Aurelia Butler

The US and Canada are seeking trade dispute talks with Mexico over the country’s nationalist energy policies, which they argue have undermined international companies investing in clean energy.Washington accused Mexico of failing to meet its obligations under the US-Mexico-Canada Agreement (USMCA) by favouring state-run utility Federal Electricity Commission (CFE) and oil company Petróleos Mexicanos (Pemex). This came at the expense of US and other private firms that have poured billions of dollars over the past decade into the clean energy sector in Mexico, it said.“Mexico’s policies have largely cut off US and other investment in the country’s clean energy infrastructure,” US trade representative Katherine Tai said in a statement on Wednesday.Canada followed the US’s lead and requested its own consultations under the USMCA trade pact. “Canada has consistently raised its concerns regarding Mexico’s change in energy policy. We agree with the United States that these policies are inconsistent with Mexico’s USMCA obligations,” a spokeswoman for Mary Ng, Canada’s international trade minister, said in a statement. Mexico president Andrés Manuel López Obrador made light of the US’s complaint at his morning press conference by saying “nothing is going to happen”. He then played a song from Mexican artist Chico Che with the title: “Oh, how scary!” “It seems like the United States government is revealing itself to us and we are answering: they are supporting corruption,” López Obrador said. Mexico’s economy ministry said the country wanted to reach a “mutually satisfactory solution” during the consultation stage.If no agreement is reached within that 75-day period, USMCA rules allow the US to request the formation of a dispute settlement panel.The complaint brought by the US accuses Mexico of restricting market access, failing to protect investment and pushing policy changes that curb the use of clean energy from private producers. The US statement takes aim at, among other things, a 2021 change in Mexico’s electricity law that gives priority to power generated by the CFE — including from its coal-fired plants — over renewables such as wind and solar, which are produced by private companies.The letter adds to tensions between the countries following US complaints that Mexico is failing to live up to its USMCA obligations on energy issues and putting little importance on climate change.López Obrador has pledged to promote “energy sovereignty” in Mexico in a reversal of a reform approved in 2013 that opened the electricity and petroleum sectors to private investment. A leftwing populist and nationalist, the president has been hostile towards investors in the sector and questioned the value of clean energy.Arturo Sarukhán, a former Mexican ambassador to Washington, said “There is real concern that Mexico is the odd man out in efforts to truly build a paradigm of North American energy efficiency, security, resilience and independence — on renewables, on hydrocarbons, on the green economy and on climate change.”

Mexico could face retaliatory tariffs under the USMCA if the complaint remains unresolved, but Sarukhan said “we still have a long process ahead of us”.The request for the dispute settlement consultation also follows a White House meeting between López Obrador and US president Joe Biden on June 12. A joint declaration after that meeting stated the two countries’ acknowledgment of “the importance of investing in and promoting renewable sources of energy.”López Obrador subsequently said private investment would be permitted in solar projects so long as it was partnered with the CFE. More

Good eveningNews this morning that UK inflation had hit a new 40-year high will fuel the simmering discontent among British workers suffering from a severe cost of living crisis and pile pressure on the Bank of England for a strong response.The bigger than expected increase in the year to June of 9.4 per cent, the highest in the G7, was driven by sharp rises in the prices of food, up 9.8 per cent, and petrol prices, up 18.1 pence per litre, the biggest jump since records began in 1990.The situation is expected to get much worse in October when recent wholesale prices for energy feed through and the government’s price cap ratchets up.The pressure on the country’s businesses was highlighted by separate data showing factory gate prices rising at a 45-year high of 16.5 per cent.Bank of England governor Andrew Bailey said yesterday that interest rates could rise by half a percentage point next month as part of its “absolute priority” in getting inflation back down its 2 per cent target rate.Meanwhile, the summer of discontent among the UK workforce continued to grow as Royal Mail postal staff announced what could be the biggest strike of the summer so far. Public sector workers have not taken kindly to the government’s offer of a below-inflation pay rise of 5 per cent. Their response has ranged from “pitiful”, “disappointing” and “wholly inadequate” to a “grave mis-step” and “a kick in the teeth”.They gained further ammo from official data that showed private sector pay rising five times faster than in the public sector. Several businesses are also offering pay boosts and bonuses to help mitigate the surging cost of living. Despite this, Simon Clarke, chief secretary to the Treasury, said today that the government had to hold down public sector pay to prevent a “replay of the 1970s” citing Margaret Thatcher in arguing “there is no alternative”.Nadhim Zahawi, in his first speech as the country’s new (and possibly temporary) chancellor, yesterday signalled a continuation of the fiscal policies of his predecessor Rishi Sunak, prioritising the taming of inflation and ruling out borrowing for tax cuts. Sunak, it was confirmed this afternoon, will face Liz Truss, the foreign secretary, in a run-off among Conservative members over the summer to become party leader and prime minister.Are big corporate profits to blame for inflation? Listen to the new edition of our Behind the Money podcast.Latest newsConsumer confidence in eurozone falls to record lowRussia signals plan to annex fresh parts of UkraineCanadian inflation rate hits 39-year high of 8.1 per centFor up-to-the-minute news updates, visit our live blogNeed to know: the economyOur Big Read lays out the “impossible situation” facing the European Central Bank as it prepares to raise interest rates tomorrow to contain inflation, just as war and the energy crisis threaten to put the eurozone into recession. Speculation is growing that the ECB could opt for a bigger than originally expected rise of 50 basis points.Latest for the UK and EuropeUK ministers have overridden their own planning inspector to approve a new nuclear power station on the site of an existing plant at Sizewell in Suffolk as it seeks to bolster domestic energy sources. It would take up to 12 years to build and be able to power up to 6mn homes.A parliamentary report said the UK government had made little progress in tackling PPE procurement fraud during the pandemic, leaving taxpayers on the hook for businesses’ “excessive profits”. The public accounts committee chair added that the “complete collapse of some of the most well-established civil service practices beggars belief”.Brussels asked EU member states to cut gas use by 15 per cent as it waits to see if Russia will reduce supplies. Hopes however are rising that flows from Russia to Germany will resume tomorrow. The IMF warned yesterday that an embargo on Russian gas would lead to severe recessions in the Czech Republic, Hungary, Slovakia and Italy if countries began to hoard supplies. The Energy Source newsletter (for Premium subscribers) examines how the global energy crisis might play out.Mario Draghi offered to stay on as Italy’s prime minister if the squabbling parties in his coalition agreed to reforms. The country’s hard-right parties are poised to step up if Draghi goes.Ukraine and Russia are inching towards a deal to end the blockade of grain exports. Ukraine’s agriculture minister Mykola Solskyi told the FT that if the blockade remained it would mean two-thirds less wheat being planted this year, worsening the global food crisis. A group of Ukraine creditor countries backed a debt moratorium as it holds on to cash for an elongated war with Russia.Global latestChina reported daily coronavirus infections above 1,000 for the first time since May, raising the prospect of further lockdowns. The FT editorial board said Beijing’s zero-Covid policy risks weakening already frail economic growth, not only in China but across the world.The Democratic Republic of Congo has upped the number of oil exploration blocks it will auction next week from 16 to 27 in response to calls for increased crude production following the Ukraine war.The two-year surge in house prices in several advanced economies is likely to come to an end as the era of low interest rates passes. Some could even experience falls in prices as their central banks plump for big rate rises, especially those with a high level of home ownership and use of adjustable rate mortgages. UK prices in the meantime continue to surge: official data showed an increase of 12.8 per cent in the year to May.The closure of Australia’s borders during the pandemic starved the country of the backpackers and temporary workers that normally staff hotels and bars and pick fruit and vegetables. The combined effect of the slowdown in immigration and a booming economy has left almost half a million jobs unfilled. The government has launched a review of the country’s central bank for its tardiness in implementing rates rises and its “embarrassing” forecasting.Protests over the cost of living have now reached Panama, as the traditionally stable Central American nation experiences its worst unrest since the fall of Manuel Noriega in 1989.Need to know: businessBusiness confidence in the global economy continues to fall. US fund managers have reached a “dire level” of pessimism, cutting their allocations to shares to the lowest level since the financial crisis, as the outlook for company profits dims. In the UK, a survey showed 76 per cent of FTSE 350 businesses expected the global economy to deteriorate, the lowest level of confidence in a decade.Furniture retailer Made.com joined those UK companies slashing their forecasts as consumer confidence dives. It’s only a matter of time before the same happens to non-consumer sectors, as is already on display in the US earnings season, writes Cat Rutter Pooley.Some more signs of the times in the UK food sector. Rising costs fuelled more losses at 2 Sisters, the country’s biggest chicken producer, but better than forecast sales at Premier Foods highlighted the increase in home cooking among cash-strapped consumers. Netflix, which prompted a sell-off in big media shares in April when it revealed its subscriber growth had ended, is optimistic that customer departures are slowing, thanks partly to the success of the new Stranger Things season. The Lex column said profitability remained a concern but Netflix’s ability to drive the social conversation should not be underestimated.Airbus chief Guillaume Faury said the supply chain crisis would last until next year as manufacturers struggle to increase production and businesses face shortages of raw materials and components. International business editor Peggy Hollinger says the aviation sector needs to learn the lesson of the pandemic and work together to build resilience after too much cost-cutting. Read more on the challenges facing the industry in our special report: Aerospace and Defence.Akzo Nobel, Europe’s biggest paint maker and producer of Dulux, missed its earnings forecasts after being hit by Chinese lockdowns and a drop in demand from Europe.US pharma group Johnson & Johnson cut its full-year profit forecast again as the strong dollar hit overseas sales, highlighting the problems faced by American multinationals during turmoil in global currency markets.Top hedge fund energy trader Bill Perkins is opening an office in London to capitalise on opportunities in the “crazy” European gas market.The political turmoil in the UK has led to SoftBank pausing plans for the London listing of Arm, which was set to be one of the country’s biggest-ever tech flotations. A bill to provide subsidies for US semiconductor manufacturing could cause more financial woes for Chinese chipmakers, says the Lex column. Dutch manufacturer ASML has benefited from the recent global shortage.The World of WorkMany people took up activities such as running and cycling to escape the rigours of lockdown but can thinking like a sports star improve our productivity and performance? And can we draw leadership lessons from the sports world? Isabel Berwick speaks to a former England cricketer turned consultant as well as former FT editor and keen cyclist Lionel Barber in the latest Working It podcast.Get the latest worldwide picture with our vaccine trackerAnd finally…You can change her appearance, voice and gender, and for just over £5 a month, she can be your girlfriend, wife, sister or even mentor, explains Siddharth Venkataramakrishnan of his new virtual pal Ada. Ever more sophisticated chatbots might be less burdensome than real friendships, but should we worry they encourage a withdrawal from society, he asks. © Replika More

(Reuters) -Nasdaq Inc on Wednesday reported quarterly profits that beat Wall Street expectations, as traders turned to the exchange operator’s investment-related products to navigate market volatility, helping drive up revenues.Nasdaq’s second-quarter net income was down around 10% from a year earlier, mainly due to a business divestiture in the year-ago quarter, as well as higher compensation-based expenses, at $307 million, or $1.85 per diluted share, from $341 million, or $2.05 cents per diluted share, a year earlier.Stripping out one-time items, Nasdaq earned $2.07 per share, well above analysts’ average estimate of $1.91 per share, according to IBES data from Refinitiv.Net revenue rose 6% to $893 million, primarily driven by a 10% growth in the company’s solutions segment, which also houses anti-financial crime technology and environmental, social, and governance (ESG) advisory products. Under Chief Executive Officer Adena Friedman, the stock exchange operator has looked to diversify its offerings and reposition itself as a leading financial technology company with an expanding footprint in the software sector, offering analytics, data and cloud services.Last month, Nasdaq also said it planned to acquire ESG software provider Metrio for an undisclosed amount.The company’s Nasdaq stock market hosted 38 IPOs in the reported quarter, compared with 135 stock market flotations in the year-ago quarter.Earlier this month, Nasdaq was also among large exchange groups that won a ruling against the Securities and Exchange Commission when a U.S. appeals court struck down the regulator’s order that would have allowed some financial firms to have a say in how essential stock market data is priced and disseminated. More

KYIV/LONDON (Reuters) – Ukraine will ask international bondholders to agree to a 2-year delay on its debt payments so it can focus its dwindling financial resources on repelling Russia, a government resolution published on Wednesday showed.Facing an estimated 35-45% crash in GDP this year following Moscow’s invasion in February, lawmakers have instructed the country’s finance ministry to negotiate the deferral on its roughly $20 billion of debt by August 15.The delay, which many creditors say is likely to be accepted and was quickly backed https://www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Europa/Krieg-in-der-Ukraine/statement-zum-schuldenmoratorium-fuer-die-ukraine.html by major western powers, would come just in time to put off around $1.2 billion of debt payments due at the start of September.The government’s resolution posted on its website said, “all interest payment dates for the bonds” would be deferred under the plan.In a bid to avoid what would be classed as a hard default, Kyiv plans to offer lenders, which include governments and many of the world’s largest investment funds, additional interest payments once the freeze ends.Ukraine has estimated a fiscal shortfall of $5 billion – or 2.5% of pre-war GDP – a month, which economists calculate pushes its fiscal deficit to 25% of GDP, compared with just 3.5% before the conflict.On top of that researchers from the Kyiv School of Economics estimate that it will already take over $100 billion to rebuild Ukraine’s bombed infrastructure, while the head of the EU’s powerful financing arm, the European Investment Bank, has warned it could run into trillions. “We, as official bilateral creditors of Ukraine, intend to provide a coordinated suspension of debt service,” a group of governments including the United States, Canada, France, Germany, Japan and Britain said shortly after Ukraine made its proposal.”We also strongly encourage all other official bilateral creditors to swiftly reach agreement” the group added. Wednesday’s move had marked something of a U-turn from Kyiv, which had repeatedly said in recent months that it planned to keep up debt payments despite the war. GRAPHIC: Ukraine bonds brace for default https://fingfx.thomsonreuters.com/gfx/mkt/dwpkrbaxrvm/Pasted%20image%201657725996621.png Speculation that a debt freeze request could be imminent however was fanned last week after the country’s state-run energy firm Naftogaz also requested one.”A proper restructuring still needs to happen, said Viktor Szabo, a portfolio manager at abrdn which holds Ukraine’s government bonds. “But it cannot be done before the situation normalizes on the ground, i.e. a sustained cease-fire at least.”Ukraine has a host of bonds, borrowings which add up to over $20 billion in total. The government also plans to postpone payment on a growth-linked ‘warrant’ offered after its last restructuring in 2015, which was designed to pay investors handsomely if the economy hit its stride.Tymofiy Mylovanov, an adviser to the Ukrainian presidential office, had urged Western countries to increase their financial support in recent weeks. Global institutions such as the International Monetary Fund, World Bank and Western governments have committed to providing $38 billion since the invasion, although almost 80% of that support is made up of loans rather than aid.Wednesday’s move from Ukraine had little impact on the bonds that Kyiv wants to delay. The prices of most of those bonds had already slumped roughly 80% since the start of the year when the build up of Russian troops on its eastern borders began.($1 = 29.5000 hryvnias) (Additional reporting Karin Strohecker in London, Editing by Timothy Heritage, Elaine Hardcastle, William Maclean) More