Latest News
-
McGeever: The data on US jobs forces us to look backwards from the Mideast chaos and AI "doom"
Investors will turn their focus on Friday, at least temporarily, to a more familiar economic area: U.S. job data. Since the joint U.S. and Israeli attack on Iran last Saturday, the events have dominated the market's thinking. Fears of artificial intelligence throwing millions of white collar workers to the scrap heap?have been put aside. The U.S. non-farm payrolls for February and the unemployment rate will once again bring these concerns to the forefront of investors' minds, and depending upon the details, they may also be at the top of the agendas of policymakers. A poll of economists found that the median consensus was for a net increase in non-farm payrolls of 59,000 last month, which is less than half the January rise. The unemployment rate will remain at 4.3%. The jobs report is still closely scrutinized to look for any warning signs. These could include weak job growth or even net job loss, as well as an increase in unemployment. The monthly payrolls and other labor market data such as "JOLTS", layoffs and weekly claims for unemployment will likely be the lightning rods of the "AI doom debate"?about whether technology will ultimately destroy jobs, economic growth and demand. APOCALYPSE, HOW? Last week, the markets were abuzz with talk about an upcoming AI "apocalypse." Investors were trying to determine AI winners and losers. Bets on the Federal Reserve cutting rates multiple times this year also rose. Jack Dorsey CEO of Block Inc., who announced on February 26, that he would be firing nearly half his staff, openly cited AI, even though the fintech firm is "strong" and profits are improving. Some people think that Dorsey, and other CEOs or chief financial officers might blame the disruptive?power? of AI for cost-cutting efforts - particularly given the labor hoarding after the pandemic. Dorsey’s statement scared investors, but it was not surprising. A series of research notes and blogs describing the doomsday AI scenarios had been widely circulated. Investors and policymakers need to separate the facts from the noise when assessing AI's impact on the labor markets. This means analyzing hard numbers, which are often backwards-looking. It is a challenge to use that data to predict the direction of wind. The picture is more balanced than AI skeptics would have you believe. In a recent study, Professor Suraj Srinivasan of Harvard Business School and his team analyzed all U.S. jobs posted from March 2019 to March last year. The study found that after ChatGPT launched in November 2022 the demand for analytical, technical and creative roles increased by 20%, while openings for jobs that are most likely to be automated fell 13%. Goldman Sachs economists estimate AI is currently a hindrance to job growth by?5,000 to 10,000 per month. This is negligible in an economy which creates over 30 million new gross jobs each year. Goldman's economists believe that AI will eventually displace 11 million workers, or 6-7% of the total workforce. The technology will also create new jobs. They wrote: "We do not expect a job apocalypse." Another research indicates a similar direction. Morgan Stanley's survey of U.S. firms conducted in January revealed that companies in the industries most likely to adopt AI are more likely to hire and retrain employees than to eliminate or not fill jobs. A Dallas Fed paper published last week concluded that AI has both helped and replaced workers. Monthly U.S. Employment Reports are usually all about the headline numbers. With AI doomsday concerns 'rife', the details below the headlines could now take on a much greater significance and cut through the fog. You like this column? Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
-
Central African Republic looks to Russia for support in energy
On 'Thursday, the leader of Central African Republic expressed his gratitude to Russia for its support in security and asked Vladimir Putin to assist with the country's serious energy problems. At talks at the Kremlin, President?Faustin Archange Touadera informed Putin that Russia's presence in security had enabled the December election that brought him back to office for another seven-year period. The West is concerned about Russia's increasing security role in?Africa, which has been at the expense of France and United States. The Russia's Africa Corps is a paramilitary unit that replaced the former Wagner mercenary force. It operates in many countries, including Mali and Equatorial Guinea. Touadera thanked Putin as well for the donation of Russian grain and fuel. He said that CAR was looking for more support. He said that the Russian Federation had a lot of experience in this area. Putin said that the two countries have good prospects for strengthening their ties, especially in agriculture and infrastructure. Russia wants to increase its economic and political ties with Africa, as part of a larger strategy to build stronger relationships with developing nations after its break with the majority of the West due to the conflict in Ukraine. Touadera has won the December election in the CAR, a chronically insecure country. He did this by campaigning on security and by enlisting both Rwandan soldiers and Russian troops to help him. The main opposition coalition boycotted voting, claiming it was unfair.
-
The easing cycle of EM central banks is on shakier footing amid escalating Mideast conflict
Analysts say that the Middle East conflict and higher oil prices threaten to shift emerging markets towards a more "hawkish" policy. In the next two weeks, more than a dozen emerging market central banks will be meeting to discuss their monetary policies. Goldman Sachs analysts noted that "markets that have been under the most pressure are those that were owned by investors anticipating rate?cuts in CEEMEA, LatAm and Latin America) and that also tend to be highly sensitive to global supply side shocks." Global financial markets are gripped by fears of an oil price spike due to the U.S. - Iran war, which could lead to higher prices for consumers. The emerging Asian economies, including India, that are major oil importers, are susceptible to supply shocks. A deepening conflict with Iran could put pressure on external balances, currencies, and capital flows. J.P.Morgan analysts stated that "oil shock" could lead to more hawkish outcomes for Indonesia, Philippines and Singapore. They also said the Indian central banks may stay on a 'prolonged hold' due to higher crude prices. Brent crude oil last traded at $83.47 per barrel, up more than 2%. Morgan Stanley stated that "DM Asia Central Banks will likely accommodate supply shocks (hold 'back on further tightening), but a few EM Asia Central Banks may not be able?to cut rates."
-
The EBRD President says the conflict in Iran is a threat to growth.
The president of the European Bank for Reconstruction and 'Development, said 'on Thursday that the widening U.S. -Iran conflict is a threat... to economic growth. But the impact will depend on the length of the conflict. Odile Renaud Basso, EBRD President, said in an interview with the Istanbul press that conflict can "reduce risk capital" in the region. However, he added that the fallout has been contained so far - except for Lebanon. She said that the risk was on the downside. The EBRD estimated growth in the 41 countries that it covers as 3.6% this year, and 3.7% in 2027. This was boosted by large infrastructure?projects undertaken in Europe but offset by uncertainty over U.S. trade and tariffs. The Strait of Hormuz has been effectively closed by the war, a major shipping artery. Crude prices have risen 12%, alarming many of the countries that import energy, and where the EBRD operates. Renaud Basso stated that the duration of the Strait of Hormuz closure and the spike in oil and gas prices were crucial, but also noted that high global gas stocks might help to cushion the blow. Lebanon is the exception. She said that it's "very much" at the heart of current turmoil. Hezbollah, a Lebanese group, launched drones and rockets at Israel's neighbour on Monday. This sparked a full-blown war between Israel and Lebanon. She said, "There we can expect a significant impact on the economy and in general." (Reporting from Jonathan Spicer, Istanbul; writing by Libby George. Editing by Amanda Cooper & Nivedita Bhattacharjee).
-
The UK's slow response to allies in the Iran conflict has raised questions about its military effectiveness
The UK's hesitant response to the Middle East conflict and reluctance to defend its allies have renewed doubts about the military effectiveness of the country, especially when the U.S. demands widespread rearmament. Trump slammed Keir starmer, the British Prime Minister on Tuesday. He said that he had "ruined" their historically close relationship when London refused to allow the U.S. to use British bases for pre-emptive attacks on Iran. Cypriot officials have also criticised London for sending a drone made in Iran to strike one of Britain's bases on the island. This prompted France, Greece, and other countries to offer support. The British destroyer will not be sailing until next week and it is expected to take a week for the destroyer to reach the area. BRITISH MILITARY HAS FACED YEARS OF CUTS Starmer has defended Starmer's actions by saying that British personnel will only be involved in legal and well-planned military action. Since then, British jets brought down Iranian drones. Britain has also resupplied air defence systems for allies and now the U.S. is using its bases to conduct defensive operations. The initial response to the report has raised concerns about the readiness of the British military after years of cutbacks. Simon Diggins is a former British Defence Attache who served with U.S. forces in Afghanistan. If he were to summarize the situation, he would say "The Brits don't take it seriously". He said that Trump was "vulgar and rude" and "undiplomatic", but Britain made itself "operationally, and strategically", irrelevant, in spite of its advanced fighter jets, such as F-35s, and nuclear weapons. BRITAIN STRUGGLES TO SET OUT HIGHER DEFENCE SPENDING This latest spat comes after months of increasing tensions between Washington and its traditional allies. The shrinking British armed forces have undermined London's attempts to be seen as U.S.'s most reliable partner in Europe. The British army has shrunk to its smallest size since the Napoleonic Wars, with just over 70,000 trained full-time soldiers. According to the International Institute for Strategic Studies, Britain is behind other European countries in re-arming with its gaps in armoured vehicles and ships, as well as ground-based air defense systems. Starmer, who blames previous Conservative governments for the lack of military investments, plans to spend 2,5% of GDP by 2027, and aims at 3% after that date. The government of the United States has delayed the release its defense investment plan for the coming decade. Trump said that Germany, France and Britain are now competing with Britain to be Washington's most valuable partners in Europe. Lack of preparation Starmer's caution can be explained by the Iraq War, where Tony Blair's decision in 2003 to join the U.S. led invasion deeply divided the country. Analysts said that while Britain may have been able to defend its hesitation on using its bases because of legal concerns, the failure of the military preparation in the area, as the U.S. gathered warships, fighter jets, and other weapons, was a major strategic mistake. Tom Sharpe who served as a naval officer for 27 years, and commanded four British ships, said that the lack of a British warship in this region was the worst British decision he'd ever seen. He said, "We can't make good decisions because of the thinness of our force. The drone attack on the British Royal Air Force base at?Akrotiri in Cyprus has brought this lack of preparedness home. Cypriot officials said they were angry that Starmer hadn't publicly stated that the U.S. wouldn't use Akrotiri. This was shortly before Akrotiri was struck by a drone believed to be from Hezbollah. The rage of TRUMP may not affect the co-operation Former diplomats, current officials and analysts say that although Trump is clearly angry with Britain they do not view his latest outburst, when he called Starmer "no Winston Churchill", as a fundamental shift in policy. Michael Martins who worked in the U.S. Embassy in London during Trump's first tenure said that he didn't expect two countries to be "significantly decoupled" from each other when they are working closely on intelligence. Starmer said that the U.S. and British "special relationship" is reflected by their high levels of cooperation rather than the words of the President. The conflict in the Middle East is getting worse, and the U.S. isn't the only one who wants Britain to do more. Bader Al Saif, associate fellow of Chatham House in Kuwait, stated that European countries need to demonstrate they can support their Gulf allies if needed. He said: "I don't say that they should join in the war effort. But I think they have partners, including Gulf states, who they can support." (Additional reporting from Michele Kambas and Michael Holden, in Nicosia; editing by Alex Richardson.)
-
USA Rare Earth acquires remaining stake in Texas Round Top Deposit for $73 Million
USA 'Rare Earth' announced on Thursday that it will acquire the remaining minority interest in an Texas rare earth deposit through a?all-stock transaction worth $73million, as part of?its?efforts to boost domestic production. The company will purchase all outstanding shares of Texas Mineral Resources in exchange for approximately 3.8 million common shares of USA Rare Earth. Following the news, shares of USA Rare Earth rose by 1% in premarket trading. The company said last year that it would 'bring forward commercial production of its rare earths in Texas project to late 2028 from 2030. It cited faster-than expected progress at its processing facility and the rising U.S. Demand for critical minerals. The acquisition will'make USA Rare Earth sole operator of Round 'Top project which it claims is the largest known U.S. resource of heavy rare Earth elements, gallium, and beryllium. USA Rare Earth announced earlier this year that the Trump administration will support a $1.6billion debt-and equity funding package for the Texas mine and magnetic facility to supply the defense sector and high-tech industries. Last year, President Donald Trump invoked emergency powers to boost the production of 'critical minerals' as part of an effort to counter a near total monopoly of this sector by China. Barbara Humpton, CEO of USA Rare Earth, said: "This acquisition is a key pillar to our strategy for building the world's most advanced global?integrated platform for critical minerals that are not from China." Under its Accelerated Mining?Plan, the company expects that it will be able to extract nearly 40,000 metric tonnes per day of critical minerals and rare?earths by 2030. The deal, which has been approved by both boards, should be completed by the third quarter. Reporting by Pooja menon in Bengaluru, editing by Saumyadebchakrabarty and Shreyabiswas
-
India's diamond and jewellery imports are disrupted by the Iran conflict
Due to widespread flight cancellations and airspace closures, the Middle East conflict has affected India's exports of gems and jewellery, as well imports of rough diamonds from United Arab Emirates. Dubai, which is a major "global hub" for polished and rough diamonds, and bullion has suspended many cargo and passenger flights. This has affected trade flows, and the shipments of essential raw materials and exports, according to industry officials. Vipul Shah is the managing director of Asian Star, one of the leading diamond exporters. Nearly a quarter of India’s annual gems, jewellery and watches exports totaling around $30 billion come from the Middle East. The United Arab Emirates account for more than two thirds of India’s rough diamond imports. India is the world's largest diamond cutting and polishing hub. It processes nine out of 10 diamonds worldwide. Shaunak Parikh is vice-chairman of the Gem and Jewellery Export Promotion Council. He said that gems and jewelry exports from India will drop in March. Dubai is not just a major gem and jewellery market, but it's also an important intermediary between countries producing diamonds and major consumer markets. Parikh stated that if the conflict drags on it could hurt demand. India relies on the demand of the "Middle East" after its largest buyer, the United States imposed heavy tariffs on Indian products last year, and curtailed their purchases. Due to the volatility of the rupee-U.S. dollar exchange rate, overseas buyers are cautious when placing orders. Colin Shah, managing Director of Kama Jewelry, has cited the dollar exchange rate as well as logistical restrictions. On Wednesday, the?Indian Rupee hit a record low of 92.3025 to the?U.S. On Wednesday, the dollar was at a record low of 92.3025 per?Indian rupee. Diamond exporter in Mumbai said that both buyers and sellers are aware of the disruptions caused by war, so they have agreed to delay shipments. (Reporting by Rajendra Jadhav. (Editing by Jane Merriman.
-
MORNING BID AMERICAS - Global markets take a deep breath
By Mike Dolan March 5th - What's important in the U.S. and Global Markets Today By Mike Dolan. Editor-at-Large for Finance and Markets The Asian markets recovered on Thursday. South Korea's KOSPI rose by almost 10%, clawing a piece of its recent drubbing, while Japan's Nikkei added nearly 2%. The apparent respite from the Middle East conflict was not confined to Asia. U.S. stocks and European stock prices also climbed?on Wednesday, as investors were comforted by even the slightest hint that geopolitical conflicts might ease. Below, I will go into more detail. Check out my most recent column about why Europe might be able absorb the Middle East's energy shock for now. Listen to the most recent episode of Morning Bid's daily podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. Global Markets Take a Breath The global markets seem to be taking a breather. The Nasdaq rose 1.29% in a tech rally on Wednesday, while the S&P 500 gained 0.78% thanks to some positive macroprints. This market breather is fueled by a mix of factors. Traders appeared to be encouraged by the New York Times report yesterday, which stated that Iranian intelligence indirectly contacted the CIA to seek a solution after the attacks on Saturday. Washington's plan, which involves navy escorts as well as insurance coverage to reopen Strait of Hormuz after it was closed by the terrorists on Saturday, may have also sparked some optimism. Positive news was reported on the labour front in advance of Friday's release of payrolls. The U.S. private pay-rolls for February showed a larger-than-expected increase. ISM's PMI for non-manufacturing, meanwhile, reached a "more than 3-year high". As the Middle East conflict enters its sixth and final day, a quick resolution of a clogged Strait of Hormuz seems, at least for now, a distant possibility. Analysts have said that Iran could continue drone attacks in the strait for many months. It's also not clear whether tankers will brave the strait with U.S. support from the navy and insurance. Other signs also point to this conflict lasting longer than just a few days. The U.S. Senate did not block the administration's war against Tehran and President Trump now has a largely unlimited power to direct it. On Thursday, oil prices rose on the prospect of a continued disruption. Brent crude, which is the price of U.S. crude oil, jumped more than 2% and reached $83 per barrel. The dollar also strengthened after retreating from its three-month-highs, while gold rose on the back of safe-haven demand. Meanwhile, U.S. stock index futures dipped ahead of the bell while U.S. Treasuries weakened. Investors will get more information?later on today, with the release of?weekly jobless claims ahead of tomorrow's Non-Farm Payrolls. Broadcom, a chip designer, reported on Wednesday a 29% increase in first-quarter revenues to $19.31billion and predicted that its AI chip sales would exceed $100billion next year. It is emerging as a major player in the AI chip market, signing deals that rival those of Nvidia's dominant competitor. Chart of the Day In recent days, global stocks have recovered some of the 2026 gains they lost following the U.S. and Israel attack on Iran in February. Watch today's events * ?U.S. Weekly jobless claims (8.30 AM EST), import prices for January (8.30?AMEST), Q4 Productivity (8.30 AMEST) * Fed's Michelle Bowman speaks Want to receive the Morning Bid every morning in your email? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed here are the author's. These opinions do not represent the views of News. News is committed to the Trust Principles and a commitment to independence, integrity, and freedom from bias.
Mexico constitutional reforms most likely with super-majority in sight
Mexican Presidentelect Claudia Sheinbaum's judgment Morena celebration and coalition partners are close to protecting a supermajority in both chambers of Congress, which would lead the way to passing controversial constitutional reforms.
Below is a take a look at the possible relocations that have markets and investors worried, and caused a sharp decline in Mexican asset costs on Monday.
DESPERATE EFFORT
Sheinbaum's coach, outbound President Andres Manuel Lopez Obrador, proposed a series of constitutional reforms in February, a few of which critics argue would get rid of much-needed oversight bodies, wear down checks and balances and focus more power in the executive branch.
Now, with a two-thirds bulk locked in the lower house of Congress and within his grasp in the Senate, Lopez Obrador will overlap with the freshly chosen lawmakers in his last month in workplace in September. Lopez Obrador on Monday recommended he would make a desperate effort to ram them through before handing the baton over to Sheinbaum.
I'm going to talk it over with Claudia ... due to the fact that we presented the propositions that are in Congress, to see which of those efforts we can push for and get approved, Lopez Obrador said at his day-to-day interview.
Issue about the shakeup sent out stocks falling over 6%. and the peso as much as 4.3% lower.
INDEPENDENT OVERSIGHT BODIES
Amongst the proposed changes, Lopez Obrador wishes to scrap the. constitutionally-enshrined flexibility of details body INAI,. federal anti-trust agency COFECE, advancement evaluation firm. Coneval and telecoms regulator IFT.
It would likewise put the energy ministry in charge of energy. regulator CRE and national hydrocarbons commission CNH, both of. which are now independent and which, like the other autonomous. bodies, Lopez Obrador charges with promoting corruption.
OVERHAULING THE ELECTIONS AUTHORITY
Throughout his administration, Lopez Obrador often berated. and bumped heads with such firms, consisting of the National. Electoral Institute (INE), which he is looking for to entirely. overhaul.
As many as 700,000 people filled the streets of Mexico City. in February to demonstration of the proposed dismantling of the INE.
The reforms are a method of instituting electoral reform to. cement Morena's political hegemony; lowering the bar for public. referendums to obtain legal validity, stated Nicholas Watson,. handling director of consulting company Teneo.
Lopez Obrador has actually frequently utilized such referendums to. pursue contentious policies like cancelling a partly-built. Mexico City airport before he took workplace in a vote in which. just a portion of the public got involved.
STRUCTURAL MODIFICATIONS TO THE JUDICIAL, LEGAL BRANCHES
Lopez Obrador also wants huge modifications in the judicial system,. which would see popularly chosen Supreme Court justices,. circuit magistrates, district judges, and electoral authorities.
The number of supreme court justices would be cut to 9, from. 11. In addition, all magistrates and judges would need to be. restored in an extraordinary election to happen in 2025, part. of a series of moves critics state would reduce independent. courts.
Lopez Obrador has said the changes are needed because the. present judiciary serves a minority and sometimes arranged. crime at the expense of society.
His reforms would also cut the variety of members of the. lower home of Congress to 300, from 500 and slash the number of. senators to 64 from 128.
S&P Global Scores stated while greater centralization of. political decision-making and blended political signals under. Lopez Obrador had minimized the self-reliance of numerous firms,. important checks and balances throughout branches of federal government,. consisting of the judiciary, stayed.
Steps that deteriorate checks and balances might affect. private-investor self-confidence by creating perceptions of greater. risk, potentially impacting economic growth and sovereign. creditworthiness, it alerted.
LAUNDRY LIST
The proposed reforms, among which Lopez Obrador may need to. pick offered the tight window between the last legal. session under him and Sheinbaum's October inauguration also. consist of:
-- Expanded retirement benefits for senior citizens 65. years or older and disabled people
-- Improved trainee grants
-- Paid employment training for youths between the age. of 18 and 29
-- a restriction on genetically modified corn
-- a restriction on water rights in locations dealing with dry spell
-- a ban on open pit mining and fracking
A few of the reforms if authorized could intensify a worsening. budget deficit which experts state is likely to be a significant burden. for Sheinbaum once she takes workplace.
(source: Reuters)