Aurelia Butler

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

The proposals, passed on Wednesday, will be taken up for discussion by the full lower house after lawmakers return to session in September.The changes would also prevent the exploitation of water in areas with water scarcity, with the exception of extraction in populated areas for domestic use, according to a statement released Wednesday night.The changes are part of a package of constitutional reforms presented in February by President Andres Manuel Lopez Obrador, which contains other proposals, including one to restructure the judiciary.In Mexico, constitutional changes must be approved by a two-thirds vote in the plenary session of the both the lower house and the Senate, and by the majority of local congresses. In the June elections, Lopez Obrador’s ruling Morena party and its allies achieved a qualified majority in the lower house and were just two seats short in the Senate.Lopez Obrador has criticized the mining contracts with private companies signed by his predecessors and says that his administration has not granted any new private concessions in the sector.The Mexican Mining Chamber (Camimex) opposes the ban on open-pit mining, saying such a prohibition would cause a 1% contraction in the country’s GDP and threaten some 200,000 jobs.Regarding the genetically modified corn, the proposal comes as Mexico and the United States have an ongoing dispute at a panel of the U.S.-Mexico-Canada Agreement. The lower house committee’s reform would allow for the entry of genetically modified corn into Mexico only for non-human consumption and only if the grain dos not have the capacity to germinate. More

NEW YORK (Reuters) -U.S. Treasury yields surged on Thursday after strong economic data all but eliminated fears about a hard economic landing and curtailed expectations that an aggressive Federal Reserve easing was coming next month.The Commerce Department said retail sales rose 1.0% last month after a downwardly revised 0.2% drop in June. Economists polled by Reuters had forecast retail sales advancing 0.3% after they were initially reported as unchanged in the previous month. Also out was news that 227,000 Americans filed for unemployment benefits last week, fewer than the 235,000 expected and the upwardly revised 233,000 claims the prior week.The data restored confidence that was jolted by a surprisingly weak employment report a couple of weeks ago, and reinforced a picture of improving inflation from July Producer Price Index and Consumer Price Index releases this week. “This will take 50 basis points in September off the table. (I) still think that 25 basis points make sense, just because inflation continues to ease and we got a couple of good reports, PPI and CPI adding to that,” said Steve Wyett, chief investment strategist at Bok Financial (NASDAQ:BOKF) in Tulsa, Oklahoma.”We have the all-important employment data before the next Fed meeting, but this should reduce the feelings that the economy is imminently going into a recession.”Thursday’s rise in the two-year note yield looked set to be the biggest daily jump in about four months. The 10-year yield initially was tracking to its biggest basis point gain in weeks before paring slightly. “While it’s pretty large for a one-day move, in the context of the move lower in yields over the most recent period here, it’s really just a little bit of a giveback, and to us makes sense,” said Scott Pike, senior portfolio manager at Income Research & Management in Boston.Subsequent news that July U.S. industrial production fell 0.6%, more than the 0.3% fall expected, barely affected the yield trajectories, since manufacturing is a smaller part of the economy than the 70% made up by the consumer.Divided sentiment since the Aug. 2 jump in July’s unemployment rate to 4.3% between traders betting on a 50 basis point cut out of the Sept. 17-18 Federal Open Market Committee meeting and a more cautious 25 bps cut has resolved for now, favoring the latter.Fed funds futures indicate traders see the odds of a 25 bps cut in the 5.25%-5.5% policy rate at about 76%, up from 65% late Wednesday, according to LSEG calculations. Meanwhile St. Louis Fed President Alberto Musalem and Atlanta Fed President Raphael Bostic on Thursday lined up behind the possibility of an interest rate cut at the U.S. central bank’s policy meeting next month, reversing their previous skepticism about lowering borrowing costs too soon.”Now that inflation is coming into range, we have to look at the other side of the mandate, and there, we’ve seen the unemployment rate rise considerably off of its lows,” Bostic said in an interview with the Financial Times. “But it does have me thinking about what the appropriate timing is, and so I’m open to something happening in terms of us moving before the fourth quarter.”The yield on the benchmark U.S. 10-year note rose 10.6 basis points to 3.928%, wrapping up with the biggest absolute gain in a week. The 2-year note yield, which typically moves in step with interest rate expectations, reached its highest since Aug. 2, and was last up 15.9 basis points at 4.1055%, which would be the biggest since a 22.2 bp surge on April 10.The 30-year bond yield rose 7.7 basis points from late Wednesday to 4.1856%.The closely watched gap between yields on two- and 10-year Treasury notes, considered a gauge of growth expectations, was at negative 18 bps, deepening an inversion from its late Wednesday reading of negative 12.8 bps. An inverted yield curve is generally seen as pointing to a recession. Last week, hopes of an aggressive 50 bps Fed easing in September to counter a slowdown briefly shifted the gap between 2- and 10-year yields to a positive 1.5 bps, the first time the curve had a more normal upward slope since July 2022. More

(Reuters) – U.S. corporate bond spreads, the premium over Treasuries that companies pay for debt, are starting to recoup some lost ground after recent strong economic data increased hopes for interest rate cuts and calmed recession fears.Investment-grade corporate bond spreads on Wednesday tightened by 3 basis points to 105 basis points (bps), according to the ICE BofA Corporate U.S. Corporate Index. Junk bond spreads finished Wednesday at 346 bps, also 3 bps tighter this week, according to the ICE BofA High Yield Index.Both high-grade and junk bond spreads retraced much of early August’s dramatic widening, after surprisingly weak July jobs and productivity reports prompted concerns of a sharp economic downturn and potential recession.Economic data this week appears to have calmed recession fears. U.S. consumer prices in July rose at their slowest pace in nearly 3-1/2 years, while the cost of services fell by the most in nearly 1-1/2 years.Other data this week pointed to economic growth, including July retail sales that rose more than expected. “The primary driver of tighter credit spreads this week is the Goldilocks narrative of growth without inflation,” said Nelson Jantzen, a strategist who covers high-yield bonds, leveraged loans and distressed leveraged credit at JPMorgan.The data has further assured credit investors that the Federal Reserve has finished hiking interest rates and will begin cutting rates as soon as September. Forecasts now see a 76.5% probability of a 25 bp Fed rate cut in September, according to CME’s FedWatch Tool, up from 64% on Wednesday. “Recent data has given the market more comfort around the likelihood of more accommodative policy at the next FOMC meeting, and this has given investors increased confidence that a substantial rise in rates is less likely,” said Blair Shwedo, head of fixed-income sales and trading at U.S. Bank.Renewed optimism was helped by an overall lack of negative surprises in borrowers’ second-quarter earnings disclosures, market participants said.”Financials aside, consumer discretionary and industrial companies were among the next strongest performers during Q2 earnings season, likely providing some support for services and basic material sectors during the widening” of credit spreads in early August, said Dan Krieter, director of fixed income strategy at BMO Capital Markets Almost $25 billion in new high-grade debt has sold this week, versus forecasts of a weekly total of $30 billion heading into the week, said Krieter.Junk debt issuance has also recovered this week following its lightest showing of 2024 last week, albeit at a slower pace than high-grade deals, said Jantzen. More