BRASILIA – Brazil’s federal public debt increased 2.03% in February from the month before to 5.73 trillion reais ($1.21 trillion), the Treasury said on Wednesday, while issuance costs kept rising amid high inflation and interest rates.

The total domestic debt stock climbed 2.3% in the period to 5.49 trillion reais, according to the Treasury.

The average interest rate on the domestic federal debt increased to 9.5% in January from 8.9% in January, while the average rate on the new domestic debt issued in the 12 months to February rose to 9.25% from 8.92%.

The Treasury said in a statement that average issuance rates started the month at a lower level, but rose again from the second week onwards, in a period marked by inflationary pressures amid Russia’s invasion of Ukraine.

Risk aversion continued through March, but the Treasury highlighted a recent easing in the yield curve, helped by the stronger currency performance and the central bank’s signals that it should end its aggressive monetary tightening cycle to tame inflation.

Brazil’s benchmark interest rate has already risen to 11.75% from its record low of 2% last March and the central bank’s chief Roberto Campos Neto indicated that a final 100-basis-point hike should wrap up the cycle in May.

“From the point of view of debt management, we observe the resilience of the Brazilian market. Interest rates, exchange rates, CDS had a very good reaction despite the conflict that occurs (in Eastern Europe),” said deputy general coordinator of Public Debt Operations Roberto Lobarinhas.

($1 = 4.7508 reais)

(Reporting by Marcela Ayres; editing by Chizu Nomiyama and Jonathan Oatis)

By Jonathan Stempel and Dietrich Knauth

(Reuters) -Florida has reached more than $878 million in settlements with CVS Health Corp and three drug companies to resolve claims and avert a trial next month over their roles in fueling an opioid epidemic in the third most populous U.S. state.

CVS will pay $484 million, Teva Pharmaceutical Industries Ltd will pay $194.8 million, Abbvie Inc’s Allergan unit will pay $134.2 million and Endo International Plc will pay $65 million, Florida’s attorney general Ashley Moody said in a statement on Wednesday.

Most of the money will be spent on opioid abatement. Teva will also provide $84 million of its generic Narcan nasal spray, which can temporarily reverse the effects of opioid overdoses.

The four companies denied wrongdoing in agreeing to settle. Endo’s accord had been reached in January.

Moody said pharmacy chain Walgreens is the only remaining defendant in Florida’s opioid litigation, with jury selection scheduled to begin on April 5.

Walgreens said its 2012 opioid-related settlement with Florida covered the state’s latest claims, and that it will defend against “unjustified attacks” on its pharmacists.

CVS and Teva said they would defend against other opioid lawsuits, and Teva said it is “actively” negotiating a national settlement of similar claims. Allergan said its settlement also covers claims for generic opioids it sold to Teva in 2016.

Endo did not immediately respond to requests for comment.

Florida announced the settlements nine days after Rhode Island reached similar accords with Teva and Allergan valued at $107 million.

More than 500,000 people have died from opioid overdoses in the past two decades nationally, including 75,673 in the year ending April 2021, according to the U.S. Centers for Disease Control and Prevention.

On Feb. 25, Johnson & Johnson and drug distributors AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp reached final settlements worth $26 billion over their roles in the nationwide epidemic.

State, local and Native American tribal governments in the United States have filed more than 3,300 lawsuits accusing drugmakers such as OxyContin maker Purdue Pharma of fueling opioid abuse, including by downplaying the risks of addiction.

(Reporting by Jonathan Stempel and Dietrich Knauth in New York; Nate Raymond in Boston; Tom Hals in Wilmington, Delaware; and Ankur Banerjee in Bengaluru; Editing by Shinjini Ganguli, Will Dunham and Chizu Nomiyama)

By Foo Yun Chee

BRUSSELS -Air France-KLM and its Dutch subsidiary KLM on Wednesday lost their challenge against million-euro fines re-imposed by EU antitrust regulators five years ago for taking part in an air cargo cartel two decades ago.

Air France KLM said it was considering appeal against the decision.

Air France and 10 of its peers had in 2015 won their court fight against fines levied by the European Commission in 2010 for fixing air freight services, fuel and security surcharges between December 1999 and February 2006.

The EU competition enforcer subsequently fixed procedural errors pointed out by the Luxembourg-based General Court and in 2017 re-issued the same penalties except for Martinair which had its fine reduced.

The airlines then took their case back to the General Court, Europe’s second-highest.

The Luxembourg-based court rejected Air France KLM and KLM’s appeals and those brought by Martinair Holland, Cargolux, Lufthansa and Singapore Airlines.

“Air France-KLM has taken note of the EU General Court’s judgement on the appeal filed against the decision of the European Commission of 17 March 2017 against 13 cargo operators, including Group airlines Air France, KLM and Martinair for practices considered to be anti-competitive in the air cargo sector,” Air France KLM said in a statement.

“The Group will immediately analyse this decision in view of an appeal before the Court of Justice. Provisions of 350.6 million euros ($391 million) including interest have been made in respect of these fines in the accounts on 31 December 2021,” it added.

The Commission had fined Air France 182.9 million euros, the highest, followed by KLM at 127.1 million. The total fine for the cartel made up of 12 airlines came to 776 million euros.

The court reduced the fines for Air Canada, Japan Airlines, British Airways, Cathay Pacific Airways, Latam Airlines Group and its subsidiary Lan Cargo.

SAS’s fine remained about the same after judges reduced the penalties for part of its infringements but increased them for others.

Lufthansa and subsidiary Swiss International Airlines escaped a fine as it alerted the EU competition authority to the cartel.

The cases are T-323/17 Martinair Holland, T-324/17 SAS Cargo Group and others, T-325/17 KLM, T-336/17 Air Canada, T-334/17 Cargolux Airlines, T-337/17 Air France–KLM, T-338/17 Air France, T-340/17 Japan Airlines, Case T-341/17 British Airways, T-342/17 Deutsche Lufthansa and others, T-343/17 Cathay Pacific Airways, T-344/17 Latam Airlines Group & Lan Cargo and T-350/17 Singapore Airlines & Singapore Airlines Cargo.

($1 = 0.8967 euros)

(Reporting by Foo Yun Chee;Editing by Elaine Hardcastle/Sudip Kar-Gupta)

BEIJING – China’s three biggest airlines on Wednesday reported wider losses in the final quarter of 2021, marking the second year in the red due to COVID-19 as hopes for a recovery remain distant while the country tries to halt the virus’ fast spread.

Shanghai-based China Eastern Airlines said its net loss rose to 4.05 billion yuan ($637.64 million)from 2.95 billion yuan in the third quarter, taking its full-year loss to 12.2 billion yuan. That is deeper than an 11.8 billion yuan loss in 2020.

The airline also faces closer regulatory scrutiny following the crash of a Boeing 737-800 jet last week that killed 132 people on board, which has led it to ground 223 planes of that type as a precaution while the investigation proceeds.

The company will closely monitor the ongoing investigation into the cause of the crash and evaluate the impact on its financial performance and operational results, said the carrier in its annual report.

Beijing-based Air China, the country’s flag carrier, said its net loss widened to 6.32 billion yuan in the fourth quarter from 3.54 billion yuan and it posted a full-year loss of 16.6 billion yuan.

China Southern Airlines fell to a fourth-quarter net loss of 5.98 billion yuan, after posting 1.43 billion yuan in the red the previous quarter. It reported a full-year loss of 12.1 billion yuan.

The Guangzhou-based airline also forecasted a pickup in deliveries of the Boeing 737 series aircraft from 2022, as Chinese carriers are set to resume commercial services of the 737 MAX, which was grounded in China for over two and a half years.

China’s domestic travel market, which had rebounded quickly due to its successful containment of the COVID-19 virus in the early days of the pandemic, is nursing heavy losses as authorities struggle to stop the spread of the highly transmissible Omicron variant under its strategy of eliminating cases.

More than two-thirds of planned flights are being cancelled every day across China, according to third-party aviation data providers, while financial capital Shanghai is in the middle of a two-stage lockdown of 26 million people.

Data firm OAG said on Tuesday that China’s available seat capacity this week was down 10.2% from a week earlier and 24.4% from the same week last year.

A strong yuan currency was again a favourable factor this year, offering some relief to Chinese airlines that have financed a large portion of their foreign debt obligations in U.S. dollars.

However, high fuel costs, which already inflated costs last year, are set to weigh on bottom lines this year, as Russia’s war in Ukraine heightens geopolitical risks and reinforces broader inflationary pressures across the supply chain.

Brent crude futures stood at $113 a barrel, up 45% from the end of last year.

China remains virtually shut off from international markets as already reduced flights get suspended under its “circuit breaker” system when there are COVID-19 positive arrivals, leaving many passengers stranded abroad.

Domestic flights over the northern summer season that began this week and lasts through October are set to reach 117,000 flights per day, up 6.8% from a year ago, according to aviation data provider Flight Master, although a large number of them could be cancelled.

($1 = 6.3515 Chinese yuan renminbi)

(Reporting by Stella Qiu in Beijing and Jamie Freed in Sydney; Editing by Andrea Ricci)

By Ahmad Ghaddar, Maha El Dahan and Alex Lawler

LONDON/DUBAI -OPEC+ sources said on Wednesday the producer alliance which includes Russia is likely to stick to its existing deal to gradually increase oil production, a view echoed by OPEC Secretary General Mohammad Barkindo.

The sources, who spoke to Reuters on condition of anonymity, were attending a joint technical committee meeting that advises OPEC+ on market fundamentals. The full ministerial meeting will take place on Thursday.

Barkindo encouraged OPEC+ members “to stay the course” regarding the group’s decision, according to an OPEC statement.

He also said that OPEC+ members should remain “vigilant and attentive to ever-changing market conditions”.

OPEC+ will likely stick to plans for a modest increase in oil output in May, several sources close to the talks told Reuters, despite a surge in prices due to the Ukraine crisis and calls from the United States and others for more supply.

OPEC+ has boosted output targets by 400,000 barrels per day (bpd) each month since August 2021. From May 1, that monthly target increase will rise slightly to 432,000 bpd.

The energy ministers of Saudi Arabia and the United Arab Emirates, key members of OPEC+, said on Tuesday the group should not engage in politics as pressure mounted on it to take action against Russia over its invasion of Ukraine.

“We urge global leaders to … once again ensure an unhindered, stable and secure flow of energy to the whole world,” Barkindo said in reference to recent market developments.

OPEC officials told the European Union that the bloc’s possible ban on oil from Russia would hurt consumers, OPEC sources said.

(Editing by Jason Neely and Paul Simao)

By Lucia Mutikani

WASHINGTON -U.S. private employers maintained a brisk pace of hiring in March, in a boost to the labor market recovery, but growth in corporate profits slowed significantly in the fourth quarter amid increasing costs.

Private payrolls increased by 455,000 jobs last month, the ADP National Employment Report showed on Wednesday. Data for February was revised higher to show 486,000 jobs added instead of the initially reported 475,000. Economists polled by Reuters had forecast private payrolls would increase by 450,000 jobs.

Medium-sized and large companies accounted for 80% of the private jobs created last month.

Manufacturers added 54,000 jobs, while the leisure and hospitality sector hired 161,000 more workers. There were also sizeable gains in professional and business services payrolls as well as healthcare and education. Trade, transportation and utilities companies also boosted hiring, but construction hiring slowed for a third straight month.

Demand for workers is being boosted by the rolling back of COVID-19 restrictions across the country amid a massive decline in coronavirus cases. There is no sign that Russia’s more than one-month long war against Ukraine has hurt the labor market.

First-time applications for unemployment benefits are at 52-1/2-year lows, while the number of Americans on jobless rolls is the smallest since 1970.

The ADP report is jointly developed with Moody’s Analytics and was published ahead of the Labor Department’s more comprehensive and closely watched employment report for March on Friday. It has, however, a poor record predicting the private payrolls count in the department’s Bureau of Labor Statistics employment report because of methodology differences.

“The ADP report hasn’t proved a useful guide to the payrolls figures in recent months, but it does echo the fairly upbeat message from other indicators,” said Andrew Hunter, a senior U.S. economist at Capital Economics.

U.S. stocks were mostly lower. The dollar fell against a basket of currencies. U.S. Treasury yields fell.

WORKER SHORTAGE

Government data on Tuesday showed there were a near record 11.3 million job openings on the last day of February, which left the jobs-workers gap at 3.0% of the labor force and close to the post war high of 3.2% in December. According to a Reuters survey of economists, nonfarm payrolls likely increased by 490,000 jobs in March. The economy created 678,000 jobs in February.

But the upbeat news on the economy was dampened by a separate report from the Commerce Department on Wednesday showing that corporate profits growth slowed significantly in the fourth quarter as domestic financial corporations suffered a decrease. Profits of domestic nonfinancial corporations and from the rest of the world increased moderately.

Corporate profits with inventory valuation and capital consumption adjustments increased at a 0.7% rate or $20.4 billion in the fourth quarter after rising at a 3.4% pace or $96.9 billion in the third quarter. Profits surged during the pandemic as demand shifted to goods from services.

Profit margins fell to 12.2% last quarter.

“While still elevated by historic comparison, the decline in margins suggests the higher-cost environment is eating into profitability,” said Jay Bryson, chief economist at Wells Fargo in Charlotte, North Carolina. “With cost pressure remaining persistent and demand slowing, we expect margins to slow further this year as businesses find it increasingly difficult to pass costs onto consumers.”

The robust demand for goods has strained supply chains, with the COVID-19 pandemic sidelining millions of workers around the globe who are needed to produce goods at factories and move them to consumers. That has fueled inflation, which has worsened following the Feb. 24 invasion of Ukraine by Russia.

The Federal Reserve this month raised its policy interest rate by 25 basis points, the first hike in more than three years and signaled an aggressive stance that has left the bond market fearing a recession down the road. The U.S. 2-year/10-year Treasury yield curve, widely tracked for signals on the economy, briefly inverted on Tuesday for the first time since September 2019.

But economists said the Fed’s massive holdings of Treasuries and mortgage backed securities made it hard to get a clear read from the yield curve moves.

“This is likely placing further downward pressure on longer- term rates, and it may only be once balance sheet reduction begins, likely in June, that we will get a better sense of how much this may be distorting long-term yields lower,” said Andrew Hollenhorst, chief U.S. economist at Citigroup in New York.

Gross domestic product increased at a 6.9% annualized rate in the fourth quarter, the government said in its third estimate on Wednesday. The economy grew at a 2.3% rate in the third quarter. Growth is 3.1% above its pre-pandemic level.

Economists expect the expansion to continue, with a tightening labor market and massive savings cushioning households against high inflation. Growth estimates for the first quarter are mostly below a 1.0% rate.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)