Business

TOKYO (Reuters) – Air Canada is expecting a demand for flights between Canada and the Asia-Pacific to recover to a near pre-pandemic level by December next year, a top regional executive said on Saturday.

Currently, the routes between Canada and the Asia-Pacific run at 30% of the 2019 capacity, but the capacity is expected to double by the end of December, said Kiyo Weiss, the airline’s sales director for the Asia-Pacific.

The airline is also considering adding flights to a new destination in the Asia-Pacific in the near future to cater for pent-up demand in leisure travel, she said.

“Probably we’ll make a decision within a month or so,” Weiss said, without providing further details.

Canada’s largest carrier is seeking to augment its presence in the region to meet high demand, particularly from Southeast Asian countries, as the area recovers from the COVID-19 pandemic.

The airline on Saturday resumed direct flights between Montreal and Tokyo’s Narita airport that had been disrupted by the pandemic.

(Reporting by Satoshi Sugiyama; Editing by Raju Gopalakrishnan)

source

(Reuters) – Abbott Laboratories said on Saturday that it has reopened its baby formula production plant in Sturgis, Michigan, taking a step toward alleviating an acute nationwide shortage that has sent parents scrambling for supplies.

The company said it will begin production of EleCare and other specialty and metabolic formulas, with initial EleCare product release to consumers beginning on or about June 20.

(Reporting by Juby Babu in Bengaluru; Editing by Lisa Shumaker)

source

BRUSSELS (AP) — NATO Secretary-General Jens Stoltenberg has met with Finland’s prime minister and spoken to Turkey’s president as he seeks to overcome Turkish resistance to Finland and Sweden joining the alliance.

Stoltenberg, who visited Washington this week, tweeted late Friday that he met with Finnish Prime Minister Sanna Marin while there and discussed “the need to address Turkey’s concerns and move forward” with the Finnish and Swedish membership applications.

Russia’s war in Ukraine pushed the Nordic countries to apply to join NATO, but Turkish President Recep Tayyip Erdogan accuses Sweden and Finland of supporting Kurdish militants deemed by Turkey to be terrorists.

Stoltenberg said he had a “constructive phone call” with Erdogan, calling Turkey a “valued ally” and praising Turkish efforts to broker a deal to ensure the safe transportation of grain supplies from Ukraine amid global food shortages caused by Russia’s invasion. Stoltenberg tweeted that he and Erdogan would continue their dialogue, without elaborating.

Erdogan’s office released a statement in which it said the president had emphasized that Sweden and Finland should “make it clear that they have stopped supporting terrorism,” have lifted defense export restrictions on Turkey and are “ready to show alliance solidarity.”

The Nordic states, among other countries, imposed limitations on arms sales in the wake of Turkey’s 2019 military incursion into northern Syria.

The NATO chief’s diplomatic efforts came before a gathering of senior officials from Sweden, Finland and Turkey next week in Brussels, where NATO is based, to discuss Turkey’s opposition to the applications.

___

Follow the AP’s coverage of the war at https://apnews.com/hub/russia-ukraine

source

(Reuters) -American Airlines Group Inc shares fell 7% on Friday as investors looked past the carrier’s upbeat revenue forecast and instead focused on its warning of a hit from higher fuel costs and staffing problems.

A steady surge in fuel prices due to geopolitical tensions and a chronic labor shortage are threatening to upset a nascent recovery in the airline industry.

“There’s going to be cost pressure. And that will, I think, have an impact on regional carriers and other carriers that rely on lower cost labor,” American Airlines Chief Executive Officer Robert Isom said at the Bernstein Strategic Decisions Conference on Friday.

American Airlines said it expected fuel expenses to average between $3.92 and $3.97 per gallon in the second quarter, up from its previous forecast of $3.59 to $3.64 per gallon.

The carrier also said it expected capacity in the quarter to be at the low end of its prior outlook range.

To get more planes in the air and counter job attrition, American Airlines said it was planning to hire 2,000 pilots.

The airline also flagged that it had almost 100 aircraft that were not productive right now.

The Fort-Worth, Texas-based airline said it was expecting revenue for the three months ending June to rise between 11% and 13% over pre-pandemic levels, compared with its prior view of a 6% to 8% increase.

That, in turn, should, offset increased costs, it added.

“We’ve never seen a revenue environment like this, led by the domestic leisure business,” Isom said.

(Reporting by Kannaki Deka in Bengaluru; Editing by Aditya Soni and Anil D’Silva)

source

FORT WORTH, Texas (AP) — American Airlines on Friday raised its forecast of second-quarter revenue, joining a growing list of airlines expecting demand this summer to top previous forecasts as the travel industry recovers from the pandemic.

American predicted that revenue will rise 11% to 13% above the second quarter of 2019. That easily beat the airline’s earlier forecast of a 6% to 8% increase over 2019.

Still, shares of Fort Worth, Texas-based American fell more than 8% in midday trading amid a drop in broad market indexes.

Delta, Southwest, JetBlue and others have raised revenue forecasts recently, as the number of people flying in the United States creeps closer to pre-pandemic levels. At the same time, airlines are offering fewer flights than they did in 2019, which is helping them push average fares much higher.

American said revenue per seat will jump by up to 22% compared with 2019, easily beating an earlier forecast of up 14% to 16%.

“That revenue is offsetting some real cost pressures out there,” CEO Robert Isom said at an investor conference.

Airfares are up nearly 50% from this time last year, according to figures from banking firm Cowen.

The airline said costs excluding jet fuel will rise by up to 11% per seat, which is a slower increase than Delta. American expects to pay nearly $4 a gallon for fuel, nearly double the price it paid three years ago.

source

(Reuters) – Marriott International Inc said on Friday it will suspend its operations in Russia after more than 25 years.

The company on March 10 decided to pause the opening of upcoming hotels and all future hotel developments and investments in Russia, following Moscow’s invasion of Ukraine.

“We remain focused on taking care of our Russia-based associates,” Marriott said.

Hilton Worldwide Holdings Inc in March suspended all new development activity in Russia and closed its corporate office in Moscow.

(Reporting by Nathan Gomes in Bengaluru; Editing by Shounak Dasgupta)

source

By Devik Jain and Anisha Sircar

(Reuters) – U.S. stock indexes fell on Friday, dragged down by shares of Apple and Tesla, while a solid jobs report supported the view that the Federal Reserve would continue on its aggressive policy tightening path to cool decades-high inflation.

Ten of the 11 major S&P sectors declined in early trade, with consumer discretionary losing 2.2% and technology falling 1.6%. The energy sector was an outlier with a gain of 1%.

The Labor Department’s closely watched report showed nonfarm payrolls rose by 390,000 jobs last month and wages grew solidly, while the unemployment rate held steady at 3.6% – all signs of a tight labor market.

Economists polled by Reuters had forecast nonfarm payrolls to rise by 325,000 jobs.

“(This report) gives permission to the Fed to keep going with their rate hikes because the labor market is strong. They can worry more about inflation pressures and less about the labor market,” said Anthony Saglimbene, global market strategist at Ameriprise Financial.

“The market is still concerned about wage inflation. Even at 0.3% that is still a very high rate. If wage inflation was lower the market reaction could be more positive.”

Volatility has gripped Wall Street in recent weeks due to hawkish comments from Fed officials, even as a recent set of data suggested that inflation may have peaked.

The blue-chip Dow has fallen 9% so far this year, the benchmark S&P 500 has lost 13%, and the tech-heavy Nasdaq has shed 22.7%, with rate-sensitive growth stocks bearing the brunt of the selloff.

“The selloff over the last few weeks could be a floor, but we do not see a lot of rationale for markets to rally materially. We will be within a trading range because the markets are waiting further information,” said Alan McKnight, chief investment officer at Regions Private Wealth.

At 10:20 a.m. ET, the Dow Jones Industrial Average was down 161.21 points, or 0.48%, at 33,087.07, the S&P 500 was down 43.57 points, or 1.04%, at 4,133.25, and the Nasdaq Composite was down 207.54 points, or 1.68%, at 12,109.36.

Apple Inc slid 3.0%, hit by a bearish brokerage comment and a report that EU countries and lawmakers were set to agree on a common charging port for mobile phones, tablets and headphones on June 7, a proposal that has been fiercely criticized by the iPhone maker.

Tesla Inc dropped 7.0% after CEO Elon Musk, in an email to executives seen by Reuters, said he has a “super bad feeling” about the economy and needs to cut about 10% of jobs at the electric carmaker.

Micron Technology also fell 7% after Piper Sandler downgraded the memory-chip maker’s stock to “underweight”, citing concerns about its heavy exposure to mobiles and PCs at a time when rising inflation forces consumers to rein in spending.

Declining issues outnumbered advancers for a 3.58-to-1 ratio on the NYSE and a 1.79-to-1 ratio on the Nasdaq.

The S&P index recorded 1 new 52-week high and 29 new lows, while the Nasdaq recorded 18 new highs and 43 new lows.

(Reporting by Sruthi Shankar, Medha Singh, Devik Jain and Anisha Sircar in Bengaluru, Sinead Carew in New York; Editing by Shounak Dasgupta and Aditya Soni)

source

(Reuters) – The European Union has expanded sanctions against Russia and added the National Settlement Depository, which Moscow planned to use to service the country’s Eurobonds, to the list of sanctioned entities, an EU document showed on Friday.

Russia said this week it was replacing Citibank, which has stopped servicing the country’s Eurobonds, with its own National Settlement Depository (NSD), as it risks its first major external debt default in more than a century.

After a key U.S. waiver allowing Russia to service its Eurobonds in original currency of issuance expired last week, Moscow proposed paying Eurobond holders by applying the mechanism it uses to process payments for its gas in roubles.

Under the plan, which was to be presented this month, Russia wanted foreign bondholders to open rouble and hard currency accounts at a Russian bank which would then convert roubles into forex and pay bondholders back via the NSD.

NSD, a Russian version of western clearing houses Euroclear and Clearstream, holds 70 trillion roubles ($1.12 trillion) worth of client assets, including 9 trillion roubles of foreign securities such as Eurobonds linked to the Russian state.

Neither NSD, nor the finance ministry replied to Reuters requests for a comment on EU sanctions.

“This make it impossible to sell foreign stocks held at the NSD but given that the NSD and Euroclear have suspended cooperation earlier, some of investors were unable to make any deals… anyway,” Promsvyazbank said in a note.

($1 = 62.2690 roubles)

(Reporting by Reuters; Editing by Christina Fincher)

source

By David Lawder

WASHINGTON (Reuters) – New U.S. trade negotiations with Taiwan could move more quickly than broader talks with 12 Indo-Pacific countries given strong interest in Taipei and Washington in deepening economic ties, Deputy U.S. Trade Representative Sarah Bianchi said on Thursday.

There are parallels between the newly launched Indo-Pacific Economic Framework talks and the Taiwan talks, Bianchi told Reuters in an interview, but the latter initiative is aimed at increasing links with Taiwan on specific economic issues.

“I think we are eager to get going with Taiwan and to scope out our negotiating mandate there and … a range of issues from small-medium enterprises to digital trade to labor and we look forward to getting going as quickly as possible,” Bianchi said.

Asked if the Taiwan initiative could bear fruit sooner then the Indo-Pacific Economic Framework (IPEF) talks, she said: “Potentially yes, it could.”

The Chinese-claimed island was excluded from the 14-country IPEF initiative launched last week by President Joe Biden. However, USTR announced separate, bilateral trade talks with Taiwan on Wednesday. [L1N2XO0YC]

IPEF, which seeks to return an economic pillar to U.S. engagement in the region, will include Japan, India, South Korea, Indonesia, Vietnam, Australia and other countries in the region, but not China.

Bianchi said IPEF would also get started right away, with plans for discussions, including ministerial-level meetings in coming months to organize the topics for the talks and to begin proposing texts for an agreement by the end of the summer.

CHOOSING PILLARS

The IPEF talks will allow member countries to choose among the key “pillars” in which they will participate, including digital trade rules, supply chain resiliency and trade facilitation, infrastructure development and strong labor rights and environmental standards.

But participation in all pillars is not required, and initial meetings will focus on defining which ones countries will choose, Bianchi said. Countries that choose only one or two can still have meaningful engagement with the United States and other IPEF members, she said.

Neither the IPEF nor the Taiwan talks will include the tariff reductions and enhanced market access offered by traditional free trade agreements.

Bianchi said IPEF is meant to be a “21st century agreement to really address 21st century problems,” including barriers to digital trade such as data localization requirements or onerous regulations that make it difficult for companies to operate in some countries. Fixing these problems will also enhance market access, she said.

(Reporting by David Lawder; Editing by Kenneth Maxwell)

source

By Kanupriya Kapoor

(Reuters) – Asian shares rose broadly on Friday morning after softer-than-expected U.S. employment data raised the possibility of the Federal Reserve turning less aggressive on its policy tightening stance in coming months.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.45%, riding on a strong Wall Street close overnight. Japan’s Nikkei was up 0.96%, and shares in Seoul opened up 0.77%, while Australia’s resource-heavy index was up 0.81%.

Overnight, tech stocks led a rally on Wall Street, lifting the S&P500 1.84%, the Nasdaq Composite 2.68%, and the Dow Jones Industrial Average 1.29%.

On Thursday, the ADP National Employment Report showed U.S. payrolls rising at a slower-than-expected pace last month.

Investors are now looking to the U.S. Labour Department’s comprehensive jobs report, due later on Friday, for confirmation of a slowdown in the employment market, which could convince the Federal Reserve to go slow on interest rate hikes for the rest of the year.

“For equities right now, anything that might be viewed as capping the Fed’s tightening could be viewed as supportive,” said ING’s Asia head of research Rob Carnell.

“So, therefore, weak macro data becomes positive for stocks.”

Economists expect about 325,000 jobs were added last month in the United States and reckon unemployment ticked lower to 3.5%.

“Any deviation from these figures that shows the labour market hanging together better than this might well be negative for equities and vice versa,” Carnell said.

Inflation is the biggest worry for the Fed and global policymakers. Fed officials have said that U.S. interest rates would likely continue to be raised aggressively unless inflation moderates.

“Front-end rate hike pressure that had built the day prior on robust economic data immediately eased off after a weaker than expected May ADP employment print, suggesting things are cooling off,” said Stephen Innes of SPI Asset Management.

Markets have locked in consecutive 50-basis-point Fed hikes in June and July but the dollar has been pushed around this week by uncertainty about what happens after that.

The U.S. dollar currency index, which tracks the greenback against six major currencies, was 0.039% lower at 101.71, pausing a rally earlier in the week.

The yen has been kept under pressure by super-low interest rates in Japan, and was last steady at 129.80 per dollar, having lost 2% on the greenback this week.

U.S. Treasury yields were mixed ahead of the non-farm payrolls data.

The benchmark 10-year yield was at 2.9168% while the 2-year yield, which tends to be sensitive to U.S. rate expectations, was down at 2.6438%.

Oil prices ticked up after U.S. crude inventories fell amid high demand, even as oil-producing countries OPEC+ agreed to boost production. Brent futures were up 0.09% at $117.72 per barrel, while U.S. West Texas Intermediate crude stood at $116.94.

To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/marketsFor the state of play of Asian stock markets please click on:

(Additional reporting by Tom Westbrook in Singapore; Editing by Shri Navaratnam)

source