Aurelia Butler

MEXICO CITY (Reuters) – Thousands of pro-business union contracts in Mexico are set to expire as Mexico ends a historic campaign to wipe out deals between employers and unions cozy with management that have kept wages low, a key commitment under a North American trade deal.Of 139,000 collective contracts in Mexico, unions will ultimately aim to ratify 33,000, or about a quarter, via worker votes, a requirement to keep them active, Labor Minister Luisa Alcalde said on Tuesday, hours after a final deadline.The remainder will dissolve, although workers will maintain the same pay and benefits.Mexico committed to eliminating these so-called “protection contracts” under the United States-Mexico-Canada Agreement (USMCA), a trade pact that replaced the 1994 NAFTA.Labor authorities expected unions to forego holding votes for most contracts, largely because many were designed to protect company interests and had no worker backing or active unions.”This is historic, because we finally managed to rid the labor market of pretend contracts and fake unions,” Labor Minister Alcalde said in an interview.”This is all about having good representatives to defend worker rights and obtain better benefits and salaries.”Since the vote process began four years ago, workers have cast ballots on some 20,000 contracts in sectors spanning autos, retail and mining. The remaining 13,000 votes are scheduled through July, although some unions may pull out.Only about 400 contracts have so far been voted down, which some experts see as a sign of conflict of interest in the union-run votes. The Independent Mexico Labor Expert Board, a U.S. advisory committee, said in March the small number of rejected contracts “raises serious doubts about the credibility” of the process.The Labor Ministry last month accused a powerful union of stealing ballots during a vote at a Goodyear tire plant, echoing similar allegations at automaker General Motors (NYSE:GM) in 2021, which led to the first USMCA labor complaint.Alcalde said she expects unions to aim to establish new contracts in place of ones that were canceled.”The first thing is they need to convince workers that they will represent them better,” she said. More

(Reuters) – Florida governor Ron DeSantis signed into law on Tuesday a bill barring state officials from investing public money to promote environmental, social and governance goals, and prohibiting ESG bond sales.The bill is one of the furthest-reaching efforts yet by U.S. Republicans against sustainable investing efforts, and a clear political message from DeSantis, a likely presidential candidate.Republicans, including some from energy-producing states, say many executives and investors have lost their focus on returns as they take growing account of issues like climate change and workforce diversity.”We want them to act as fiduciaries. We do not want them engaged on these ideological joyrides,” said DeSantis just before he signed the bill at a webcast event. Analysts said the legislation goes further than other state anti-ESG bills, even as business groups worry the efforts pose financial risks. Florida’s law now creates some questions of how it will operate in practice, analysts said.For instance, fund managers working for agencies like the state’s big pension fund would have to include disclaimers in some communications with portfolio companies to make clear they do not reflect Floridians’ views. Fund managers that don’t include enough disclaimers could face regulatory action, said Joshua Lichtenstein of law firm Ropes & Gray. But, he added, “It’s an oddity to say you’re only talking on behalf of some of your clients.”The law also outlaws the sale of ESG bonds, a popular way to fund renewable energy projects or lower debt costs for borrowers if they meet gender diversity or greenhouse gas emissions targets.Lawyers and credit analysts said the new law could deny municipalities access to large pools of ESG-mandated capital. A further issue is how officials interpret the terms, said Thomas Torgerson, co-head of global sovereign ratings at DBRS Morningstar, which rates debt.   “If we as a rating agency cannot assess environmental, social or governance risk that creates a problem for us. There are climate and weather risks that are highly relevant, especially in a state like Florida, and would be captured in our assessment of credit risk,” Torgerson said. More

WASHINGTON (Reuters) -A top White House economist on Tuesday said Federal Reserve interest rate hikes aimed at curbing inflation were having a negative impact on the banking sector, and warned Republicans against worsening the situation with their debt ceiling threats.Heather Boushey, a member of the White House Council of Economic Advisers, told Reuters that Republicans should not be “playing games” with the U.S. economy, by pegging an increase in the $31.4 trillion debt limit to budget cuts.”The economy remains, it’s been strong. You don’t want to be pushing it off of the course that it’s on,” Boushey said, urging Republicans to back a debt ceiling increase without conditions. “The Fed is raising interest rates in the hope of reducing inflation. That is having this negative effect on the banking sector. Why would we add to that?”Boushey said Congress could easily remove the risk of default by raising the debt ceiling, while the issue of interest rates and their impact on bank assets was a far more complicated question that no single entity had the power to solve.”This is terrible. It’s scary. We should not be be playing these kind of games with the U.S. economy and with the full faith and credit of the United States,” Boushey said. “We need to be focused on how we’re going to keep the economy moving.”Boushey’s comments come as Fed governors are gathered for a two-day policy meeting that analysts expect to result in a 25-basis-point increase in the federal funds rate on Wednesday.House Republicans passed a bill to raise the debt limit last week that includes steep cuts to spending from healthcare to air-traffic controllers, which the Democratic-controlled Senate and President Joe Biden say they will not approve.Biden on Monday summoned the four Senate and House of Representatives leaders – two fellow Democrats and two Republicans – to the White House next week, after the U.S. Treasury warned the government could run short of cash to pay its bills as soon as June 1. More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever.Maybe the U.S. banking turmoil of March 2023 wasn’t boxed up, tied with a bow, and neatly shelved for posterity after all.Shares in regional U.S. banks got clobbered on Tuesday – PacWest BanCorp lost a quarter of its market cap – setting a gloomy and defensive tone for Asian markets on Wednesday ahead of the Federal Reserve’s latest interest rate decision.The U.S. regional banking index tanked 5.5% on Tuesday, its biggest fall since the depths of the crisis in mid-March. The index is at a two and a half year low and has lost a third of its value in the last two months. (Graphic: US regional banks – annual change – https://fingfx.thomsonreuters.com/gfx/mkt/zgpobyjlnvd/USbanks.png) Not coincidentally, renewed fears over the U.S. banking system following JP Morgan’s recent takeover of failed First Republic Bank (NYSE:FRC) also dovetailed with unexpectedly weak U.S. jobs data and increasing alarm over the U.S. debt ceiling standoff.In addition, global jitters intensified on Tuesday – the Reserve Bank of Australia’s shock rate hike, a downbeat bank lending survey from the European Central Bank, and a 5% slump in oil prices painted a gloomy picture for the world economy. Brent crude oil is now down almost 30% year-on-year – a huge disinflationary impulse for the world economy. (Graphic: Brent crude oil – current price and year-on-year change – https://fingfx.thomsonreuters.com/gfx/mkt/dwvkdqjlmpm/OIL.png) This may play into Malaysian policymakers’ thinking as they prepare to deliver their latest interest rate decision on Wednesday. Twenty one of 25 economists polled by Reuters expect the key interest rate to be kept on hold at 2.75% for a third consecutive meeting, with the other four predicting a quarter point hike. Not only that, Bank Negara Malaysia is expected to keep rates on hold for the rest of this year and all of next, according to the Reuters poll. (Graphic: Malaysian interest rates – https://fingfx.thomsonreuters.com/gfx/mkt/jnvwykljjvw/Malaysia.png) As the RBA reminded everyone on Tuesday, however, policymakers still retain the ability to surprise. Surely the Fed won’t throw a curve ball later on Wednesday, will it? Markets are pricing in a 15% chance of no move, a small but not negligible chance, and an 85% probability the Fed will deliver one final 25 basis point hike.But that’s what Asian markets will be waking up to on Thursday. Before that on Wednesday they have the Malaysian rate decision, services PMI data from Australia and India, and South Korean FX reserves to offer local direction.Here are three key developments that could provide more direction to markets on Wednesday:- Malaysia interest rate decision- India, Australia services PMIs (April)- U.S. Fed interest rate decision (By Jamie McGeever) More