Aurelia Butler

WASHINGTON (Reuters) – U.S. passenger railroad Amtrak CEO Stephen Gardner will testify on June 6 before a U.S. House Transportation and Infrastructure railroads subcommittee, a spokesperson for the panel said on Wednesday, as traffic rebounds after a pandemic-driven dip.Gardner and Northeast Corridor Commission Executive Director Mitch Warren will testify at a hearing on Amtrak operations examining the challenges and opportunities for improving efficiency and service.Amtrak did not respond immediately to a request for comment.Traffic on the busy Northeast Corridor connecting Boston and Washington more than doubled in the 12-month period ending Sept. 30 to 9.2 million passengers.Amtrak wants to expand dramatically across the United States and add up to 39 corridor routes and up to 166 cities by 2035 and plans to hire 3,100 workers this year. It is also modernizing major rail stations and rebuilding key infrastructure.Congress in November 2021 approved $22 billion for Amtrak as part of a $1 trillion bipartisan infrastructure bill.The Biden administration in March sought $3.1 billion in annual funding for Amtrak for the 2024 budget year on top of $4.4 billion in funding the railroad will receive from the infrastructure law. It is also seeking $700 million for a key New York Hudson (NYSE:HUD) River tunnel project.Aging infrastructure is preventing Amtrak from running trains at higher speeds along the Boston to Washington northeast corridor.In November, Amtrak said ridership jumped by more than 10 million riders in the year ending Sept. 30 and has nearly returned to pre-COVID-19 levels. Amtrak said ridership rose 89% over 2021 levels to 22.9 million riders, up 10.8 million passengers over the prior year.Overall ridership hit about 85% of pre-COVID levels in the last six months of the 2022 budget year, Amtrak said, adding it expects passengers and revenue to rise above 90% of pre-COVID levels by September 2023. More

Some analysts have described local government financing vehicles (LGFVs) as the “black hole” of China’s financial system, with debts of more than $9 trillion and rising. But Beijing is counting on their continued spending to help lift a patchy economic recovery.Sales by LGFVs of so-called “pearl bonds”, which are issued as foreign debt in Shanghai’s free trade zone, have soared to a record 72 billion yuan ($10 billion) so far this year, official data shows – nearly double last year’s total.Analysts say the fundraising spree is due to the market’s offshore designation, which makes it an elegant alternative for local vehicles frozen out of onshore borrowing by tighter rules on their finances since 2021. LGFVs accounted for about two-thirds of the issuers and 60% of the debt sold this year nation-wide, according to Reuters’ calculations.Among all the newly-issued FTZ bonds this year, 55, or two-thirds of all 82 issuers, were LGFVs, according to Reuters’ calculations.The market has also offered favourable pricing relative to rising global rates due to surging dollar financing costs in the wake of the U.S. Federal Reserve’s aggressive rate hikes. That has benefited both local issuers and Chinese banks which are the dominant buyers of such debt — underscoring the broader systemic risks of such concentrated exposure to LGFVs’ burgeoning debts. “Domestic financing policies for district and county-level LGFVs are still strict, and financing channels are limited,” said Shi Xiaoshan, senior analyst at CSCI Pengyuan Credit Rating Co Ltd.”For LGFVs with relatively low credit ratings, overseas financing is still an important financing channel.”The “pearl” or free trade zone (FTZ) bonds have been around since 2016 but are only now becoming popular as tighter central government supervision on LGFV debts starts to bite. About 5.5 trillion yuan worth of onshore LGFV bonds are due to mature this year, according to ratings agency Fitch, the highest since 2021.Although bonds issued in FTZs can be in any currency, all new issuances this year were denominated in yuan.”LGFV issuers are active in the FTZ bond market because they require funding,” said Royston Quek, managing director of debt capital markets at Haitong International Securities in Hong Kong. “The onshore market is closed to some of them.” AMBIGUOUS POSITIONING”Pearl bonds” differ from other offshore bonds as trades are cleared by the state-owned China Central Depository & Clearing Co, rather than a global clearing house.To participate, investors must register at the CCDC. In practice, almost all the 30 active accounts are Chinese banks, whose buying power has put the market into a sweet spot.Despite concerns about LGFVs fiscal health and the country’s sputtering economic rebound, coupons of around 4-5% for three-year terms are much lower than semi-government borrowers can get abroad as well as being a fair bit higher than the 3-4% return that banks could expect from loans to a state-owned enterprise.One recent deal, for example, was Quzhou Industrial Development Group Co, of China’s eastern province of Zhejiang, which issued 500 million yuan of 3-year FTZ bonds with a coupon of 4.2%. China’s 10-year sovereign bonds are trading at just under 3%.”How big the FTZ market could grow depends on how much Chinese banks could allocate their risk limits to FTZ bond issuers and if other investor segments decide to get involved,” said Tim Fang, head of Greater China debt capital markets at Credit Agricole (OTC:CRARY) CIB.STRING OF PEARLSTo be sure, the market also seems to have at least the implicit backing of authorities, as its sudden popularity coincides with a push to broaden yuan financing.Financial regulators and lenders, including Shanghai Pudong Development Bank and Bank of Communications, held events in May to promote the bonds.”Pearl bonds” expand the scale of offshore yuan transaction and promote yuan internationalisation, Zhang Hong, director of the Pudong New Area Financial Regulatory Bureau said at a forum in Shanghai.Still, some bankers say the sudden promotion and influx of funds has raised eyebrows and questions over how investments and currency flows into such bonds ought to be categorised.”Due to the ambiguous positioning of the free trade zone, in the actual practices, FX regulators are vague and inconsistent about whether foreign debt in the free trade zone needs to be registered and managed,” China Chengxin International Credit Rating said in a note. China’s National Development and Reform Commission, which is in charge of granting foreign debt quotas in China, did not immediately respond when contacted by Reuters. The State Administration of Foreign Exchange, the country’s FX regulator, did not immediately comment.($1 = 7.1 Chinese yuan renminbi) More

BENGALURU (Reuters) – Australia’s housing market outlook has improved significantly, with home prices expected to on average stagnate this year compared to the near double-digit fall predicted three months ago, according to a Reuters poll of housing analysts.After slumping about 9% from May 2022 to February, Australian home prices rose for a second straight month in April, suggesting the fall in the country’s property prices had bottomed out and the market was now rebounding.That turnaround was partly down to expectations the Reserve Bank of Australia is mostly done with its policy tightening, enticing cash-rich home buyers to go house hunting again.The May 16-31 Reuters poll of 14 property analysts showed average home prices stagnating this calendar year, a significant improvement from the just over 9% fall predicted in a March survey.They were then forecast to rise 4.5% in 2024, almost twice the expected rate from the previous poll.However, major local banks have differing views on the outlook. While ANZ and Westpac forecast no growth this year, CBA expected a 3.0% rise and NAB predicted a 4.0% decline in prices.”The recent upturn has come as a surprise to us,” said Adelaide Timbrell, senior economist at ANZ, who said the sharp rise in interest rates previously had them forecasting a 10% decline this year but said “we now think most of the weakness is behind us.””We did expect that strong household income growth and large savings buffers would provide a cushion for the fall in house prices. It’s possible that these are providing more support than we originally anticipated,” she added. Analysts also revised their forecast of the peak-to-trough fall to a median of just under 10% from the previous survey’s 16% decline.That was modest compared to the 20% top-to-bottom drop predicted in New Zealand house prices and only a fraction of the 25% surge during the pandemic alone.”The shift upwards…has arrived earlier than we anticipated,” said Gareth Aird, head of Australian Economics at CBA, which has the country’s largest mortgage book. They had long held a peak-to-trough forecast decline of 15%. “We are almost at the top of the RBA’s hiking cycle, which means the headwind on property prices from rates ratcheting higher has largely run its course.”The RBA has hiked rates by 375 basis points so far and it was a close call in a separate Reuters poll as to whether it was now done at 3.85% or would go for one more 25 basis point lift. Markets are pricing in an August move to 4.10%.But affordability remains a problem for most first-time home buyers as prices were still beyond their reach. Seven of nine analysts who answered an additional question said affordability over the coming year would worsen. Two said it would improve.”All measures of housing affordability are poor. Despite the fall in prices from their highs it takes over 10 years for someone on average full-time earnings to save for a deposit, versus five years 30 years ago,” said Shane Oliver, chief economist at AMP (OTC:AMLTF).(For other stories from the Reuters quarterly housing market polls:) More

LONDON (Reuters) – Britain has a bigger inflation problem than the United States or the euro zone, with both large headline price rises and growing signs of persistence in underlying pressures, Bank of England policymaker Catherine Mann said on Wednesday.Mann, who has been the BoE’s keenest advocate of interest rate increases since she joined in 2021, also saw a risk of future financial market volatility as the global economy adjusts to higher borrowing costs.British consumer price inflation hit a 41-year high of 11.1% in October and in April, at 8.7%, was the joint highest alongside Italy’s among the world’s big advanced economies, sparking a sell-off in bond market as investors bet on more BoE rate rises.Core inflation – which excludes volatile food and energy prices, and which Mann said was a better guide to future inflation trends – rose to its highest since records began in 1992 at 6.8% last month.Mann said core inflation was showing signs of being kept high by British businesses’ ability to push through price rises, as well as increased wages, while headline inflation had also been slower to fall back towards the core rate than elsewhere.”The gap (between headline and core CPI) that I have in my country is more persistent than the gaps that we see in either of my neighbours, the U.S. or the euro area,” Mann said in a policy discussion hosted by Swiss asset manager Pictet.”There is a gap between the headline, which is incorporating energy which went up really high and now has come down, and core where we do start to see the implications coming through pricing channels, through wage negotiations, into something that is persistent,” she added.Left-over savings from the COVID-19 pandemic had increased British households’ ability to absorb companies’ price rises, while an increased minimum wage, which rose 9.7% in April, might have had knock-on impacts further up the pay scale, Mann said.The BoE has raised rates 12 times since December 2021, taking them to 4.5% this month. Markets expect them to reach 5.5% later this year after last week’s stronger-than-expected inflation data.BoE Governor Andrew Bailey and other top officials at the central bank have said they will respond if there are signs of persistently strong inflation pressure.Mann also flagged a tension between the long-term level of interest rates needed to control inflation and the level needed for a stable financial system, which could bring “an awful lot of volatility” for exchange rates, asset prices and inflation.”The metaphor that is appropriate here … is: ‘The water is calmest before the falls’,” she said. More

LONDON (Reuters) – Starting salaries advertised in Britain reached the highest level in two years in April and there were the most job vacancies since December, suggesting some recovery in the labour market, according to job search website Adzuna. Adzuna’s survey showed advertised annual salaries had increased each month since October 2022, reaching an average of 37,658 pounds ($47,528) in April, up 2.9% on a year earlier. This was still slightly below the 37,898 pounds average in April 2021, when they were the highest since Adzuna’s records began in 2016.Trends in advertised salaries differ from those collected by Britain’s Office for National Statistics for average earnings across the workforce as a whole. Basic wages in Britain in the first quarter of this year were 6.7% higher than a year earlier and were an average of 598 pounds a week in March – equivalent to 31,096 pounds a year, an all-time high in nominal terms.However, pay has not kept up with annual consumer price inflation in Britain, which eased to 8.7% in April.The Bank of England, which increased interest rates to 4.5% in May and is expected to raise Bank Rate further, is closely monitoring inflation pressure in the jobs market but has said it expects pay growth to slow.Tony Wilson, director of the Institute for Employment Studies, said the Adzuna figures potentially reflected continued strong demand in the economy rather than chronic shortages and jobs going unfilled. “Combined with pretty modest growth in advertised salaries, this also suggests that some of the inflationary pressures from the labour market may be starting to ease,” Wilson said.Overall online job adverts climbed 0.18% month-on-month to about 1.046 million postings in April, the highest since December 2022. Previous ONS data showed 1.086 million job vacancies in April on a non-seasonally adjusted basis, down from 1.359 million a year earlier.Andrew Hunter, co-founder at Adzuna, said his data pointed to recovery in Britain’s job market, but that there was still some volatility.”It’s clear that the job market is still volatile, but we are encouraged by the steady growth we’re seeing.”There was also a steady climb in the Adzuna’s gauge of the average number of people applying for the same role. ($1 = 0.7923 pounds) More