Aurelia Butler

The attacks, targeting a route that accounts for about 15% of the world’s shipping traffic, have pushed several shipping companies to reroute their vessels.Below are companies’ responses to the disturbances (in alphabetical order):AB FOODSThe Primark-owner is monitoring the situation, but its supply chains are capable of some adjustment, a spokesperson said, adding that so far it saw no need to be concerned.BP (NYSE:BP) The oil major on Dec. 18 said it had temporarily paused all transits through the Red Sea.DANONEThe French food group said in December that most of its shipments had been diverted, increasing transit times. Should the situation last beyond 2-3 months, Danone will activate mitigation plans, including using alternate routes via sea or road wherever possible, a spokesperson said. DHL The German logistic company, which does not operate ships but uses them to transport containers, on Jan. 8 advised its customers to take a close look at how they manage inventories.ELECTROLUXThe Swedish home appliance maker has set up a task force to find alternative routes or identify priority deliveries to try to avoid disruptions. It sees a limited impact on deliveries for now.EQUINORThe Norwegian oil and gas firm on Dec. 18 said it had rerouted vessels that had been heading towards the Red Sea.ESSITYThe maker of brands such as Libresse and TENA said it was staying in contact with impacted suppliers to ensure continued flow of goods, but added the impact on its business was limited due to the low number of supplies moving via the Suez Canal.EUROPRISThe Norwegian retailer, which imports 35-40% of goods sold from Asia via sea freight, on Jan. 5 said it had not considered other shipping options as this would increase costs. It said longer shipping times were within its safety margin and no significant challenges were expected.GEELY Geely, China’s second-largest automaker by sales, said on Dec. 22 its EV sales would likely be impacted by a delay in deliveries, as most shipping firms it uses to export EVs to Europe sail around the Cape of Good Hope.IKEAThe Swedish ready-to-assemble furniture retailer on Dec. 19 said the situation would result in delays and may cause availability constraints for certain products. “We are evaluating other supply options to secure the availability of our products,” it said.KONEThe Finnish elevator maker said the situation may in some cases delay shipments by 2-3 weeks, but most of its customer deliveries should stay on schedule. Kone said it had prepared for the disruptions by seeking alternative delivery methods and routes.LIDLLidl unit Tailwind Shipping Lines, which transports non-food goods for the discount supermarket chain and goods for third-party customers, said it was sailing around Africa for now.MOSAIC The U.S. fertilizer company said on Dec. 18 it had rerouted a couple of U.S.-bound shipments around Africa.NEXT The British clothing retailer’s CEO on Jan. 4 said sales growth would likely be moderated if disruptions continued through 2024. He said Next, which sources the majority of its products from Asia, could mitigate this through earlier ordering or using some air freight.SAINSBURY’SBritain’s second largest grocer said on Jan. 10 it was in regular contact with the UK government about the Red Sea disruptions.”We’re making sure that we plan the sequencing of product from Asia Pacific so that we get products in the right order,” CEO Simon Roberts said, noting that long term contracts with shippers “mitigate any cost impact as far as possible”.TSMC,The world’s top contract chipmaker said on Dec. 19 it did not anticipate a significant impact on its operations.VOLKSWAGEN The German carmaker on Dec. 20 said rerouting of shipments would result in around two weeks longer journeys, but it had not seen any problems so far.VOLVO CARThe Swedish automaker said it was affected by the disruptions and was investigating their potential impact, but saw no impact on its ability to reach global wholesale and production targets.WHIRLPOOLThe appliances maker said in December it was closely monitoring logistics issues in the region to help mitigate risks as they arise, adding there was no impact to its business so far.YARAThe Norwegian fertilizer maker told Reuters it was only mildly impacted for now, though the Red Sea is an important supply route for the company. More

The world’s largest contract chipmaker, whose customers include Apple (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA), has benefited from a boom in artificial intelligence applications that has helped it weather the tapering off of pandemic-led demand. Revenue in the final three months of last year came in at T$625.5 billion ($20.10 billion), according to Reuters calculations, compared with $19.93 billion in the year-ago period.That beat Taiwan Semiconductor Manufacturing Co’s (TSMC) previous prediction for fourth-quarter revenue being in a range of between $18.8-19.6 billion, and also beat an LSEG SmartEstimate of T$617.1 billion drawn from 21 analysts.SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate.For December alone, TSMC reported that revenue fell 8.4% year-on-year to T$176.3 billion, which was down 14.4% compared with the previous month.TSMC, Asia’s most valuable publicly listed company with a market capitalisation of $491 billion, did not provide any details or forward guidance in its brief revenue statement.It is due to report fourth-quarter earnings on Jan. 18, where it will also update its outlook for the current quarter and the year.TSMC’s Taipei-listed shares closed down 0.3% on Wednesday ahead of the release of the sales data. The broader market ended down 0.4%.The shares surged 32% in 2023, compared with a 27% gain for the broader market. ($1 = 31.1220 Taiwan dollars) More

PARIS (Reuters) – French President Emmanuel Macron and his new Prime Minister Gabriel Attal worked on Wednesday to pull together a cabinet, a day after Macron appointed the 34-year-old media-savvy loyalist to breathe new life into his second term.Attal has promised to be bold and fast to help the middle class weather the rising cost of living, signalling a desire by Macron to move beyond divisive reforms and improve his centrist party’s chances in European Parliament elections in June.Little has leaked on the formation of the new cabinet, though Gerald Darmanin told French media he was confident he would stay on as interior minister. He is in charge, among other issues, of security for this summer’s Paris Olympics.Attal and Darmanin were scheduled to visit a town in the Paris region later on Wednesday, French media said.Finance Minister Bruno Le Maire, who has been in his job for seven years – rare stability in that role by French standards – also seemed keen to stay on and unveiled his plans at the ministry for the whole year in a speech on Monday.A source in regular contact with both Le Maire and Macron said he expected the former to remain in the post. “For the president, it’s a guarantee there will be no hiccups.”PRESIDENTIAL RACEAttal’s office told Reuters Emmanuel Moulin, a close ally of Macron’s powerful chief of staff Alexis Kohler, would become the prime minister’s chief of staff, in a sign the president may keep a close eye on his premier, as he has for predecessors.The reshuffle is likely to intensify the race in Macron’s camp to succeed him in the next presidential election in 2027, with former prime minister Edouard Philippe, Darmanin and Le Maire all seen as potential candidates – alongside fast-rising Attal.French commentators said Attal’s ambitious and more senior cabinet colleagues could give him a hard time. But the surprise choice suggests the president was keen to promote a “Macron generation” of thirtysomethings, a palace official said. It was unclear when the new government team would be appointed, with Senate president Gerard Larcher telling TF1 TV that Attal told him it could be done around the end of the week.Widespread public discontent over surging living costs and last year’s contested pension reform have seriously hit Macron’s ratings, and his chances in the EU ballot, where his party trails badly behind Marine Le Pen’s far-right.Attal has polled as one of France’s most popular politicians in recent months. A Macron loyalist, he became a household name as government spokesperson during the COVID pandemic and earned a reputation as a smooth communicator. More

BERLIN (Reuters) -The outlook for Germany’s construction sector is grim for 2024, according to two prominent research institutes on Wednesday, a further bad sign for the nation’s struggling property industry as it suffers its worst crisis in decades.German construction spending is set to fall in 2024 for the first time since the financial crisis, according to a study by the DIW economic institute.A separate survey by the Ifo economic institute showed sentiment in residential construction at an all-time low.For years, the property sector in Germany and elsewhere in Europe boomed as interest rates were low and demand was strong. But a rapid rise in rates and costs put an end to the upsurge, pushing some developers into insolvency as bank financing dried up and deals froze.”The slump in the construction industry is taking longer than expected,” said Laura Pagenhardt, an author of the DIW study.Construction volume will shrink by 3.5% in 2024 to 546 billion euros ($597.38 billion) before recovering slightly with a 0.5% increase in 2025, DIW said. The last time that German construction spending declined was in 2009.The Ifo survey showed sentiment in residential construction dropped to -56.8 points in December, worse than -54.4 points in November. It was the lowest level since Ifo began tracking the index in 1991.”The prospects for 2024 are bleak,” said Klaus Wohlrabe, head of surveys at Ifo. Germany has been falling short of its efforts to build 400,000 apartments a year, and the industry has been calling on German Chancellor Olaf Scholz to stem the property crisis. Tim-Oliver Mueller, head of the German Construction Industry Federation, kept up the pressure on Wednesday.”Berlin, we have a problem. We are not talking about abstract things, but about affordable housing, which is urgently needed,” he said.($1 = 0.9140 euros)(writing by Tom Sims and Miranda Murray; editing by Rachel More, Michael Perry and Christina Fincher) More

BENGALURU (Reuters) – U.S. Treasury yields will trade around current levels over the coming six months before falling later in the year, according to bond strategists polled by Reuters, suggesting markets were fully priced in for Federal Reserve interest rate cuts.Since peaking at 5.02% in October, the benchmark U.S. 10-year Treasury note yield fell over 120 basis points and finished 2023 roughly where it started.Bond bulls drove the yield, which moves inversely to prices, lower by front-loading pricing of about 150 bps of interest rate cuts this year following a perceived-dovish Fed pivot and slowing inflation.It has since recovered to about 4.00%, gaining over 20 bps from a late December-low of 3.78% as incoming economic data showed the world’s largest economy was still growing at a healthy pace and didn’t need immediate rate cuts.Interest rate futures are now pricing in about a two-thirds chance of the first rate cut in March, down from near-90% just two weeks ago. The Fed’s own dot plot projections showed 75 bps of rate cuts this year.This recovery in yields is set to hold ground, with the yield on the 10-year note forecast to rise about 10 bps to 4.10% in three months, the Jan. 5-10 Reuters poll of 62 bond strategists found; a 15 bps downgrade from a December poll.”Our forecast is for yields to remain unchanged for the first three months; and while that may sound really boring, that’s how bonds work,” said Steven Major, global head of fixed income research at HSBC.”I feel very strongly the next big move in yields is downwards and will come in the second half of the year because markets need to see actual moves from the central bank rather than working on pure expectations,” Major added, albeit making allowance for some interim volatility.The benchmark 10-year yield was expected to fall to 3.93% by end-June and then to 3.75% by end-year, the poll found. A smaller sample of the U.S. primary dealer banks had higher forecasts of 4.00% and 3.88%, respectively.”We have a bimodal outlook. One is a typical late-cycle recession and the other is rate cuts boosting productivity and leading to stronger economic growth,” said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott.”A naive midpoint of those two scenarios could see the 10-year yield rise to about 4.70% by the end of 2024,” he added – the highest end-year forecast in the survey.The interest rate sensitive 2-year Treasury note yield, currently about 4.35%, was expected to hold steady in the coming three months, before falling to 4.00% by end-June and a further 50 bps to 3.50% by the end of the year.If realised, the negative spread between yields of 2-year and 10-year Treasury notes – usually a foreteller of impending recession – will completely lose its inversion and have a 25 bps positive gap by end-2024.”As an indicator that was not helpful in forecasting recession last year, it’s likely to not be helpful this year either,” said Torsten Slok, chief economist at Apollo Global Management (NYSE:APO).”The incoming supply of Treasuries will put considerable upward pressure on long rates for reasons that have nothing to do with whether we have a recession or not,” he added, stating factors such as the U.S. budget deficit and the risk of a resurgence in inflation could keep yields elevated. More

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