FILE PHOTO: An Airbus A318 airplane of Avianca Brazil flies over the Guanabara Bay as it prepares to land at Santos Dumont airport in Rio de Janeiro
FILE PHOTO: An Airbus A318-100 airplane of Avianca Brazil flies over the Guanabara Bay as it prepares to land at Santos Dumont airport in Rio de Janeiro, Brazil, April 3, 2019. REUTERS/Sergio Moraes/File Photo

May 24, 2019

SAO PAULO (Reuters) – Brazil’s civil aviation regulator ANAC said on Friday it had suspended all flights and operations of carrier Avianca Brasil in the country as a precautionary measure, following the company’s filing for bankruptcy late last year.

“All the flights are suspended until the company proves it has the capacity to maintain operations safely,” ANAC said in a statement.

Avianca Brasil has filed for bankruptcy protection and lost most of its fleet after lessors obtained favorable court decisions to take aircraft back for lack of payments. It is still trying to reach a deal to sell remaining assets.

The carrier, which is controlled by the same holding company as publicly traded Colombia-based Avianca Holdings SA, was operating around 30 flights per day using the planes it had left.

ANAC said, without elaborating, that it took the decision after receiving information regarding the operational safety of Avianca Brasil flights.

Avianca Brasil confirmed in a statement later on Friday the suspension of its flights and said it would comply with local legislation regarding refunds or finding room for its clients with other carriers.

The company said it would continue to work on its in-court reorganization as it looks to resume operations. It did not respond directly to the concerns ANAC raised.

(Reporting by Marcelo Teixeira; Editing by Tom Brown and Rosalba O’Brien)

Source: OANN

FILE PHOTO: Butchers cut up chickens in a butcher shop in downtown Mexico City
FILE PHOTO: Butchers cut up chickens in a butcher shop in downtown Mexico City, Mexico, July 27, 2017. REUTERS/Edgard Garrido

May 24, 2019

MEXICO CITY (Reuters) – The Mexican government increased its tariff-free chicken import quota by 55,000 tons on Friday due to crimped domestic production amid avian flu outbreaks.

The announcement was made in the Mexican government’s official gazette, which cited confirmed cases of avian flu in about two-thirds of the country’s states.

While boosting overall imports, Mexico also banned chicken product imports from several U.S. counties, citing a reported outbreak of Newcastle disease.

“In order to avoid a shortage … it is advisable to keep external supply options open and expand the quota amount for imports of fresh, refrigerated and frozen chicken meat,” the economy ministry said in the official gazette.

The United States has traditionally been Mexico’s biggest foreign chicken supplier.

Under the new quota, buyers can import fresh, refrigerated or frozen chicken meat, including legs and thighs, which are especially in high demand by Mexican consumers.

(Reporting by Adriana Barrera; Editing by Tom Brown)

Source: OANN

Mexico's President Andres Manuel Lopez Obrador attends a news conference, in Mexico City
Mexico’s President Andres Manuel Lopez Obrador attends a news conference, at the National Palace in Mexico City, Mexico, May 21, 2019. REUTERS/Henry Romero

May 24, 2019

By Anthony Esposito

MEXICO CITY (Reuters) – Mexico’s economy shrank in the first quarter of 2019 from the previous three-month period, data showed on Friday, dealing a blow to the new government’s drive to convince investors it can boost growth in Latin America’s second-largest economy.

President Andres Manuel Lopez Obrador took office in December pledging to ramp up lackluster growth and job creation.

But the economy shrank 0.2% compared with the October-December period as services and industrial activity dipped, the first contraction since the second quarter of 2018, according to data from national statistics agency INEGI. The contraction was particularly sharp in March.

“March was a very bad month for economic activity, clocking a 0.6% contraction,” Mexican central bank board member Jonathan Heath said on Twitter, citing monthly economic activity data also published on Friday.

Goldman Sachs economist Alberto Ramos said strikes and fuel supply disruptions earlier in the year had contributed to the slump.

After the data was published, Mexico’s benchmark stock index <.MXX> fell more than 1% to a two-month low, the peso currency <MXN=> dipped into negative territory, and economic research consultancy Capital Economics cut its Mexican growth forecast to 1.8% for 2019.

“The weak Q1 GDP figure means the economy won’t, barring a major surprise, grow by the 2.5% that we had projected … The next few years will be underwhelming for Mexico’s economy,” said William Jackson, Chief Emerging Markets Economist at Capital Economics.

Lopez Obrador brushed aside concerns about the data at his daily morning press conference.

“Investment is growing, I said it yesterday, our currency is strong, it is appreciating more than other currencies around the globe and inflation is stable. And there will be growth, much more growth. So we’re going to wait,” said Lopez Obrador.

Mexico received some $10 billion in foreign direct investment in the first quarter, up 7% from the same quarter last year, and inflation was slightly lower than expected in the first half of May at 4.43%.

The peso has appreciated over 6% since Lopez Obrador took office.

Still, some of the president’s decisions have rattled investors, prompting concern among private sector analysts.

The International Monetary Fund on April 9 lowered Mexico’s 2019 growth outlook to 1.6% from 2.1%, citing shifts in perception about policy.

In a note, Goldman Sachs’ Ramos said high interest rates would weigh on consumer spending, adding that the investment outlook was lackluster, partly due to uncertainty over the ratification of a new trade deal with Mexico’s top export market the United States.

The U.S. economy expanded 3.2 percent in the first quarter in annual terms, but some economists believe that growth rate will be short lived, bringing more gloom to Mexico.

“The projected deceleration of the U.S. economy may also weaken the thrust to activity from exports and foreign direct investment,” Ramos said.

In annual terms, Mexico’s economy expanded just 1.2%, slightly lower than the 1.3% growth preliminary data published last month showed. It was the weakest quarterly annual growth in a year.

(Reporting by Anthony Esposito; Additional reporting by Miguel Angel Gutierrez and David Alire Garcia; Editing by Susan Thomas and James Dalgleish)

Source: OANN

Finance Minister Olaf Scholz addresses a news conference to present the budget plans for 2019 and the upcoming years in Berlin
Finance Minister Olaf Scholz addresses a news conference to present the budget plans for 2019 and the upcoming years in Berlin, Germany March 20, 2019. REUTERS/Fabrizio Bensch

May 24, 2019

BERLIN (Reuters) – German Finance Minister Olaf Scholz is ready to press ahead with a financial transaction tax at national level if other countries are not willing to introduce the levy, Der Spiegel reported in its online edition on Friday.

Germany and other European Union states have been trying to agree a financial transaction tax and Scholz said last week he expected progress by the third quarter of 2019 on introducing such a levy in at least nine EU countries.

Should that prove impossible, Spiegel said Scholz was ready to introduce the tax in Germany anyway as he wants to finance a basic pension for low-income workers that his left-leaning Social Democrats (SPD) is pushing.

The SPD is the junior coalition partner in the German government, led by Chancellor Angela Merkel’s conservatives.

“If there is no agreement to be reached on this at international level, then Germany should move forward,” Spiegel quoted an official source close to Scholz as saying. The source did not want to be named.

A Finance Ministry spokeswoman, when asked about the financial transaction tax, earlier told Friday’s regular government news conference in Berlin: “Work is continuing at the European level. Let’s wait and see.”

(Writing by Paul Carrel; Editing by Gareth Jones)

Source: OANN

British Prime Minister Theresa May makes a statement
British Prime Minister Theresa May leaves the back of Downing Street with her husband Philip, in London, Britain, May 24, 2019. REUTERS/Toby Melville

May 24, 2019

LONDON (Reuters) – Britain’s next prime minister is likely to adopt a tougher stance on Brexit than Theresa May, and may revive the prospect of a disorderly, no-deal exit as a negotiating tool, ratings agency Standard & Poor’s said on Friday.

“In our opinion, Mrs. May’s successor will likely take a harder stance on Brexit and would potentially resurrect the specter of a no-deal exit as a negotiating tool, although it remains to be seen if they would carry through with the threat,” S&P said in a statement.

“We do not anticipate an easy end to the deadlock before the end of October, when the UK is due to leave the EU,” the ratings agency added.

May said earlier on Friday that she planned to step down on June 7, paving the way for a contest to be leader of the Conservative Party and Britain’s next prime minister.

(Reporting by David Milliken; editing by Stephen Addison)

Source: OANN

FILE PHOTO: The Carige bank logo is seen in Rome
FILE PHOTO: The Carige bank logo is seen in Rome, Italy, April 16, 2016. REUTERS/Stefano Rellandini/File Photo

May 24, 2019

MILAN (Reuters) – A junior minister from Italy’s ruling 5-Star Movement said on Friday he favored a market solution for troubled bank Carige, adding the government had to put in place the right conditions to ease it.

“The government should work to create right conditions for a market solution for Carige,” Cabinet Undersecretary for Regional Affairs Stefano Buffagni said on the sidelines of an event.

Deputy Prime Minister and League leader Matteo Salvini has said that his party was ready to back a state rescue of Carige in the absence of private investors willing to plug in a capital shortfall at the ailing bank.

(Adds dropped word in lead)

(Reporting by Elvira Pollina, writing by Giulio Piovaccari)

Source: OANN

FILE PHOTO: The logo of French oil giant Total is seen at La Defense business and financial district in Courbevoie
FILE PHOTO: The logo of French oil giant Total is seen at La Defense business and financial district in Courbevoie, near Paris, France. May 16, 2018. REUTERS/Charles Platiau/File Photo

May 24, 2019

By Katya Golubkova, Ron Bousso and Shadia Nasralla

LONDON/MOSCOW (Reuters) – France’s Total is seeking to sell part of its stake in Kazakhstan’s giant Kashagan oilfield to raise up to $4 billion, four banking sources said.

Total holds a 16.8% stake in Kashagan, one of the world’s largest oilfields with production of about 400,000 barrels per day (bpd), and is seeking to sell around a third of its stake, according to the sources.

The company’s entire stake has an estimated value of up to $9 billion, the sources said.

The energy group has held talks with a Chinese national oil company about a stake sale in recent months but the sides were unable to agree on price, two sources said.

Total initially declined to comment but subsequently said it is not “currently” in talks with a Chinese company to sell a stake in Kashagan. “Total has no ongoing sale process for its Kashagan stake,” it added.

Kashagan, the world’s biggest oil find in decades and the most expensive standalone oil project, took an estimated $50 billion and 13 years to develop before starting in 2016.

Total is not using any external bankers in the sale process, one of the sources said.

The sale would be a welcome cash boost for Total as it prepares to buy $8.8 billion of oil and gas assets in Africa from Occidental Petroleum should the U.S. group’s acquisition of rival Anadarko go through.

Kashagan is operated by the North Caspian Operating Company (NCOC) and the other partners in the field are Eni, Royal Dutch Shell, Exxon Mobil, KazMunayGas, Inpex and China National Petroleum Corp.

Kashagan, located in the Caspian sea, where temperatures throughout the year can drop below 30 Celsius and rise above 40 Celsius, is expected to produce 370,000-400,000 bpd early next month after undergoing maintenance.

Under Kazakh law, companies selling stakes in projects like Kashagan have to offer them to the Kazakh government first and can sell to third parties only if the government chooses not to buy.

Kazakhstan’s Energy Ministry could not be reached for immediate comment.

(Additional reporting by Bate Felix in Paris and Mariya Gordeyeva in Almaty; Editing by Elaine Hardcastle and David Goodman)

Source: OANN

FILE PHOTO: A car carrier trailer carries Tesla Model 3 electric sedans, is seen outside the Tesla factory in Fremont
FILE PHOTO: A car carrier trailer carries Tesla Model 3 electric sedans, is seen outside the Tesla factory in Fremont, California, U.S. June 22, 2018. REUTERS/Stephen Lam/File Photo

May 24, 2019

By Lucia Mutikani

WASHINGTON (Reuters) – New orders for U.S.-made capital goods fell more than expected in April, further evidence that manufacturing and the broader economy were slowing after a growth spurt in the first quarter that was driven by exports and a buildup of inventories.

The report from the Commerce Department on Friday also showed orders for these goods were not as strong as previously thought in March and shipments were weak over the last two months. Manufacturing is easing as businesses work off stockpiles of unsold goods, leading to fewer orders being placed with factories. Industrial production dropped in April and a measure of factory activity declined to a near 10-year low in May.

Activity is also being weighed down by an escalation in the trade war between the United States and China, which has sparked a sell-off on Wall Street, as well as tepid global growth. The renewed trade tensions are expected to weigh on exports, which earlier this year had benefited from increased Chinese purchases of American goods.

Non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, dropped 0.9% last month as demand softened almost across the board.

Data for March was revised down to show these so-called core capital goods orders rising 0.3% instead of increasing 1.0% as previously reported. Economists polled by Reuters had forecast core capital goods orders falling 0.3% in April. Core capital goods orders increased 2.6% on a year-on-year basis.

Shipments of core capital goods were unchanged last month after a downwardly revised 0.6% decline in the prior month. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement.

They were previously reported to have slipped 0.1% in March.

The downward revision to March shipments suggests business spending was even weaker than initially estimated in the first quarter and could result in GDP growth for the quarter being trimmed when the government publishes its revision next week.

The government estimated last month that the economy expanded at a 3.2% pace in the first quarter. Second-quarter GDP growth estimates are below a 2% annualized rate.

The dollar slipped against a basket on currencies following Friday’s data. U.S. Treasury prices were little changed.


In April, orders for machinery edged up 0.1% after dropping 2.0% in March. Orders for computers and electronic products fell 0.4%. There were also decreases in orders for primary metals. Orders for electrical equipment, appliances and components gained 0.9%.

Overall orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, tumbled 2.1% in April after increasing 1.7% in the prior month. Orders for transportation equipment dropped 5.9% after rising 5.9% in March.

Orders for motor vehicles and parts decreased 3.4% last month, the most since May 2018. Orders for non-defense aircraft plunged 25.1% after rising 7.8% in March. Boeing reported on its website that it had only four aircraft orders in April, down from 44 in March.

All of the orders last month were for the troubled 737 MAX aircraft. Boeing’s fastest-selling MAX 737 jetliner was grounded in March after two fatal plane crashes in five months.

Boeing has cut back production and suspended deliveries of the aircraft, which is also contributing to the weakness in manufacturing.

Overall durable goods shipments fell 1.6% in April, the most since December 2015. There was a 3.4% drop in shipments of motor vehicles and parts. Shipments of civilian aircraft tumbled 16.0% last month.

Durable goods inventories rose 0.4% last month, with motor vehicle stocks rising 0.8%. Civilian aircraft inventories increased 1.3% last month.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Source: OANN

FILE PHOTO: Logo of PrivatBank, the Ukraine's biggest lender, is seen on a bank's branch in Kiev
FILE PHOTO: Logo of PrivatBank, the Ukraine’s biggest lender, is seen on a bank’s branch in Kiev, Ukraine April 18, 2019. REUTERS/Vasily Fedosenko/File Photo

May 24, 2019

By Natalia Zinets

KIEV (Reuters) – Tycoon Ihor Kolomoisky told Reuters he hoped Rothschild bank could help broker an out-of-court deal with the Ukrainian authorities over PrivatBank, to end his legal tussles with the state.

One option he hopes could be agreed upon is for Kolomoisky to regain a 25 percent stake in the country’s largest lender, he said.

Kolomoisky was PrivatBank’s main owner until December 2016 when the government nationalized the lender as part of a donor-backed clean-up of the financial system. He has fought a series of legal battles to overturn the nationalization.

The authorities say overturning the nationalization would rock investor confidence and rupture relations with the International Monetary Fund, which helps keep Ukraine’s economy on an even keel with a $3.9 billion aid-for-reforms program.

A Kiev court ruled in April that the nationalization of PrivatBank was illegal but the central bank said on Friday it had appealed the decision, as it had previously said it would.

Rothschild had an official mandate in 2017 to try to broker a compromise between the two sides, which failed.

“We have always said that we are open to negotiations. We believe that we are the injured party, that we have been robbed,” Kolomoisky told Reuters by phone.

Kolomoisky calculates he is due a 25 percent stake in the bank because of the capital he had put into it.

“Give us then our 25 percent and keep 75, we will have a joint-stock company. There will be a 25 percent participation and 75 percent by the state, as one of the options,” he said.

PrivatBank, the finance ministry and IMF declined comment. Rothschild did not immediately respond to a request for comment.

The legal wrangle took another turn when Volodymyr Zelenskiy was elected as the new president in April. Zelenskiy had business ties to Kolomoisky but denied he would hand back PrivatBank to him or pay state compensation.

A source familiar with Kolomoisky’s talks with Rothschild played down the prospects of the IMF agreeing to any deal that would involve giving Kolomoisky a partial stake in PrivatBank.

The central bank said it would not be involved in any resumption of negotiations, which would be a matter for the ministry of finance and Kolomoisky.

The central bank believes PrivatBank was used as a vehicle for fraud and money-laundering while Kolomoisky owned it, and said the government was forced to inject $5.6 billion of taxpayers’ money into the lender to shore up its finances.

Kolomoisky emphatically denies any wrongdoing, rejects the central bank’s assessment of PrivatBank’s financial health and said the lender was nationalized on spurious grounds.

PrivatBank launched a case against Kolomoisky in the Delaware Court of Chancery in the United States this week, accusing the tycoon and associates of misappropriating and laundering the proceeds of corporate loans from the bank.

(Additional reporting by Karin Strohecker in London Writing by Matthias Williams; Editing by Elaine Hardcastle)

Source: OANN

FILE PHOTO: An investor looks at an electronic board showing stock information at a brokerage house in Shanghai
FILE PHOTO: An investor looks at an electronic board showing stock information at a brokerage house in Shanghai, China July 6, 2018. REUTERS/Aly Song/File Photo

May 24, 2019

(Reuters) – 1/THE MONTH OF MAY

Theresa May stepped into 10 Downing Street in July 2016 with the express aim of taking Britain out of the European Union. She will depart as prime minister this summer having failed in that ambition. No one can say she didn’t try — after three attempts to get her EU withdrawal bill through parliament, she finally had to admit it was dead in the water.

Speculation about her departure has been rife all month. Now it’s wait and see if her successor will fare any better with the withdrawal deal, or if he or she steers Britain towards a no-deal Brexit. What’s clear is that risks of crashing out of the EU without a transition period have risen, given the eurosceptic Boris Johnson is favorite to succeed May. The other risk is a new election, and possibly, a hung parliament. That means sterling could suffer more losses; it has fallen almost 3% this month against the dollar and euro.

May will remain in charge as the Conservatives elect a new leader. Her last task as prime minister — welcoming U.S. President Donald Trump to Britain — will hopefully be easier than trying to deliver Brexit.

Trade-weighted sterling interactive

Graphic on Brexit and sterling:


The Sino-U.S. trade war has morphed from a tariff spat into a battle over who controls global tech. Washington has banned U.S. firms from doing business with Chinese telecommunications giant Huawei. Essentially that cripples the company’s ability to make new chips for its future smartphones.

As chipmakers and companies including Panasonic and ARM fell into line behind the U.S. ban and others like Toshiba scrambled to check their exposure, the widespread impact of the move on complex global supply chains is becoming clear.

Accordingly, shares have tumbled worldwide. Among others, the potential loss of business from the Chinese smartphone giant has hit Europe’s AMS and STMicroelectronics. Taiwan Semiconductor, which Bernstein analysts calculate makes around 11% of revenues from Huawei, sank too.

The Philadelphia semiconductor index, widely seen as a bellwether for world chipmakers, has lost around 18% in just a month since hitting a record high on April 24.

However, some telecoms equipment firms such as Nokia and Ericsson could benefit if the Huawei clampdown diverts business to them.

Trump’s latest claim that Huawei could be part of a trade deal has injected some hope into markets, but unless further talks are announced investors will remain unconvinced.

(For a graphic on ‘Chips tank worldwide as trade tensions return’ click


Markets have a funny way of repeating themselves and exactly six years on from the ‘taper tantrum’, when investors freaked at the sudden realization the U.S. Fed wanted to end money printing, some are wondering whether something similar is brewing again.

A conviction the U.S.-China trade war will force the Fed to cut interest rates have pushed benchmark government bond yields that drive global borrowing costs to the lowest in years. But just like in 2013, the Fed is flagging something different.

It has signaled it may sit on its hands “for some time”. So if yields do start to spring back up, things could get scary.

Emerging markets in particular have painful memories of the taper tantrum. Economic surprises in the developing world are the most negative now in six years, according to an index compiled by Citi. And nearly $4 billion fled EM equities last week, EM equities have dropped around 10% so far this month and the premiums investors demand to hold EM bonds have spiked.

Clearly, many investors are not hanging around to find out what happens next.

(For a graphic on ‘EM stocks having a tantrum without the taper’ click

(For a graphic on ‘EM economic surprises most negative in six years’ click

4/MODI-NOMICS TO THE TEST After a stunning win in the world’s biggest election, Indian Prime Minister Narendra Modi begins to put together a new cabinet and a 100-day action plan. Focus is on who becomes finance minister — Arun Jaitley, a key troubleshooter for years — is said to be out of the race due to ill-health.

Modi’s re-election reinforces a global trend of right-wing populists sweeping to victory, from the United States to Brazil and Italy. Energised by his brand of Hindu nationalism, voters gave less weight to his failure to create jobs — a key campaign promise at the last election. In fact, a complex tax reform and a flash demonetization pushed millions out of work.

Credibility issues aside, upcoming growth data will be a reminder that while investors gave Modi a big thumbs up and pushed Indian stocks to record highs, the economy is less cheerful. Corporate earnings have in fact disappointed in the years Modi has been in office. And small businesses, low-income farmers, jobseekers and liquidity-starved banks will demand more of him in his second mandate.

(For a graphic on ‘Corporate India Earnings’ click


The U.S. summer vacation season begins, unofficially, with the Memorial Day weekend, and travel volumes across the United States should be the second-highest on record this year, according to the American Automobile Association (AAA). Despite high fuel prices, nearly 43 million Americans will be traveling over the long weekend, and 37.6 million will be driving, making this holiday travel season the busiest since 2005, the AAA predicts.

But gasoline supplies are tight on the U.S. East and West Coasts, leaving both regions vulnerable to potential price spikes at the pump, just as the peak summer driving season kicks off. High fuel prices cut into people’s discretionary spending though, so the question is what impact there will be on the U.S. consumer.

Consumer spending — which includes spending on services such as travel — jumped in March by the most in nearly a decade, following small increases in the previous two months. But even though first-quarter U.S. growth was a healthy 3.2% on an annual basis, consumer spending grew less. In coming months, the economy is widely seen decelerating; the question is what role consumer and travel spending will play.

(For a graphic on ‘Summer Gas Season’ click

(Reporting by Sujata Rao, Helen Reid and Marc Jones in London; Marius Zaharia in Hong Kong and Jennifer Ablan in New York)

Source: OANN

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