By Clare Jim

HONG KONG (Reuters) -For most young adults, moving out of home is a rite of passage but in Hong Kong – notorious for its chronic lack of housing – it’s usually an unaffordable dream.

Silver Ho, a 26-year-old hair stylist assistant who was tired of arguing with his parents, counts himself as one of the lucky ones. Two months ago, he landed a spot at a new so-called “youth hostel”, which offers rooms for young adults that are subsidised by the Hong Kong government and can be rented for up to five years.

His 22 square metre (240 square foot) twin-bed room he’ll share with another person is only a bit smaller than the public housing unit he shared with his parents.

Ho also pays rent of just HK$4,400 ($560) per month, 27% cheaper than a space in a sub-divided flat in the same neighbourhood. Such partitioned units often have no personal bathroom and are barely big enough for a bed.

The hostel programme, ramped up last year under pressure from Chinese President Xi Jinping, is aimed at tackling youth frustration with housing – a factor Beijing believes contributed to the anti-government pro-democracy protests that rocked the city in 2019.

It’s also aimed at nurturing what the government considers to be good responsible citizens and providing opportunities for self-development.

Applicants – who must be younger than 31, earn less than HK$25,000 ($3,200) a month and have less than HK$380,000 in assets – are chosen after interviews. They are also required to do 200 hours a year of community service or approved activities to keep their rooms.

For Ho, gaining a room at the BeLIVING hostel has meant independence and saving on commuting time. It’s the first to have been converted from a hotel under a new scheme and unlike the city’s three other hostels, is conveniently located in the bustling commercial area of Causeway Bay.

“I now have more time in the salon to learn new skills and practise. That helps increase my chances of getting a promotion,” he said.

HOME TRUTHS

Hong Kong has been the world’s least affordable housing market for 13 consecutive years, according to research firm Demographia, and housing woes are widely blamed for most of the city’s social problems.

Public housing units are available for low-income people but the average waiting time is 5.3 years. Families and the elderly are favoured, so the chances of one going to a young single person are close to nil.

Hong Kong’s hostel programme first started in 2011 but only gained momentum after Xi visited the city last July and said the government must do more to tackle youth housing and job problems while creating more opportunities for self-development.

At the time, the city had only one hostel with 80 beds. Since then, however, the government has pledged to boost supply.

It now aims to provide 3,000 beds in five years through hotel-to-hostel conversions, which would come on top of 3,400 planned under the first programme that are either being built from scratch or through redeveloping properties owned by non-profit groups.

A survey by the Concerning Youth Housing Rights Alliance published in May suggests the hostels will have limited appeal with close to 90% of respondents saying they don’t plan to apply. Most are instead prioritising saving up to purchase their own flat one day.

That said, applicants for the BeLIVING hostel outstripped the number of beds 5 to 1.

New BeLIVING resident Chelsea Tung sees her move as both a chance to live with her boyfriend while putting aside money for a flat of their own.

“I’ll be able to save up for a downpayment here,” the 23-year-old insurance agent said.

The programme faces several hurdles.

It may be hard to boost the number of hostels as hotels, previously hit hard by three years of pandemic restrictions, are now seeing more demand.

Non-profit groups that run the hostels are also struggling to find a sustainable financing model.

The group that runs the city’s first hostel built under the government scheme said all its rental income goes towards building maintenance and project management.

“We need to think of ways to cut costs and to raise funds to keep operating,” said Carrie Wong, a supervisor at the Hong Kong Federation of Youth Groups.

Ngai Ming Yip, a professor of housing and urban studies at City University of Hong Kong, said the hostel scheme will only provide a limited amount of supply and only goes so far in ameliorating frustration among the city’s youth.

“The root of the problem is not only housing. Research has shown it’s related to young people’s views towards opportunity, outlook, politics, democracy, everything,” he said.

($1 = 7.8136 Hong Kong dollars)

(Reporting by Clare Jim; Editing by Anne Marie Roantree and Edwina Gibbs)

BEIJING (Reuters) -China’s producer prices fell at their fastest pace in over seven years in June, while consumer prices teetered on the edge of deflation, adding to the case for policymakers to use more stimulus to revive sluggish demand.

The worsening factory-gate price deflation and the move by consumer prices towards deflation for the first time since February 2021 bode ill for China’s economic growth.

Momentum in China’s post-pandemic recovery has slowed from a brisk pickup seen in the first quarter with demand for industrial and consumer products weakening, raising concerns about the health of the world’s second-largest economy.

“We think the more challenging deflation environment and sharp slowdown in growth momentum support our view that the PBOC has entered a rate-cutting cycle,” said economists at Barclays in a research note.

The producer price index (PPI) fell for a ninth consecutive month in June, down 5.4% from a year earlier, the National Bureau of Statistics (NBS) said on Monday, the steepest decline since December 2015. That compared with a 4.6% drop in the previous month and a 5.0% fall tipped in a Reuters poll of analysts.

The consumer price index (CPI) was unchanged year-on-year, compared with the 0.2% gain seen in May, driven by a faster fall in pork prices. That dashed expectation for a 0.2% rise and was the slowest pace since February 2021.

Nomura expects consumer prices to fall 0.5% year-on-year in July, even taking into account a potential rise in service inflation as a result of the summer holiday season.

The weaker-than-expected inflation readings knocked financial markets with the yuan falling and Asian stocks also dipping into the red.

“We expect headline inflation to rise to around 1% by the end of this year. But this would still be soft and won’t constrain the PBOC’s ability to loosen policy further,” said economists at Capital Economics.

“That said, with credit demand weak, and the currency under pressure, we think the bulk of support will come through fiscal policy. We expect only another 10 basis points of policy rate cuts this year.”

Beijing has set a target for average consumer inflation in 2023 of about 3%. Prices rose 2% year-on-year in 2022.

China last month cut policy rates to boost liquidity and vowed to take measures to promote household consumption.

For producer prices, the biggest year-on-year declines were seen in energy, metals and chemicals as domestic and foreign demand weakened.

“The accelerating decline in PPI reflects the still weak real estate and construction sector as well as the strength of industrial production,” said Bruce Pang at chief economist at Jones Lang Lasalle.

“However, the year-on-year decline in the PPI is likely to have bottomed out and is expected to narrow gradually in the second half of the year,” said Pang.

China’s central bank is likely to cut lending rates further, said Hu Yuexiao, analyst at Shanghai Securities, who expects reductions in the reserve requirements ratio and interest rates in the second half.

However, economists say small cuts in rates will not have a big impact on demand for loans as families and businesses repair balance sheets damaged by COVID and repay debts, forcing Beijing to rely on fiscal stimulus and other means to spur demand.

(Reporting by Liangping Gao, Ella Cao and Ryan Woo; Editing by Sam Holmes)

(Reuters) -Trade tensions between Washington and Beijing are riding high while U.S. inflation data will inform the Federal Reserve’s next move and rate setters in New Zealand and Canada meet.

Here’s a look at the week ahead in markets from Lewis Krauskopf and Nupur Anand in New York, Li Gu in Shanghai, Kevin Buckland in Tokyo, and Naomi Rovnick and Amanda Cooper in London.

1/ UNDER PRESSURE

Markets have come around fast to the Fed’s view that instead of being cut anytime soon, rates will remain high for longer. After another brutal bond sell off, focus turns to Wednesday’s U.S. inflation data. Price pressures have been easing but perhaps not fast enough with a July rate hike seen as likely.

May CPI data showed the smallest year-on-year increase since March 2021 – but at 4%, that was still well above the Fed’s 2% target. Just like the latest personal consumption expenditures index showed similarly slowing inflation also above the Fed ‘s comfort zone.

June meeting minutes showed a united Fed agreed to hold rates steady, buy time and assess whether further hikes would be needed. The answer seems yes. And the most deeply inverted bond yield curve since the 1980s suggests investors bracing for another hike also expect Fed tightening raises recession risks.

2/ FIGHTING FIRES

    China is fighting a hi-tech trade war with Washington while grappling with a sputtering economy.

    After months of tightening of restrictions by the U.S. and key allies on chip-related imports, Beijing hit back in recent days with curbs on chip-making metal exports, and a warning of more to come.

Treasury Secretary Janet Yellen’s visit to Beijing over the weekend seems to have calmed the waters somewhat – while there was no breakthrough, both sides described their talks as “productive” and agreed to keep channels open “at all levels” for discussions on the economy.

    Things aren’t looking bright on the economic front though.

Data out on Monday showed China’s factory-gate prices fell at the fastest pace in seven-and-a-half years in June, while consumer inflation was at its slowest since 2021. Thursday’s trade numbers are expected to see a continued decline in exports – all pointing to lacklustre demand.

    Hopes for major Politburo policy support at month-end seem to have faded. Goldman Sachs said that conversations with their local clients showed they now expected to see measures aimed only at easing economic headwinds, rather than generating strong growth.

3/ PAUSE AND EFFECT

Skips, pauses and pivots dominate monetary policy conversations as persistent inflation has seemingly consigned central-bank forward guidance to the dustbin of history. Increasingly, policymakers say decisions depend on future data, making it harder for traders to formulate a view on the outlook.

The Reserve Bank of New Zealand (RBNZ) – one of the first major central banks to start tightening policy – has raised rates by 525 basis points since October 2021 – the most among the G10. In May, it signalled it had finished raising rates, but at its meeting on Wednesday longer-term clarity may remain out of reach with inflation running at 6.7% and the economy in recession.

The Bank of Canada, meeting the same day, is in the data-dependent corner, leaving markets split down the middle on whether it will raise or pause.

4/BANK EARNINGS

U.S. banking giants sailed through the Fed’s annual health check in late June, highlighting they have enough capital to weather a severe economic downturn.

But now it’s time for earnings, with JPMorgan Chase, Citigroup and Wells Fargo all scheduled to report second quarter earnings on July 14.

The picture looks not so rosy with results predicted to be weighed down by sluggish dealmaking and trading revenue while a dearth of investment-banking activity has prompted banks to lay off thousands of employees.

Meanwhile, the largest U.S. lenders are expected to keep tightening credit standards given the uncertain economic environment, particularly after bank failures earlier this year. Analysts focus on banks’ lending outlook and how much they set aside in rainy-day funds to cushion losses from souring loans.

5/ TROUBLE IN CREDIT LAND

Debt-laden companies are running into trouble.

Embattled French retailer Casino, with 3 billion euros ($3.3 billion) of debt maturing in the next two years, has until end-July to agree a restructuring plan.

Britain’s Thames Water, with 14 billion pounds of borrowings, said on Monday investors had agreed to invest 750 million pounds ($960 million) – but warned it would need more funding in the years ahead.

Sweden’s commercial landlord SBB is fighting for survival.

In the U.S., junk-rated companies have to refinance almost $1.2 trillion of borrowings by 2026, according to S&P Global Ratings. At the same time, the market for collateralised loan obligations – vehicles formed by specialist asset managers that buy about 60% of all junk-rated loans and package them up into bonds – has almost shuddered to a halt.

Stock market valuations do not reflect any credit-related worries yet – but that may just be the eye of a storm.

(Compiled by Karin Strohecker; Editing by Toby Chopra)

(Reuters) – A look at the day ahead in European and global markets from Wayne Cole

China’s inflation data for June surprised on the downside, with consumer prices slipping 0.2% on the month to leave annual CPI dead flat. Producer prices fell 5.4% on the year, the sharpest decline since late 2015.

On the face of it, this implies there is plenty of scope to ease monetary and fiscal policy further. Yet it also underlines the scale of the challenge that Beijing faces in avoiding an outright deflationary spiral. Japan’s experience shows what deflation combined with a shrinking population can mean for an economy.

The soft data saw the yuan lose early gains but Chinese blue chips are still up, in part thanks to hopes that Beijing is relaxing its regulatory grip on the tech sector.

Globally, a deflationary pulse from China could over time help to offset service-driven inflation in developed nations. Disinflation in goods is a major reason analysts expect coming U.S. CPI data to show a slowdown in June.

Headline U.S. inflation is forecast at 3.1%, a remarkable turnaround from 9.1% a year earlier even if core measures are proving stickier. That would be welcome news for the Treasury market after its recent drubbing.

Some funds were clearly long of bonds in anticipation of an “end of the tightening cycle” rally that never materialised, and got badly squeezed when the market moved against them.

The fact that U.S. 10-year yields are still testing 4.09% despite the downside miss on headline payrolls suggests the market is still long and there’s further pain ahead.

One side effect of the surge in bond yields has been a shake-out of carry trades in the forex market. Every investor and their mum has borrowed cheaply in yen to invest in high yielders, with the Mexican peso likely the most crowded of all the trades.

Rising yields in the developed world make emerging markets look relatively less attractive and can pressure those positions. It was notable late last week that Mexican bonds suddenly sold off and the peso slid 2.6% on the yen over two sessions – although that follows months of gains.

Such trades are usually done by selling yen for dollars and dollars for pesos, or whatever the target currency is, so when the positions are reversed it leads to selling of dollars for yen.

This was likely a major reason the dollar dropped 1.3% on the yen on Friday, and why any major unwinding of carry trades would drag the dollar down even if its own fundamentals seemed sound.

Still, a sustained unwinding seems unlikely unless and until the Bank of Japan finally gives up on its yield curve control (YCC) policy. The BOJ’s next meeting is on July 28 and many western banks are tipping some form of tightening, although the BoJ itself has shown scant sign of gratifying them. Were it to happen, it would be a seismic event for markets.

Key developments that could influence markets on Monday:

– Bank of England Governor Andrew Bailey and Finance Minister Jeremy Hunt speak at the annual Mansion House dinner

– Fed speakers at Monday events include San Francisco President Mary Daly, Cleveland President Loretta Mester and Atlanta President Raphael Bostic

(By Wayne Cole; Editing by Edmund Klamann)

By Joe Cash

BEIJING (Reuters) – China on Monday called on the U.S. to take “practical action” in response to its “major concerns” about sanctions on Chinese firms, after U.S. Treasury Secretary Janet Yellen wrapped up more than 10 hours of meetings with senior officials in Beijing.

Yellen came to Beijing seeking to ease tensions between the world’s two superpowers, and while there was no breakthrough, both sides described their talks as “productive” and agreed to keep channels open “at all levels” for talks on the economy.

The visit boosts chances for a meeting between U.S. President Joe Biden and China’s President Xi Jinping later this year, possibly at the Asia-Pacific Economic Cooperation Summit in San Francisco in November.

Before departing on Sunday, Yellen told reporters that she and her Chinese counterparts had “aired significant disagreements” in their meetings, a sentiment reflected in a readout from China’s finance ministry on Monday morning.

China “requires” the U.S. to “cease the suppression of Chinese enterprises, lift bans on Xinjiang-related products, and take concrete steps to respond to China’s major concerns in economic relations between the two countries,” the ministry wrote.

The United States has imposed sanctions on some companies for using forced labour in the far-western region of Xinjiang.

Beijing denies the use of forced labour and any other abuses there.

The ministry also said China believed its development was an opportunity rather than a risk to the U.S. and that “strengthening cooperation between China and the United States is a realistic need and the correct choice of the two countries.”

“The re-commencement of senior-level Sino-U.S. talks in diversified areas could open up room for more cooperation on bilateral and global issues,” said Hong Kong-based Bruce Pang, chief economist at Jones Lang LaSalle.

“I expect more working-level communications ahead, on a range of topics where there is more consensus than disagreements, such as climate change and the tariff reduction list, among others,” he added.

(Reporting by Joe Cash and Ellen Zhang; Editing by Muralikumar Anantharaman and Stephen Coates)

By Yoruk Bahceli and Dhara Ranasinghe

(Reuters) – Government bond markets from Europe to the United States and Australia are in a tailspin as the prospect of higher interest rates sparks a rout in longer-dated bonds, hurting investors seeking higher returns after a lacklustre first half.

German and British two-year borrowing costs touched their highest levels since 2008 this week, U.S. peers hit highs not seen since 2007, and Australia’s bond yields rose to decade highs.

Crucially, while recent rises in borrowing costs had been driven by shorter-dated debt, longer-dated yields have led this week’s push higher, rising over 20 basis points (bps) in Germany, the United States and Britain.

The latest drubbing in the world’s biggest bond markets, which last year suffered a record rout, does not yet point to any dysfunction in the markets themselves, investors said.

But in echoes of the volatile conditions seen during March’s banking crisis, trading in euro zone benchmark German government bond futures were briefly interrupted on Thursday when bond yields spiked.

Investors took hawkish U.S. Federal Reserve June meeting minutes, strong U.S. services sector data and private payrolls numbers earlier this week as signs that the Fed — and other central banks — may have to keep rates higher for longer.

Weaker-than-expected U.S. non-farm payrolls data pushed two-year yields off their highs on Friday, but did little to soothe the selloff in longer-dated bonds.

“Markets are saying that inflation is too high, and growth is still too strong, and we need more rate hikes,” said Mike Riddell, senior portfolio manager at Allianz Global Investors.

“Central banks seem to be encouraging markets to believe this too, suggesting more hikes are ahead.”

Prospects for a November Fed hike had risen on Thursday in addition to a July move and traders reduced bets on cuts next year, though those moves reversed on Friday.

In Europe, traders bet the Bank of England would hike rates as high as 6.5% and briefly bet on a small probability that the European Central Bank will hike to 4.25%, from previous expectations for 4%.

HIGHER FOR LONGER

Germany’s 10-year yield, which staged its biggest daily jump since March on Thursday, was eyeing its biggest weekly jump since last September, up around 23 bps.

Bund futures on Thursday posted the biggest volume yet seen for the September contract, IFR analysts said.

U.S. and British 10-year yields were also set to end the week more than 20 bps higher.

That’s a sign that investors are reconsidering what “higher for longer” rates means for longer-term borrowing costs, said Nordea chief analyst Jan von Gerich.

As longer-dated borrowing costs rose faster than shorter ones, the closely watched U.S. yield curve measured by the gap between two- and 10-year Treasury yields was set to end the week steeper for the first time since early May.

It was at minus 88 bps, having flattened to minus 109.5 bps earlier this week in the biggest inversion since 1981.

    “With long-dated bonds the issue is that yield curves have become so inverted it becomes hard to like long-term bonds unless you can convince yourself that rates will come down in your investment horizon,” said Mark Dowding, chief investment officer at BlueBay Asset Management, who holds a neutral position on U.S. and euro zone bonds.

In Germany, the 10-year yield rising above 2.5% marked a “significant development”, said Gael Fichan, head of fixed income at Syz Group, noting that was a level that had acted as resistance preventing higher yields in the shorter run.

Analysts noted 5% on two-year and 4% on 10-year Treasuries — levels breached on Thursday — as other key milestones.

“It is crucial to recognise that the repricing in the 7-10 year sector, where long positions are concentrated, is particularly susceptible to a stronger and sustained higher for longer narrative, potentially leading to losses,” Fichan said.

ING said earlier on Friday that this week’s data was strong enough to push yields higher even if jobs numbers interrupt the moves.

No doubt, the renewed selloff throws a curve ball at bond investors, who have been disappointed so far after last year’s record 13% losses.

The hope was for better returns in the second half of 2023, but global government bonds were down 1% this week through Thursday, cutting this year’s returns to a meagre 0.7%. Global equities, while down 1% this week, are still up 11% this year.

“There is a concern that if data remains strong, if central banks need to keep going further, then we are going to see a redux of 2022,” BlueBay’s Dowding said.

“It won’t be as bad as that, but higher rates and higher yields could lead to negative returns and pressure returns on equity markets.”

(Reporting by Yoruk Bahceli and Dhara Ranasinghe; Additional reporting by Samuel Indyk and Harry Robertson; Editing by Hugh Lawson)

By Leigh Thomas and Mathieu Rosemain

AIX-EN-PROVENCE, France (Reuters) -An unusually long lag in the time interest rate hikes are taking to feed through to the economy has left corporate leaders guessing whether to prepare for a hard or soft landing.

Although central banks in the United States and Europe have raised interest rates at the fastest pace in decades in an effort to tame inflation, most economies have so far escaped the painful recessions triggered by previous tightening cycles.

For corporate leaders at a weekend economics conference in the southern French town of Aix-en-Provence, that delay has left them questioning when and how much higher borrowing costs will affect them, especially if central banks keep hiking.

“There’s no real consensus at the moment about the increase in interest rates among economic actors,” Jeremie Delecourt, chief operating officer at French private equity fund Ardian, told Reuters.

“The fact everyone is asking the question is interesting, there are those who are optimistic and others who are pessimistic,” he added.

In the euro zone, the peak is near after a combined 4 percentage points rise in the past year, ECB policymaker and French central bank governor Francois Villeroy de Galhau said on a panel at the conference.

But he also said that rates would be left high for as long as necessary to ensure that inflation is headed back to the European Central Bank’s 2% target by 2025.

The ECB raised interest rates to their highest level in 22 years last month and promised another hike this month, with possibly another in September.

Jean-Louis Girodolle, head Lazard in France, told a panel that there was a danger central banks would fight inflation with the same zeal they fought deflation and go too far.

“The scenario that I fear is that we get the landing wrong, the opposite of ‘whatever it takes’, the of investment bank head said, referring to former ECB president Mario Draghi’s 2012 pledge to steer the euro zone through its debt crisis.

‘GOING TO BITE’

The full impact of rate hikes is taking more time than usual because many households and companies entered the new era of higher borrowing costs with solid cash levels, the result of strong savings during the pandemic.

Additionally, labour markets are strong on both sides of the Atlantic and corporate profits have so far held up, while housing markets are generally cooling but not in a tailspin.

“The transmission (of monetary policy) is coming late, but it’s going to bite, I would say towards the end of this year,” said Aylin Somersan Coqui, head of German export credit insurer Allianz Trade.

The pinch from higher borrowing costs would come just as corporate profits and the broader economy starts to falter, while elections in many countries next year would make it hard for governments to help struggling firms, she added.

“I see quite a bit of optimism in the short term, but I see a lot of downside risks if there is a policy mistake, especially from the central banks,” she added.

Though corporate defaults are on the rise in many countries they remain below pre-pandemic levels as many firms’ debt is in cheap, fixed-rate loans taken out when rates were ultra low.

While refinancing at much higher levels in the coming months could be a challenge for the weakest balance sheets, the increase in borrowing costs would come gradually for most firms, said Daniel Barneix, head of AFTE association for French corporate treasurers.

“We can expect debt levels to be adjusted on a case by case basis without triggering a systemic crisis,” said Barneix, who is also deputy finance director at French building materials group Saint-Gobain.

Although inflation is receding in most countries after last year’s supply-chain and energy price shocks, interest rate hawks say that its better to err on the side of going too high rather than not tackling high inflation.

“You should really avoid being dovish because then there is a big risk that inflation will come back and it will be really hard and long-lasting,” Veronika Grimm, one of the German government’s chief economic experts, told Reuters.

(Reporting by Leigh Thomas; Editing by Alexander Smith)

TOKYO (Reuters) -Japan’s current account surplus more than doubled year-on-year in May, in a fourth straight month of gains, as the country’s trade deficit narrowed and income gains from its overseas investment expanded, Ministry of Finance data showed on Monday.

The current account surplus reached 1.86 trillion yen ($13.08 billion) in May, compared with 773 billion yen in the same month a year earlier and just short of economists’ median forecast for a surplus of 1.88 trillion yen in a Reuters poll.

A breakdown of the data showed the trade deficit narrowed to 1.2 trillion yen from 1.8 trillion yen in May 2022, a ministry official said.

The primary income surplus hit 3.6 trillion yen, up from 3.1 trillion yen in the same month a year earlier, resulting in an overall surplus for a fourth straight month.

Dividend payments from overseas business affiliates in sectors such as automobiles and interest payments from securities investments helped drive up income gains.

Over the past year, the current account data has highlighted the pain that high energy costs and a weak yen have inflicted on the world’s third biggest economy, which relies heavily on imports of fuel and raw materials.

Japan’s position as an export powerhouse has also waned in recent years, in part because companies have moved production overseas, making overseas investment a pillar of the country’s earning power.

($1 = 142.2200 yen)

(Reporting by Tetsushi Kajimoto; Editing by Sonali Paul)

TORONTO (Reuters) – Talks in Pacific Canada between striking dock workers and their employers have resumed after four days away from the negotiation table, a statement on Saturday by the British Columbia Maritime Employers Association (BCMEA) showed.

The BCMEA and the International Longshore and Warehouse Union Canada (ILWU Canada) met on Saturday, supported by federal mediators, the statement said. The talks had stalled on Tuesday and the two sides broke off negotiations.

Some 7,500 port workers went on strike on July 1 for higher wages, upending operations at the Port of Vancouver and Port of Prince Rupert – key gateways for exporting the country’s natural resources and commodities as well as for bringing in raw materials.

Canada’s federal and provincial governments had urged the parties to restart talks, while on Saturday Alberta Premier Danielle Smith in a statement said her province supports an immediate recall of parliament to consider legislation to resolve the work stoppage.

BCMEA said it tabled a revised proposal to resolve skilled trades shortages and address ILWU Canada’s demand to expand their jurisdiction over regular maintenance work on terminals, which was rejected by ILWU Canada.

ILWU Canada did not immediately reply to a request for comment. The union is due to hold a rally on Sunday in Vancouver.

The Canadian Manufacturers & Exporters (CM&E) industry body said the strike is disrupting C$500 million ($377 million) in trade every day. That could lead to supply-chain disruptions that fuel inflation, economists say.

($1 = 1.3271 Canadian dollars)

(Reporting by Fergal Smith; Editing by Mark Porter)