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Business News

Australia’s central bank hiked rates for fear inflation was becoming entrenched

by Reuters June 19, 2023
By Reuters

SYDNEY, June 20 (Reuters) – Australia’s central bank’s decision to hike interest rates in June was “finely balanced” but judged necessary to ensure high inflation did not become embedded in wage and price expectations.

Minutes of its June 4 policy meeting released on Tuesday showed the Reserve Bank of Australia (RBA) board considered leaving rates unchanged given consumer spending was clearly slowing, but felt the risks to inflation had shifted to the upside.

“Members recognised the strength of both sets of arguments, concluding that the arguments were finely balanced,” the minutes showed. “They judged, though, that the case to raise the cash rate at this meeting was the stronger one.”

The bank lifted its cash rate a quarter point to 4.1%, marking 12 hikes in 13 months and surprising some in financial markets who had looked for a pause.

The hawkish outlook was underlined by a surprisingly strong jobs report for May released last week, leading futures to price in a top for rates around 4.6%, compared to 3.85% just a few months ago.

The minutes devoted much space to the arguments for an immediate hike, including rising electricity prices, high rents, stubborn services inflation and a rebound in national house prices.

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Headline inflation is still running hot at 7.0% while unemployment is down near 50-year lows of 3.6% and stoking wage pressures.

Low productivity and rising wages was a particular worry, with the board noting that a recent national award for low-paid workers had been higher than expected.

“Members discussed the possibility of implicit indexation of wages to past high inflation and the potential for this to become widespread,” the minutes showed.

“Similarly, members observed that some firms were indexing their prices, either implicitly or directly, to past inflation.”

This behaviour raised the risk that inflation would not return to the RBA’s 2-3% target band in a “reasonable timeframe”, the minutes showed.

(Reporting by Wayne Cole)

Keywords: AUSTRALIA RBA/MINUTES

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US and World News

Blinken ‘actively talking’ about three Americans detained in China – CBS News

by Reuters June 19, 2023
By Reuters

WASHINGTON (Reuters) – U.S. Secretary of State Antony Blinken said on Monday the United States and China were continuing to discuss the release of three U.S. citizens who are detained in China.

“I don’t want to get into the details, but we are very actively talking about that,” Blinken said in an interview with CBS News.

The three detained Americans are David Lin, 67, a pastor imprisoned in China since 2006; Kai Li, 60, who was handed a 10-year sentence in 2018 on spying charges, and Mark Swidan, a Texas businessman convicted by a Chinese court in 2019.

Washington says all three are wrongfully detained.

Blinken said the United States has a commitment to continue to work on resolving all three cases. “I not only raised, but talked some length about the individual cases of the detained Americans,” he said in the interview, held as he finished a rare trip to Beijing.

“It (their release) would, regardless of anything else be a very important and positive development and we’re working intensely,” Blinken said.

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(Reporting by Patricia Zengerle; Editing by Sandra Maler)

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New Zealand to investigate profitability, competition at banks

by Reuters June 19, 2023
By Reuters

SYDNEY (Reuters) – New Zealand said on Tuesday it would examine the profitability of the country’s banks and investigate whether competition in the sector was working well for consumers.

The banking sector is dominated by four banks making up around 85% of mortgage and other lending, and 90% of deposits, government data showed. Loans by smaller lenders have been rising but remain small in comparison.

“There have been long standing concerns that the market is not working well for New Zealanders,” Minister of Finance Grant Robertson said in a statement.

“Banks have consistently made high profits over a number of years and their returns have outperformed their peers in other countries.”

New Zealand’s four largest banks – ANZ Bank New Zealand, ASB Bank, Bank of New Zealand and Westpac New Zealand – are owned by Australia’s “Big Four” banks.

Robertson said the government aimed to set up a more competitive market for personal loans, mortgages and credit cards so consumers get the best deal as households struggle with higher living costs.

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“There has not been an in-depth look into competition issues in New Zealand’s banking for some time, and New Zealand lags other countries such as Australia and the UK into doing a detailed analysis into banking services,” he said.

But Robertson said the investigation will not check on the conduct of banks and culture.

It will focus on whether barriers exist for new competitors entering or expanding in the market, the introduction of innovative products and services, and consumers’ ability to switch between banks.

The government aims to finish the probe by August 2024 and will then determine whether any action is needed.

The New Zealand Banking Association said it “will engage constructively” with the government’s move.

“We believe the enquiry will ease any concerns in the community about competition and innovation in the banking industry,” said association CEO Roger Beaumont.

(Reporting by Renju Jose in Sydney; Editing by Christopher Cushing)

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U.S. NHC says 50% chance of cyclone near Cape Verde Islands

by Reuters June 19, 2023
By Reuters

(Reuters) – A tropical wave located several hundred miles southwest of the Cape Verde Islands has a 50% chance of developing into a cyclone in the next 48 hours, the U.S. National Hurricane Center (NHC) said on Monday.

“Environmental conditions appear favorable for further development of this system, and a tropical depression could form in a couple of days,” the Miami based forecaster said.

(Reporting by Harshit Verma in Bengaluru; Editing by Sandra Maler and Kim Coghill)

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Business News

Exclusive-Civitas Resources nears $5 billion deal to expand into Permian-sources

by Reuters June 19, 2023
By Reuters

By David French

(Reuters) – Civitas Resources Inc is nearing a deal to acquire oil and gas operations in the Permian basin from private equity firm NGP Energy Capital Management LLC for close to $5 billion, including debt, people familiar with the matter said on Monday.

The deal would transform Civitas, currently valued at $5.6 billion, expanding its operations beyond Colorado’s Denver-Julesburg (DJ) basin into the lucrative Permian basin in Texas and New Mexico, considered the heart of the U.S. shale industry.

Civitas is in advanced discussions with NGP to buy Hibernia Resources as well as much of Tap Rock Resources, the sources said.

The company will fund the deal using a mixture of cash and newly-issued Civitas shares, although the precise ratio could not be learned from the sources.

If the negotiations conclude successfully, an agreement could be announced as early as Tuesday, the sources said, requesting anonymity because the matter is confidential.

Civitas, NGP, Tap Rock and Hibernia did not respond to requests for comment.

Reuters reported in April that NGP was exploring a sale of Tap Rock and Hibernia.

Civitas, created in 2021 through the combination of three smaller DJ basin producers, bills itself as Colorado’s first carbon-neutral energy producer. It uses carbon offsets and renewable energy credits to compensate for emissions it cannot eliminate from its energy production operations.

The Denver-based company currently operates on more than 500,000 net acres and produces roughly 160,000 barrels of oil equivalent per day (boed), according to its website.

Tap Rock, among the largest private equity-controlled oil producers left in the Permian, is producing more than 100,000 boed from the Delaware portion of the basin in New Mexico, according to its website. Hibernia, which does not disclose the level of its production, operates in the Midland part of the Permian basin in Texas.

Cashing out on Tap Rock and Hibernia would help NGP with its bid to raise its 13th natural resources fund – the first flagship fund from the firm since 2018.

(Reporting by David French in New York; Editing by Sonali Paul)

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International donors pledge $1.5 billion in Sudan aid

by Reuters June 19, 2023
By Reuters

By Gabrielle Tétrault-Farber, Emma Farge and Khalid Abdelaziz

GENEVA (Reuters) -International donors made pledges on Monday of close to $1.5 billion in aid for Sudan and the surrounding region, about half of estimated needs for a deepening humanitarian crisis that has driven some 2.2 million people from their homes.

The conflict between Sudan’s army and paramilitary Rapid Support Forces (RSF) has turned the capital Khartoum into a war zone and triggered lethal, repeated attacks and mass displacement in the western region of Darfur as well as other parts of the country.

Though a 72-hour ceasefire has brought a lull in fighting in Khartoum since Sunday, residents reported that looting had surged as clashes subsided and the International Committee of the Red Cross (ICRC) said gunfire had prevented the transfer of wounded soldiers to hospital.

In El Geneina, the worst hit city in Darfur, desperate residents have been trying to flee attacks by Arab militias, but face murder, rape or detention as they set out on foot for the nearby border with Chad, witnesses and aid workers say.

A fundraising conference in Geneva hosted by Germany, Saudi Arabia, Qatar, Egypt and the United Nations was meant to drum up pledges to support relief efforts that have been hampered by ceasefire violations, looting and bureaucratic controls.

Donors announced close to $1.5 billion in pledges, U.N. aid chief Martin Griffiths said, though it was not immediately clear if all the money was new or when it would be disbursed.

That included 200 million euros ($218 million) from Germany and $171 million from the United States. The European Union said it had committed 190 million euros, and Qatar pledged $50 million.

“This crisis will require sustained financial support and I hope that we can all keep Sudan at the top of our priorities,” Griffiths said.

USAID chief Samantha Power said the U.S. had contributed more than half the funding for Sudan, which she described as unsustainable.

“The funds pledged today fail to meet the urgency of the situation,” said David Macdonald, of humanitarian agency CARE.

SURGE IN LOOTING

The war between the rival military factions began in mid-April amid tensions over an internationally backed plan for a transition towards elections under a civilian government.

It has left more than 3,000 people dead and 6,000 injured, according to Sudan’s health minister, though aid workers and witnesses say many bodies have been uncounted.

The ceasefire that began on Sunday was brokered by Saudi Arabia and the United States at talks in Jeddah. It is the latest in a series of truce deals that have allowed for the delivery of some humanitarian aid but failed to prevent the conflict from intensifying.

“Since the truce began yesterday, there has been a big increase in the rate of theft and looting of homes,” Mohamed Motasem, a 34-year-old resident of the capital, told Reuters by phone.

Residents reported clashes in Omdurman, across the Nile River from Khartoum. The RSF said the army had fired on an ICRC convoy carrying wounded army soldiers in the capital, while the army said it did not have any troops in the area. The army said it had repelled an RSF attack in Tawila in North Darfur.

U.N. Secretary-General Antonio Guterres said he was especially concerned by ethnic violence in Darfur and reports of gender-based and sexual violence. U.N. human rights chief Volker Turk said his office had received reports of sexual violence against at least 53 women and girls, saying that some 18 to 20 women were raped in a single attack.

Turk said the RSF had been identified as the perpetrator “in almost all cases” and also named them in relation to looting, large-scale attacks in West Darfur and enforced disappearances, of which 394 cases had been reported in the Khartoum area alone.

Before the donor conference, a U.N. appeal for $2.57 billion for humanitarian support within Sudan this year was about 17% funded, and an appeal for nearly $500 million for refugees fleeing from Sudan was just 15% funded, a situation U.N. refugee agency chief Filippo Grandi called “deeply distressing”.

U.N. aid officials say privately they expect oil-rich Gulf states to do more to prop up the global U.N. aid budget, which had already reached record highs of $51.5 billion in 2023 before the Sudan conflict.

($1 = 0.9159 euro)

(Reporting by Emma Farge and Gabrielle Tétrault-Farber in Geneva, Khalid Abdelaziz in Dubai; Writing by Aidan Lewis; Editing by Christina Fincher, Jonathan Oatis and Sandra Maler)

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NATO ready to act to save Kosovo’s peace, calls for de-escalation

by Reuters June 19, 2023
By Reuters

By Fatos Bytyci

PRISTINA (Reuters) – NATO forces in Kosovo are ready to face any situation if acts of violence similar to recent encounters threaten the peace, the NATO commander in Pristina said late on Monday.

Some 30 NATO peacekeeping soldiers defending three town halls in northern Kosovo were injured in clashes with Serb protesters late on May. Fifty-two protesters were wounded.

NATO, what has been guarding Kosovo since the war ended in 1999, decided to deploy an extra 700 troops and put another battalion on high alert, bringing its force to about 4,511.

“We plan to face any kind of circumstances. That’s the reason why we received additional forces. We do not react, we act,” the commander of NATO troops, known as KFOR, Angelo Michele Ristuccia told to a group of journalists from his headquarters in the outskirts of Pristina.

He said the situation remained very tense, despite relative calm in recent days.

“There is not a military solution at this moment because the only way to solve this situation is a political decision which is based on the will of both sides to normalise their relations. But first to de-escalate,” Ristuccia said.

The north of Kosovo, which is mainly inhabited by ethnic Serbs, have seen the worst tensions since the country declared independence from Serbia in 2008.

Violence erupted last month after ethnic Albanian mayors took office following a local election in which turnout was just 3.5% after Serbs who form a majority in the region boycotted the vote.

The United States and European Union have called on Prime Minister Albin Kurti to withdraw the mayors and remove special police used to install them.

Kurti has made its own demands and things further escalated last week when Serbia arrested three Kosovo police officers at the border area under disputed circumstances and ordered a continued detention for a month.

Kosovo says the three were arrested inside its territory by Serbian officers who had crossed the border. Belgrade says they were detained inside Serbia.

“We are here to avoid the situation to worsen and to defuse tensions…The only way to de-escalate depends on the political willingness of both parties,” Ristuccia said.

Some 50,000 Serbs who live in the north part refuse Pristina ruling and consider Belgrade as their capital.

(Reporting by Fatos Bytyci, Editing by Franklin Paul)

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Ukrainian artillerymen praise US howitzers outside Russian-held town

by Reuters June 19, 2023
By Reuters

By Max Hunder

NEAR KREMINNA, Ukraine (Reuters) – The artillerymen of Ukraine’s 67th infantry brigade are delighted with the U.S.-supplied M119 howitzer amid an increase in military exchanges south of the Russian-held town of Kreminna.

The men now stationed in Ukraine’s northeast have been redeployed from positions around the devastated town of Bakhmut – encircled and locked in fierce fighting for more than nine months before it fell last month to Russian mercenaries.

The northeast, where Ukrainian troops made big, rapid gains late last year, may be somewhat less intense, but it still saw plenty of exchanges. And the level of activity has risen noticeably in recent days.

Nearly 16 months after the Russian invasion, Ukraine has embarked on a counter-offensive focusing on the south and east and benefiting from supplies of U.S. and other Western weapons.

The M119 is described by military experts as a versatile, manoeuvrable and accurate weapon for light units, but with a specific, limited range of up to about 20 km (12.4 miles).

The artillerymen spent the day firing at enemy targets with the M119s, which they say they have had for seven months. And, by their account, work brilliantly in the area’s gruelling artillery battles.

“It all happens in waves,” said a gunner, aged 48, who introduced himself by his callsign, Skipper, and sported a cropped beard and cheeky grin.

“I can’t say that it got more intense. Still, over the last five days, we observe that they (Russian troops) became more active.”

Exchanges of fire, he said, had picked up on both sides where his unit was stationed.

“We also became more active, but everything else had better remain a secret. You’ll see what’s next.”

The artillerymen moved quickly to load their gun, toiling in the heat of a sunny June day.

Near the front lines, the sky was a clear blue punctuated by thick columns of black, grey or white smoke rising in the distance where artillery had struck.

Some reached hundreds of metres into the air.

Skipper and several of his comrades lauded the M119 for its precision and compact size, which made it easier to operate, hide and move.

A gunner identifying himself as Cousin, 47, lavished praise on the weapon.

“It is wonderful … They say that modern war heavily relies on artillery, that’s our mission,” he said.

“What is most important is to have enough shells. We can manage everything else on our own.”

(Reporting by Max Hunder near Kreminna; Editing by Ron Popeski and Stephen Coates)

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Blinken urges China’s vigilance on its firms providing tech to Russia

by Reuters June 19, 2023
By Reuters

By Humeyra Pamuk

BEIJING (Reuters) -U.S. Secretary of State Antony Blinken said on Monday he had asked China’s government to be vigilant about private companies that may be providing Russia with technology that could be used against Ukraine, although he said he had seen no evidence Beijing is providing lethal assistance to Moscow.

“What we do have ongoing concerns about, though, are Chinese firms, companies, that may be providing technology that Russia can use to advance its aggression in Ukraine and we have asked the Chinese government to be very vigilant about that,” Blinken told reporters.

Blinken spoke on a rare visit to Beijing during which China and the United States agreed to stabilize their intense rivalry so it does not veer into conflict, although the visit did not yield any major breakthrough.

Blinken met on Monday, the second day of his visit, with Chinese President Xi Jinping.

Western powers have provided Ukraine with billions of dollars in military assistance since Russia invaded in February 2022. China has faced accusations, which it denies, of supplying lethal weapons to Moscow. China and Russia announced a “no-limits” partnership shortly before Russia invaded Ukraine.

“With regard to lethal aid to Russia for use in Ukraine, we and other countries have received assurances from China that it is not and will not provide lethal assistance to Russia for use in Ukraine,” Blinken said.

“We appreciate that, and we have not seen any evidence that contradicts that,” he told reporters.

Asked for comment on Blinken’s remarks, the Chinese embassy in Washington said China is committed to promoting peace talks and has not provided weapons to either side in the Russia-Ukraine conflict.

“We oppose the unfair prohibition or restriction on normal economic and trade activities between Chinese and foreign companies. We urge the U.S. side not to undermine China’s legitimate rights and interests in any form when handling the Ukraine issue and its relations with Russia,” spokesperson Liu Pengyu said in an emailed statement.

(Reporting by Humeyra Pamuk, additional reporting by Patricia Zengerle in Washington; writing by Patricia Zengerle; editing by Jonathan Oatis and Sandra Maler)

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‘Great Resignation’ continues as quarter of workers look to change jobs – PwC

by Reuters June 19, 2023
By Reuters

By Divya Chowdhury

MUMBAI (Reuters) – A quarter of workers surveyed by PwC expect to change jobs in the next 12 months, up from 19% last year, as they are increasingly left cash-strapped in a cooling economy while dealing with inflationary pressures.

Even as the ‘Great Resignation’ continues, around 42% of the employees surveyed by PwC in its new study of the global workforce said they are planning to demand payrises to cope with the higher cost of living, up from 35% last year.

Some 46% of respondents to the ‘2023 Hopes and Fears Global Workforce Survey’, which polled 54,000 workers in 46 countries, said either that their households were struggling to pay bills every month, or that they could not pay bills most of the time.

“With the ongoing economic uncertainty, we see a global workforce that wants more pay and more meaning from their work,” said Bhushan Sethi, joint global leader of PwC’s people & organization practice.

Some 38% said they had money left over at the end of the month, down from 47% last year. Around one worker in five is doing multiple jobs, with 69% of those saying they were doing so for additional income.

“Purpose, company culture and inclusion also remain key to employee concerns,” the survey found.

Workers who are struggling financially are also less able to meet the challenges of the future, including investing in developing new skills and adapting to the rise of artificial intelligence (AI).

Among the workers surveyed who were doing better financially, more than one-third said AI will improve their productivity, while a quarter expected AI to create new job opportunities.

Younger workers, including Gen Z and millennials – people born after 1981 – expect to see a positive impact from AI on their careers over the next five years, the survey found.

(Join the Reuters Global Markets Forum on Refinitiv Messenger for live interviews: )

(Reporting by Divya Chowdhury in Mumbai; Editing by Jan Harvey)

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Bankers see stable interest rates reviving Asia’s capital markets in second half

by Reuters June 19, 2023
By Reuters

By Scott Murdoch and Yantoultra Ngui

SYDNEY/SINGAPORE (Reuters) – Asia’s dealmakers are counting on a pause in rate hikes globally and an economic rebound in China to rekindle activity in the region’s equity capital markets, after volumes in the first half of the year sank to their lowest in four years.

First-half Asia Pacific equity capital markets volumes dropped 16% to $117.2 billion from the same period in 2022, including a 34% drop in initial public offerings (IPOs) to $34.3 billion, Refinitiv data showed.

Flatlining activity has prompted some banks like Goldman Sachs to start laying off staff across nearly all major investment banking divisions.

“For investor sentiment to return for IPOs we need to see a more stable interest rate environment in the U.S., more economic stimulus from China and an improving geopolitical backdrop,” said Cathy Zhang, head of Asia Pacific equity capital markets at Morgan Stanley.

On global league tables, China now holds the top two spots for IPOs. Companies listing on Shanghai’s STAR Market raised $10.1 billion in the first half, nearly double the proceeds of New York deals, while companies debuting on Shenzhen’s ChiNext market raised $8.1 billion.

Hong Kong, traditionally known as a major global listing venue, raised just $1.9 billion in the first half, while Indonesia emerged as a rare bright spot in the region with $1.6 billion in new share sales.

Despite the ongoing downturn, bankers are betting on stabilisation of interest rates globally and a Chinese economic rebound spurred by stimulus measures to boost deal activity in the next six months.

“We are hoping to see more IPO activity in the second half and starting to see some green shoots in the U.S. and Europe,” said Udhay Furtado, Citigroup’s co-head of Asia equity capital markets.

“Monetary policy is the number one (macro) driver (to support issuance conditions). It impacts sentiment, it impacts volatility and valuations. In aggregate that is the biggest factor.”

As bankers scan their pipeline of IPO candidates for the second half, larger transactions in the region are being favoured to help kick-start activity.

“The first IPOs that will attract broad global investor attention will be larger companies that have scale, strong earnings and will have a liquid after-market,” said Sunil Dhupelia, JPMorgan’s co-head of Asia equity capital markets ex-Japan, adding consumer, clean energy and sectors linked to China’s reopening deals would be a key focus.

In terms of potential big deals, China’s JD.com has filed to spin off units JD Industrial and JD Property, each to raise $1 billion in Hong Kong deals this year.

Similarly, Alibaba Group has said it would separate six business units that would also look to carry out IPOs or capital raisings to fund future growth.

A rush of IPOS in Indonesia worth $1.64 billion led that market to double its share of the global new listing volumes in the first half compared to the same time last year.

Most of the deals came from miners and state-owned enterprises. Bankers expect there will be more in the second half in Southeast Asia from the likes of Indonesia’s Pertamina Hulu Energi’s planned $1.4 billion IPO and Amman Mineral Internasional’s expected $880 million float.

“We understand there are still several potential listings in the works in the region which should bolster new issuances raised,” said Edmund Leong, Head of Group Investment Banking, UOB.

(Reporting by Scott Murdoch in Sydney and Yantoultra Ngui in Singapore; Additional Reporting by Vineet Sachdev in Bangalore; Editing by Sonali Paul)

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Biden criticizes U.S. senator’s hold on military nominations

by Reuters June 19, 2023
By Reuters

By Trevor Hunnicutt and Nandita Bose

(Reuters) – President Joe Biden on Monday criticized Republican U.S. Senator Tommy Tuberville for holding up some 200 Pentagon nominees over a Defense Department abortion policy.

“It’s just bizarre. I don’t remember it happening before, and I’ve been around,” Biden said of the actions of Tuberville at a fundraiser for wealthy donors in California’s Silicon Valley.

Tuberville, a former football coach from Alabama, began blocking confirmations to senior Pentagon posts in March to protest a Defense Department policy enacted last year that provides paid leave and reimburses costs for service members who travel to get an abortion.

The Alabama senator has called the policy a violation of the Hyde Amendment, which prohibits using federal taxpayer funds for abortion services.

Earlier this month, the White House slammed the lawmaker. Press secretary Karine Jean-Pierre called his actions “shameful” and accused him of endangering national security.

Jean-Pierre said the senator’s blockade on the nominees was hurting military families and risking “our military readiness by depriving our armed forces of leadership.”

The Alabama senator is blocking what is usually a speedy process to confirm Pentagon nominees. If he persists, the U.S. Senate would have to consider each nominee in a longer process that takes up valuable floor time.

Defense Secretary Lloyd Austin in May said the holdup as endangering national security and called the block “irresponsible.”

(Reporting by Trevor Hunnicutt in Los Gatos, California, and Nandita Bose in Washington; editing by Jonathan Oatis)

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Japan regulator sounded out top domestic banks about China risks, sources say

by Reuters June 19, 2023
By Reuters

By Takaya Yamaguchi, Makiko Yamazaki and Paritosh Bansal

TOKYO (Reuters) -Japan’s financial regulator has sounded out top domestic banks about China risks and whether they have plans in place if Sino-Western tensions escalate, according to multiple sources with direct knowledge of the matter. 

The Financial Services Agency’s (FSA) request, which has not been previously reported, is to ensure Japan’s megabanks are thinking about the risks and are prepared to respond if the geopolitical situation worsens, including over the issue of Taiwan’s political status, said three of the sources.

Japanese megabanks Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Financial Group (SMFG) and Mizuho Financial Group have a combined $6.5 trillion in assets, according to Refinitiv.

As of end-March, the three banks had total credit exposure of about $64 billion to China, or roughly 1% of their total assets, according to their financial statements. The number does not include all business unit of the banks.

A major risk for Japanese banks would involve U.S. sanctions on China, hobbling their ability to do business there similar to the bans on Russia dealings after the invasion of Ukraine, said one of the sources, who is a financial industry executive.

All the sources requested anonymity because of the sensitivity of the matter.

The FSA, MUFG and Mizuho declined to comment. SMFG said it declined to comment on anything related to dealings with regulators.

The FSA has not given the banks any specific directions for actions they need to take, one of the other sources said, adding the lenders were thinking about various eventualities and the regulator was hoping for their insights and information.

The FSA’s request to look into China-related geopolitical risk was made in May, said two other sources. At a meeting last month, one of the banks was asked by the FSA how it is assessing risk related to China operations, one of them said.

The watchdog’s move comes as tensions between China and Western allies have increased over the last 18 months amid a series of disputes involving the Russia-Ukraine war, Taiwan’s sovereignty, and technology access.   

    In particular, tensions have risen between the United States and China.

U.S. Secretary of State Antony Blinken met with China’s top diplomat Wang Yi on Monday at the start of the second and final day of a rare visit to Beijing aimed at ensuring that the many disagreements do not spiral into conflict.

CONTINGENCY PLANS   

    Japanese banks, like many multinational companies, find themselves faced with the prospect of being caught in the middle. 

Top Japanese financial firms, led by banks, are heavily exposed to China either via their onshore operations in the world’s second-largest economy or through their offshore business networks. They also do business in the West.   

    The regulator’s move underscores how far-reaching the impact of a geopolitical crisis, such as one involving Taiwan, would be for the global economy and businesses.

China claims democratically governed Taiwan as its territory and has never renounced the use of force to bring it under its control. Taiwan strongly objects to China’s sovereignty claims and says only the island’s people can decide their future.    China has over the past three years stepped up its pressure to try and force Taiwan to accept Beijing’s sovereignty, including staging war games around the island.

    Many global businesses worry an escalation of tensions could result in the U.S. imposing sanctions on China, as it did with Russia in the aftermath of the Ukraine war. They are taking steps such as drafting contingency plans and inquiring about manufacturing capacity outside Taiwan.    Almost half of the companies surveyed by the American Chamber of Commerce in Taiwan are revising or plan to revise their business continuity plans amid tensions with China, Reuters reported in February.

For Japanese banks with large exposure to the United States, the impact of any Western sanctions against China is likely a greater concern than the fallout of their direct exposure to Taiwan, the financial industry executive said.

Dealing with China sanctions would be extremely complex, the executive added.

(Reporting by Takaya Yamaguchi and Makiko Yamazaki in Tokyo and Paritosh Bansal in New York; Editing by Sumeet Chatterjee and Jamie Freed)

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Biden: US-China relations on the ‘right trail’

by Reuters June 19, 2023
By Reuters

PALO ALTO, California (Reuters) – U.S. President Joe Biden said on Monday he thinks relations between the United States and China are on the “right trail” and suggested progress was made during a rare trip to Beijing by Secretary of State Antony Blinken.

“We’re on the right trail here,” Biden said of U.S.-China relations. Asked by reporters whether he felt progress had been made, he replied, “It’s been made.”

Biden also praised Blinken and said “he did a hell of a job.”

China and the United States agreed on Monday to stabilize their intense rivalry so it doesn’t veer into conflict but failed to produce any major breakthrough.

(This story has been corrected to show Biden suggested progress was made)

(Reporting by Trevor Hunnicutt in California and Nandita Bose in Washington; editing by Jonathan Oatis)

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Xi, Blinken agree to stabilize US-China relations in Beijing talks

by Reuters June 19, 2023
By Reuters

By Humeyra Pamuk

BEIJING (Reuters) -China and the United States agreed on Monday to stabilize their intense rivalry so it does not veer into conflict, but failed to produce any major breakthrough during a rare visit to Beijing by U.S. Secretary of State Antony Blinken.

Chinese President Xi Jinping welcomed “progress” after shaking hands with Blinken at the Great Hall of the People, a grand venue usually reserved for greeting heads of state.

The top U.S. diplomat and Xi both stressed the importance of having a more stable relationship, as any conflict between the world’s two largest economies would create global disruption.

China refused to entertain Washington’s bid to resume military-to-military communication channels, citing U.S. sanctions as the obstacle. The two sides appeared entrenched in their positions over everything from Taiwan to trade, including U.S. actions toward China’s chip industry, human rights and Russia’s war against Ukraine.

U.S. President Joe Biden said later on Monday he thinks relations between the two countries are on the right path, and indicated that progress was made during Blinken’s trip.

“We’re on the right trail here,” Biden said of U.S.-China relations. Asked by reporters during a trip to California whether he felt progress had been made, he replied, “I don’t feel,” he said. “You know it’s been made.”

Biden said of Blinken: “He did a hell of a job.”

At one of the most significant U.S.-China exchanges since Biden took office, it was not clear how the countries would overcome their differences. The sides agreed to continue diplomatic engagement with more visits in the coming weeks and months.

ACHIEVED OBJECTIVES

At a news conference concluding his two-day trip to Beijing, the first by a U.S. secretary of state since 2018, Blinken said Washington had achieved its objectives for the trip, including raising concerns directly, trying to set up channels for dialogue and exploring areas of cooperation. The trip was postponed in February after a suspected Chinese spy balloon flew through U.S. airspace.

But he said progress was not straightforward.

“The relationship was at a point of instability, and both sides recognized the need to work to stabilize it,” Blinken said before leaving China.

“But progress is hard. It takes time. And it’s not the product of one visit, one trip, one conversation. My hope and expectation is: we will have better communications, better engagement going forward.”

U.S. officials had been playing down the prospect of a major breakthrough, but hoped Blinken’s visit would pave the way for more bilateral meetings, including possible trips by Treasury Secretary Janet Yellen and Commerce Secretary Gina Raimondo.

It had been hoped that it would even pave the way for a summit between Xi and Biden later in the year.

Biden and Xi last met on the sidelines of the G20 summit in Indonesia in November, pledging more frequent communication, although ties have since deteriorated.

“The two sides have also made progress and reached the agreement on some specific issues. This is very good,” Xi told Blinken on Monday across a long table adorned with pink flowers.

Blinken responded by saying the two countries have a responsibility to manage their relationship.

His meetings in Beijing, including talks with China’s top diplomat Wang Yi and foreign minister Qin Gang, had been “candid and constructive,” Blinken added.

It was not clear from Xi’s remarks what progress he was referring to, although he told Blinken that China “hopes to see a sound and steady China-U.S. relationship” and believes that the countries “can overcome various difficulties,” according to a Chinese readout of the talks.

Xi also urged Washington not to “hurt China’s legitimate rights and interests,” a signal of potential flashpoints such as Taiwan, the democratic island Beijing claims as its own.

Blinken said he made clear the United States needs much greater cooperation from China on stemming the flow of fentanyl and the sides agreed to set up a working group on the matter.

TAIWAN CORE ISSUE

The lack of open communication channels between the two countries has prompted international jitters, and Beijing’s reluctance to engage in regular military-to-military talks with Washington has alarmed China’s neighbors.

Speaking to reporters after the talks, senior foreign ministry official Yang Tao said U.S. sanctions were blocking progress on improving military-to-military communications.

Chinese defense minister Li Shangfu has been sanctioned since 2018 over the purchase of combat aircraft and equipment from Russia’s main arms exporter, Rosoboronexport.

Asked what specific progress the two sides had made, Yang said they had agreed to prevent a downward spiral in relations. The official added that Chinese foreign minister Qin had accepted Blinken’s request to visit the United States.

Xi’s comments, and the diplomatic choreography of the visit, appeared to signal a will to make progress, analysts said.

“China’s messaging has been pretty positive,” said Wu Xinbo, a professor and director at the Center for American Studies at Fudan University in Shanghai.

“China showed that it still hopes to work with the U.S. to stabilize and improve relations. I think that while China is not optimistic about Sino-U.S. relations, it has not given up hope either.”

Beijing’s tone on Taiwan was particularly pointed throughout Blinken’s visit.

“China has no room for compromise or concessions,” said Wang, according to the Chinese readout.

The United States has long stuck to a policy of “strategic ambiguity” over whether it would respond militarily to an attack on Taiwan, which Beijing has refused to rule out.

(Reporting by Humeyra Pamuk in Beijing; Additional reporting by Jason Xue in Shanghai, Sophie Yu, Yew Lun Tian, Dominique Patton, Joe Cash in Beijing, Jeanny Kao and Ben Blanchard in Taipei; Writing by Humeyra Pamuk, John Geddie, Doina Chiacu and Patricia Zengerle; Editing by Simon Cameron-Moore, Andrew Heavens and Lisa Shumaker)

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US urges ‘orderly, responsible’ drawdown of UN peacekeepers from Mali

by Reuters June 19, 2023
By Reuters

(Reuters) – The United States regrets a decision by Mali’s interim military authorities to ask a United Nations peacekeeping force to leave the country, the State Department said on Monday, calling for an “orderly and responsible” drawdown of the mission.

Mali’s Foreign Minister Abdoulaye Diop made the request during a U.N. Security Council meeting on Friday, citing a “crisis of confidence” between Malian authorities and the decade-long U.N. mission known as MINUSMA.

“The United States regrets the transition government of Mali’s decision to revoke its consent for MINUSMA,” State Department spokesperson Matthew Miller said. “MINUSMA’s drawdown must be orderly and responsible, prioritizing the safety and security of peacekeepers and Malians.”

“We are concerned about the effects this decision will have on the security and humanitarian crises impacting the Malian people,” he said in a statement.

Mali has struggled to stem an Islamist insurgency that took root following an uprising in 2012. MINUSMA was deployed by the U.N. Security Council in 2013 to support foreign and local efforts to restore stability.

Frustrations over the growing insecurity spurred two coups in 2020 and 2021, and the ruling junta has been increasingly at loggerheads with MINUSMA and other international allies, including France.

The junta has burned bridges with traditional Western allies and turned to Russia for help boosting its military capabilities.

The United States “will continue to work with our partners in West Africa to help them tackle the urgent security and governance challenges they face,” Miller said. “We welcome further consultations with regional leaders on additional steps to promote stability and prevent conflict.”

U.N. Security Council members had started to discuss a draft resolution to extend MINUSMA’s mandate, which expires on June 30. It was unclear what would happen now.

The U.N. special envoy to Mali, El-Ghassim Wane, said on Friday it would be “extremely challenging, if not impossible” to operate in a country without the government authorities’ consent.

(Reporting by Michelle Nichols and Daphne Psaledakis; Editing by Franklin Paul and Jonathan Oatis)

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Ukraine prepares ‘biggest blow’ as it claims recapture of eight villages from Russia

by Reuters June 19, 2023
By Reuters

By Tom Balmforth and Pavel Polityuk

KYIV (Reuters) -Ukraine said on Monday it had driven Russian forces out of an eighth village in its two-week-old counteroffensive and a defence official vowed Kyiv’s “biggest blow” lay ahead despite tough resistance from Moscow’s troops.

Deputy Defence Minister Hanna Maliar said Ukrainian forces had retaken Piatykhatky, a settlement on a heavily fortified part of the front line near the most direct route to the country’s Azov Sea coast.

This was part of an advance by Kyiv of up to seven km (4.3 miles) into Russian lines in two weeks, capturing 113 square km (44 square miles) of land.

“The enemy will not easily give up their positions, and we must prepare ourselves for a tough duel,” Maliar said on the Telegram messaging app. The military “are moving as they should have been moving. And the biggest blow is yet to come.”

She said the fiercest fighting was in the east and south of Ukraine. Separately, she said Ukraine’s military was preventing a Russian advance in the east where it concentrated its units, including air assault troops.

President Volodymyr Zelenskiy said in his nightly video address that Kyiv’s military was moving forward in some sectors and defending against intensified attacks in others. But the net outcome was favourable for Ukraine, he said.

“We have no lost positions, only liberated ones. And they have only losses,” he said.

Two slick videos released on Telegram by the Ukrainian armed forces showed what they said were attacks and advances by their forces in recapturing the village of Piatykhatky, including several strikes on Russian positions and a convoy. The video shows thick smoke rising from the area. Columns of Ukrainian armoured vehicles are seen advancing down a country road.

The video concluded with soldiers of the 128th separate assault brigade standing in front of a colonnaded building with Ukrainian flags and saying they have liberated the village.

Reuters was able to confirm the location of the video but could not independently verify the date.

The General Staff of the Ukrainian Armed Forces wrote on Facebook that anti-aircraft units had shot down four cruise missiles and four Iranian-made drones in the last 24 hours.

It said Russia had shelled more than a dozen towns and villages in the Zaporizhzhia region, including Piatykhatky.

Reuters could not verify the battlefield claims.

INCREMENTAL GAINS

The reported capture of the villages reflects the incremental nature of the gains so far for Ukraine along lines Moscow has spent months strengthening.

Piatykhatky is significant, however, as it lies around 90 km from the coast.

Zelenskiy said he would continue talks with Western allies to get weapons and ammunition to them as soon as possible.

Russia, hoping to dent Western resolve, said it had repelled numerous assaults and it released a video showing what its troops say is captured Western equipment, in this case a French-made tank reportedly seized in the eastern Donetsk region. It did not mention Piatykhatky.

Ukraine has acknowledged attacks along several parts of the 1,000-km-long front line in its long-anticipated counteroffensive to retake the 18% of its territory occupied by Russia, but carefully controls information for security reasons. Analysts say the main phase of the counteroffensive is yet to begin.

Both sides appear to have taken heavy losses in recent fighting and both say the other side’s are greater.

Ukraine has prepared an array of new military units for the counteroffensive, while its established brigades weathered Russia’s winter offensive in the east.

Separately, Ukraine Deputy Minister for Strategic Industries Sergiy Boyev told Reuters at the Paris Airshow on Monday that Ukraine is in talks with Western arms manufacturers to boost output of weapons, including drones, and possibly even in Ukraine.

The conflict has killed thousands of civilians, destroyed towns and cities and driven millions of people from their homes while exacerbating global inflation and reshaping security arrangements.

Russia says it invaded Ukraine to “denazify” it, an argument Ukraine and its Western allies call a pretext for a land grab.

REDEPLOYMENT?

Officials from two NATO member states said Moscow was redeploying some of its forces as it seeks to predict where Ukraine will strike.

British and Estonian intelligence officials said that Russia had been moving some forces east along the front line from areas south of the Dnipro river flooded by the destruction of the huge Kakhovka hydroelectric dam on June 6.

Russia and Ukraine have blamed each other for the unleashing of the vast reservoir. Flooding has destroyed homes and farmland along both sides of the front line in Kherson region. The death toll has risen to 52, with more than 11,000 people evacuated.

(Additional reporting by Dan Peleschuk, Ron Popeski, Joanna Plucinska and Valerie Insinna; Writing by Philippa Fletcher, Hugh Lawson and Cynthia Osterman; Editing by Angus MacSwan, Alistair Bell and Sandra Maler)

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Honduras anti-corruption activist says she left country after threats

by Reuters June 19, 2023
By Reuters

TEGUCIGALPA (Reuters) -One of Honduras’ leading anti-corruption advocates on Monday said she had left the Central American nation because of threats, weeks after accusing President Xiomara Castro’s government of nepotism.

Gabriela Castellanos, executive director of the National Anti-Corruption Council (CNA), which has investigated public corruption in Honduras for nearly a decade, left the country on Sunday with her family and traveled to the United States, she told local media.

“Given the situation of insecurity facing my family and myself, we decided to leave the country and (hope) these events that have occurred in recent weeks can be investigated,” Castellanos said on television channel 3.

Castellanos, who had been invited to attend an event organized by the Organization of American States (OAS), did not specify where the threats were coming from or what investigation they were related to, but said they began in the past three weeks.

On May 24, the CNA published the results of an investigation alleging that the Honduran government tapped Castro’s relatives for positions in the presidency, the Cabinet, Congress and the Supreme Court.

Castro denied the claims the next day and described them as false, accusing the CNA of keeping silent during corruption in the government of former President Juan Orlando Hernandez, who was extradited to the United States on drug trafficking charges last year.

Gerardo Torres, Castro’s deputy foreign minister, said the threats against Castellanos were not coming from within the government.

“I hope we can figure out where they’re coming from and that Ms. Castellanos can come back to the country,” he said in a press conference.

(Reporting by Gustavo Palencia; editing by Jonathan Oatis)

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Marketmind: China to cut rates, but by how much?

by Reuters June 19, 2023
By Reuters

By Jamie McGeever

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.

The People’s Bank of China takes center stage on Tuesday with a near-certain interest rate cut, according to the expectations of investors, who are also trying to read the political tea leaves from U.S. Secretary of State Antony Blinken’s visit to Beijing.

Trading volume across the region should pick up after U.S. markets were closed Monday for the Juneteenth holiday, and Malaysian trade, Japanese industrial output, and Hong Kong inflation data could all move asset prices in these countries.

All eyes, however, are on Beijing.

All 32 market watchers in a Reuters poll said the PBOC will cut key lending benchmarks for the first time in 10 months, as authorities battle to shore up a slowing recovery in the world’s second-largest economy and ward off the threat of deflation.

The PBOC last week lowered short- and medium-term policy rates, paving the way for lower benchmark borrowing costs. Most poll participants expect the one-year loan prime rate to be cut by 10 basis points to 3.55%, and half said they forecast a deeper cut of at least 15 bps to the five-year LPR.

The weakness of recent economic data suggests the anticipated loosening of policy on Tuesday will be on the aggressive side and will be followed with further easing in the coming months.

Several major banks have cut their 2023 GDP growth forecasts for China to a 5.1% to 5.7% range from an earlier range of 5.5% to 6.3%.

Chinese stocks on Monday posted their biggest fall in two weeks, but the weakness was not confined to China. The MSCI World index came off last week’s 14-month high, Japan’s Nikkei lost 1%, and Hong Kong tech and the MSCI Asia ex-Japan index both had their biggest falls in three weeks.

That’s the economic and market backdrop to U.S. Secretary of State Blinken’s visit to Beijing, which ended on Monday with all the diplomatic courtesies and protocols one would expect, but with no major breakthrough for investors to cling to.

The two countries agreed to stabilize their rivalry so it doesn’t veer into conflict, hailed “progress” and stressed the importance of a more stable relationship. But they appeared entrenched in their positions over everything from Taiwan to trade, including U.S. actions toward China’s chip industry, human rights and Russia’s war against Ukraine.

The yuan remains under pressure, anchored near seven-month lows against the dollar, and sentiment toward the Chinese currency will not have been boosted by the auspicious start to yuan-denominated trading in certain Hong Kong stocks on Monday.

The 24 companies that debuted the yuan-denominated stock trading scheme attracted a small fraction of their stocks’ trading volume, as interest in using the new currency option was dwarfed by the Hong Kong dollar.

It is early days, of course, but perhaps another reminder that the yuan’s road to internationalization is a very long one.

Here are key developments that could provide more direction to markets on Tuesday:

– China interest rate decision

– Japan industrial production (April)

– Malaysia trade (May)

(By Jamie McGeever; Editing by Lisa Shumaker)

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EU countries fail to agree energy reforms after coal subsidy clash

by Reuters June 19, 2023
By Reuters

By Kate Abnett

LUXEMBOURG (Reuters) -European Union countries failed on Monday to agree on planned new rules for the bloc’s power market, having clashed over a proposal to extend subsidies for coal plants under the reform, and a push to expand state aid for other power plants.

EU energy ministers meeting in Luxembourg ended talks without a joint stance on the reforms that seek to avoid a repeat of last year’s energy crisis, when record-high gas prices left consumers with soaring energy bills.

The talks had been complicated by a late proposal by Sweden, which holds the EU’s rotating presidency, to allow countries to prolong capacity mechanism subsidies for coal power plants that pay generators to keep capacity on standby to avoid blackouts.

EU countries’ ambassadors will take up the negotiations, aiming for a deal this month.

Asked about the coal proposal, Swedish Energy Minister Ebba Busch said ensuring Poland, which borders Ukraine, had stable power generation could help it support Ukraine with back-up power.

Poland, which gets around 70% of its power from coal, could prolong its support scheme for coal plants, potentially until 2028, under the proposal.

Countries including Austria, Belgium, Germany and Luxembourg had objected, saying the move would undermine Europe’s goals to fight climate change.

The draft proposal, seen by Reuters, would allow existing capacity mechanisms to temporarily waive a CO2 emissions limit – enabling coal plants to participate – if they fail to attract enough lower-carbon generators, and if the European Commission approved the exemption.

“For some of us, security means capacity markets,” Polish Climate Minister Anna Moskwa said earlier on Monday.

Coal is the most CO2-emitting fossil fuel. Scientists say its use must plummet this decade if the world is to avoid the most severe impacts of climate change.

STATE AID

Ministers also struggled to agree rules governing state support for renewable and nuclear power plants, with Germany and France at odds over the issue.

Germany, Austria and the Netherlands had said letting countries offer fixed-price power contracts with the state to existing power plants, as well as new ones, could distort the EU’s single market.

“This could lead to market distortions as large parts of the markets could become inflexible, and also to a distortion of a level playing field concerning the prices in Europe,” German Economy and Climate Minister Robert Habeck said in the meeting.

EU diplomats said the concerns centred around the potential use of these subsidies for French nuclear plants.

French Energy Minister Agnes Pannier-Runacher opposed the call to restrict the use of such contracts, which she said “endangers the objective of security of supply and of protecting consumers”.

The proposed EU power market reform aims to make power prices more stable. Once they agree a common position, countries must negotiate the final law with the EU Parliament.

The latest proposal would also let countries introduce national schemes, until mid-2024, to recoup windfall revenues from some power plants if power prices spike – a move backed by countries including Greece and Spain.

(Reporting by Kate Abnett; additional reporting by Tassilo Hummel, Sudip Kar-Gupta; Editing by Giles Elgood, Emelia Sithole-Matarise, Barbara Lewis, Marguerita Choy and Jonathan Oatis)

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Israeli troops, backed by helicopter, kill 5 Palestinians in clash

by Reuters June 19, 2023
By Reuters

By Ali Sawafta

JENIN, West Bank (Reuters) -Israeli forces backed by the rare use of helicopter gunships killed five Palestinians including a teenager and wounded more than 90, as a West Bank raid led to an hours-long gunbattle with armed fighters, the military and health officials said.

Eight Israeli personnel were wounded after troops came under fire during an operation in the flashpoint city of Jenin to arrest two Palestinians suspected in attacks, the military said. At least three of the Palestinians killed in the fighting belonged to the armed Islamic Jihad group.

With U.S.-sponsored peacemaking stalled for almost a decade, Jenin and other areas of the northern West Bank have been a focus of months of stepped-up sweeps by Israel amid a spate of Palestinian street attacks in its cities.

As troops faced heavy fire and a rain of explosive devices from gunmen in the city, the army was forced to mount an extraction mission to pull out the wounded and a number of its vehicles blocked in the fighting, it said.

“So that’s why you saw also our forces in a very problematic area and we had to bring in a helicopter,” an army spokesman told reporters.

The unusual use of helicopter gunships in the operation underlined the intensity of the fighting in Jenin, where armed militant groups including Hamas and Islamic Jihad have long had a strong presence in the adjoining refugee camp.

Bezalel Smotrich, the head of one of the parties in Prime Minister Benjamin Netanyahu’s religious-nationalist coalition, said the government should launch a broad offensive operation “to restore deterrence” in Jenin, Nablus and other West Bank areas.

“It’s time for the gloves to come off,” he said.

The Palestinian Foreign Ministry said Israel’s operations in Jenin were “a dangerous escalation that will drag the region into more bloodshed” and called on the international community to “immediately and urgently intervene”.

Video filmed by a local resident and obtained by Reuters showed an explosion enveloping an armoured troop transport as shots ring out. Other clips showed a military helicopter launching a missile and releasing flares.

Israeli media said use of helicopter gunships was a 20-year first in the West Bank. The Israeli military did not immediately respond to a request for comment on when it had last used them there.

A military spokesperson said an Apache helicopter fired on an open area in order to drive back gunmen as casualties were extricated from the troop transport.

“We’re aware Palestinians are hit, quite a big number,” the spokesman said.

An Islamic Jihad official said the use of aircraft “will push our fighters to use tools that will surprise the enemy.”

An official from the Fatah party said fighters from the nearby cities of Nablus and Tulkarem had arrived in Jenin to support the local fighters.

NO COMPROMISES

The Palestinian health ministry said the five killed during the fighting included 15-year-old Ahmad Saqer. Islamic Jihad claimed three of the dead as members. Another 91 Palestinians were wounded, among then 23 people in critical condition, the ministry said.

Some Palestinian journalists said Israeli forces fired at them during Monday’s operation, even though they were wearing clearly identifiable blue body armour with Press markings. Video showed reporters taking cover on a rooftop as one said they were being targeted by Israeli snipers.

The head of the Red Crescent in Jenin, Mahmoud al-Saadi, told Reuters his medical teams also came under Israeli fire while transporting the wounded, damaging two ambulances.

The Israeli military said it was unaware of any fire at medics or journalists but was reviewing the incident.

“The IDF does not shoot at uninvolved individuals, and the use of live fire is made after all other options have been exhausted,” it said in a statement.

As well as Islamic Jihad, Hamas, the Islamist movement which rules the Gaza Strip, said a number of its fighters also took part in the clashes.

By late afternoon, the military said all its forces had left the city, where soldiers mounted a major operation in January that killed nine Palestinians and sparked a brief exchange of cross-border fire with Gaza.

The U.N. Special Coordinator for the Middle East Peace Process Tor Wennesland said that escalations like the one in Jenin risked plunging the region into a deadly crisis and said both sides should re-engage on a political path.

Defence Minister Yoav Gallant said Israel would employ whatever means it thought necessary.

“There are no compromises in the fight against terrorism, we will continue to take an offensive approach. We will use all the means at our disposal,” he said on Twitter.

The Palestinian Foreign Ministry said Palestinians will “continue to defend themselves” as “their homes are being bombed, lands stolen, and children killed”.

In a separate incident late on Monday, the Palestinian health ministry said 20-year-old Zakaria Zaoul was shot in the head by Israeli forces in the town of Husan near Bethlehem. At least two more Palestinians sustained gunshot wounds in clashes with Israeli forces in the area, the Palestinian WAFA news agency reported. There was no immediate statement from the military.

Earlier in the evening, the Israeli military said two assailants rammed their car into soldiers operating around a checkpoint in the northern West Bank. The soldiers fired at and hit the suspects and two soldiers were wounded in the incident, a statement from the military said.

The Palestinian health ministry said two people who were shot by Israeli forces arrived for treatment at a Jenin hospital, one in critical condition.

(Writing by Dan Williams, Nidal al-Mughrabi and James Mackenzie; Editing by Gareth Jones, Ed Osmond, Hugh Lawson, Peter Graff and Jonathan Oatis)

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Paris air show takes off with historic plane order

by Reuters June 19, 2023
By Reuters

By Tim Hepher, Allison Lampert and Valerie Insinna

PARIS (Reuters) -Airbus announced a record 500-plane deal with Indian airline IndiGo on day one of the Paris Airshow on Monday, as strong demand for jets and air defences vied for attention with the industry’s supply chain problems.

The multibillion-dollar deal for single-aisle planes – the largest ever by number of aircraft – confirmed a Reuters report earlier this month, and eclipsed Air India’s provisional purchase of 470 Airbus and Boeing jets earlier this year.

The world’s largest air show, which alternates with Farnborough in Britain, is at Le Bourget for the first time in four years after the 2021 edition fell victim to the pandemic.

French President Emmanuel Macron flew in to the packed aerospace bazaar by helicopter and watched a flying demonstration including Airbus’s latest jet development, the A321XLR, and air power including the French Rafale fighter.

On the civilian side, planemakers arrived with growing demand expectations as airlines rush for capacity to meet demand and help reach industry goals of net zero emissions by 2050.

But they also face a challenge to meet that demand as suppliers struggle with rising costs, parts shortages and a scarcity of skilled labour in the wake of the pandemic.

Industry executives say as many as 2,000 jet orders are up for grabs worldwide in a resurgent commercial jet market, on top of those provisionally announced already, as airlines try to fill a void left by sharp falls in activity in the COVID crisis.

But only a portion of these potential fresh deals will be ready in time for this week’s air show, which could see a mixture of new and repeat announcements, they said.

“It is only when these appear in the year-end backlog that we have any idea of the strength of the market and the quality of the orders,” said Agency Partners analyst Sash Tusa.

UKRAINE ARMS TALKS

IndiGo’s deal highlights the growing importance of India, the world’s fastest-growing aviation market, serving the largest population, to planemakers.

“This is just the beginning, there’s more going forward. With the growth of India (and) the growth of the Indian aviation market … this is the right time for us to place this order,” IndiGo Chief Executive Pieter Elbers told a news conference.

In another key market, Airbus said Saudi budget airline flynas had firmed up an order for 30 of its A320neo-family narrowbody aircraft, confirming a Bloomberg report.

The air show is taking place under the shadow of the conflict in Ukraine, with no Russian presence in the chalets and exhibition halls in contrast to the last event four years ago.

A Ukrainian minister told Reuters that Kyiv is in talks with Western arms manufacturers to boost production of weapons, including drones, and could sign contracts in coming months.

Belgium said it would apply to join as an observer the potential successor to the Rafale and multinational Eurofighter, the Franco-German-Spanish FCAS fighter project, despite differences between industrial partners over whether to expand.

France’s Thales also announced a contract from Indonesia for 13 long-range air surveillance radars.

Looking ahead to the rest of the show, Air India may finalise its recent huge order, split between Airbus and Boeing, as Irish lessor Avolon finalises a deal with Boeing which is having a relatively quiet show after a string of recent orders.

Airbus is seen close to a potentially large deal with Mexico’s Viva Aerobus, but by Monday some sources were predicting the volume could be closer to 60 jets than the triple digits first reported, with no guarantee of a result this week.

And with increased bargaining power at their disposal from tight supplies, airline executives say planemakers are being tougher on price and more circumspect than in previous upcycles.

Engine makers are meanwhile sketching bets on fuel-saving technology that will influence how jets evolve next decade.

(Reporting by Tim Hepher, Joanna Plucinska, Allison Lampert and Valerie Insinna; Additional reporting by Aditi Shah, Julia Payne, Nandan Mandayam; Editing by Mark Potter and Jonathan Oatis)

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US and World News

UK lawmakers vote to approve report that Boris Johnson misled parliament

by Reuters June 19, 2023
By Reuters

LONDON (Reuters) – British lawmakers on Monday voted to approve a report that recommended sanctioning former prime minister Boris Johnson for deliberately misleading parliament over rule-breaking parties held during the COVID-19 pandemic.

Lawmakers in the House of Commons voted by 354 to 7 to endorse the privileges committee’s report, which concluded that the former leader should have his parliamentary pass revoked and had he not already quit, it would have recommended a 90-day suspension from parliament.

Johnson abruptly resigned from parliament 10 days ago after seeing an advance copy of the report, calling the inquiry a “witch hunt”.

(Reporting by Andrew MacAskill and Muvija M; Editing by Sandra Maler)

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US and World News

Greek migrant tragedy death toll rises, suspects detained

by Reuters June 19, 2023
By Reuters

By Karolina Tagaris

MALAKASA, Greece (Reuters) -The suspected smugglers of scores of migrants who drowned in a Mediterranean Sea shipwreck last week are expected to face manslaughter charges in a Greek court this week, while Pakistan detained a dozen suspects over the disaster.

Greece recovered three more bodies on Monday, bringing the confirmed toll to 81, after a fishing boat packed with hundreds of migrants sank of its south-west coast last week in a journey which started from Libya and was supposed to end in Italy.

Only 104 people are known to have survived.

Lawyers for nine suspected smugglers held by Greece, all from Egypt, sought and were granted a postponement of their arraignment hearing to Tuesday morning, the semi-official Athens News Agency said.

One of the lawyers said his client denied he was a smuggler, saying he was instead a victim who had paid to be taken to Italy.

“He left his country looking for a better life in Europe because of economic difficulties,” said the lawyer, Athanasios Iliopoulos.

Greece was still scouring the sea on Monday, though the chance of finding more survivors was seen as virtually nil. The boat sank in some of the deepest waters of the Mediterranean.

The victims are thought to be from Syria, Pakistan and Egypt. Hundreds more are feared dead.

Greece has come under increasing scrutiny over its response to the disaster, which occurred even though the boat had been shadowed by its coastguard for several hours.

Pakistan declared a national day of mourning on Monday, after counting at least 21 victims from the Koti district in the Pakistan-administered area of the Himalayan Kashmir region. It said an initial investigation suggested the boat was carrying around 800 people.

Other estimates have said at least 400 people were aboard.

Fourteen people in Pakistan have been arrested on suspicion of alleged trafficking.

ANGUISH FOR RELATIVES

The boat is thought to have set off with passengers from the Libyan coastal city of Tobruk on June 10.

Greek authorities say the vessel, which they had monitored for about 15 hours after being alerted by Italy, flipped and capsized about 25 minutes after its engine stalled in the early hours of June 14.

Authorities said the vessel repeatedly refused Greek help, saying it wanted to go to Italy.

Alarm Phone, an advocacy group that was in communication with the vessel, said that on at least two occasions people on board pleaded for help. The group said it alerted Greek authorities and aid agencies hours before the disaster unfolded.

Greek authorities also denied reports the vessel was stationary for hours, saying that it had sailed a distance of about 30 nautical miles from its detection to its sinking.

Over a 15-hour period, that would suggest the boat going at a crawl.

Relatives have been turning up outside a migrant facility north of Athens since survivors were brought there on Friday, showing photos of the missing through the camp gates, in the hopes someone might recognise them.

“I’m looking for my brother. I want to see where the boat sunk to try to find him,” said 54-year-old Mohamed El Sayed El-Dadamony Radwan, who travelled from Germany, after reuniting with a nephew who survived.

Radwan showed a photo of his missing brother on his phone.

“I want to look for him because I can’t find (his name), not in the hospital records of those who perished or in the list of those who survived,” he said.

On Sunday, there was an emotional reunion for Syrian teenager Mohammad Hadhoud, 18, who survived the wreck, and his elder brother Fadi, who had first spotted each other through a metal barricade in the coastal city of Kalamata on Friday.

At a migrant camp in Malakasa near Athens, Mohammad sprinted into his brother’s open arms as they both sobbed, holding each other for several moments. Fadi said their brother-in-law died in the shipwreck.

Others had yet to receive news of loved ones.

“My uncle was with me on the same boat, the boat that capsized. I am looking for my uncle but I can’t find him,” said 22-year-old Egyptian survivor Atia Al Said.

(Reporting by Karolina Tagaris; Additional reporting by Abu Arqam Naqash in Muzaffarabad; writing by Michele Kambas; Editing by Frank Jack Daniel and Cynthia Osterman)

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Business News

US lawmakers to urge automakers to cut reliance on China

by Reuters June 19, 2023
By Reuters

By David Shepardson

WASHINGTON (Reuters) -A bipartisan group of U.S. lawmakers will urge the CEOs of Ford Motor and General Motors to shrink reliance on China auto parts, particularly electric vehicle batteries, sources told Reuters on Monday.

Four lawmakers who are part of the House of Representatives China Select Committee will travel to Detroit Tuesday to meet with Ford’s Jim Farley and GM’s Mary Barra, the sources said.

Republicans Mike Gallagher and John Moolenaar and Democrats Raja Krishnamoorthi and Haley Stevens also plan to meet with executives from auto suppliers including BorgWarner, Continental, Bosch, Tenneco and battery startup Our Next Energy (ONE).

The focus on Chinese auto parts comes soon after U.S. Secretary of State Antony Blinken made a rare visit to Beijing and hours of meetings failed to produce any major breakthroughs.

Ford said Monday it “shares the committee’s goals of strengthening American competitiveness and establishing EV supply chains in the U.S., and in our meeting tomorrow we plan to share how we’re doing just that.”

GM declined to comment on the meeting.

Gallagher, who chairs the China committee, in April raised concerns about Tesla’s dependency on China, after the company revealed plans to open a Megapack battery factory in Shanghai.

The $430 billion Inflation Reduction Act (IRA) signed by President Joe Biden in August aims to wean U.S. EV production from Chinese supply chains by imposing new conditions on EV tax credits. The new tax credit rules restrict eligibility to only North American assembled vehicles and set battery sourcing rules.

Ford’s deal announced in February to use technology from Chinese battery company CATL as part of the automaker’s plan to spend $3.5 billion to build a battery plant in Michigan has drawn criticism from some lawmakers.

Republican Senator Marco Rubio has asked the Biden administration to block EV tax credits for batteries produced using Chinese technology.

Ford said previously “making those batteries here at home is much better than continuing to rely exclusively on foreign imports, like other auto companies do.”

Bloomberg News first reported the planned meetings.

(Reporting by David Shepardson and Kanishka Singh in Washington; Editing by Sandra Maler and Lisa Shumaker)

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