Aurelia Butler

The “Bayesian,” a luxury yacht owned by Angela Bacares, sank near the Sicilian port of Porticello during a severe storm. Of the 22 people on board, 15 were rescued, including a one-year-old child.One person died, and six, including yacht owner Bacares’ husband, British tech entrepreneur Mike Lynch, and Morgan Stanley Chairman Jonathan Bloomer, remain missing. Lynch’s 18-year-old daughter is also among the unaccounted for, the report added. Also reported missing are Chris Morvillo, a lawyer at Clifford Chance, and several others of British, American, and Canadian nationality. Eyewitnesses described the yacht vanishing quickly beneath the waves just before dawn. The report mentioned that the Italian coast guard confirmed the missing individuals were on a trip organized by Lynch for his work colleagues. The captain of a nearby boat described turning on his engine to avoid colliding with the Bayesian as the storm intensified. After the weather subsided, the yacht was nowhere to be found. More

Confidence is returning to Wall Street as investors prepare for what are expected to be largely dovish comments from Fed Chair Jerome Powell at the U.S. central bank’s annual economic symposium in Jackson Hole, Wyoming at the end of the week.Markets recorded their best week of the year last week, with major inflows into the S&P 500 index in particular [see below] as recent positive data relieved worries over the prospect of a recession.Powell will likely use the Friday morning address to frame the Fed’s strategy for reducing rates, according to Evercore ISI analysts, in a note, highlighting that the central bank is prepared to implement significant cuts if needed.”We think Powell’s take will be reassuring and consistent with a soft baseline of a string of 25s, but he will convey the Fed is open to 50s and the bar for this is not very high,” said Evercore ISI.The investment bank anticipates that Powell will affirm the Fed’s confidence in inflation trending back towards the 2% target, signaling that rate reductions could commence as soon as September.However, “we do not expect a hard steer as to whether the first move will be a 25bp or 50bp cut,” Evercore ISI states. Instead, Powell is expected to suggest that the decision will hinge on the upcoming labor data.The Fed has maintained its benchmark overnight interest rate in the current 5.25%-5.50% range since last July.U.S. stock futures edged higher Tuesday, continuing the recent winning streak amid confidence that the Federal Reserve will shortly start cutting interest rates, helping activity in the world’s largest economy. By 04:00 ET (08:00 GMT), the Dow futures contract was 40 points, or 0.1%, higher, S&P 500 futures climbed 6 points, or 0.1%, and Nasdaq 100 futures rose by 45 points, or 0.2%.The benchmark Wall Street indices closed higher Monday, with the S&P 500 advancing nearly 1%, while the NASDAQ Composite added 1.4%. Both indexes posted their eighth straight positive session, a first for the S&P 500 since November 2023, and the longest winning stretch for the Nasdaq since December 2023. The Dow Jones Industrial Average gained 0.6%. The economic data slate is largely empty Tuesday, and investors will continue to focus on the minutes from the Federal Reserve’s most recent meeting, on Wednesday, and then Friday’s Jackson Hole speech by Jerome Powell.Earnings are due from home improvement retailer Lowe’s (NYSE:LOW), while cybersecurity company Palo Alto Networks (NASDAQ:PANW) stock rose almost 2% after posting top and bottom line beats for the fiscal fourth quarter. The battle to take over Paramount Global (NASDAQ:PARA) has heated up with media executive Edgar Bronfman Jr. submitting a roughly $4.3 billion bid to acquire National Amusements, the company that owns a controlling stake in the media giant.This move threatens to undo a planned acquisition by David Ellison, the founder and CEO of Skydance Media.Bronfman’s offer includes $2.4 billion in debt and equity for National Amusements, according to a Reuters report, and would also contribute $1.5 billion to Paramount’s balance sheet, which could be used to pay down debt. Skydance reached an agreement last month to buy out the Redstone family’s controlling stake in the home of Paramount Pictures, the CBS broadcast network and MTV, and subsequently merge into the larger publicly traded company.That agreement contained a 45-day “go-shop period” that allowed Paramount to solicit and evaluate other offers, but if Paramount chooses another suitor, it must pay Skydance a $400 million break-up fee.Investor sentiment has shifted markedly over the past week, resulting in substantial inflows into the S&P 500 index, with positive economic data appearing to have underpinned this renewed investor confidence.Both the U.S. PPI and CPI releases reassured investors of the easing inflationary environment, contributing to a more optimistic economic outlook and reducing fears of a protracted inflationary period.“Net positioning rose across US indexes, with the S&P seeing distinctively larger and consistent new risk flows throughout the week. Notional positioning rose by almost $18bn, with the vast majority ($16bn+) coming from new longs,” analysts at Citi said. “Nasdaq and Russell position flows followed a similar rising trend, but the magnitude of flows was much smaller,” they added. This influx of capital has been accompanied by a marked reduction in short positions, as the rally pushed all short positions into loss territory. However, Citi notes that the risks associated with these short positions are mitigated by the relatively smaller size of these positions.The Nasdaq, in particular, had been under pressure from long position losses, but these losses have now eased significantly, reducing pressure on investors and improving the overall profit setup for the index.Crude prices fell Tuesday on easing geopolitical risks after progress over a potential ceasefire deal in Gaza. By 04:00 ET, the U.S. crude futures (WTI) dropped 1% to $72.94 a barrel, while the Brent contract fell 1% to $76.88 a barrel.U.S. Secretary of State Antony Blinken said on Monday that Israeli Prime Minister Benjamin Netanyahu had accepted a “bridging proposal” presented by Washington to tackle disagreements blocking a ceasefire deal in Gaza, and urged Hamas to do the same.This points to an increased likelihood of a ceasefire deal, which would see market participants pricing out the risks of an escalation across the wider region, potentially hitting supply from this oil-rich region.Concerns over China’s demand outlook continue to weigh, with the decision of the People’s Bank to keep its benchmark loan prime rate unchanged disappointing some traders given the country’s recent weak economic data.In the United States, the American Petroleum Institute will release its estimate of U.S. crude stockpiles later in the session. More

BENGALURU (Reuters) – The Bank of Korea will keep its key interest rate at 3.50% on Thursday and cut it next quarter after the U.S. Federal Reserve likely begins easing in September, according to a Reuters poll.The benchmark rate has been at 3.50% since January 2023. With inflation rising 2.6% in July from an 11-month low of 2.4% in June, moving further away from the central bank’s 2% target, the BOK may need to see prices stabilising before it starts to ease policy.The Korean won, which has lost over 3% against the dollar this year and is one of the worst-performing emerging market currencies in 2024, was also likely to prevent the BOK from leapfrogging the U.S. Federal Reserve’s first rate cut, which is widely expected to come in September. A strong majority of economists, 38 of 40, in the Aug. 13-19 poll forecast the central bank would keep its base rate unchanged at 3.50% on Aug. 22. The remaining two predicted a 25 basis point cut to 3.25%.Although two board members said in July they were open to rate cuts, economists cautioned such a move could exacerbate house price increases in Seoul, heightening concerns in a country with one of the world’s highest household debt-to-GDP ratios, at 104.3% in the first quarter.”The BoK will continue to signal a more dovish stance, albeit cautiously, given persistent concerns about rising home prices and the associated financial stability risks,” wrote Krystal Tan, economist at ANZ Bank.”Our base case is still for the BoK to kick off its rate easing cycle in October, following a likely Fed pivot in September. The government is also set to tighten debt service ratio regulations from September, which should help contain growth in household debt.”Median forecasts showed no change to interest rates this quarter but predicted a 25 basis point cut to 3.25% in the October-December quarter. This outlook was largely unchanged from a July survey.Among economists who provided an outlook until the end of 2024, 27 forecast the rate would be at 3.25%, while eight predicted 3.00%.”We think the BOK will cut rates in October, with inflation higher than expected there is no urgency… to cut as soon as August. Also, house prices in Korea (are) actually quite high at the moment,” said Kelvin Lam, senior economist at Pantheon Macroeconomics.The BOK has cited growth in household debt and rising home prices as key factors it is monitoring before opening the door to rate cuts. House price increases accelerated in July, with prices in Seoul increasing the most in over four years. Going into next year, the BOK was expected to cut rates by an additional 75 basis points, bringing its interest rate to 2.50% by the end of 2025, the poll showed. (This story has been refiled to fix wording in the headline) More

PALERMO, Sicily (Reuters) -One man died and six people were missing, including British tech entrepreneur Mike Lynch and his daughter, after a luxury yacht was struck by an unexpectedly violent storm and sank off Sicily early on Monday.The British-flagged “Bayesian”, a 56-metre-long (184-ft) sailboat, was carrying 22 people and was anchored just off shore near the port of Porticello when it was hit by ferocious weather, the Italian coast guard said in a statement.Eyewitnesses said the yacht vanished quickly beneath the waves shortly before dawn. Fifteen people escaped before it went down, including Lynch’s wife, Angela Bacares, who owned the boat, and a one-year-old girl.The names of the dead and missing were not immediately released, but a person familiar with the rescue operation confirmed that Lynch and his 18-year-old daughter, Hannah, were not accounted for. Salvatore Cocina, head of the Civil Protection in Sicily said Jonathan Bloomer, chairman of Morgan Stanley International and Chris Morvillo, a lawyer at Clifford Chance were also among the missing people.Italian media said the dead man was the yacht’s onboard chef.Morgan Stanley did not immediately respond to a phone call and email seeking comment after hours. Clifford Chance did not return a request for comment.The Italian coast guard said the missing had British, American and Canadian nationalities. Survivors said the trip had been organised by Lynch for his work colleagues.”The wind was very strong. Bad weather was expected, but not of this magnitude,” a coast guard official in the Sicilian capital Palermo told Reuters.The captain of a nearby boat told Reuters that when the winds surged, he had turned on the engine to keep control of his vessel and avoid a collision with the Bayesian, which had been anchored alongside him.”We managed to keep the ship in position and after the storm was over, we noticed that the ship behind us was gone,” Karsten Borner told journalists. The other boat “went flat on the water, and then down,” he added. He said his crew then found some of the survivors on a life raft – including a baby girl and her mother – and took them on board before the coast guard picked them up.Lynch, aged 59, is one of Britain’s best-known tech entrepreneurs. He built the country’s largest software firm, Autonomy, from his ground-breaking research at Cambridge University, and became known as Britain’s Bill Gates. He sold the firm to HP (NYSE:HPQ) for $11 billion in 2011, before the deal unravelled spectacularly following the acquisition, with the U.S. tech giant accusing him of fraud.Once lauded by academics, scientists and politicians, Lynch spent much of the last decade in court defending his name. He was acquitted by a jury in San Francisco in June, after he spent more than a year living effectively under house arrest. He said at the time that he was “elated” to be cleared in the criminal trial in which he denied any wrongdoing and blamed HP for botching the integration of the two companies.DIVERS INSPECT WRECKThe coast guard said divers were inspecting the wreck of the Bayesian, which was lying at a depth of 49 metres.Prosecutors in the nearby town of Termini Imerese have opened an investigation to look into what had gone wrong.Storms and heavy rainfall have swept down Italy in recent days after weeks of scorching heat, which had lifted the temperature of the Mediterranean sea to record levels, raising the risk of extreme weather conditions, experts said.”The sea surface temperature around Sicily was around 30 degrees Celsius (86 Fahrenheit), which is almost 3 degrees more than normal. This creates an enormous source of energy that contributes to these storms,” said meteorologist Luca Mercalli.”We can’t say that this is all due to global warming but we can say that it has an amplifying effect,” he told Reuters.The Bayesian was built by Italian shipbuilder Perini in 2008 and was last refitted in 2020. Its 75-metre mast is the tallest aluminium mast in the world, Perini said on its website.The shipspotting.com website said the boat was owned by a firm called Revtom Limited. Lynch’s wife Bacares is named as the sole shareholder of the firm on company documents.The yacht’s name would resonate with Lynch because his PhD thesis and the software that made his fortune was based on Bayesian theory.The ship won a string of awards for its design and can accommodate up to 12 guests in six suites and a crew of 10, according to online specialist yacht sites. The boat left the Sicilian port of Milazzo on Aug. 14 and was last tracked east of Palermo on Sunday evening, with a navigation status of “at anchor”, according to vessel tracking app Vesselfinder. More

Minutes of its Aug 5-6 board meeting out on Tuesday showed the Reserve Bank of Australia (RBA) considered raising its 4.35% cash rate as underlying inflation remained too high at 3.9% and financial conditions appeared to have eased, with a pickup in credit growth and house prices.However, it decided the case to hold steady was the stronger one as it would best balance the risks to both inflation and the labour market, given prevailing uncertainty about staff forecasts, market volatility and expectations for rate cuts. In particular, the board judged market pricing for rate cuts in the coming year, including a first easing by December, was incompatible with a return of inflation to the mid-point of the target band of 2-3% in 2026. As a result, the RBA felt the need to push back against talk of a near-term reduction in rates and might possibly keep rates steady for “an extended period”. “Members also observed that holding the cash rate target steady at its current level for a longer period than currently implied by market pricing may be sufficient to return inflation to target in a reasonable timeframe, but that the board will need to reassess this probability at future meetings,” the minutes showed. The board also stressed that it was appropriate to continue placing somewhat greater-than-usual weight on the flow of data given the degree of uncertainty about the staff’s forecasts for spare capacity, unemployment and consumer demand. The RBA has held interest rates steady for six straight meetings now, having raised them by 425 basis points to a 12-year high since May 2022.Markets are wagering there is an 84% probability that the RBA could cut by the year-end, and a cut in February is more than fully priced in.(This story has been refiled to fix a typo in paragraph 7) More

TOKYO (Reuters) – Japan’s dwindling working-age population is leading to structural changes in the labour market that are heightening pressure on firms to hike wages and services prices, the Bank of Japan said in two research papers released on Tuesday.The findings back up the central bank’s argument that broadening inflationary pressures warrant raising interest rates steadily from current near-zero levels.Permanent workers’ pay remained stagnant even as labour shortages intensified since the mid-2010s, as female and elderly workers filled the gap by taking on low-paid, part-time jobs.The trend is changing as a dwindling pool of female and elderly workers, rising job hoppers and an increase in pay for part-time jobs prod firms to hike permanent workers’ pay, the BOJ said in a research paper on Japan’s labour market.”Labour shortages are triggering changes in companies’ wage-setting behaviour,” the paper said. “Scope for additional labour supply is likely to gradually shrink, which is seen keeping upward pressure on wages.”Such wage pressure is beginning to replace raw material costs as the main driver of inflation, the BOJ said in another research paper on Japan’s service-sector prices.Services ranging from English lessons to tuition to massage have seen prices rise as labour costs continue to increase, the paper said.”With wage pressure heightening, companies’ price-setting behaviour is changing” and propping up service-sector prices, which had hovered around zero since the late 1990s, it said.The BOJ ended negative interest rates in March and hiked short-term borrowing costs to 0.25% in July on the view a solid economic recovery will keep inflation durably at its 2% target.BOJ Governor Kazuo Ueda has said the central bank will keep raising interest rates if economic growth and inflation move in line with its projections. More

TOKYO (Reuters) – Japan is ramping up promotional efforts to boost seafood exports to more destinations in Asia, the U.S., and Europe as it seeks to fill a sales gap left by a year-long Chinese import ban, the head of the Japan External Trade Organization said.China, previously the biggest market for Japanese seafood exports, banned purchases of Japanese-origin seafood citing risk of radioactive contamination after Tokyo Electric Power started releasing treated water from the wrecked Fukushima nuclear power plant into the Pacific Ocean last August. Japan’s exports of agricultural, forestry and fishery products in the first half of 2024 fell for the first time since 2020 as exports to China plunged 43.8%. Scallops were the hardest-hit, dropping 37% year-on-year.”We haven’t yet fully compensated for the loss from China in volume, but exports to the U.S., Canada, Thailand and Vietnam are increasing, significantly boosting momentum in alternative markets,” said Norihiko Ishiguro, the chairman of the Japan External Trade Organization, or JETRO.The government-backed trade body is promoting the diversification of export destinations for scallops and other products impacted by China’s curb by establishing new commercial channels in Asia, the U.S., and Europe, he added.”Our intensive promotional efforts have enabled us to redirect 20-30% of the scallop exports lost due to China’s import ban,” Ishiguro said on Friday, ahead of the first anniversary of the Fukushima water release on Aug. 24.”There is significant growth potential for Japanese seafood exports … it won’t take long to make up for the gap caused by China’s ban,” he added.Japan exported 87.1 billion yen ($592 million) worth of aquatic products to China in 2022, making it the biggest market for Japanese exports, according to government data. The figure, which includes pearl and coral, plunged to 61 billion yen in 2023 and 3.5 billion yen in the first half of 2024.PROMOTION EFFORTSWith an additional 5 billion yen budget from the government, the JETRO has supported 170 events in the past year to promote scallops, yellowtail and other fishes in more than 70 cities in Japan and abroad, including Davos, Switzerland and San Francisco, according to Ishiguro and another JETRO official.It has also invited renowned chefs, influencers and buyers from abroad to tour fish markets and fisheries in Japan, while campaigns in Thailand promoted Japanese seafood in non-Japanese restaurants like Thai, Italian, Chinese.Mission have also been sent to Vietnam and Mexico to explore alternative processing sites for scallops, aiming to replace China’s supply chain, Ishiguro added.Growth can be expected in emerging markets like Eastern Europe and the Middle East, he noted, pointing out that there are 2,000 Japanese restaurants in Poland alone.The weak yen and the boom in Japan tourism are also contributing factors, he said, adding there is no longer any reputational risk linked with Japanese seafood outside of China.($1 = 147.1500 yen) More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More