Aurelia Butler

Retail sales increased 0.2% last month, the Commerce Department said on Tuesday. Data for May was revised higher to show sales gaining 0.5% instead of 0.3% as previously reported. Economists polled by Reuters had forecast retail sales gaining 0.5%. Retail sales are mostly goods and are not adjusted for inflation. Food services and drinking places are the only services category in the retail sales report.Spending has remained resilient despite 500 basis points worth of interest rate hikes from the Federal Reserve since March 2022, when the U.S. central bank kicked off its fastest monetary policy tightening cycle in more than 40 years.A tight labor market continues to boost wage gains while some households still have savings accumulated during the COVID-19 pandemic. Consumers’ purchasing power is also gradually improving as inflation subsides.Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.6% in June. Data for May was revised slightly up to show these so-called core retail sales increasing 0.3% instead of the previously reported 0.2%.Core retail sales correspond most closely with the consumer spending component of gross domestic product. June’s solid rise and May’s upward revision to core retail sales in May suggest that consumer spending, which accounts for more than two-thirds of the U.S. economy, continued to grow last quarter. The pace was, however, probably slower than the first quarter’s rate, which was fastest pace in nearly two years. Economic growth estimates for the second quarter are currently as high as a 2.3% annualized rate. The economy grew at a 2.0% pace in the January-March quarter. More

BEIJING (Reuters) – China and the United States could use climate cooperation to redefine their troubled relationship and lead the way in tackling global warming, U.S. climate envoy John Kerry told senior Chinese officials on Tuesday.Kerry’s three-day visit to China aimed at reviving climate cooperation between the world’s top greenhouse gas emitters has coincided with waves of extreme weather across the planet, including a heat dome in the western United States that brought temperatures in California’s Death Valley to 53 Celsius (128 Fahrenheit) on Sunday.”Our hope is that this can be the beginning of a new definition of cooperation and capacity to resolve differences between us,” Kerry told top diplomat Wang Yi in a meeting in the Great Hall of the People, China’s cavernous legislative building.Addressing Premier Li Qiang, Kerry warned that the situation could get worse this summer, and cited reports that a weather station in China’s northwestern Xinjiang region had recorded an all-time high temperature of 52.2C on Sunday. “The predictions are much more serious than they’ve ever been,” Kerry added after an unusual interruption by Li expressing doubt about the Xinjiang temperature.Li acknowledged later in the meeting the severe climate impacts facing China and elsewhere, according to people in the room.Topics of discussion between the two sides include the issue of climate financing, China’s coal consumption and the abatement of methane, a potent greenhouse gas.Li urged rich countries to “take the lead” in cutting emissions and meet their commitments to provide climate financing to developing nations, the official Xinhua news agency reported.Speaking at a conference on environmental protection, Chinese President Xi Jinping reiterated the country’s “unwavering” commitments to tackling climate change, Xinhua said in a separate report on Tuesday.”But the route, method and intensity used to achieve this goal should and must be determined by ourselves, and will never be influenced by others,” he said. FRESH STARTKerry told Wang that talks could provide a fresh start for the two countries that have been mired in disputes over Taiwan and trade.”We are very hopeful that this can be the beginning, not just of a conversation between you and me and us on the climate track, but that we can begin to change the broader relationship,” Kerry told Wang.He also delivered a message from U.S. President Joe Biden, telling Wang how much Biden “values his relationship” with his Chinese counterpart Xi Jinping. “President Biden is very committed to stability within this relationship and also to achieve efforts together that can make significant difference to the world,” Kerry said. “I know he looks forward to being able to move forward, change the dynamics.” Wang referred to Kerry as “my old friend”, saying they had “worked together to solve a series of problems between both sides”. Kerry also referred to their work together, including on the Iran nuclear talks. Kerry met his counterpart Xie Zhenhua for nearly 12 hours at the Beijing Hotel on Monday. Wang praised Kerry and Xie for their “hard work” throughout the talks.The U.S. and Chinese delegations will pick up on Tuesday where they left off the previous day and negotiate through the day. Asked how the discussions were going, Kerry said it was too early to assess.U.S. State Department officials said the negotiations were on two tracks, with one focused on national action on climate change and the other on COP28 talks in Dubai later this year.Kerry is scheduled to leave Beijing in the early hours of Thursday. His third visit to China as U.S. climate envoy marks the formal resumption in top-level climate diplomacy between the countries. The former secretary of state is the third top U.S. official to visit Beijing in the past month.Kerry had previously sought to ring-fence climate issues from wider diplomatic disputes, but Wang said during Kerry’s previous visit in 2021 that climate could not be separated from broader concerns. More

Big investment banks are turning more bearish on the dollar as expectations grow that a “soft” economic landing will reduce the need for the US Federal Reserve to raise interest rates much further.Morgan Stanley, JPMorgan Chase, Goldman Sachs and HSBC are among the lenders to have either scrapped bullish dollar calls or forecast further declines for the currency in the wake of last week’s unexpectedly large drop in US inflation.The US currency sank to a 15-month low against an index of rivals following last Wednesday’s figures, which bolstered expectations that the Fed could soon end its campaign of monetary tightening without tipping the world’s largest economy into recession. “Signs of further improvement in the global growth-inflation mix and a US soft landing sow the seeds for US dollar weakness ahead,” analysts at HSBC said in a note to clients on Tuesday, adding that the currency was likely to break out of the tight range in which it had traded since late 2022. The world’s de facto reserve currency has seesawed for much of the year, strengthening in February after a flurry of alarming inflation data before sinking in March and April following the collapse of several US regional banks. Goldman Sachs analysts also said the recent move was likely to be the start of a bigger decline. “There’s more where that came from,” the bank wrote to clients on Friday. “We think this can extend in the near term.” Morgan Stanley’s currency strategists on Monday shifted to a neutral position on the greenback from overweight while JPMorgan’s team on Friday closed its recommended dollar trades after economic data that they said provided “a gut check” to bullish dollar thinking. Trading in interest rate futures implies a quarter-point rate rise is priced in for the Fed’s meeting next week, but tentative bets on a further September rise subsided following the data, implying a 14 per cent probability, according to CME’s FedWatch tool, compared with 22 per cent a week ago. Traders emboldened by June’s relatively benign inflation figures are growing increasingly optimistic that the US economy will avoid a recession altogether. Just a fifth of investors now expect a “hard landing” where economic output shrinks, compared with 68 per cent who expect continued, if meagre, growth, according to Bank of America’s latest fund managers’ survey, sent to clients on Tuesday. “With better inflation data, the soft landing camp is in the ascendancy, and that’s the environment where the dollar does least well out of the three scenarios,” said Alan Ruskin, chief international strategist at Deutsche Bank. The currency typically benefits from higher US interest rates but also tends to gain in periods of global recession when investors seek the safety of US assets. The speed of the dollar’s recent decline took some by surprise. The currency was “falling somewhat faster than relative interest rate trends, or current economic data, would seem to justify”, said Kit Juckes, a currency strategist at Société Générale, noting that the greenback’s weakness had pushed the euro above $1.12 for the first time since Russia full-scale invasion of Ukraine in February last year. More

By Shivangi Acharya, Sarita Chaganti Singh and Nikunj OhriNEW DELHI (Reuters) – India will push its Group of 20 partners at a meeting it is hosting to support its proposal to raise the share of taxes multinational companies pay to countries where they earn “excess profits”, government officials said.India’s proposal, which has not been previously reported, could temper optimism among G20 members such as Australia and Japan that the meeting of finance ministers and central bankers in Gujarat would make progress on a long-awaited overhaul of global corporate taxation.More than 140 countries were supposed to start implementing next year a 2021 deal overhauling decades-old rules on how governments tax multinationals. The present rules are widely considered outdated as digital giants like Apple (NASDAQ:AAPL) or Amazon (NASDAQ:AMZN) can book profits in low-tax countries.The deal, pushed by the U.S., would levy a minimum 15% tax on large global firms, plus an additional tax on 25% of “excess profits”, as defined by the Organisation for Economic Cooperation and Development (OECD).But several countries have concerns about the multilateral treaty underpinning a major element of the plan, and some analysts say the overhaul is at risk of collapse.”India has made suggestions to get its due share of taxing rights on excess profits of multinational companies,” one official said. The suggestions have been made to the OECD and will be discussed “extensively” during the G20 meeting on Monday and Tuesday, the official said.Three officials, who asked not to be named as discussions with the OECD were ongoing and the G20 meeting had not begun, said India wants significant increases in the tax paid in countries where the firms do business. They did not specify how much India is seeking.India’s finance and external affairs ministries and the OECD did not respond to requests for comment.Under the agreement, global corporations with annual revenues over 20 billion euros ($22 billion) are considered to be making excess profits if the profits exceed 10% annual growth. This 25% excess profit is to be divided among countries for them to levy tax. India, fighting for a higher share of taxes for markets where firms do business, is the world’s most populous country and set to become one of the biggest consumer markets. Indian people’s average income is set to grow more than 13-fold to $27,000 by the end of 2047, according to a survey by the People’s Research on India’s Consumer Economy.The G20 host nation will also propose that withholding taxation be de-linked from the excess profit tax principle. The rules now say countries offset their share of taxes with the withholding tax they collect.Withholding tax is collected by companies while making payments to vendors and employees, and remitted to tax authorities. The OECD in a document issued on Wednesday said a few jurisdictions have expressed concerns over allocating taxing rights among countries. “Efforts to resolve these issues are underway with a view to prepare the Multilateral Convention for signature expeditiously,” it said.($1 = 82.0490 Indian rupees)($1 = 0.8907 euros) More

LONDON/ROME (Reuters) – Soaring summer temperatures across southern Europe could prompt a lasting shift in tourist habits, with more travellers choosing cooler destinations or taking their holidays in spring or autumn to dodge the extreme heat, tourism bodies and experts predict.European Travel Commission (ETC) data shows the number of people hoping to travel to the Mediterranean region in June to November has already fallen 10% compared to last year, when scorching weather led to droughts and wildfires.Destinations like the Czech Republic, Denmark, Ireland and Bulgaria have meanwhile seen a spike in interest. “We anticipate that unpredictable weather conditions in the future will have a greater impact on travellers’ choices in Europe,” said Miguel Sanz, the head of the ETC.A report by the trade body also shows 7.6% of travellers now see extreme weather events as a major concern for trips between June and November. Among them are Anita Elshoy and her husband, who returned home to Norway from their favourite vacation spot of Vasanello, a village north of Rome, a week earlier than planned this month as temperatures reached around 35C. “(I) got a lot of pain in the head, legs and (my) fingers swelled up and I became more and more dizzy,” Elshoy said of her heat-related symptoms. “We were supposed to be there for two weeks, but we couldn’t (stay) because of the heat.” NO CANCELLATIONS YET Demand for travel has soared again this summer as tourists leave behind years of pandemic restrictions, and travel companies say the heat hasn’t caused many cancellations – yet. Britons in particular have booked fewer holidays at home and more in the Mediterranean, often many months in advance, as they continue to crave post-lockdown beach escapes, said Sean Tipton of British travel agent group ABTA.But that balance could shift as heatwaves are set to become more gruelling. Scientists have long warned that climate change, caused by CO2 emissions from burning fossil fuels, will make weather events more frequent, severe and deadly.Meteorologists predict that temperatures in the coming week may surpass Europe’s current record of 48.8 degrees Celsius (119.84 Fahrenheit), set in Sicily in August 2021, raising fears of a repetition of last year’s heat deaths. Stories of tourists being airlifted off Italian beaches or ferried away in ambulances from Athens’ Acropolis have flooded European media in recent weeks. “Our recent research indicates a decline in the number of people interested in travelling in August, the peak month, while more Europeans are considering autumn trips,” Sanz said. SHIFTS IN SOUTHERN EUROPETourists in Rome told Reuters they would think twice about booking a trip there again in July as they struggled to drink enough water, stay cool and find air-conditioned spots to rest. “I would come when it’s colder. Only June, April,” said Dalphna Niebuhr, an American tourist on holiday with her husband in Rome this week, who said the heat was making her visit “miserable.” That’s bad news for Italy’s economy, which thrives on busy summer traffic. Italy’s Environment Ministry warned in a report this year that foreign tourists would in future travel more in the spring and autumn and choose cooler destinations. “The balance will be negative, also because part of the Italian tourists will contribute to the flow of international tourism to less hot countries,” the report said. Some hope that the change will simply be a shift in traffic, not a reduction. In Greece, where international air arrivals were up 87.5% year-on-year between January and March, overcrowding in the summer has plagued tourist hot spots like the island of Mykonos. Increased travel in the winter, spring and autumn months could ease that problem and make up for a potential summer slowdown, according to the Greek environment ministry.Greek authorities closed Athens’ ancient Acropolis during the hottest part of the day on Friday to protect tourists.In Spain, high vacation demand is expected in coastal destinations in the north of the country and on Spanish tourist islands, where summer temperatures tend to be cooler, according to a report from national tourism association Exceltur. Spaniards Daniel Otero and Rebeca Vazquez, who were visiting Bilbao, said they might move their holiday to June next year, when it would be cooler and more comfortable.For Elshoy, summers in southern Europe may be a thing of the past. She said she will consider holidaying in her home country of Norway instead, adding: “I don’t want to have a holiday where I have a headache and am dizzy again.” More

IMF chief Kristalina Georgieva, speaking to G20 finance ministers and central bank governors in the western Indian state of Gujarat, said divergence in countries’ economic fortunes was a persistent concern.Inflation was finally trending downward, she said, though “headline inflation is still too high and core inflation remains sticky despite the significant monetary policy tightening.” Still, inflation could remain higher for longer and require even more policy tightening, she warned.”While there is progress, the job is not yet done — monetary policy must stay the course. A premature celebration can reverse the hard-won gains made so far in the disinflation process.”Lowering inflation was a top priority for countries, Georgieva said, along with efforts like rebuilding fiscal buffers and growth-enhancing reforms.”To support these reform efforts, the Fund will also expand its work on mobilising domestic resources, improving quality of country spending, building deep capital markets and improving the environment for private investment – both domestic and foreign,” she said.She emphasised the need for strengthening the global financial safety net, including reviewing the IMF’s quota resources, critical for ensuring predictability of the IMF’s firepower which has shrunk in relative terms.The IMF chief also highlighted the progress made on restoring debt sustainability following a recent agreement on Zambia’s debt restructuring.Still, “the debt restructuring process still needs to be speedier and more effective,” she said. “The costs of delays in reaching agreement on needed debt treatments are borne acutely by borrower countries and their people, who are least able to bear this burden.” More