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US Treasury to slow pace of longer-dated debt issuance
Taken from FT Thursday, 2 November 2023
Borrowing plans announced over summer helped push government bond yields to multiyear highs
The US Treasury department is slowing the pace at which it issues longer-dated debt, following a surge in borrowing costs that has roiled global markets.
The announcement on Wednesday follows the Treasury’s decision in August to dramatically increase its borrowing across the board, a move that in subsequent months sent yields on 10- and 30-year US government bonds to their highest levels in 16 years.
The Treasury said on Wednesday that it would continue to increase issuance of shorter- dated notes at the pace it set three months ago, while slowing the pace of 10- and 30-year bond issues.
To satisfy its borrowing needs, the Treasury will raise the auction sizes of the two- and five- year notes by $3bn per month, with a rise in 10-year note auctions by $2bn and in 30-year bond auctions by $1bn. In August, the Treasury had increased its 10-year auctions by $3bn and its 30-year auctions by $2bn.
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Tata Steel: Unions condemn plans for UK's biggest steelworks
Taken from BBC News Thursday, 2 November 2023
Unions have claimed Tata Steel was planning to close the bulk of its operation at the UK's biggest steelworks.
Tata's announcement about the future of its Port Talbot plant was anticipated on Wednesday, but it is now not clear when its statement will be made.
Unions have responded ferociously to the proposals after they were briefed by Tata officials.
Tata said it was not in a position to make a statement about its plans.
Previously the GMB said the company would have "fired the starting gun on the death of UK steel".
GMB, along with Community and Unite, promised to oppose the plans with every means at their disposal.
The Labour MP for the area, Stephen Kinnock, said it would be "utter madness" to close the heavy end of the steelworks.
He told BBC Wales that a proper transition plan was needed: "You need a bridge from where we are now to where we want to be.
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Can Taiwan’s opposition presidential candidates team up?
Taken from FT Thursday, 2 November 2023
Failure by Hou Yu-ih and Ko Wen-je to reach a deal could be disastrous for their hopes of calmer ties with China
Taiwan’s presidential election is still more than two months away but its decisive battle is being fought now — in Taipei’s political back rooms.
The two leading opposition candidates in what is currently a four-way presidential race are wrestling over a deal to join forces that could reshape a January 13 election of crucial significance for regional peace and stability.
For months Hou Yu-ih, nominated by the main opposition Kuomintang, and Ko Wen-je, founder of the small centrist Taiwan People’s party, have been neck and neck in opinion polls, behind vice-president and frontrunner Lai Ching-te from the ruling Democratic Progressive party. Terry Gou, the billionaire founder of Apple supplier Foxconn, trails in fourth place.
The election to choose a successor to Tsai Ing-wen, the current DPP president, will have far-reaching implications for relations with China, which claims Taiwan as part of its territory and threatens to attack if Taipei refuses unification indefinitely. Taiwan has become the biggest driver of increasing tensions between the US and China in recent years.
Whereas China has denounced Lai as a separatist, Hou and Ko have pledged to restart dialogue with Beijing, which cut off talks across the Taiwan Strait when Tsai took office in 2016.
Hou and Ko appeal to different pools of voters, but for both the only prospect of victory appears to be to team up, in a single-round, first-past-the-post election where backing for the DPP appears only lukewarm.
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US upstages Rishi Sunak with AI regulation plan
Taken from FT Thursday, 2 November 2023
Gina Raimondo announces new safety institute on day UK prime minister begins Bletchley Park summit
The US has said it is setting up its own institute to police artificial intelligence, on the day that UK prime minister Rishi Sunak hosted a summit to help shape global rules and scrutiny for AI.
Wednesday’s announcement, by Gina Raimondo, US commerce secretary, came despite the UK’s own plans to set up an international AI Safety Institute — a move she said she “welcomed and applauded”.
Raimondo said the US institute would “develop best-in-class standards . . . for safety, security and testing” and “evaluate known risks and emerging risks of AI at the frontier”.
The two-day summit at Bletchley Park in England and attended by tech leaders including Elon Musk and OpenAI’s Sam Altman is part of a UK bid to help shape global rules and scrutiny for AI.
While British officials played down any divergence with Washington, one tech chief executive said the US stance meant that the country, home to some of tech’s biggest titans, did not “want to lose our commercial control to the UK”.
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Only 2% of freight between Melbourne and Sydney goes by rail – putting Australia’s emissions targets at risk
Taken from The Guardian Thursday, 2 November 2023
Freight transported across Australia by rail has dwindled to such minuscule levels that emissions targets will be unachievable without policies to counter the country’s over-reliance on heavy and polluting trucks, the industry has warned.
The share of non-bulk freight – including manufactured goods, produce, post, foods, drinks and most other items – transported by rail in Australia has now dropped to 17% and just 11% across the eastern seaboard, according to new research released by the Australasian Railway Association (ARA) and Freight on Rail Group, a coalition of operators.
Between Melbourne and Sydney, just 2% of freight is taken by rail, the research found, down from about 40% in the 1970s, according to Bureau of Infrastructure and Transport Research Economics.
The popularity of trucking has emerged alongside underinvestment in tracks on key corridors and significant roads spending that means large B-doubles can complete some key trips faster.
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Canadian Central Bank Governor Says Rate Cuts Possible When Core Inflation Is on Downward Trend
Taken from MarketWatch Thursday, 2 November 2023
Bank of Canada Gov. Tiff Macklem told the country's senators on Wednesday that central bank officials can entertain interest-rate cuts when there is clear evidence of a slowing in core inflation.
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Canada govt spending to feed inflation next year, central banker says
Taken from Yahoo Finance (Reuters) Thursday, 2 November 2023
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.
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U.S. senators oppose Indonesia FTA that paves way for nickel subsidies
Taken from Nikkei Asia Thursday, 2 November 2023
Southeast Asian country's mining industry is dominated by China, lawmakers say
U.S. lawmakers have expressed concern about signing a limited free trade agreement with Indonesia, seeking to block the Southeast Asian nation's critical minerals from benefitting indirectly from subsidies created under the Inflation Reduction Act (IRA).
In a letter sent last week to U.S. Trade Representative Katherine Tai, Treasury Secretary Janet Yellen, Energy Secretary Jennifer Granholm and Commerce Secretary Gina Raimondo, a bipartisan group of senators argued that the country's mining and refining industry is dominated by companies from China.
"Given the extraordinary taxpayer resources at play, we strongly believe that eligibility for the critical minerals credit must prioritize domestic producers and existing free trade agreement partners," such as Canada and Australia, the lawmakers wrote.
The senators acknowledged that Indonesia plays a strategic role in the Indo-Pacific region and has the potential to become a partner through the Indo-Pacific Economic Framework for Prosperity, but wrote "if expansion is deemed necessary, it should be directed toward countries with strong labor, human rights and environmental standard."
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Japan to invite Central Asian foreign ministers to G7 meeting next week
Taken from Nikkei Asia Thursday, 2 November 2023
Japanese Foreign Minister Yoko Kamikawa plans to invite counterparts from five Central Asian countries to participate online in the Group of Seven foreign ministers meeting here next week, Nikkei has learned.
Ministers from Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan and Kyrgyzstan are expected to attend a session that focuses on the region, to be held on Wednesday. Discussions could also touch on the war between Israel and Hamas, as well as on Russia's invasion of Ukraine and on the Indo-Pacific region.
The invitation is part of efforts by the G7 to increase engagement with Central Asia.
The risks posed by the region's overdependence on Russia have grown clearer since the Ukraine invasion. The G7 and China see this as an opportunity to increase their outreach.
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China agrees to nuclear arms-control talks with US, news report says
Taken from SCMP Thursday, 2 November 2023
China has agreed to hold nuclear arms control talks with the United States next week, the first since the Obama administration, The Wall Street Journal reported on Wednesday.
The discussions are aimed at avoiding a dangerous three-way arms race between the United States, China and Russia but do not constitute the beginning of formal negotiations toward limits on nuclear weapons, the Journal reported.
A spokesperson for the US State Department did not immediately respond to a request for comment.
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Brazil central bank cuts rates by 50 bps, signals further reductions ahead
Taken from Yahoo Finance (Reuters) Thursday, 2 November 2023
Brazil's central bank cut its benchmark interest rate by 50 basis points on Wednesday for the third time in a row and once again signaled more of the same for its upcoming meetings.
The bank's rate-setting committee, known as Copom, unanimously reduced its Selic benchmark interest rate to 12.25%, matching the expectations of all 40 economists polled by Reuters.
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Schumer and other Senate Democrats call for a federal probe of huge oil deals by Exxon and Chevron
Taken from Yahoo Finance (AP) Thursday, 2 November 2023
Senate Majority Leader Chuck Schumer and 22 other Democratic senators are urging federal regulators to investigate multibillion-dollar acquisitions by oil giants ExxonMobil and Chevron, saying the deals could lead to higher prices at the gas pump.
In a letter Wednesday to the Federal Trade Commission, the lawmakers said Exxon's proposed $60 billion acquisition of Pioneer Natural Resources and Chevron’s proposed $53 billion purchase of Hess Corp. are two of the largest petroleum deals in U.S. history and could violate antitrust law.
“These deals are likely to harm competition, risking increased consumer prices and reduced output throughout the United States,'' the senators wrote. The deals threaten to harm small operators and suppress wages, they added.
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DoubleLine's Gundlach expects interest rates to fall as US economy worsens
Taken from Yahoo Finance (Reuters) Thursday, 2 November 2023
DoubleLine Capital CEO Jeffrey Gundlach expects interest rates are about to trend lower as the U.S. economy deteriorates further and tips into a recession in early 2024, he said in an interview with CNBC on Wednesday.
"One thing that the market is going to have to confront is we cannot sustain these interest rates and this deficit any longer," the head of the investment management firm said.
Gundlach's comments came after the U.S. Federal Reserve held interest rates steady earlier in the day but left the door open to a further increase in borrowing costs. The Fed's policy statement acknowledged the U.S. economy's surprising strength but also nodded to the tighter financial conditions faced by businesses and households.
Gundlach said if the economy weakened, the central bank was likely to cut rates by 200 basis points and not 50, adding interest expense issues may cause the next "financial crisis".
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1 年Interesting... The slowdown in US Treasury debt issuance, AI regulation, central bank interest-rate considerations, and international trade agreements reflect a complex landscape.
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1 年I'm curious about the strategies the US treasury department will implement to stabilize borrowing costs.????