Aurelia Butler

PARIS (Reuters) – French President Emmanuel Macron paid a surprise visit to a Socialist-held working class suburb north of Paris on Wednesday on his first official outing since his re-election, in an effort to woo left-wing voters ahead of June’s parliamentary vote.Macron strolled around a food market in the town of Cergy, shaking hands, chatting with young people and posing with them for selfies, in what the Elysee palace said was a way to show he was “listening to people’s concerns, expectations and needs”.Macron, a centrist, has long faced accusations of being too aloof and elitist, charges that discouraged some left-wing voters from backing him in Sunday’s runoff vote against far-right candidate Marine Le Pen.”I want to give a message of respect and consideration to these areas that are among the poorest in the country right from the start of my new mandate,” Macron told reporters in Cergy, where far-left candidate Jean-Luc Melenchon won almost half of the votes in the first round of the presidential election.RISING PRICESSources close to Macron say he needs to counter the challenge mounted by Melenchon for the parliamentary elections on June 12 and 19, a crucial hurdle which will determine the president’s ability to govern for the next five years. Melenchon, who came a strong third in the first round of the presidential vote after Macron and Le Pen, wants to rally a union of the left to dominate parliament and force Macron into an awkward “cohabitation”.The cost of living has emerged as voters’ number one priority in this year of elections, which coincide with sharp rises in food, energy and petrol prices partly caused by post-pandemic disruptions and by the war in Ukraine.Officials from working class areas say voters are particularly angry over rising prices of food staples including bread, rice and Ukraine-produced sunflower oil.”The most basic stuff is now very, very expensive,” Mohammed Djae-Rachid, the head of the local Comorian community told Reuters TV. “Imagine that, a bottle of cooking oil used to cost one euro, now it’s three euros. All the stores are empty, it’s becoming very hard for everybody,” he said.Macron’s security detail at one point opened an umbrella to protect him against what appeared to be an attempt to pelt him with tomatoes on what was otherwise a friendly walkabout, where locals – many from an immigrant background – jostled excitedly to take pictures of themselves with the president.Asked who he would name as his prime minister, Macron said cryptically: “I will name someone who is keen to work on social, environmental and productive issues.” More

BEIJING/SHANGHAI (Reuters) -Millions of people in Beijing took their second COVID-19 tests of the week on Wednesday as the Chinese capital tried to keep an outbreak numbering in the dozens from spiralling into a crisis like the one the locked-down city of Shanghai is enduring.Evidence that Shanghai’s month-long isolation has become almost unbearable for many of the city’s 25 million people is emerging on an almost daily basis on the country’s heavily censored internet.A widely circulated video – since taken down – showed a foreigner trying to break through metal barriers onto a Shanghai street, before being pulled back and dragged to the ground by four people in protective hazmat suits. “I want to die,” the man shouted repeatedly in Chinese and English. One of the people holding him down responded: “You came to China, you need to respect the laws and regulations here.””Calm down, calm down,” says another. Reuters was unable to immediately verify the authenticity of the video. Such distressing scenes are being watched with apprehension in Beijing, where officials hope early mass testing will spare them the anguish of Shanghai, where officials waited for about a month as cases surged before ordering city-wide screening.In Beijing, supermarkets have kept supplies well-stocked under orders from authorities. Shi Wei, 53, a retiree, said he was encouraged by the capital’s low caseload but still nervous.”These past two days every time I go to the supermarket there are lots of people, so I just turn around and leave, as I feel slightly unsafe,” he said. “I can understand the panic, given what happened in Shanghai.”Geng, 31, who works in finance and only gave his surname, said he worried about being a close contact of a COVID case and being forced into quarantine with his whole family.Beijing was testing the more than 3.5 million residents of its Chaoyang district on Wednesday, all of whom were screened on Monday. On Tuesday, 16 million from other districts were tested and are due for another round on Thursday.In total, 20 million of Beijing’s 22 million will be tested three times this week.Results for almost all samples from the first round came through on Wednesday afternoon, with 12 tubes of mixed samples showing positive, a Beijing health official said. Some 46 new cases have been identified since 4 p.m. on Tuesday, a second Beijing official said.In mass testing in China, multiple samples are tested together in a single tube for speed and efficiency.GLIMMER OF HOPEThe coronavirus first emerged in the Chinese city of Wuhan in late 2019 and authorities managed to keep outbreaks largely under control with lockdowns and travel bans. But the fast-spreading Omicron variant has tested China’s “zero-COVID” policy.Shanghai has been offered a glimmer of hope with officials reiterating that they would soon begin easing restrictions in districts that have stamped out infections, without giving a time frame or other details. In the meantime, most people are confined to their homes. Even those who can go out have few options, with most shops and other venues closed.Data showed six of Shanghai’s 16 districts had zero cases outside quarantined areas, with numbers in seven others in the single digits. In total, Shanghai detected 171 such cases on Tuesday, down from Monday’s 217. Shanghai reported 48 new deaths on Tuesday, down from 52 the day before, taking the city’s official death tally since April 17 to 238.ECONOMIC PAINChina’s zero tolerance policy has provoked rare public anger in an important year for President Xi Jinping, over measures that look increasingly bizarre to much of the outside world that has chosen “live with COVID”, even as infections spread.Xi is widely expected to seek a third leadership term this year.Research by Gavekal Dragonomics estimated that 57 of China’s 100 biggest cities were under some form of COVID curbs as of last week.The measures have hurt consumption, disrupted industry and prompted official efforts to stimulate the world’s second largest economy, including stepping up infrastructure investment, state television reported, citing a meeting chaired by Xi.Hundreds of factories have been allowed to resume operations, with state media giving plenty of coverage of the reopening of Tesla (NASDAQ:TSLA)’s Shanghai plant last week. But industry associations say most factories are struggling to get back to work with staff stuck at home, trucks parked in lots, and orders of components from contractors in the same situation unfilled.Many frustrated bankers, traders and investors confined to their homes say they are considering moving to other financial centres. More

The chief investment strategist at Bridgewater Associates, the world’s largest hedge fund, says interest rates will need to rise a lot higher than Powell thinks in order to tame inflation. The aggressive policy tightening that’s expected will continue to lift yields of all maturities, which helps explain why the firm is shorting Treasuries across the curve.“Markets are discounting that you are going to have inflation not back down to 2%, but to around 3%, over the next three years — and that’s with a lot of Fed tightening,” Patterson said during an interview at Bridgewater’s campus in Westport, Connecticut. “The question to us is if it’s enough to get inflation to where markets are discounting it. We think the risk is that it is not.”Patterson is the type of market veteran who central bankers listen to, based on her reputation for making correct calls in a career that’s taken her from cub reporter at a local newspaper in Florida to the right-hand side of Ray Dalio, Bridgewater’s famous founder. The 53-year-old has been a member of the Fed’s advisory committee, and has appeared on American Banker’s annual Most Powerful Women in Banking list multiple times.These days, Patterson and her Bridgewater colleagues are looking suspiciously at market pricing that suggests a peak federal funds rate of just over 3% in this tightening cycle, above the 2.8% level that policy makers have signaled will be needed to control inflation. That outlook alone has already helped lift benchmark 10-year Treasury yields to a more-than three-year high of almost 2.98% this month. Yet the U.S. breakeven rate — a bond-market gauge of expectations — still projects headline inflation averaging about 2.9% over the coming decade. The consumer price index rose by an annual rate of 8.5% in March, with the core rate — which strips out food and energy costs — at 6.5%. Bridgewater expects core CPI to remain at 6.5% in a year’s time. While she declined to say exactly how much she believes the Fed needs to hike, Patterson said the central bank’s benchmark rate needs to go much higher than expected to get inflation back down to anywhere near the Fed’s 2% target for the personal consumption expenditure index, which runs about 40 basis points below CPI, or even to what breakevens are pricing. To Patterson, that all adds up to a further rise in yields.“Ten-year Treasury yields have decent room to run,” Patterson said during the April 12 interview. “3% is really easy to see, and I wouldn’t rule out that we could see 4%.” Patterson’s not alone in her thinking about the Fed funds rate. Deutsche Bank economists warned on Tuesday that the central bank likely needs to engage in the most aggressive monetary tightening since the 1980s, assuming “conservatively” that the benchmark rate needs to be lifted well into the 5% to 6% range.Read More: Deutsche Bank Sees 5%-6% Fed Target Rate and Deep U.S. RecessionTo bulletproof their funds for an environment of persistent inflation and higher rates, Bridgewater also is invested in diversified and cyclical commodities, gold and inflation-linked bonds. In equities, the firm is short U.S. stocks and long Japan given the sharp withdrawal of liquidity by the Fed. Patterson has confidence that she and her colleagues will help Bridgewater continue to navigate a tricky market environment after an impressive start to the year. The firm posted a 16.3% return for the first quarter, a period in which both stocks and Treasuries retreated. Before joining Bridgewater, her track record managing money at Bessemer Trust — where she worked for eight years before leaving as chief investment officer in January 2020 — led former New York Fed President William Dudley to invite her to be a member of the central bank’s Investor Advisory Committee on Financial Markets. She had previously sat on the New York Fed’s foreign-exchange committee, where she taught classes on currencies to junior central bankers. On the advisory committee, Patterson got to know Dalio and other hedge-fund heavy hitters who were also members, including Paul Tudor Jones, Bill Ackman and David Tepper. Besides market dynamics, she for decades has focused on efforts to hire and promote women and increase diversity in finance. She helped launch Bessemer’s diversity and inclusion committee and is involved in similar work at Bridgewater, where the staff is 36% women and 27% minorities, with women holding 20% of senior positions, according to the firm’s website. She was also recently named the board chairperson of the Council for Economic Education, which seeks to foster economic and financial literacy among kids. Patterson is leveraging her knowledge of currency markets as U.S. interest rates surge higher than those in other big developed nations like Japan. Weakness in the yen, which is hovering near a 20-year low versus the dollar, has caught her attention. She says the yen’s slide has more room to run since verbal intervention by Japanese officials will only slow the speed of a downtrend stemming from the divergence of U.S. and Japanese monetary policy.There are “both positive and negative implications of a weak yen; it helps their exporters but it causes inflation,” she said. “But Japan has been trying to get inflation for so long. I think they see this as an opportunity to reset” and just “manage the cost of the weaker yen.”©2022 Bloomberg L.P. More

ABIDJAN (Reuters) – Djeneba Belem’s fried bean cake stall in Abidjan is a world away from the war raging in Ukraine. But her business is now at the mercy of an unexpected consequence: runaway palm oil prices.”I didn’t even want to sell anymore because I thought, if the price of oil had gone up that much, what am I going to earn?” she said as she stirred a batch of cakes at her street-side stall in Ivory Coast’s lagoon-side commercial capital. Neither Russia nor Ukraine produces palm oil, a tropical commodity, but Moscow’s invasion has triggered knock-on effects across today’s intricately interconnected global economy. The conflict has helped propel prices for palm oil – ubiquitous in African dishes from Nigerian jollof rice to Ivorian sticky alloco plantains – to record highs that experts say will deepen a food-cost crisis and punish the poorest. The upheaval pushed top palm oil exporter Indonesia to ban some exports in recent days, in a effort to keep a lid on domestic prices. A senior government official said on Tuesday that the ban could be widened.”We’ve never really tested this kind of situation,” said James Fry, founder of agricultural commodities consultancy LMC International. “It will be the poorest in big countries or countries in Africa who will almost certainly have to bear the brunt.” Indeed in sub-Saharan Africa, food expenses already account for 40% of households’ consumer spending, the highest proportion of any region in the world, and more than double the 17% spent on food in advanced economies.And as prices rise rapidly across the board, including fuel, and tens of millions of Africans already pushed into extreme poverty by the pandemic, spiking palm oil prices will help force many to make tough choices. Lucy Kamanja, a beauty industry consultant in Kenya’s capital Nairobi, said a 90% increase in palm-based cooking oil means she’s had to cut down on fruit and household essentials. “I’m very worried. I don’t know where we’re heading to, because food has almost doubled in price,” she said. “The common person … I don’t know how we’re going to survive.” ‘GIANT LEAP’ IN FOOD PRICESEven before the outbreak of fighting in Ukraine, inflation had become a global concern. Food commodity prices climbed over 23% last year, the fastest pace in more than a decade, according the United Nations Food and Agriculture Organization (FAO). In March the FAO’s global price index for meat, dairy, cereals, sugar and oils hit its highest level since its inception in 1990, after a 12.6% “giant leap” from February.Cooking oils have been among the products hardest hit.Drought decimated soy oil exports from Argentina and rapeseed production in Canada. Poor weather in Indonesia and COVID-related immigration restrictions in Malaysia throttled palm oil output and caused labour shortages on plantations. “The only bright spot, in a way, was sunflower,” said LMC’s Fry.Then Russia sent its military into Ukraine in February, disrupting shipments from the Black Sea region, which accounts for 60% of sunflower production and over three-quarters of exports, and wiping out a huge share of global supply. If that wasn’t enough, high crude oil prices – another consequence of the war – have added further pressure to vegetable oil supplies by increasing demand for biofuels.”You almost couldn’t make it up how bad it’s been,” Fry added. “We have had really almost a perfect storm.” On March 9, about two weeks after Russia’s invasion, the Malaysian crude palm oil contract that serves as the global benchmark topped out at a record 7,268 ringgit ($1,718) per tonne, nearly double the price a year earlier.The contract, which jumped more than 9% on Wednesday, has now risen by close to 50% this year.REAPING THE BENEFITCulinary tradition aside, the choice of palm oil has also been an economic one for many poor countries, given it has historically been the cheapest of the major vegetable oils. Lately, however, World Bank data show it’s been catching up to rivals, particularly soy and sunflower oil. In March, for the first time, it temporarily became the costliest among the four major edible oils in India, considered a global price bellwether, signalling that the days when Africa’s go-to oil was reliably the cheapest could be over.While this is straining the nerves and budgets of millions of Africans, like Kamanja in Nairobi and Belem in Abidjan, it is also presenting some opportunities on the continent. Nearly two dozen African countries grow oil palm on almost 6 million hectares of land, and the sector is a major agricultural sector employer of workers who stand to see their incomes rise. Sylvain N’Cho runs an oil palm mill an hour east of Abidjan and estimates his revenues are up around 20% over the past year.”We’re not the only ones reaping the benefit of the increase in palm oil prices. Part of it goes to the farmers,” he said as heavy machines loaded bunches of red palm fruit onto a conveyor belt. Jerome Kanga, who farms two hectares near the Ivorian town of Adiake, said he was disappointed by the prices he was getting when he started producing three years ago. “But since December, and especially in February and March, it’s been more interesting. There’s been roughly a 20% increase,” he said. ‘EVERYONE IS COMPLAINING’Yet the number of people getting ahead is dwarfed by those feeling the squeeze.Africa consumes significantly more palm oil than it produces in a global market dominated by Southeast Asia. Even in Ivory Coast, one of just a handful of net palm exporters, N’Cho conceded that consumers are in for pain. “If there is an increase over there, there’s systematically an increase on the local market,” he said. African nations imported nearly 8 million tonnes of palm oil in 2020, according to the FAO, the latest year for which data is available. Nigeria, the continent’s biggest importer, shipped in over 1.2 million tonnes of palm oil. Kenya brought in nearly $830 million worth. Ann Obanih, who runs a small food shop in Lagos, Nigeria, said the price of the refined red palm oil she buys to resell has gone up roughly 20% in the past month alone. “Everyone is complaining, as if we’re the ones adding the money. We’re selling according to how we bought it,” the mother-of-six added. “I don’t even know how to cook without palm oil.” ($1 = 4.2300 ringgit; $1 = 597.7500 CFA francs) More

China will also tackle bottlenecks in supply chains affected by COVID by easing congestion at ports and airports and restoring delivery services, according to a State Council meeting chaired by Premier Li Keqiang.From May 1 till the end of the year, China will exempt delivery firms’ revenues from value-added tax, it added. More