July 13 (Reuters) – A threatened U.S. strike at United Parcel Service (UPS.N) could be “one of the costliest in at least a century,” topping $7 billion for a 10-day work stoppage, a think tank specializing in the economic impact of labor actions said on Thursday.
That estimate from Michigan-based Anderson Economic Group (AEG) includes UPS customer losses of $4 billion and lost direct wages of more than $1 billion. A 15-day UPS strike in 1997 disrupted the supply of goods, cost the world’s biggest parcel delivery firm $850 million and sent some customers to rivals like FedEx (FDX.N).
Roughly 340,000 union-represented UPS workers handle about a quarter of U.S. parcel deliveries and serve virtually every city and town in the nation. A strike could delay millions of daily deliveries, including Amazon.com (AMZN.O) orders, electronic components and lifesaving prescription drugs, shipping experts warned. They added this also could reignite supply-chain snarls that stoke inflation.
A strike by roughly 340,000 U.S. workers at the world’s biggest package delivery firm threatens to delay millions of shipments, snarl supply chains and send shipping costs higher.
Talks are deadlocked between UPS and the International Brotherhood of Teamsters union.
The Teamsters have vowed to strike if a deal is not ratified before the current contract expires at midnight on July 31.
“Consumers are going to feel this within days,” AEG CEO Patrick Anderson said of a potential strike, adding his analysis does not include the human cost of disruption to shipments of critical and perishable medicines to treat cancer and other life-threatening illnesses.
A sticking point in negotiations is pay increases for part-time workers who account for roughly half the UPS workforce. Tenured part-timers are particularly frustrated because they make just slightly more than new hires whose wages have jumped in a tight labor market.
Anderson said a UPS employee walkout would be a bigger risk to the U.S. economy than a work stoppage by UAW workers at the “Detroit Three” automakers, who started contract talks on Thursday.
He noted that the automaker talks cover fewer workers and have a limited geographic impact. In fiscal 2019, GM’s (GM.N) fourth-quarter profit took a $3.6 billion hit from a 40-day UAW strike that shut down its profitable U.S. operations.
UPS is urging Teamster negotiators to return to the bargaining table, but union officials say UPS needs to sweeten its offer for workers who risked their lives during the pandemic to help the company generate outsized profits.
UPS faces two unappealing choices, Stifel analyst Bruce Chan said in a recent note: Risk a strike and resulting customer losses or acquiesce to Teamster demands that could worsen the company’s labor cost disadvantage versus nonunion rivals in an inflationary environment.
“Both situations would create pain for UPS, so it could just be a question of when and how the company wants to take its medicine,” Chan said.
Reporting by Lisa Baertlein in Los Angeles, additional reporting by Priyamvada C in Bengaluru; Editing by Pooja Desai, Jonathan Oatis and David Gregorio
Lisa Baertlein covers the movement of goods around the world, with emphasis on ocean transport and last-mile delivery. In her free time, you’ll find her sailing, painting or exploring state and national parks.
WASHINGTON, June 13 (Reuters) – A vast majority of Republicans believe federal criminal charges against Donald Trump are politically motivated, according to a Reuters/Ipsos poll completed on Monday that also showed him far ahead of his nearest rival in the race for the Republican presidential nomination.
The polling, which began on Friday, a day after Trump was indicted, found that 81% of self-identified Republicans said politics was driving the case, reflecting the deep polarization of the U.S. electorate. President Joe Biden, a Democrat, has repeatedly said he has no involvement in the case brought by the Department of Justice.
The number of Republicans who believe the former president is being unfairly targeted vastly exceeds the 30-35% of Trump supporters who are estimated by political analysts to make up his core base.
Some 62% of respondents in the Reuters/Ipsos poll, including 91% of Democrats and 35% of Republicans, said it was believable that Trump illegally stored classified documents at his home in Florida as alleged by prosecutors.
The indictment did not appear to dent Trump’s standing in the Republican nominating contest for the 2024 presidential election. The specific charges, including obstruction of justice, became public on Friday afternoon when the indictment was unsealed.
Some 43% of self-identified Republicans said Trump was their preferred candidate, compared to 22% who picked Florida Governor Ron DeSantis, Trump’s closest rival.
In early May, Trump led DeSantis 49% to 19%, but that was before DeSantis formally entered the race.
The rest of the Republican field, which includes former Vice President Mike Pence who declared his candidacy last week, had low single-digit levels of support.
Trump flew to Miami on Monday to face federal charges of unlawfully keeping U.S. national security documents and lying to officials who tried to recover them. Trump, who will appear in court on Tuesday, has proclaimed his innocence and vowed to continue his campaign to regain the presidency in the November 2024 general election.
Many Republican contenders in the 2024 race have accused the U.S. Justice Department of political bias and say it is being “weaponized” against Biden’s biggest Republican challenger. The department says all investigative decisions are made without regard to partisan politics.
Trump also faces charges in New York in a state criminal case related to alleged hush money payments to a pornographic film star. A Reuters/Ipsos poll in March found that Republicans also saw that investigation as politically motivated.
Biden’s approval rating stood at 41% last week, close to the lowest level of his presidency. Trump had a 40% approval rating at this point in his 2017-2021 presidency.
The latest poll included responses from 1,005 adults nationwide and had a credibility interval, a measure of precision, of 4 percentage points for all voting-age Americans and between 6 and 7 percentage points for Republicans.
Reporting by Jason Lange; Editing by Andy Sullivan, Ross Colvin and Howard Goller
WASHINGTON, May 24 (Reuters) – The central pillar of any debt-ceiling agreement between President Joe Biden and House Republican Kevin McCarthy is shaping up to be “discretionary spending” – the chunk of the United States’ roughly $6 trillion annual federal budget that is set annually by Congress.
Talks are fluid as Biden and McCarthy work towards a deal to raise the $31.4 trillion debt ceiling and avoid a default as soon as June 1. But cuts to Social Security and Medicare programs that eat up most of the U.S. budget are already off the table.
Instead, funds for programs from education to rail safety to law enforcement could be cut, trims that economists warn will slow U.S. economic growth.
WHAT IS THE US DISCRETIONARY BUDGET?
Congress sets funding levels for discretionary spending every year, which powers a wide swath of military and domestic programs.
In 2022, discretionary spending reached $1.7 trillion, accounting for 27% of the overall $6.27 trillion spent, according to federal figures.
Military spending typically accounts for roughly half of that total, though the amount varies from year to year.
The other half is devoted to domestic programs like law enforcement, transportation, housing and scientific research.
Estimated U.S. government discretionary spending for fiscal year 2023, in billion US dollars
Discretionary spending as a share of U.S. gross domestic product peaked in the late 1970s, and cuts have served as the backbone for several landmark budget deals since the 1980s.
Reuters Graphics
HOW COULD DISCRETIONARY CUTS WORK?
Biden and Democrats have offered to hold discretionary spending flat from the current 2023 fiscal year, a cut from Biden’s 2024 budget, and then cap spending in future years.
House Republicans passed a plan last month that would save $3.2 trillion by capping growth at 1% annually for 10 years.
Republicans say they will not accept a deal unless it results in the government spending less money than it did in the last fiscal year, and are pushing for cuts to 2022 levels.
Both sides are also at odds over how long any spending caps should last, with Republicans now offering caps for six years, and the White House only two.
Negotiators are avoiding the main driver of U.S. debt: rising retirement and health costs, driven by an aging population.
The Social Security pension program is projected to increase by 67% by 2032, and the Medicare health program for seniors will nearly double in cost during that period, according to the nonpartisan Congressional Budget Office. Together, these programs account for roughly 37% of current federal spending.
U.S. spending on health, retirement and other benefit programs has climbed steadily in recent decades, but negotiators in debt-ceiling talks look to cut other domestic and military spending.
MORE BATTLES AHEAD
If they can hammer out a general agreement on these levels and caps, if could help the United States avoid default, but would likely set up another series of budget battles, as lawmakers would still have to agree on funding levels for everything from fighter-plane construction to border enforcement.
Republicans have said they do not want to cut spending on national defense and veterans’ care, which would require other programs to shoulder steeper cuts.
The Republican-led House Appropriations Committee has unveiled legislation that would boost spending on veterans’ care, border security, and other priorities next year.
That would likely require cuts of more than 13% in other areas like scientific research and environmental protection if they want to keep overall spending at the same level as this year, according to the Center on Budget and Policy Priorities, a left-leaning think tank.
The Democratic-controlled Senate is not likely to accept those figures – which could lead to a government shutdown if the two sides do not reach agreement by Sept. 30, the end of the fiscal year.
POLITICS OF CUTS
While Republicans on the federal level have generally pushed for funding cuts to these discretionary items and Democrats to increase them, Republican-leaning states tend to benefit more from federal domestic spending, according to a Reuters analysis.
“Spending restraint always sounds good in the abstract and sounds less good when you’re talking about specifics,” said Jan Moller, head of the Louisiana Budget Project, a nonpartisan think tank.
Even if Biden and McCarthy agree to spending caps in the years ahead, Congress might not stick to the agreement.
In 2011, Democratic President Barack Obama reached a deal with Republicans to save $1.8 trillion over 10 years through discretionary spending caps. But lawmakers opted to bypass those caps in the years that followed.
In the end, the agreement only saved $1.3 trillion, according to Brian Riedl, a fellow with the conservative Manhattan Institute.
Reporting by Jarret Renshaw and Andy Sullivan; Editing by Heather Timmons and Andrea Ricci
Andy covers politics and policy in Washington. His work has been cited in Supreme Court briefs, political attack ads and at least one Saturday Night Live skit.
Challenge ahead for opposition parties to form government
Move Forward comes close to sweep of capital Bangkok
No alliances with dictator-backed parties – Pita
Military parties down, but not out
Too soon to discuss alliances – Pheu Thai
BANGKOK, May 14 (Reuters) – Thailand’s opposition secured a stunning election win on Sunday after trouncing parties allied with the military, setting the stage for a flurry of deal-making over forming a government in a bid to end nearly a decade of conservative, army-backed rule.
The liberal Move Forward party and the populist Pheu Thai Party were far out in front with 99% of votes counted, but it was far from certain either will form the next government, with parliamentary rules written by the military after its 2014 coup skewed in its favour.
To rule, the opposition parties will need to strike deals and muster support from multiple camps, including members of a junta-appointed Senate that has sided with military parties and gets to vote on who becomes prime minister and form the next administration.
Sunday’s election was the latest bout in a long-running battle for power between Pheu Thai, the populist juggernaut of the billionaire Shinawatra family, and a nexus of old money, conservatives and military with influence over key institutions at the heart of two decades of turmoil.
But the staggering performance by Move Forward, riding a wave of support from young voters, will test the resolve of Thailand’s establishment and ruling parties after it came close to a clean sweep of the capital Bangkok on a platform of institutional reform and dismantling monopolies.
Move Forward came top, followed closely by Pheu Thai, the preliminary results showed. According to a Reuters calculation, both were set to win more than triple the number of seats of Palang Pracharat, the political vehicle of the junta, and the army-backed United Thai Nation party.
Move Forward leader Pita Limjaroenrat, a 42-year-old former executive of a ride-hailing app, described the outcome as “sensational” and vowed to stay true to his party’s values when forming a government.
“It will be anti- dictator-backed, military-backed parties, for sure,” he told reporters. “It’s safe to assume that minority government is no longer possible here in Thailand.”
He said he remained open to an alliance with Pheu Thai, but has set his sights set on being prime minister.
“It is now clear the Move Forward Party has received the overwhelming support from the people around the country,” he said on Twitter.
Reuters Graphics Reuters Graphics
MAJOR BLOW
[1/15]Â Move Forward Party leader and prime ministerial candidate, Pita Limjaroenrat, waves to the crowd during the general election in Bangkok, Thailand, May 14, 2023. REUTERS/Jorge Silva
The preliminary results will be a crushing blow for the military and its allies. But with parliamentary rules on their side and influential figures behind them and involved behind the scenes, they could still have a role in government.
Prime Minister Prayuth Chan-ocha, a retired general who led the last coup, had campaigned on continuity after nine years in charge, warning a change in government could lead to conflict.
On Sunday, he slipped away quietly from his United Thai Nation party headquarters, where there were few supporters to be seen.
A handful of staff sat beside plates of uneaten food as a giant television screen showed a live speech by Move Forward’s leader.
“I hope the country will be peaceful and prosper,” Prayuth told reporters. “I respect democracy and the election. Thank you.”
Pheu Thai had been expected to win having won most votes in every ballot since 2001, including two landslide victories. Three of its four governments have been ousted from office.
Founded by the polarising self-exiled tycoon Thaksin Shinawatra, Pheu Thai remains hugely popular among the working classes and was banking on being swept back to power in a landslide on nostalgia for its populist policies like cheap healthcare, micro-loans and generous farming subsidies.
Thaksin’s daughter Paetongtarn, 36, has been tipped to follow in the footsteps of her father and of her aunt, Yingluck Shinawatra, and become prime minister. Yingluck and Thaksin were both overthrown in coups.
Paetongtarn said she was happy for Move Forward, but it was too soon to discuss alliances.
“The voice of the people is most important,” she said.
Move Forward saw a late-stage rally in opinion polls and was betting on 3.3 million first-time voters getting behind its liberal agenda, including plans to weaken the military’s political role and amend a strict law on royal insults that critics say is used to stifle dissent.
Thitinan Pongsudhirak, a political scientist at Chulalongkorn University, said Move Forward’s surge demonstrated a major shift in Thai politics.
“Pheu Thai fought the wrong war. Pheu Thai fought the populism war that it already won,” he said.
“Move Forward takes the game to the next level with institutional reform. That’s the new battleground in Thai politics.”
Reporting by Chayut Setboonsarng; Writing by Martin Petty; Editing by William Mallard
WASHINGTON, April 23 (Reuters) – It won’t be a campaign from the basement this time.
As U.S. President Joe Biden gears up for a bruising re-election battle, the realities of the 2024 race and differences with 2020 at the height of the coronavirus pandemic create new challenges for him.
In 2020, Biden kept a low profile as the spread of COVID-19 caused havoc to most aspects of American life, including the election campaign that pitted him against then-President Donald Trump, a Republican.
Trump still spoke at big rallies, but Biden did much of his campaigning virtually from the basement of his home in Wilmington, Delaware, largely avoiding crowds to prevent the spread of disease and reduce his own risk of catching the virus.
That will change this time around. Gone will be the aversion to public events, large and small, likely replaced by traditional campaign stops at diners, factories and union halls with handshakes, selfies, and crowds of people.
The Democratic convention in Chicago will be in-person rather than online. And Biden, who at 80 is already the oldest president in U.S. history, will have his day job to do while he makes the case for four more years in office.
Biden beat Trump in 2020 by winning the Electoral College 306 to 232, winning the close swing states of Pennsylvania and Georgia, and he bested Trump by more than 7 million votes nationally, capturing 51.3 percent of the popular vote to the Republican’s 46.8 percent.
AGE FACTOR
Republicans will watch closely for signs of a diminished schedule to suggest that age has made Biden less fit for the campaign trail, and for the White House.
“It’s quite shocking that Biden thinks he would be able to fill a second term, let alone the rest of this term,” said Republican strategist Scott Reed.
Trump, the early front-runner for the Republican nomination, is himself 76 years old.
Biden’s reply to concerns about his age and running for re-election has been to say “watch me,” and the White House points to his record of legislative accomplishments as a sign of his effectiveness.
“An extensive travel schedule is not the measure of a candidate’s ability to do the job,” said Democratic strategist Karen Finney. “There’s no scenario where the Republicans don’t try to make his age an issue. We know that. And so the focus has to be on … what is the most effective way to reach the American people. Some of that, yes, is going to be in-person events and travel, but there may be other innovations.”
CAMPAIGN REINVENTED
Biden campaign aides reinvented his 2020 campaign as COVID-19 spread across the country.
Some of the innovations were regarded as a success, including star-studded virtual fundraisers done without the need for expensive travel.
But other changes were more controversial, including a months-long prohibition on the use of door-knocking by campaign volunteers and the regular appearances by Biden in his home’s basement, which became a meme panned by right-wing voters.
Having to get out more than in 2020 could help Biden, said Meg Bostrom, co-founder of Topos Partnership, a strategic communications firm.
“Just look at the State of the Union (address.) That was the best I’ve ever seen. When Republicans started heckling him, he just lit up,” she said. Biden sparred ably with Republicans during his speech to Congress in February.
But other issues may trip up the incumbent president on the campaign trail, including his handling of the economy.
“The allure for voting for Biden in 2020 was sort of the quaint notion of getting back to normal,” said Republican strategist Ford O’Connell, referring to the chaos of Trump’s time in office.
“The problem for Biden is that he’s been in power … and things are anything but normal, especially when it comes to the economy and inflation.”
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RECESSION CONCERNS
Biden took office in January 2021 just as COVID vaccines were rolling out, and economic conditions gradually normalized during his early tenure after the shock of nationwide shutdowns. The United States now boasts 3.2 million jobs over the pre-pandemic peak.
But Americans are concerned about a potential recession, and Biden may suffer from being on the wrong side of an economic cycle heading into 2024, with unemployment likely to rise as growth slows, interest rates remaining high and inflation potentially hovering above pre-pandemic levels.
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Trump, who has announced his re-election bid already and could be Biden’s opponent again, is expected to follow the strategy that he employed in 2016 and 2020 with multiple large rallies to energize his base.
But he will first have to win what could be a grueling Republican nomination contest – something that Biden, as an incumbent without major opposition inside his party, will not face.
“We don’t need fire and brimstone. We don’t need rah rah rallies,” said Democratic strategist Joe Lestingi. “We need the strength and conviction of our values and a steadiness not to move on them.”
Biden, he said, would provide that steadiness.
“I think he’ll get out more,” Lestingi said, praising Biden’s skill at traditional “retail” politics. “If you get an opportunity to be with him in a small intimate setting, he can make a real big difference.”
Reuters Graphics Reuters Graphics
Reporting by Jeff Mason; additional reporting by Trevor Hunnicutt, Steve Holland, Howard Schneider and Andrea Shalal; editing by Grant McCool
Jeff Mason is a White House Correspondent for Reuters. He has covered the presidencies of Barack Obama, Donald Trump and Joe Biden and the presidential campaigns of Biden, Trump, Obama, Hillary Clinton and John McCain.
He served as president of the White House Correspondents’ Association in 2016-2017, leading the press corps in advocating for press freedom in the early days of the Trump administration. His and the WHCA’s work was recognized with Deutsche Welle’s “Freedom of Speech Award.”
Jeff has asked pointed questions of domestic and foreign leaders, including Russian President Vladimir Putin and North Korea’s Kim Jong Un. He is a winner of the WHCA’s “Excellence in Presidential News Coverage Under Deadline Pressure” award and co-winner of the Association for Business Journalists’ “Breaking News” award.
Jeff began his career in Frankfurt, Germany as a business reporter before being posted to Brussels, Belgium, where he covered the European Union.
Jeff appears regularly on television and radio and teaches political journalism at Georgetown University. He is a graduate of Northwestern University’s Medill School of Journalism and a former Fulbright scholar.
RATINGEN, Germany, April 14 (Reuters) – In the German town of Ratingen, exploding cash machines are a hot-button topic.
Two got blown up early on the same morning last month, at branches of Santander (SAN.MC) and Deutsche Bank (DBKGn.DE) across the street from each other close to the Duesseldorf suburb’s main square.
A year ago, residents of the apartments above Santander unsuccessfully sued to have the machines removed due to concerns they could be raided – a gesture that might in retrospect be deemed prophetic in other countries.
But in Germany, thieves are blowing ATMs up at the rate of more than one a day.
Attacks are up more than 40% since 2019, according to the interior ministry, and investigators say two factors are driving the increase.
Europe’s largest economy has 53,000 ATM machines, a disproportionately high number that reflects Germans’ preference for cash rather than bank cards. The country also boasts an extensive network of highways, or Autobahns, on much of which no speed limit is enforced.
Ratingen lies just 70km (40 miles) from the Dutch border, and investigators say gangs from the Netherlands are the prime culprits for the attacks, which send glass flying, cause building facades to crumble and money cartridges to crack open.
Raiders got away with nearly 20 million euros ($22.1 million) in 2021, when 392 ATM explosions were recorded, a tally that rose to 496 in 2022. Police in the state of North Rhine-Westphalia, where Ratingen lies and which has borne the brunt of the attacks, have recorded 47 incidents so far in 2023, up on last year’s rate.
Reuters Graphics Reuters Graphics
DUTCH RAIDERS
Meanwhile the frequency of ATM attackers is falling in the Netherlands, partly due to security measures such as glue that makes blocks of cash inside ATMs unusable, Dutch police say.
So Dutch cash machine raiders are crossing the border and, German police estimate, have carried out between 70% to 80% of attacks in Germany since 2018.
Dutch police suspect around 500 men are responsible, working in ever-evolving groups as new recruits replace those who get caught. Prosecutors in Frankfurt this week charged six Dutch citizens with causing explosions, theft and property damage.
Reuters Graphics
Ratingen police are investigating a possible Dutch connection in last month’s twin raid too, having identified a small vehicle that sped from the scene to a nearby Autobahn.
On Thursday, nearly a month after the attacks, Santander’s facade remained boarded up. Deutsche Bank’s sign was still damaged, and a sign asked for customers’ understanding that ATMs were out of order while under repair.
In Germany, roughly 60% of everyday purchases are paid in cash, according to a Bundesbank study that found Germans, on average, withdrew more than 6,600 euros annually chiefly from cash machines.
Germany is also working with officials in Belgium and France and at Europol to combat the cash machine crime wave. The partner authorities did not respond to requests for comment.
Noting that ATM raids endangered lives, German Interior Minister Nancy Faeser this week urged banks to step up safety measures for ATMs.
Both Santander and Deutsche said they prioritised safety and were continuously improving ATM security, but banks inside Germany are reluctant to adopt blanket measures, instead advocating a case-by-case approach depending on individual security risk.
A spokesperson for Deutsche Kreditwirtschaft, a umbrella lobby group for the nation’s financial institutions, said: “Different locations come with different risks. There is currently no one-size-fits-all solution.”
($1 = 0.9044 euros)
Additional reporting by Milan Pavicic; editing by John Stonestreet
Covers German finance with a focus on big banks, insurance companies, regulation and financial crime, previous experience at the Wall Street Journal and New York Times in Europe and Asia.
LONDON, April 13 (Reuters) – The latest bid by the world’s leading institutions and creditors to speed up debt restructurings and get bankrupt countries back on their feet has been greeted by a mix of cautious optimism and weary scepticism by veteran crisis watchers.
Standoffs between major Western-backed lenders like the International Monetary Fund (IMF) and the world’s top bilateral creditor, China, have been blamed for keeping countries such as Zambia mired in default for nearly three years.
The somewhat loose framework around sovereign restructurings has seen Beijing seek to influence the traditional rules of engagement in these processes.
The renewed push to overcome the logjams came after a “roundtable” at the IMF Spring Meetings and included pledges from the Fund and World Bank to share assessments of countries’ troubles more quickly, provide more low-interest and grant funding and stricter timeframes on restructurings overall.
The idea is that Beijing would then drop its insistence that the multilateral lenders take losses, or “haircuts”, on the loans they have provided or underwritten in crisis-hit countries.
Beijing has not commented directly on the demand for multilateral lender haircuts, but in remarks published on Friday People’s Bank of China Governor Yi Gang reiterated China’s willingness to implement debt talks under the Common Framework, the platform introduced by leading G20 nations in 2020 to streamline talks with all creditors.
“If the multilateral development banks are now making real commitments to provide fresh grants to distressed countries this is a breakthrough,” said Kevin Gallagher, director of the Boston University Global Development Policy Center.
But he added that as the new plans lacked specific mention of China’s intentions it suggested the “lack of a strong and clear consensus” in Washington.
The IMF’s managing director Kristalina Georgieva has stressed that with around 15% of low income countries already in debt distress and dozens more in danger of falling into it, far more urgency is needed.
Besides members of the Paris Club of creditor nations such as the United States, France and Japan, cash-strapped nations now have to rework loans with lenders such as India, Saudi Arabia, South Africa and Kuwait – but first and foremost China.
Beijing is now the largest bilateral creditor to developing nations, extending $138 billion in new loans between 2010 and 2021, according to World Bank data, and some estimates put total lending at almost $850 billion.
Reuters Graphics
HEADWINDS
Global headwinds are about to get stronger too.
Financially weaker countries with “junk”-grade sovereign credit ratings need to repay or refinance $30 billion worth of government bonds next year between them, compared to just $8.4 billion for the remainder of this one.
The rise in global borrowing costs, though, means that many countries under the greatest stress are now unable to borrow in the international capital markets or, if they can, only at unsustainably high interest rates.
The Chinese debt, meanwhile, is often opaque and muddied by arguments about whether the loans have been given by “official” entities – i.e by the government – or by “private” entities.
Authorities in Beijing also prefer to roll over debt payments rather than write them off, and given it is an increasingly dominant creditor, it has little incentive to follow co-operative Paris Club-like principles.
“It would be great to have China on board (with the push to speed up restructurings) but I don’t really have high hopes because there is a lot of geopolitics involved,” said Viktor Szabo, an emerging market debt manager at Abrdn in London.
Select IMF loans to low and middle income countries by date of Board approval
COMMON PROBLEMS
Recent research by Boston University estimated that up to $520 billion in debt needs to be written off to help developing nations at greatest risk of default return to a sounder fiscal footing.
But lengthy delays in Zambia, and more recently in Sri Lanka, have elicited widespread criticism of the Common Framework.
Wednesday’s promises by the IMF to provide its assessments more quickly was an admission that the Common Framework was currently failing, Szabo added.
“You have to make it functional. The fact that it’s been in place for three years and there is nothing to really show for it, that is really appalling.”
Anna Ashton, director of China research at Eurasia Group, said this week’s developments underscored the benefits for China to give some ground on some of its concerns.
“Being willing to compromise and facilitate debt restructuring right now is likely crucial to China’s continued credibility with the developing world writ large,” Ashton said.
Patrick Curran, senior economist with Tellimer, added that China dropping demands for the big multilateral development banks (MDBs) to swallow losses on their loans could also be “a major breakthrough”.
“There is likely to be broad support for the alternative proposal that MDBs mobilize their resources more aggressively, especially at a time when most low-income countries are locked out of the market,” Curran said.
Germany’s finance minister Christian Lindner on Thursday too said all the talk now needed to be converted into action.
The group that took part in Wednesday’s roundtable plans to meet again in coming weeks to address remaining issues, including how various creditors are treated, principles for cut-off dates and suspending debt payments.
Ultimately, whether the new terms help Zambia, and countries like Sri Lanka, Ghana and Ethiopia that are also in the midst of bailout talks, finalise deals will be the only proof of whether the new terms work.
“China is a difficult partner to talk to but we need China at the table for the solution of debt problems, because otherwise we won’t see any progress,” Lindner said.
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Additional reporting by Rodrigo Campos in New York and Joe Cash in Beijing
Editing by Mark Potter
Fighting along Donbas front as Russia presses offensive
Kyiv says civilians killed in strike on shelter
Red Cross says civilians in Bakhmut at limits of survival
Biden and Trudeau reaffirm ‘steadfast’ support for Ukraine
NEAR KREMINNA, Ukraine, March 24 (Reuters) – Russian forces attacked northern and southern stretches of the front in Ukraine’s eastern Donbas region on Friday, even as Kyiv said Moscow’s assault was flagging near the city of Bakhmut.
Ukrainian military reports described heavy fighting along a line running from Lyman to Kupiansk, as well as in the south at Avdiivka on the outskirts of the Russian-held city of Donetsk.
Both areas have been major Russian targets in a winter campaign to fully capture Ukraine’s industrialised Donbas region. The offensive has so far yielded scant gains despite the deaths of thousands of troops on both sides in the war’s bloodiest fighting.
At a Ukrainian artillery position in lush pine forests behind the northern stretch of the front, troops fired 155 mm rounds from a French TRF-1 howitzer towards a highway used to supply Russian-held Kreminna.
“Luckily we are holding the same position,” a soldier told Reuters. “Because we are facing a very strong enemy with very good arms. And it’s a professional army: airborne troops.”
As orders came in with coordinates, the crew jumped into position, removed camouflage, aimed, loaded and fired. After three rounds, they lowered their gun’s barrel, covered it back up and returned to bunkers to await further orders. Artillery and small arms fire could be heard in the distance.
The front lines have barely budged since November, despite intense fighting. Ukraine recaptured swathes of territory in the second half of 2022, but has since kept mostly to the defensive, while Russia has attacked with hundreds of thousands of freshly called-up reservists and convicts recruited from prison.
As winter turns to spring, the main question in Ukraine is how much longer Russia can sustain its offensive, and when or whether Ukraine can reverse the momentum with a counterassault.
On Thursday, the commander of Ukrainian ground forces said Russia’s assault on Bakhmut, a small city that has been the focus of the biggest battle of the war, appeared to be losing steam and Kyiv could go on the offensive “very soon”.
‘PEOPLE PUSHED TO THE VERY LIMITS’
For now, Ukrainian forces are still focused on preventing a Russian advance along more than 300 km (185 miles) of Donbas front, from Kupiansk in the north to Vuhledar in the south.
“Shelling of Avdiivka does not stop – artillery, rockets, mortars,” said Oleksiy Dmytrashkyvskyi of Ukraine’s Tavria military command, responsible for southern areas, who said he was saddened by the conditions suffered by the mostly elderly people who did not want to leave.
Serhiy Cherevatyi, spokesperson for the east command defending the front farther north, said Russia’s main focus was on a stretch from Kupiansk to Lyman recaptured by Ukrainian forces last year.
[1/5]Â Anti-aircraft unit serviceman of the 10th Mountain Assault Brigade, call sign “Chub”, 34, prepares to pose for a portrait with a portable anti-aircraft missile system, amid Russia’s attack on Ukraine, near Soledar north of Bakhmut, Ukraine March 23, 2023. REUTERS/Violeta Santos Moura
Both said the Russians were reinforcing after heavy losses. There was no similar update from the Russian side, which has long claimed to be inflicting heavy casualties on the Ukrainians.
In Bakhmut itself, Ukrainian troops, who weeks ago appeared likely to pull back, have instead dug in, a strategy some Western military experts say is risky given the need to conserve forces for a counterattack.
The International Committee of the Red Cross said some 10,000 Ukrainian civilians, many elderly and with disabilities, were suffering “very dire conditions” in and around Bakhmut.
“They are … spending almost the entire days in intense shelling in the [underground] shelters,” the ICRC’s Umar Khan told a news briefing. “All you see is people pushed to the very limits of their existence and survival and resilience.”
The United Nations issued its latest report on rights abuses in the war, confirming thousands of civilian deaths, which it describes as the tip of the iceberg, as well as disappearances, torture and rape, mostly of Ukrainians in Russian-occupied areas. Russia denies atrocities.
RUSSIAN ECONOMY BURDENED
In Kostiantynivka, west of Bakhmut, a Russian missile slammed into a refuge offering warm shelter for civilians, killing at least three women, local officials said.
In the northern Sumy region, an administrative building, a school building and residential buildings were among those damaged by Russian shelling that killed two civilians, President Volodymyr Zelenskiy’s office said.
There was no immediate Russian response to the reports.
Russia said its forces had destroyed a hangar housing Ukrainian drones in the Odesa region in the south.
Russia invaded Ukraine in February 2022, saying Ukraine’s ties to the West were a security threat. Since then, tens of thousands of Ukrainian civilians as well as soldiers on both sides have been killed. Kyiv and the West call the war an unprovoked assault to subdue an independent country.
Dmitry Medvedev, a hardline Kremlin official, said Moscow wants to create demilitarised zones around Ukrainian territory it claims to have annexed, and would otherwise battle deep into Ukraine.
While Russia’s invasion has wreaked colossal damage in Ukraine, increased defence spending, Western sanctions and the loss of hundreds of thousands of young men from the workforce have also caused economic upheaval at home.
The Social Policy Institute at Moscow’s Higher School of Economics found in a study released this week that, even in its most optimistic scenario, real incomes would only exceed 2021 levels by 2% by the decade’s end and a middle class that grew after Vladimir Putin became president in 2000 would shrink markedly.
Reporting by Mike Collett-White west of Kreminna, Pavel Polityuk in Kyiv and Reuters bureaux; Writing by Peter Graff and David Brunnstrom; Editing by Philippa Fletcher, Alex Richardson and Cynthia Osterman
Market rout deepens in Indian tycoon Adani’s shares
Adani Enterprises loses $26 bln in value since report
Falls after Adani pulled share sale, investors spooked
Analysts say signals confidence crisis in Indian market
NEW DELHI/MUMBAI, Feb 2 (Reuters) – Adani’s market losses swelled above $100 billion on Thursday, sparking worries about a potential systemic impact a day after the Indian group’s flagship firm abandoned its $2.5 billion stock offering.
Another challenge for Adani on Thursday came when S&P Dow Jones Indices said it would remove Adani Enterprises from widely used sustainability indices, effective Feb. 7, which would make the shares less appealing to sustainability-minded funds.
In addition, India’s National Stock Exchange said it has placed on additional surveillance shares of Adani Enterprises <ADEL.NS>, Adani Ports <APSE.NS> and Ambuja Cements <ABUJ.NS>. read more
However, Adani Group Chairman Gautam Adani is in talks with lenders to prepay and release pledged shares as he seeks to restore confidence in the financial health of his conglomerate, Bloomberg News reported on Thursday. read more
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The shock withdrawal of Adani Enterprises’ share sale marks a dramatic setback for founder Adani, the school dropout-turned-billionaire whose fortunes rose rapidly in recent years but have plunged in just a week after a critical research report by U.S.-based short-seller Hindenburg Research.
Aborting the share sale sent shockwaves across markets, politics and business. Adani stocks plunged, opposition lawmakers called for a wider probe and India’s central bank sprang into action to check on the exposure of banks to the group. Meanwhile, Citigroup’s (C.N) wealth unit stopped making margin loans to clients against Adani Group securities.
The crisis marks an dramatic turn of fortune for Adani, who has in recent years forged partnerships with foreign giants such as France’s TotalEnergies (TTEF.PA) and attracted investors such as Abu Dhabi’s International Holding Company as he pursues a global expansion stretching from ports to the power sector.
In a shock move late on Wednesday, Adani called off the share sale as a stocks rout sparked by Hindenburg’s criticisms intensified, despite it being fully subscribed a day earlier.
“Adani may have started a confidence crisis in Indian shares and that could have broader market implications,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
Adani Enterprises shares tumbled 27% on Thursday, closing at their lowest level since March 2022.
Other group companies also lost further ground, with 10% losses at Adani Total Gas (ADAG.NS), Adani Green Energy (ADNA.NS) and Adani Transmission (ADAI.NS), while Adani Ports and Special Economic Zone shed nearly 7%.
Since Hindenburg’s report on Jan. 24, group companies have lost nearly half their combined market value. Adani Enterprises – described as an incubator of Adani’s businesses – has lost $26 billion in market capitalisation.
Adani is also no longer Asia’s richest person, having slid to 16th in the Forbes rankings of the world’s wealthiest people, with his net worth almost halved to $64.6 billion in a week.
The 60-year-old had been third on the list, behind billionaires Elon Musk and Bernard Arnault.
His rival Mukesh Ambani of Reliance Industries (RELI.NS) is now Asia’s richest person.
[1/4]Â Indian billionaire Gautam Adani addresses delegates during the Bengal Global Business Summit in Kolkata, India April 20, 2022. REUTERS/Rupak De Chowdhuri
Reuters Graphics
BROADER CONCERNS
Adani’s plummeting stock and bond prices have raised concerns about the likelihood of a wider impact on India’s financial system.
India’s central bank has asked local banks for details of their exposure to the Adani Group, government and banking sources told Reuters on Thursday.
CLSA estimates that Indian banks were exposed to about 40% of the $24.5 billion of Adani Group debt in the fiscal year to March 2022.
Dollar bonds issued by entities of Adani Group extended losses on Thursday, with notes of Adani Green Energy crashing to a record low. Adani Group entities made scheduled coupon payments on outstanding U.S. dollar-denominated bonds on Thursday, Reuters reported citing sources.
“We see the market is losing confidence on how to gauge where the bottom can be and although there will be short-covering rebounds, we expect more fundamental downside risks given more private banks (are) likely to cut or reduce margin,” said Monica Hsiao, chief investment officer of Hong Kong-based credit fund Triada Capital.
In New Delhi, opposition lawmakers submitted notices in parliament demanding discussion of the short-seller’s report.
The Congress Party called for a Joint Parliamentary Committee be set up or a Supreme Court monitored investigation, while some lawmakers shouted anti-Adani slogans inside parliament, which was adjourned for the day.
ADANI VS HINDENBURG
Adani made acquisitions worth $13.8 billion in 2022, Dealogic data showed, its highest ever and more than double the previous year.
The cancelled fundraising was critical for Adani, which had said it would use $1.33 billion to fund green hydrogen projects, airports facilities and greenfield expressways, and $508 million to repay debt at some units.
Hindenburg’s report alleged an improper use of offshore tax havens and stock manipulation by the Adani Group. It also raised concerns about high debt and the valuations of seven listed Adani companies.
The Adani Group has denied the accusations, saying the allegation of stock manipulation had “no basis” and stemmed from an ignorance of Indian law. It said it has always made the necessary regulatory disclosures.
Adani had managed to secure share sale subscriptions on Tuesday even though the stock’s market price was below the issue’s offer price. Maybank Securities and Abu Dhabi Investment Authority had bid for the anchor portion of the issue, investments which will now be reimbursed by Adani.
Late on Wednesday, the group’s founder said he was withdrawing the sale given the share price fall, adding his board felt going ahead with it “will not be morally correct”.
Reporting by Chris Thomas, Nallur Sethuraman, Tanvi Mehta, Ira Dugal, Aftab Ahmed, Sumeet Chatterjee, Anshuman Daga, Summer Zhen, Ross Kerber and Bansari Mayur Kamdar; Editing by Muralikumar Anantharaman, Jason Neely and Alexander Smith
Moody’s warns will find it harder to raise capital
NEW DELHI, Feb 3 (Reuters) – Financial contagion fears spread in India on Friday as the Adani Group’s crisis worsened, with ratings agency Moody’s warning the conglomerate may struggle to raise capital and S&P cutting the outlook on two of its businesses.
Chaotic scenes in both houses of India’s parliament led to their adjournment on Friday as some lawmakers demanded an inquiry after a dramatic meltdown in the stock market values of Indian billionaire Gautam Adani’s companies.
The crisis was triggered by a Hindenburg Research report last week in which the U.S.-based short-seller accused the Adani Group of stock manipulation and unsustainable debt.
Adani Group, one of India’s top conglomerates, has rejected the criticism and denied wrongdoing in detailed rebuttals, but that has failed to arrest the unabated fall in its shares.
In the latest sign of the crisis widening, India’s ministry of corporate affairs has begun a preliminary review of Adani Group’s financial statements and other regulatory submissions made over the years, two government officials told Reuters.
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Although shares in Adani companies recovered after sharp falls earlier on Friday, the seven listed firms have still lost about half their market value, totalling more than $100 billion since Hindenburg published its report on Jan. 24.
Moody’s warned the share plunge could hit the Adani Group’s ability to raise capital, although fellow credit ratings agency Fitch saw no immediate impact on its ratings.
“These adverse developments are likely to reduce the group’s ability to raise capital to fund committed capex or refinance maturing debt over the next 1-2 years. We recognise that a portion of the capex is deferrable,” Moody’s said.
For Adani, a former school drop-out from Gujarat, the western home state of Indian Prime Minister Narendra Modi, the crisis presents the biggest reputational and business challenge of his life, as his firm struggles to assuage investor concerns.
Amid fears the turmoil could spill over into the broader financial system, some Indian politicians have called for a wider investigation, and sources have told Reuters the central bank has asked lenders for details of exposure to the group.
“Contagion concerns are widening, but still limited to the banking sector,” Charu Chanana, a market strategist with Saxo Markets in Singapore, said on Friday.
The Reserve Bank of India said the country’s banking system remains resilient and stable. State Bank of India said it was not concerned about the exposure to Adani Group, but further financing to its projects would be “evaluated on its own merit”.
Adani Enterprises shares closed 1.4% higher, after earlier slumping 35% to hit their lowest since March 2021. That low took its losses to nearly $33.6 billion since last week, a 70% fall.
Shares fell 5% in Adani Total Gas (ADAG.NS), a joint venture with France’s TotalEnergies (TTEF.PA), which said its exposure to Adani companies was limited.
Traffic moves past the logo of the Adani Group installed at a roundabout on the ring road in Ahmedabad, India, Feb. 2, 2023. REUTERS/Amit Dave
Adani Ports and Special Economic Zone (APSE.NS) was up 8%, while Adani Transmission (ADAI.NS) and Adani Green Energy (ADNA.NS) were both down 10%.
“There is a risk that investor concerns about the group’s governance and disclosures are larger than we have currently factored into our ratings,” S&P said, as it cut its outlook on Adani Ports and Adani Electricity to negative from stable.
India’s divestment secretary Tuhin Kanta Pandey told Reuters that Life Insurance Corp (LIC) shareholders and customers should not be concerned about its exposure to the Adani Group.
State-run LIC (LIFI.NS) has a 4.23% stake in the flagship Adani Enterprises, while its other exposures include a 9.14% stake in Adani Ports.
Reuters Graphics
‘ONE INSTANCE’
Adani, 60, has in recent years forged partnerships with, and attracted investment from, foreign giants as he pursued global expansion in industries from ports to power.
The market and financial crisis means foreign investors, many already underweight on India as they consider its stock market overpriced, are reducing exposure.
“One instance, however much talked about globally it may be … is not going to be indicative of how well Indian financial markets are governed,” Indian Finance Minister Nirmala Sitharaman told Network18 when asked about the market weakness.
Reuters Graphics
Hindenburg’s report said key listed Adani companies had “substantial debt” and shares in the seven listed firms had a downside of 85% due to what it called sky-high valuations.
The Adani Group has called the report baseless and said over the past decade, its companies have “consistently de-levered”.
The listed Adani firms now have a combined market value of $107.5 billion, versus $218 billion before the report.
That has forced Adani to cede the crown of Asia’s richest person to Indian rival Mukesh Ambani of Reliance Industries Ltd (RELI.NS), and he has slid to 17th in Forbes’ list of the world’s wealthiest people.
He had ranked third, behind Elon Musk and Bernard Arnault.
Reporting by Aditya Kalra, Chris Thomas, Ankur Banerjee, Bansari Mayur Kamdar, Shivam Patel, Tanvi Mehta and Rae Wee in Singapore; Editing by Clarence Fernandez, Mark Potter and Alexander Smith
WASHINGTON, Nov 4 (Reuters) – Economic sanctions, the primary means the United States has used for years to try to exert pressure on North Korea, have abjectly failed to halt its nuclear and missile programs or to bring the reclusive northeast Asian state back to the negotiating table.
Instead, North Korea’s ballistic missile program has become stronger and it has carried out a record-breaking testing regime of multiple types of weapons this year – including of intercontinental ballistic missiles designed to reach the U.S. mainland. Expectations are that it may soon end a self-imposed five-year moratorium on nuclear bomb testing.
Now, U.S. policy makers and their predecessors can do little more than pick through the wreckage and seek to determine what went wrong, and who might be to blame.
“We’ve had a policy failure. It’s a generational policy failure,” said Joseph DeThomas, a former U.S. diplomat who worked on North Korea and Iran sanctions and served in the administrations of Democratic Presidents Bill Clinton and Barack Obama.
“An entire generation of people worked on this. It’s failed … so alright, now we have to go to the next step, figure out what we do about it.”
Biden administration officials concede that sanctions have failed to stop North Korea’s weapons programs – but they maintain they have at least been effective in slowing North Korea’s nuclear program.
“I would disagree with the idea that sanctions have failed. Sanctions have failed to stop their programs – that’s absolutely true,” a senior administration official told Reuters. “But I think that if the sanctions didn’t exist, (North Korea) would be much, much further along, and much more of a threat to its neighbors to the region and to the world.”
The State Department, U.S. Treasury and White House’s National Security Council did not immediately respond to requests for comment.
Former officials and experts say sanctions were never imposed robustly enough for long enough and blame faltering U.S. overtures to North Korea as well as pressures like Russia’s war in Ukraine and U.S-China tensions over Taiwan for making them ineffective and easy for North Korea to circumvent.
North Korea has long been forbidden to conduct nuclear tests and ballistic missile launches by the U.N. Security Council.
The Security Council has imposed sanctions on North Korea since 2006 to choke off funding for it nuclear and ballistic missile programs. They now include exports bans coal, iron, lead, textiles and seafood, and capping imports of crude oil and refined petroleum products.
However U.N. experts regularly report that North Korea is evading sanctions and continuing to develop its programs.
Russia and China backed toughened sanctions after North Korea’s last nuclear test in 2017, but it is not clear what U.N action – if any – they might agree to if Pyongyang conducts another nuclear test.
Anthony Ruggiero, who headed North Korea sanctions efforts under former President Donald Trump, said they were only pursued vigorously enough from the last year of the Obama administration to early in Trump’s second year. They then dropped off in the ultimately vain hope of progress in summit negotiations between Trump and Kim.
Some critics like sanctions expert Joshua Stanton fault both the Trump and Biden administrations for failing to exert maximum pressure to stop China allowing North Korea’s sanctions evasion. They point to the powerful option of imposing sanctions on big Chinese banks that have facilitated this.
“The sanctions we don’t enforce don’t work, and we haven’t been enforcing them since mid-2018,” Stanton said, noting that history had shown a correlation between stronger enforcement and North Korea willingness to engage diplomatically.
“The Biden administration’s most significant failure is its failure to prosecute or penalize the Chinese banks we know are laundering Kim Jong Un’s money,” he said.
Some experts like DeThomas argue that taking what some call the “nuclear option” of going after Chinese banks could exclude huge Chinese institutions from the international financial system and have catastrophic consequences not just for the Chinese, but for the U.S. and global economies – something Stanton considers unfounded.
“Going full bore against the Chinese over North Korea is always a possibility, but it’s a high-risk option,” said DeThomas, arguing that such a measure should be reserved for an even more pressing scenario, such as deterring any move by China to all-out support for Russia’s war in Ukraine.
“You want them to be thinking about that. And you can’t fire that gun twice,” he said. “And even if you sanctioned the Chinese banks, you wouldn’t get the North Koreans to change.”
Some U.S. academic experts argue that Washington should recognize North Korea for what it is – a nuclear power that is never going to disarm – and use sanctions relief to incentivize better behavior.
“I do think we can buy things other than disarmament with our economic leverage,” Jeffrey Lewis, a non-proliferation expert at the Middlebury Institute of International Studies told a conference in Ottawa this week.
“I do think we can buy things other than disarmament with our economic leverage,” Jeffrey Lewis, a non-proliferation expert at the Middlebury Institute of International Studies, told a conference in Ottawa this week.
The senior Biden administration official said maintaining sanctions was not just punitive, but about the international community showing it is united.
He rejected the idea that Washington should recognize North Korea as a nuclear-armed state.
“There is an extraordinarily strong global consensus … that the DPRK should not, and must not, be a nuclear nation,” he said. “No country is calling for this … the consequences of changing policy, I think would be profoundly negative.”
Additional reporting by Steve Holland and Michelle Nichols
Editing by Alistair Bell
Ukraine official: religious dispute led to base shootings
Fighting rages in eastern Ukraine, southern Kherson region
Ukrainian forces damage administration building in Donetsk
KYIV, Oct 16 (Reuters) – Russia has opened a criminal investigation after gunmen shot dead 11 people at a military training ground near the Ukrainian border, authorities said on Sunday, as fighting raged in eastern and southern Ukraine.
Russia’s RIA news agency, citing the defence ministry, said two gunmen opened fire with small arms during a firearms training exercise on Saturday, targeting personnel who had volunteered to fight in Ukraine. RIA said the gunmen, who it referred to as “terrorists,” were shot dead.
The incident in the southwestern Belgorod region was the latest blow to Russian President Vladimir Putin’s “special military operation” in Ukraine. It came a week after a blast damaged a bridge linking mainland Russia to Crimea, the peninsula it annexed from Ukraine in 2014.
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Russia’s defence ministry said the attackers were from a former Soviet republic, without elaborating. A senior Ukrainian official, Oleksiy Arestovych, said the two men were from the mainly Muslim Central Asian republic of Tajikistan and had opened fire on the others after an argument over religion.
Reuters was not immediately able to confirm the comments by Arestovych, a prominent commentator on the war, or independently verify casualty numbers and other details.
“As a result of the incident at a shooting range in Belgorod region, 11 people died from gunshot wounds and another 15 were injured,” Russia’s Investigative Committee said, announcing the criminal investigation. It gave no other details.
Some Russian independent media outlets reported that the number of casualties was higher than the official figures.
The governor of Belgorod region, Vyacheslav Gladkov, said no local residents were among those killed or wounded.
Two witnesses later told Reuters they had seen Russian air defence systems repelling air strikes in Belgorod.
Putin said on Friday Russia should be finished calling up reservists in two weeks, promising an end to a divisive mobilisation in which hundreds of thousands of men have been summoned to fight in Ukraine and many have fled the country.
Belarusian President Alexander Lukashenko, a strong Putin ally, said last week that his troops would deploy with Russian forces near the Ukrainian border, citing what he said were threats from Ukraine and the West.
The Belarusian defence ministry in Minsk on Sunday said just under 9,000 Russian troops would be stationed in Belarus as part of a “regional grouping” of forces to protect its borders.
RUSSIAN SHELLING
Russian forces shelled Ukrainian positions on several fronts on Sunday, the General Staff of Ukraine’s Armed Forces said, with the targets including towns in Kharkiv, Donetsk and Kherson regions. Russian forces were trying to advance on Bakhmut in Donetsk region and in and around Avdiivka.
Intense fighting is taking place around Bakhmut as well as the town of Soledar, Ukrainian President Volodymyr Zelenskiy said on Sunday in his nightly video address.
FILE PHOTO – An instructor trains Russian newly-mobilised reservists at a shooting range in the course of Russia-Ukraine conflict in the Donetsk region, Russian-controlled Ukraine, October 10, 2022. REUTERS/Alexander Ermochenko
“The key hot spots in Donbas are Soledar and Bakhmut,” Zelenskiy said. “Very heavy fighting is going on there.”
Bakhmut has been the next target of Russia’s armed forces in their slow move through the Donetsk region since taking the key industrial towns of Lysychansk and Sievierodonetsk in June and July. Soledar is located just north of Bakhmut.
Fighting has been particularly intense this weekend in the Donetsk and Luhansk regions, and the strategically important Kherson province in the south, three of the four provinces Putin proclaimed as part of Russia last month.
Shelling by Ukrainian forces damaged the administration building in the city Donetsk, capital of the Donetsk region, the head of its Russian-backed administration said on Sunday.
“It was a direct hit, the building is seriously damaged. It is a miracle nobody was killed,” said Alexei Kulemzin, surveying the wreckage, adding that all city services were still working.
There was no immediate reaction from Ukraine to the attack on Donetsk city, which was annexed by Russian-backed separatists in 2014 along with swathes of the eastern Donbas region.
Russia’s defence ministry said on Sunday its forces had repelled efforts by Ukrainian troops to advance in the Donetsk, Kherson and Mykolaiv regions, inflicting what it described as significant losses.
Russia also said it was continuing air strikes on military and energy targets in Ukraine, using long-range precision-guided weapons.
Reuters was unable to independently verify the battlefield reports.
In the city of Mykolaiv, residents queued on Sunday – as they do every day – to fill water bottles at a distribution point after supplies were severed by fighting early in the war.
“This is not war, this is a war crime. War is when soldiers fight with each other, but when civilians are being fought, it’s a war crime,” said Vadym Antonyuk, a 51-year-old sales manager, as he stood in line.
A spokeswoman for Ukraine’s Southern Military Command said Russian forces were suffering severe shortages of equipment including ammunition as a result of the damage inflicted last weekend on the Crimea Bridge.
“Almost 75% (of Russian military supplies in southern Ukraine) came across that bridge,” Natalia Humeniuk told Ukrainian television, adding that strong winds had also now stopped ferries in the area.
“Now even the sea is on our side,” Humeniuk said.
Putin blamed Ukrainian security services for the bridge blast and last Monday, in retaliation, ordered the biggest aerial offensive against Ukrainian cities, including the capital Kyiv, since the start of Russia’s invasion on Feb. 24.
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Reporting by Reuters bureaux; Writing by David Ljunggren, Matt Spetalnick, Gareth Jones and James Oliphant; editing by Michael Perry, Tomasz Janowski, Will Dunham and Nick Macfie
Evergrande averts default with surprise interest payment
U.S. 10-year yields lower
NEW YORK, Oct 22 (Reuters) – The Dow Jones industrial average registered a record closing high on Friday and major equity indexes posted a third straight week of gains while the U.S. dollar slipped.
On the day, MSCI’s broadest gauge of global shares (.MIWD00000PUS) was flat, and the S&P 500 (.SPX) and Nasdaq (.IXIC) ended lower.
Stocks came under pressure after Federal Reserve Chair Jerome Powell said the U.S. central bank was “on track” to begin reducing its purchases of assets. read more
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Intel’s stock (INTC.O)fell 11.7% and was among the biggest drags on the S&P 500. Late Thursday, Intel reported sales that missed expectations and pointed to shortages of chips holding back sales of its flagship processors. read more
American Express Co’s stock (AXP.N) gained, boosting the Dow after the company beat profit estimates for the fourth straight quarter.
Next week brings reports from several key mega-cap names including Amazon (AMZN.O). read more
The dollar pared losses after Powell’s comments, but the dollar index was last down 0.10% at 93.64, and is off from a one-year high of 94.56 last week. read more
“There’s a bit of a positioning unwind taking place. We’ve obviously seen a firmer dollar since the September” Fed meeting, said Mazen Issa, senior FX strategist at TD Securities in New York. “That also dovetails with the seasonal tendency for the dollar to soften into the end of the month.”
Investors also digested news that China Evergrande Group (3333.HK) appeared to avert default with a source saying it made a last-minute bond coupon payment. read more
The Dow Jones Industrial Average (.DJI) rose 73.94 points, or 0.21%, to 35,677.02, the S&P 500 (.SPX) lost 4.88 points, or 0.11%, to 4,544.9 and the Nasdaq Composite (.IXIC) dropped 125.50 points, or 0.82%, to 15,090.20.
The pan-European STOXX 600 index (.STOXX) rose 0.46% and MSCI’s gauge of stocks across the globe shed 0.03%.
The MSCI index posted gains for a third straight week along with the three major U.S. stock indexes.
In the U.S. bond market, yields on longer-dated U.S. Treasuries slid.
The yield on 10-year Treasury notes was down 1.6 basis points to 1.659% after rising to a five-month high of 1.7064% late Thursday.
Oil rose and ended up for the week, near multi-year highs. Brent crude futures rose 92 cents to settle at $85.53 a barrel, and registered its seventh weekly gain. U.S. crude futures gained $1.26, to settle at $83.76, and rose for a ninth straight week. read more
Spot gold was up 0.6% at $1,793.82 per ounce.
Among cryptocurrencies, bitcoin last fell 2.21% to $60,841.96.
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Additional reporting by Simon Jessop in London, and Karen Brettell, Sinead Carew and Herbert Lash in New York and Kevin Buckland in Tokyo
Editing by Hugh Lawson Mark Potter and David Gregorio
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