Aurelia Butler

Milei, an outsider economist whose party has a minority in Congress, took office in December and used his powers of presidential decree to roll out measures ranging from privatizations to labor reforms. The decree, which originally contained over 600 articles, was rejected in a vote of 42-25, with four abstentions, and can only be definitively discarded if it is also rejected by Argentina’s lower house. The president’s party has a minority in both chambers.Thursday’s vote dealt a second legislative defeat after lawmakers last month put the brakes on a separate proposed package of sweeping reforms.Opposition Senator Martin Lousteau said his vote against the decree on Thursday was “very simple: It is unconstitutional.” The December decree, issued just days into the new president’s government, kicked off Milei’s shock treatment approach to Argentina’s chronic economic ills, a plan that included his devaluation of the local peso by more than 50%.The government’s measures have managed to move the country’s fiscal and trade imbalances in a favorable direction, while also taking a toll on much of the population. Annual inflation surged to 276% last month, with poverty levels climbing to 57% of the population. More

Joe Biden has declared his opposition to Nippon Steel’s proposed $14.9bn purchase of US Steel, saying it was “vital” for the American steel company to remain “domestically owned and operated”.In a statement on Thursday, the US president characterised his decision as an effort to side with American workers, at a time when he is under pressure in his re-election campaign to retain the blue-collar vote in the face of aggressive courting by his Republican rival Donald Trump.But the declaration risks damaging Washington’s relationship with Japan, one of its closest allies, even as the US is attempting to rally allies and partners in the region to contain a frequently belligerent regime in Beijing.“It is important that we maintain strong American steel companies powered by American steel workers,” Biden said. The White House said the president on Thursday called David McCall, international president of the United Steelworkers union, to “reiterate that he has the steelworkers’ back”.Biden has described himself as the most pro-union president in US history and is banking on the support of organised labour in November. US Steel’s shares dropped a further 6.4 per cent to $38.26 on Thursday, having fallen by more than 12 per cent on Wednesday.Biden’s intervention comes a day after the Financial Times first reported that he was preparing to voice concerns about the Japanese group’s proposed acquisition of the Pennsylvania-based steelmaker.Nippon Steel last week formally filed the deal with the Committee on Foreign Investment in the US (Cfius), the inter-agency panel that vets inbound deals for national security threats. The Japanese group reacted to the intervention by arguing that its deal would increase competitiveness in industries that need American steel and would strengthen US supply chains and economic defences against China. “We are progressing through the regulatory review, including Cfius, while trusting the rule of law, objectivity and due process we expect from the US government,” Nippon Steel said. “We are determined to see this through and complete the transaction.”The intervention by Biden raises questions about how Cfius will proceed in its investigation, however.“Based on past practice, it is likely that Cfius would have been on track to clear the deal, likely with some conditions related to protection of domestic steel production and related jobs,” said Emily Kilcrease, a Cfius expert at the Center for a New American Security think-tank. “But, with the president’s statement opposing the deal, Cfius is potentially in the uncomfortable position of having to reverse engineer their risk assessment to fit a politically determined outcome.”The intervention comes less than a month before Japanese prime minister Fumio Kishida is due to arrive in Washington for a high-profile visit designed to underscore the importance of the US-Japan alliance.Heino Klinck, a former top Pentagon Asia official, said the timing of Biden’s statement was “inopportune to say the least” given Kishida’s visit. He said it also came as Congress debates legislation to ban TikTok and could feed a Chinese government narrative about xenophobia in the US.The move caps months of debate within the White House about how to respond to a deal that has sparked a political backlash in Washington and Pennsylvania, a critical swing state.Trump, who has also courted union workers in Pennsylvania and in other big industrial states, last month vowed to “absolutely” block the Nippon Steel deal if elected to another term in the White House.“I would block it instantaneously. Absolutely,” he told reporters after meeting last month with the International Brotherhood of Teamsters, one of the largest US labour unions. Trump said it was a “horrible thing” that US Steel might be sold to a foreign entity.“We saved the steel industry, now US Steel is being bought by Japan,” Trump added. “It’s so terrible.”United Steelworkers, which is based in Pittsburgh, has long opposed the takeover.“Allowing one of our nation’s largest steel manufacturers to be purchased by a foreign-owned corporation leaves us vulnerable when it comes to meeting both our defence and critical infrastructure needs,” United Steelworkers said on Thursday. “The president’s statements should end the debate: US Steel must remain ‘domestically owned and operated’.”Cleveland-Cliffs, a domestic rival whose $7.3bn bid US Steel rejected last August, signalled on Thursday that it could bid again should Nippon Steel drop out. Chief executive Lourenco Goncalves told Bloomberg that Cleveland-Cliffs would consider a bid “in the $30s” and would have the United Steelworkers’ backing. Bob Casey, the Democratic US senator from Pennsylvania who is also facing a tough bid for re-election in November, immediately welcomed Biden’s statement, saying he had “long held concerns that this sale could be a bad deal for our workers.”Casey, who is likely to go head-to-head in November against Republican candidate and former Bridgewater executive David McCormick, added his “number one priority” was “protecting union jobs”, adding: “I’ll work like hell against any deal that leaves our steelworkers behind.” More

Market watchers widely believe Beijing will continue to prioritise the stability of the yuan, despite widespread views that the struggling economy needs more stimulus.Cutting rates before a move by the Fed or other major central banks would widen yield differentials, potentially putting more pressure on the currency, which has depreciated 1.3% against the dollar so far this year despite persistent central bank efforts to shore it up.In a Reuters poll of 36 market watchers conducted this week, 32, or 89%, of respondents expected the People’s Bank of China (PBOC) to keep the interest rate on one-year medium-term lending facility (MLF) loans unchanged at 2.50% when rolling over 481 billion yuan ($66.86 billion) worth of such loans. The remaining four participants projected a marginal interest rate reduction.”We maintain our view that the PBOC will not front-run the Federal Reserve for a policy rate cut,” said Samuel Tse, economist at DBS.”After all, the authority aims at stabilising the exchange rate to forestall further capital outflows. Stabilising economic data also leaves room for a delayed rate cut decision.”The Fed is widely expected to cut interest rates this year if inflation cools, and markets now see a 65% chance of a rate cut in June, though that has edged down from 71% earlier in the week, according to LSEG’s rate probability app. The likelihood of a July rate cut sits around 83%.A Fed rate cut or series of cuts would offer leeway for its Chinese counterpart to lower borrowing costs to prop up economic growth, traders and analysts said.”China’s policy rate adjustment may have to wait until when the timing of the U.S. interest rate cut becomes clear,” said a bond fund manager in Beijing, expecting the PBOC to fully roll over the maturing MLF loans and even offer some fresh funds into the financial system on Friday.However, PBOC Governor Pan Gongsheng said last week the bank would keep the yuan basically stable and sent a dovish message to the market by saying China had “rich monetary policy tools at its disposal.””We expect more monetary policy easing in China to support growth,” economists at Barclays said in a note.”We expect a 10-basis-point cut in the policy rate in both Q2 and Q3, and look for a 25-50 bps cut in banks’ reserve requirement ratio (RRR) in Q2 and another 25-50 bps RRR cut in Q3.”($1 = 7.1942 Chinese yuan) More

(Reuters) – A look at the day ahead in Asian markets.Asian markets are likely to come under downward pressure at the open on Friday, following the sharp rise in U.S. bond yields and the dollar the previous day on the back of yet another hotter-than-expected U.S. inflation report.Wall Street’s late slide on Thursday – the S&P 500 and Nasdaq both shed 0.3% – could tempt investors to play safe ahead of the weekend and steer Asian equities away from what would be their seventh weekly rise in eight.The MSCI Asia ex-Japan index would need to avoid falling 0.5% or more to notch a weekly gain. Japan’s Nikkei 225, on the other hand, goes into Friday’s session down more than 2% on the week and on track for its worst week this year. The pullback in Japanese stocks should come as little surprise – the Nikkei hit a record high above 40,000 points last week and the Bank of Japan next week could deliver its first interest rate hike in 17 years. The Asia and Pacific economic calendar on Friday includes South Korean trade figures and import and export prices, New Zealand’s manufacturing PMI for February, and Japan’s ‘tertiary index’ gauge of conditions in the services sector.Japan watchers are also awaiting the findings of a preliminary survey of national wage round talks from labor union umbrella group Rengo. Sources have told Reuters that signs of strong wage growth could be the switch that flips the Bank of Japan’s into raising rates next week.Japanese news agency Jiji reported on Thursday that the BOJ has started to make arrangements to end its negative interest rate policy next week.The main indicator though will probably be Chinese house prices for the month of February. They fell at an annual rate of 0.7% in January, the biggest decline in almost a year, and have been declining almost every month since April 2022.A turnaround in the embattled property sector is needed for the broader economy to get going again, and to convince investors that the market and economic nadir has passed. Curiously, China’s economic surprises index this week rose to its highest level since October, begging the question: strong data, or lousy expectations to begin with? Maybe a bit of both. A reasonably bullish case, however, could be made for Asian risk assets on Friday. Even though the U.S. 10-year yield and dollar had their biggest rises in a month and Fed rate cut expectations were pared back, Wall Street only fell 0.3%.Chipmakers and tech stocks across the region could also get a boost from Apple (NASDAQ:AAPL) supplier Foxconn saying on Thursday that it expects a significant rise in revenue driven by booming demand for artificial intelligence servers.Here are key developments that could provide more direction to markets on Friday:- China house prices (February)- Japan tertiary index (January)- New Zealand manufacturing PMI (February) (By Jamie McGeever) More

Despite the beauty retailer’s efforts to boost sales through steep discounts, inflation-weary consumers cut back spending on discretionary items such as cosmetics and hair care products. Although pressure from retail shrink, where inventory is lost or damaged due to theft and breakage, has risen over the past few years, it persists as a challenge for retailers with several companies flagging an impact on margins. Ulta Beauty now expects its annual operating margin to range between 14.0% and 14.3%, down from 15.0% reported in 2023. The company forecast annual adjusted earnings per share between $26.20 and $27 per share, the mid-point of which fell below analysts’ average estimate of a profit of $27 per share, according to LSEG data.It expects fiscal 2024 revenue to be between $11.7 billion and $11.8, largely above LSEG estimates of $11.69 billion. The beauty retailer reported a profit of $8.08 per share for the fourth quarter ended Feb. 3, compared with expectations of $7.53.Quarterly revenue rose about 10% year-on-year to $3.6 billion, ahead of analysts’ expectations of $3.53 billion.Shares of the Illinois-based company hit an intra-day record high on Thursday before closing down at $565.44. The stock has surged around 15% in 2024. More

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NEW YORK (Reuters) -U.S. Treasury yields and the dollar climbed on Thursday, while a gauge of global stocks stumbled after a stronger than expected reading on U.S. inflation cast doubt on the timing and magnitude of interest rate cuts from the Federal Reserve this year.The producer price index (PPI) for final demand rose 0.6% last month, above the 0.3% climb forecast by economists polled by Reuters, after advancing by an unrevised 0.3% in January, the Labor Department said. A reading on consumer inflation earlier this week also showed some stickiness in inflation.Other data showed U.S. retail sales rebounded last month with a 0.6% rise, but were below the 0.8% estimate, while weekly initial jobless claims fell to 209,000 versus the 218,000 forecast. “Fed confusion – where we started with ‘Oh my God, they’re going to cut six times or eight times this year,’ now it’s ‘They’re definitely going to cut three times this year,'” said JJ Kinahan, CEO of IG North America and president of Tastytrade in Chicago.”What people are seeing in the inflation numbers, what it looks like is starting to maybe turn a little bit on job numbers, there’s just all this conflicting data so what the easiest thing to do is to not do a lot.”The Dow Jones Industrial Average fell 137.66 points, or 0.35%, to 38,905.66, the S&P 500 lost 14.83 points, or 0.29%, to 5,150.48 and the Nasdaq Composite shed 49.24 points, or 0.30%, to 16,128.53. Ahead of a Fed policy meeting next week where a rate cut has been essentially ruled out, the market has trimmed the odds of a cut at the June meeting, with expectations for a cut of at least 25 basis points at 59.9%, according to CME’s FedWatch Tool, down from 81.7% a week ago.The yield on benchmark U.S. 10-year notes jumped 9.8 basis points to 4.29%, from 4.192% while the 2-year note yield, which typically moves in step with interest rate expectations, rose 6.9 basis points to 4.6914%.The 10-year yield was poised for its biggest one-day increase since Feb. 13.MSCI’s gauge of stocks across the globe fell 2.75 points, or 0.35%, to 772.53, while the STOXX 600 index closed down 0.18% after hitting a third straight intraday record high. Europe’s broad FTSEurofirst 300 index shed 3.37 points, or 0.17%.The Bank of Japan also meets next week. Officials including Governor Kazuo Ueda have sought to temper expectations of an imminent shift out of negative interest rates, which has set the yen on course for its worst weekly performance in a month.The dollar index gained 0.53% at 103.29, with the euro down 0.5% at $1.0891.Against the Japanese yen, the dollar strengthened 0.32% at 148.22. The Japanese currency had briefly firmed against the greenback after Jiji news agency reported the Bank of Japan had started to make arrangements to end its negative interest rate policy at the March 18-19 meeting. Investors have been pricing in the chance of a change in policy this month, particularly after news of big pay hikes from some of Japan’s biggest companies at this year’s annual wage negotiations.In commodities, U.S. crude settled up 1.93% at $81.26 a barrel and Brent settled at $85.42 per barrel, up 1.65% on the day, the highest settlement price since Nov. 6, after the International Energy Agency’s (IEA) latest oil market report predicted a tighter market in 2024. More