Aurelia Butler

NEW YORK (Reuters) – Chile estimates it will issue $12 billion in total debt next year and the largest budget increases will be in social protection and science and technology, Finance Minister Mario Marcel told Reuters on Thursday.”So we’re cutting (issuance) by half, reflecting the fact that we will have an overall balance that will be considerably stronger than what people thought we would have,” said Marcel, adding most of it will be to refinance maturing issues.The minister is confident Chile will soon make a dent on inflation, running at double digits.”We’re particularly confident in terms of curbing inflation earlier than other countries,” he said, citing an early and consistent monetary policy tightening that began in mid-July 2021.PENSION AND PESOThe Chilean peso has been pressured like many other currencies by the dollar strength, breaching the 1,000 pesos per dollar mark for the first time last July. It currently sits at 944 pesos per greenback, down nearly 10% so far this year.Marcel said between 100 and 150 pesos in the exchange are due to an uncertainty premium he says shot up in late 2019 when Chileans took to the streets in what were the largest social protests in decades. The COVID-19 pandemic and a string of votes in Chile, including a referendum that rejected a new constitution that would have sharply expanded social benefits, helped keep uncertainty high.Marcel said clear signals for another moderate constitutional proposal, progress on tax reforms and hopeful pension reforms will help reduce uncertainty.The pension reform is expected to be presented to Congress in a matter of weeks, aiming among other things to expand the basic benefit by some 30% and increase contributions from employers by 6%.”Pension reform should cost in the longer run something between 4% and 5% of (gross domestic product),” Marcel said. “It should take at least six years to face-in all this increase so as not to have an impact on employment.” More

The head of the International Energy Agency has warned European countries against a scramble for energy security this winter that threatens to shatter EU unity and trigger social unrest. Fatih Birol, the IEA’s executive director, said he feared “a wild west scenario” if European countries restricted their own trade or stopped collaborating with neighbours amid mounting anxieties about fuel shortages. “The implications will be very bad for energy, very bad for the economy, but extremely bad politically,” Birol said Thursday in an interview at the inaugural Global Clean Energy Action Forum in Pittsburgh. “If Europe fails this test in energy, it can go beyond energy implications.”European relations have grown more fractious as countries try to maintain a united front amid soaring energy prices that have brought the continent to the brink of an economic recession. But the mounting crisis has prompted fears that some countries may cut side deals for Russian supply or restrict power exports to their neighbours.There were “two scenarios”, said Birol, whose Paris-based watchdog agency is mainly funded by members of the OECD. “EU and members will work in solidarity, supporting each other . . . or there is another scenario, if everybody is for himself.”“One of the founding values of the EU is solidarity. It will negatively affect the EU’s weight across the world,” Birol said of the latter scenario. Norway’s Nordic neighbours last month blasted Oslo for “selfish” behaviour as it considered pausing electricity exports while it refilled its hydroelectric reservoirs. Andreas Bjelland Eriksen, state secretary in Norway’s petroleum and energy ministry, denied it would halt exports, however, telling the Financial Times that the country was simply “prioritising filling reservoirs for the same reason as Europe is filling its gas (storage)”.The EU has faced opposition from Hungary and some other member states as it deepened sanctions on Russian in response to its invasion of Ukraine. Birol also cautioned against European complacency after the continent succeeded in building up natural gas stockpiles ahead of the winter months when demand peaks.Even if the continent avoided “negative surprises” in gas supply, such as a colder-than-expected winter, Europe would suffer “bruises” in the coming months, Birol said, including economic recession and “significant damage to household budgets”. The crisis for Europe would also last well into 2023, he said, given stagnant global supply and the likelihood of increased competition for liquefied natural gas from a recovering China and other importers.

“When we look around there are not many new gas [projects] coming . . . And the Norway, Algeria, Azerbaijan pipelines are near their maximum capacity. It will be another challenging period,” he said. But Birol was also adamant that Moscow had “already lost the energy battle” with Europe as the continent seeks out alternative suppliers. Most of Russia’s gas and oil exports had gone to Europe before the war, he said — but that was now over. “Russia has lost a good client, and forever. This client paid the money on time and didn’t create any political problems,” Birol said. The IEA chief dismissed Russian efforts to replace Europe’s gas market with exports to Asia. “You are not selling onions in the market. You have to build pipelines, infrastructure, logistics. This will take at least 10 years,” he said. Russia will also struggle to maintain output as sanctions restrict its access to the western technology and capital it needed to continue repairing ageing oilfields and gasfields, Birol said.

Video: How Putin held Europe hostage over energy | FT Energy Source More

A feverish week of central bank activity around the globe has left markets at extremes.Currency prices were rattled after Japan intervened in the foreign exchange market to buy yen for the first time since 1998. The yen surged against the dollar after the intervention. Some analysts were skeptical the battered currency would stay strong given the loose monetary policy by the Bank of Japan contrasted with hawkish moves this week by the Federal Reserve and other central banks. The dollar index, which measures the greenback against a basket of currencies, weakened modestly on Thursday, but was not far from its 20-year high.Wednesday’s actions by the Fed continued to reverberate. The U.S. central bank raised rates by 75 basis points for a third straight meeting and Chair Jerome Powell was blunt about the “pain” to come as policymakers commit to taming four-decade-high inflation.Yields on U.S. government debt ascended new peaks on Thursday. Yields on the two-year U.S. Treasury note hit their highest since 2007 and those on the benchmark 10-year reached their highest since 2011. The curve between those two maturities inverted to their most inverted level since at least 2000, indicating rising concerns about an impending recession. The prospect of a downturn weighed on equities. MSCI’s gauge of stocks across the globe touched its lowest point since November 2020 during the session.Investors might be excused for wanting to take a breath on Friday, but further digestion of the week’s central bank action along with inflation data in Asia and economic readings in Europe could beget more volatility. Key developments that could provide more direction to markets on Friday: Malaysia, Singapore CPI dataTaiwan industrial productionEuro zone PMIsFed Chair Powell gives remarks before “Fed Listens: Transitioning to the Post-pandemic Economy” event More

WASHINGTON (Reuters) – A procedural vote on a government funding bill is expected to take place on Tuesday, an aide to U.S. Senate Majority Leader Chuck Schumer said on Thursday.Congress faces a Sept. 30 deadline to pass legislation to approve funding to keep the government operating beyond the current fiscal year. More