Aurelia Butler

The U.S. dollar index is up roughly 3% this year. A Reuters poll showed a strong U.S. dollar will maintain the status quo in the near term, as markets brace for the possibility the Federal Reserve’s first interest rate cut gets delayed to the second half of this year.Gold should only follow the appreciation of the dollar, not go up more than the greenback shot, Karniol-Tambour also said during comments at the Sohn Conference in New York. Geopolitical fears could explain the metal’s price high prices, she added. Gold price has risen 11.5% so far this year, to $2,299.17 per ounce. The metal reached a record high on Wednesday, after Federal Reserve Chair Jerome Powell reiterated that recent readings on job gains and higher than expected inflation do not materially change the overall picture of economic policy this year.Karniol-Tambour said she favors U.S. stocks over bonds, but did not elaborate on the reasons. More

STANFORD, California (Reuters) -Federal Reserve officials including U.S. central bank chief Jerome Powell on Wednesday continued focusing on the need for more debate and data before interest rates are cut, a move financial markets expect to occur in June.”Recent readings on both job gains and inflation have come in higher than expected,” Powell said in a speech to the Stanford Graduate School of Business. While policymakers generally agree that rates can fall later this year, he said this will happen only when they “have greater confidence that inflation is moving sustainably down” to the Fed’s 2% target.His remarks repeated language the Fed has adopted as it tries to balance the risks of cutting interest rates before inflation is truly controlled with the risks of suppressing economic activity more than is needed.As new data arrives, however, as many questions have been raised as answered.In separate comments to CNBC on Wednesday, Atlanta Fed President Raphael Bostic said rates should likely not be reduced until the fourth quarter of this year. Bostic anticipates only one quarter-percentage-point cut will be appropriate in 2024, well below the three or more cuts most of his colleagues anticipate.”We’ve seen inflation kind of become much more bumpy,” Bostic said. “If the economy evolves as I expect, and that’s going to be seeing continued robustness in GDP and employment, and a slow decline in inflation over the course of the year, I think it will be appropriate for us to start moving down at the end of this year, the fourth quarter.”Few other Fed officials have been as specific in their public remarks about the interest rate outlook as Bostic, however.Fed Governor Adriana Kugler, for one, agreed with the assessment from Bostic, Powell and other officials that recent progress on inflation has been “bumpy.” Still, Kugler said in comments at Washington University in St. Louis, “I expect the disinflationary trend to continue” and help pave the way for rate cuts over the course of the year. “If disinflation and labor market conditions proceed as I am currently expecting, then some lowering of the policy rate this year would be appropriate,” she said, without commenting on the timing or extent of policy easing she expects.The Fed last month held its benchmark overnight interest rate steady in the 5.25%-5.50% range, where it has been since July. ‘LATER THIS YEAR’Powell’s prepared remarks and answers to questions at the event in Stanford, California, broke no new policy ground.As he did at his press conference at the end of the Fed’s last policy meeting on March 20, Powell maintained the baseline outlook that rates will fall “later this year,” and said that recent data did not “materially change the overall picture which continues to be one of solid growth, a strong but rebalancing labor market, and inflation moving down toward 2% on a sometimes bumpy path.” But neither has he hinted at when the Fed might loosen its grip on credit, with upcoming jobs data, including the March nonfarm payrolls report on Friday, and incoming inflation readings next week important in shaping the outlook for the central bank’s April 30-May 1 and June 11-12 policy meetings.”Given the strength of the economy and progress on inflation so far, we have time to let the incoming data guide our decisions on policy,” Powell said, with decisions made “meeting by meeting.Inflation, based on the Fed’s preferred measure, remains half a percentage point or more above the central bank’s 2% target, and recent progress has been minimal.”January and February showed a bit of firming in the inflation data,” Kugler said.But she also said recent inflation numbers “featured some atypical or seasonal factors that suggest a need to withhold judgment” before deciding that last year’s rapid progress back to the Fed’s 2% target had indeed slowed. Rather, Kugler said, she felt there was “still a bit of room” for supply improvements to slow the pace of price increases, “especially in the services sector, where solid labor supply growth will continue to ease wage and inflation pressures.” More

(Reuters) -The U.S. health regulator approved Basilea Pharmaceutica’s antibiotic for bacterial infections including multidrug-resistant strains, the FDA said on Wednesday.The Switzerland-based company was seeking approval of its antibiotic ceftobiprole for the treatment of three conditions – Staphylococcus aureus bacteremia (SAB), acute bacterial skin and skin structure infections, and community-acquired bacterial pneumonia.The approval expands options for patients who may have developed a resistance to currently available antibiotics. More than 2.8 million antimicrobial-resistant infections occur each year in the U.S., according to government data.The U.S. market for the intravenous antibiotic, which will be sold under the brand name Zevtera, is projected to be $5.50 billion and is probably going to be the “lion’s share of the market for this drug”, said Soo Romanoff, analyst at Edison Group.She added that the drug is differentiated from the current drugs available in the market which have not been updated for decades.The indications for the drug include SAB, which is a serious cause of bloodstream infection associated with high death rates, and acute bacterial skin and skin structure infections, which cause swelling of the skin.The approval was based on data from three separate late-stage studies for each indication in which Zevtera met the main goals and showed improvement in symptoms.The antibiotic is approved and marketed as Zevtera and Mabelio in several countries outside U.S. More

(Reuters) – A look at the day ahead in Asian markets.A pause in the global bond market selloff, stabilization on Wall Street and a softer dollar should all help support Asian markets on Thursday, as investors also turn their eyes to U.S. Treasury Secretary Janet Yellen’s visit to China. The Asia and Pacific economic calendar on Thursday is extremely light, with only Australian and Indian services purchasing managers index reports on tap, leaving investors to take their cue from global market moves and events.Chief among them will be Federal Reserve Chair Jerome Powell’s reiteration on Wednesday that policymakers can take their time deliberating over when to deliver their first rate cut, and that it remains “too soon” to judge whether recent stronger-than-expected inflation is “more than just a bump.” The recent whittling away of U.S. rate cut expectations – rates markets no longer fully expect a move in June or 75 basis points of easing in total this year – has recently begun to squeeze bond and stock markets around the world.But Powell didn’t scare the horses any further on Wednesday. In addition, figures also showed service sector prices pressures cooled significantly last month and the dollar had its steepest fall in a month, which should help Asian stocks on Thursday claw back some of the previous day’s losses.Yellen lands in China as evidence mounts that the economy may finally be emerging from its post-lockdown funk. The latest services PMIs strengthened that view, and Citi’s China economic surprises index is at its highest level in almost a year.The Caixin/S&P Global services purchasing managers’ index (PMI) edged up to 52.7 in March from 52.5 the month before, above the 50-mark that separates expansion from contraction for the 15th consecutive month.China’s tentative recovery is also supporting the continued rise in global commodity prices. Oil edged closer to $89 a barrel on Wednesday, copper hit a 13-month peak and gold printed yet another record high. Gold has risen in 26 of the last 35 trading days, in which time it has surged 15%.Investors will be wary of further aftershocks following a 7.2 magnitude earthquake that rocked Taiwan on Wednesday, the island’s biggest in 25 years. Shares in global chipmaking giant TSMC fell 0.9% after it said some facilities were evacuated following the quake, though workers have since returned.India’s services PMI figures, meanwhile, will be closely watched to see if they match the strength of the manufacturing PMI earlier this week. Manufacturing in March expanded at the fastest pace in 16 years and hiring increased at the strongest rate in six months.Here are key developments that could provide more direction to markets on Thursday:- Australia services PMI (March)- India services PMI (March)- U.S. Treasury Secretary Janet Yellen visits China (By Jamie McGeever; Editing by Josie Kao) More

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The “emu” is a portable brain scanner whose inventors are seeking a global impact, but with a name that proudly suggests its “made in Australia” roots.Scott Kirkland, co-founder and chief executive of Sydney-based EMVision, said local production of the device was vital if his company were to succeed. “Any critical steps in the manufacturing process [need] to be close to home,” he said. “That control is pivotal.”But companies such as EMVision have been few and far between in Australia, where manufacturing has taken a back seat to huge primary industries based on resources and agriculture.Fearing the repercussions for the country’s economic resilience, the government is trying to revitalise manufacturing with a A$15bn (US$9.7bn) fund led by a former Macquarie banker, in a bid to commercialise more Australian innovation. It is part of efforts by countries around the world to boost their manufacturing sectors, partly triggered by the way geopolitical tussles and the Covid-19 pandemic exposed the fragility of global supply chains.Ed Husic, Australia’s minister for industry and science, said that while Australia’s economy had thrived over the past three decades, recent trade tension with Beijing had shown how dependent some of its largest industries, including coal, timber and wine, were on exports to China. Meanwhile, the pandemic exposed Australia’s reliance on imports in areas such as medicine and car parts.“This is the biggest investment in manufacturing capabilities in Australia in living memory,” said Husic. “We need to reduce our vulnerability on supply chain shocks.”You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Australia’s traditional manufacturing industry has been in sharp decline since the 1970s when the country forged trade relations with China and opened up its economy to imports. Roy Green, an academic with the University of Technology Sydney, said further liberalisation of the economy in the 1980s and 1990s triggered a brief renaissance in export-led advanced manufacturing.A subsequent combination of a strong Australian dollar and rise in China’s export power triggered a further collapse, as industries including carmaking and steel shrank or disappeared.Dwindling support for the manufacturing sector has turned Australia into “the world’s quarry” and made it too reliant on the export of raw materials, said Green, who has advised previous governments on industrial policy. “The doctrine of comparative advantage [that] has prevailed for 30 years has suggested that we shouldn’t move up the value chain.”He cited lithium, a critical material for electric vehicle components of which Australia exports about half of the world’s supply but only captures 0.5 per cent of the value chain.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Australia is also a laggard in spending on research and development, which accounts for only 1.68 per cent of gross domestic product, far below the OECD average.Labor intends its National Reconstruction Fund to help redress the balance by making targeted investments in maturing companies in sectors including renewable energy, medicine, defence, agriculture and mining. It has appointed Ivan Power, a 20-year Macquarie Group veteran, to run the fund.Power said Australia could offer a big pool of private capital, including large pension funds. “We have enormous potential, and our job at the NRF is to help Australia’s economy fulfil that potential,” he said.However, he argued that the taxpayer-funded institution would need to learn from private investors such as Macquarie in assessing risk and understanding the assets it backs. “We need to be practical and sensible to capitalise on that potential, not Pollyannas,” he said.Michael Climpson, head of manufacturing at Grant Thornton, which compiles an annual report on Australian industry, said small and midsized manufacturers had faced challenges including rising wages and higher energy and freight costs in recent years, but many had continued to grow.“Australian manufacturing has declined, but those companies that have survived are more resilient,” he said.  You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Catherine Livingstone, the former chief executive of listed medical devices maker Cochlear and a former chair of government research agency CSIRO, said the country needed to consider whether it had the people, skills base and research infrastructure to match its ambitions for manufacturing — and to focus on what it wanted to deliver.“You need to be clear what the end is and then work back to the means,” she said.Christiaan Jordaan, founder and chief executive of Wollongong-based battery technology company Sicona, said that while the grand vision to rebuild the country’s manufacturing prowess was realistic, Australia could not go “toe-to-toe” with China and should instead “find its edge” in areas such as renewable energy.“We can’t just copy-paste what China is doing. We’ve got to do it differently,” he said. Sicona, which is developing a silicon composite material that improves the performance of batteries used for electric vehicles and energy grids, is building its first manufacturing facility in the US, where it has tapped into huge funding programmes from the Department of Energy. Jordaan said his company still intended to establish manufacturing in Australia to supply Asian energy and automotive customers. But he highlighted slow access to grants compared with in the US and a “gap in the middle” between government funding programmes aimed at start-ups and the type of larger businesses that the NRF will target.“It’s not all moonshine and roses,” he said of Australia’s attempts to meet its manufacturing ambitions.Husic said he was “under no illusions” as to the scale of the task ahead. “We are not nostalgically trying to resuscitate past glories,” he said. “It’s not about doing everything, it is about doing the important things.” More

“I expect the disinflationary trend to continue” and help pave the way for rate cuts over the course of the year, Kugler said in comments prepared for delivery at Washington University in St. Louis. “If disinflation and labor market conditions proceed as I am currently expecting, then some lowering of the policy rate this year would be appropriate,” she said, without commenting on the timing or extent of policy easing she expects.The Fed’s policy rate has been at 5.25-to-5.50% since July, and most Fed officials anticipate three quarter-point rate cuts by the end of 2024. They have been reluctant to signal a starting point, though, after progress towards lower inflation seemed to stall at the start of the year.”January and February showed a bit of firming in the inflation data,” Kugler said.But she also said recent inflation numbers “featured some atypical or seasonal factors that suggest a need to withhold judgment” before deciding that last year’s rapid progress back to the Fed’s 2% target had indeed slowed.Rather, Kugler said, she felt there was “still a bit of room” for supply improvements to slow the pace of price increases, “especially in the services sector, where solid labor supply growth will continue to ease wage and inflation pressures.”Demand, meanwhile, should ease.”I expect consumption growth to slow some this year,” she said, with households exhausting the savings buffers built during the coronavirus pandemic and now also facing “restrictive financial conditions.” More

(Reuters) – Scott Goodwin, co-founder of credit asset management firm Diameter Capital, said he sees value in investing in bonds and stocks of failed Signature Bank (OTC:SBNY).Goodwin said at the Sohn Conference, in New York, that recent joint-ventures sealed by the Federal Deposit Insurance Corp-run Signature with real estate investors such as Blackstone (NYSE:BX) are likely to allow the bank’s securities to generate returns within five years.In December, the FDIC sold 20% of its equity stake in a venture that holds a $16.8 billion real estate loan portfolio to some investors, including Blackstone Real Estate Income Trust.Spain’s Santander (BME:SAN) bought 20% of Signature’s real estate portfolio for $1.1 billion from the Federal Deposit Insurance Corporation (FDIC) also in December.Goodwin’s firm has bought positions in the bank’s securities.The investor estimates that the market capitalization of Signature Bank will jump to over $600 million from current $145 million. He also sees Signature’s bond prices more than doubling.Goodwin said the joint ventures, like the one forged with Blackstone in December, are likely to manage assets in a way that there will be some money left for investors in Signature’s securities in five years.His thesis, he added, is not related to his optimism about the real estate market. “We’re not bullish on CRE (commercial real estate). We’re net short (CRE) as a firm.” More