and over 330,000 deaths reported worldwide.

The Indian government stands ready to cover the costs of trials of any vaccine in the country, said Poonawalla, adding that the government had also expressed interest in placing advance orders for a potential vaccine.

“We’ve reached out and they have been very positive,” he added. “But we’ve said hold on … as we don’t want to take government money until we are very confident we can deliver.”

UNLOCKING VALUE IN THE ‘HYPE’

Serum, one of the few companies ramping up hiring during the health crisis, is also designing a separate facility to make vaccines for pandemic-level diseases that could handle 90% of the current vaccine candidates being developed, beyond just the COVID-19 ones.

That facility, which will be ready in the next two to three years, would be able to potentially churn out 700-800 million doses a year, according to Poonawalla.

The CEO said he considered taking the company public some years ago to fund some large acquisitions, but changed course when the deals fell through.

Now he’s considering a different approach. He is exploring creating a holding entity that will host the company’s pandemic-level technologies, including manufacturing rights, intellectual property and the sale of all of Serum’s COVID-19-related candidates, and selling a minority stake in the venture.

“That will unlock value in the main hype,” he said.

Poonawalla said he had engaged bankers to test the waters on this, but stressed he would only consider selling a stake to ethical, long-term funds or sovereign funds that do not expect huge returns and want to “make a difference to the world”.

“After getting them onboard, I don’t want to be in a situation where I have to charge high prices to give them returns.”

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Coronavirus: Some Edmonton out-of-school child care programs still closed amid provincial relaunch

It’s the first week some families have finally been able to take their kids back to daycare as part of Phase 1 of Alberta’s relaunch strategy.

“It was really exciting to be able to see these families that we know and care about and to welcome them back. It was also stressful, it was hard for the kids,” Allyson Bonkowski, owner of Global Aware Kids Care explained.

While there is excitement, its been a much different process than before.

“Right at the very beginning, a lot of our operators were experiencing low enrollment and that can be for a number of reasons — from families that aren’t ready to go back to work to families that can’t go back due to unemployment,” Cynthia Nerling with Alberta Association of Child Care Operators said.

But many parents, whose daycares are inside schools, are still waiting as those haven’t been able to open.

“Each school board is being given the choice as to whether they are going to allow childcare programs to come back and operate, so each board can make that decision on their own,” Staci Wilson, chair of School Age Care Directors Association said.

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In a statement the Edmonton Catholic School Division said it’s communicating with daycare providers to determine their relaunch strategy and whether it can safely be implemented in schools.

“We are collaborating with our daycare providers that have expressed interest in opening for Phase 1 to get them back in operation as early as June 1,” the board said.

Edmonton Public did not provide a timeline, but said the division is working with all of its tenants to determine how it can safely reopen daycares that are in the schools.

The Office of the Minister of Children’s Services said that daycares in schools, churches or community centres can open in Phase 1, as long as they have permission as well as separate entrances, exits and washrooms that those working in and attending the daycare can use.

“There is no cap on the total number of people in a facility. However, centres must operate in cohorts of 10 (children and staff), and cohorts are to be separated from one another to limit spread,” the department said.

Guidelines for daycares and out-of-school child care centres can be found online.

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