Tag Archives: Economy

Spain to sack Catalan government in bid to end secessionist crisis

Spain to sack Catalan government in bid to end secessionist crisis

By Isla Binnie and Julien Toyer

MADRID (Reuters) – The Spanish government will sack Catalonia’s secessionist leadership and force the region into a new election, it decided on Saturday, unprecedented steps it said were needed to prevent the region breaking away.

The plan, which requires parliamentary approval, is Madrid’s bid to resolve the country’s worst political crisis in four decades, but it risks an angry reaction from independence supporters, who planned street protests later in the day.

Outlining the cabinet’s decision, Prime Minister Mariano Rajoy said Catalonia, which accounts for a fifth of Spain’s economy, was already in worrying economic shape as a result of the regional government’s push for independence.

“We will ask the Senate, with the aim of protecting the general interest of the nation, to authorize the government … to sack the Catalan president and his government,” Rajoy told a news conference.

Spain’s upper house of parliament is scheduled to vote on the plan next Friday.

It is the first time since Spain’s return to democracy in the late 1970s that the central government has invoked the constitutional right to take control of a region.

Direct rule will give Madrid full control of the region’s finances, police and public media and curb the powers of the regional parliament after it allowed an independence referendum that Madrid declared illegal.

Rajoy said he did not intend to use the special powers for more than six months and he would call a regional election as soon as the situation was back to normal.

“Our objective is to restore the law and a normal cohabitation among citizens, which has deteriorated a lot, continue with the economic recovery, which is under threat today in Catalonia, and celebrate elections in a situation of normality,” Rajoy said.

Catalan President Carles Puigdemont, was due to deliver an address at 9 p.m. (1900 GMT) after meeting with his government, his office said. He was also due to join the protests in Barcelona.

Puigdemont made a symbolic declaration of independence on Oct. 10, and on Thursday he threatened to press ahead with a more formal one unless the government agreed to a dialogue.

The Catalan parliament is expected to decide on Monday whether to hold a plenary session to formally proclaim the republic of Catalonia.

Catalan media have said Puigdemont could decide to dissolve the regional parliament himself immediately after independence is proclaimed and call elections before the Spanish senate makes direct rule effective.

Under Catalan law, those elections would take place within two months.

UNSUSTAINABLE

Pro-independence parties said the move from the center-right government of the People’s Party (PP) showed the Spanish state was no longer democratic.

“The Spanish government has carried out a coup against a democratic and legal majority,” Marta Rovira, a lawmaker from Catalan government party Esquerra Republica de Catalunya, tweeted.

Anti-capitalist party CUP, which backs the pro-independence minority government in the regional assembly said: “Taken over but never defeated. Popular unity for the Republic now. Not a single step back.”

Catalan authorities said about 90 percent of those who voted in the referendum on Oct. 1 opted for independence. But only 43 percent of the electorate participated, with opponents of secession mostly staying at home.

The main opposition in Madrid, the Socialists, said they fully backed the special measures and had agreed on holding regional elections in January.

“Differences with the PP on our territorial unity? None!” said socialist leader Pedro Sanchez.

Rajoy also received the backing of King Felipe, who said at a public ceremony on Friday that “Catalonia is and will remain an essential part” of Spain.

The independence push has brought on Spain’s worst political crisis since a failed military coup in 1981 several years after the end of the Franco dictatorship. It has met with strong opposition across the rest of Spain, divided Catalonia itself, and raised the prospect of prolonged street protests

It has also led Madrid to cut growth forecasts for the euro zone’s fourth-largest economy and prompted hundreds of firms to move their headquarters from Catalonia. Rajoy on Saturday urged firms to stay in the region.

Madrid has insisted that Puigdemont has broken the law several times in pushing for independence.

“The rulers of Catalonia have respected neither the law on which our democracy is based nor the general interest,” the government said in a memorandum to the Senate. “This situation is unsustainable.”

Pro-independence groups have mustered more than 1 million people onto the streets in protest at Madrid’s refusal to negotiate a solution.

Heavy-handed police tactics to shut down the independence referendum were condemned by human rights groups, and secessionists accused Madrid of taking “political prisoners” after two senior independence campaigners were jailed on charges of sedition.

Hacking group Anonymous on Saturday joined a campaign called “Free Catalonia” and took down the website of Spain’s constitutional court.

Spain’s national security department had said on Friday it was expecting such an attack to take place, though nobody was available on Saturday to confirm it.

(Editing by Angus MacSwan and Robin Pomeroy)

U.S. tax plan hopes lift stocks, strengthen dollar

U.S. tax plan hopes lift stocks, strengthen dollar

By Chuck Mikolajczak

NEW YORK (Reuters) – World stocks and bond yields rose and the U.S. dollar strengthened on Friday, as investors anticipated President Donald Trump could make progress on his fiscal plans after the U.S. Senate approved a budget blueprint that paves the way for tax cuts.

U.S. Republican Senator Rand Paul appeared to back the administration’s sweeping tax cut plan, saying he was “all in” for massive tax cuts, even as the Senate passed a key budget measure without his support one day earlier.

Equities rose on Wall Street, with financials <.SPSY>, which are expected to benefit from the administration’s proposed policies, up 1.16 percent as the best performer of 11 major S&P sectors.

“It clearly is a positive and has added to the sentiment,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.

“Any legislative action that promotes economic growth, clearly will be additive to not only sentiment but presumably earnings.”

Housing stocks <.HGX> also moved higher, up 0.73 percent, after data from the National Association of Realtors showed U.S. home resales unexpectedly increased in September.

But gains were curbed by declines in Celgene <CELG.O>, off 10.04 percent after the company said it would abandon drug trials for a Crohn’s disease treatment.

General Electric <GE.N> also lagged, down 0.30 percent after its third-quarter results and forecast cut.

The Dow Jones Industrial Average <.DJI> rose 134.39 points, or 0.58 percent, to 23,297.43, the S&P 500 <.SPX> gained 11.47 points, or 0.45 percent, to 2,573.57 and the Nasdaq Composite <.IXIC> added 33.14 points, or 0.5 percent, to 6,638.20.

The dollar index <.DXY>, tracking the greenback against a basket of major currencies, rose 0.44 percent, with the euro <EUR=> down 0.6 percent to $1.1779.

Bets that Trump’s planned tax cuts, infrastructure spending and other pro-business measures would push up growth and inflation had been behind a reflation trade that propelled the dollar to 14-year highs earlier this year.

European shares rebounded from their worst day in two months, also helped by well-received earnings reports for Volvo and Ericsson and high German producer-price inflation numbers.

The pan-European FTSEurofirst 300 index <.FTEU3> rose 0.24 percent. MSCI’s world equity index <.MIWD00000PUS>, which tracks shares in 47 countries, gained 0.10 percent, just shy of a record intraday high.

The Senate budget resolution also sent U.S. Treasury yields higher, with two-year yields reaching a near nine-year high, as investors reduced bond holdings on worries about more inflation and federal borrowing.

Benchmark 10-year notes <US10YT=RR> were last down 17/32 in price to yield 2.3809 percent, from 2.321 percent late on Thursday.

The increased risk appetite also sent gold lower. Spot gold <XAU=> dropped 0.8 percent to $1,279.08 an ounce. U.S. gold futures <GCcv1> fell 0.74 percent to $1,280.50 an ounce.

U.S. crude <CLcv1> rose 0.23 percent to $51.63 per barrel and Brent <LCOcv1> was last at $57.49, up 0.45 percent. Still, oil was set for a weekly loss as investors sought to book profit, despite tensions in the Middle East that have slashed supplies of crude.

 

(Additional reporting by Sruthi Shankar; Editing by James Dalgleish)

 

Dow, S&P 500 eke out record highs, turn up after Fed Powell report

Dow, S&P 500 eke out record highs, turn up after Fed Powell report

By Caroline Valetkevitch

NEW YORK (Reuters) – The Dow and S&P 500 eked out record closing highs on Thursday, turning higher at the last minute after a Politico report that Federal Reserve Governor Jerome Powell is the leading candidate for the nominee for Fed chair.

Investors have been anxious to hear who President Donald Trump will pick as the nominee. A decision like Powell would likely be a continuation of the current stock market-friendly monetary policy that has helped fuel the market’s more than eight-year bull run.

Stocks had been recovering from early losses for much of the afternoon but the S&P 500 and Dow were still a tad lower just before the Powell report.

“Clearly at the end it had everything to do with the speculation about Jerome Powell,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. “I can’t observe any other reason for why we ended up.”

“He’s viewed to be sort of an extension of (current Fed Chair) Janet Yellen by way of being a policy dove … and, with the market loving more of the same with regard to uber-accommodative monetary policy, as more welcome than the alternative,” he said.

Powell was among several names circulating as possible picks, including Yellen. Others include Trump’s chief economic adviser, Gary Cohn, former Fed Governor Kevin Warsh and Stanford University economist John Taylor.

The White House on Wednesday said Trump will announce his decision on the matter in the “coming days.”

Tech shares were among the day’s biggest drags, led by Apple <AAPL.O>, which fell 2.4 percent in its biggest daily percentage decline since Aug. 10 as doubts about its double 2017 iPhone release strategy weighed on investors.

The Dow Jones Industrial Average <.DJI> rose 5.44 points, or 0.02 percent, to end at 23,163.04, the S&P 500 <.SPX> gained 0.84 point, or 0.03 percent, to 2,562.1 and the Nasdaq Composite <.IXIC> dropped 19.15 points, or 0.29 percent, to 6,605.07.

Stocks have posted a string of record highs in recent weeks, and the Dow closed above 23,000 for the first time on Wednesday.

The day also marked the 30th anniversary of the 1987 Black Monday stock market crash. Most traders see a repeat of the crash as unlikely because of modern trading technology and other changes.

Investors also took profits in the broader tech sector, which has had a strong run so far this year, gaining about 30 percent and helping drive the market’s recent record run. The tech index <.SPLRCT> was down 0.4 percent on the day.

Weighing on the market early as well was some disappointing news on the earnings front.

United Airlines <UAL.N> tumbled 12.1 percent, weighing on other airlines stocks after the third-largest U.S. carrier’s profit fell due to flight cancellations during the hurricane season. American Airlines <AAL.O> fell 1 percent.

Shares of eBay <EBAY.O> were down 1.8 percent a day after it reported results.

Advancing issues outnumbered declining ones on the NYSE by a 1.04-to-1 ratio; on Nasdaq, a 1.33-to-1 ratio favored decliners.

About 5.8 billion shares changed hands on U.S. exchanges. That compares with the 5.9 billion daily average for the past 20 trading days, according to Thomson Reuters data.

(Reporting by Caroline Valetkevitch in New York; Editing by Nick Zieminski and James Dalgleish)

California Dept of Insurance estimates wildfires losses at $1.05 billion

California Dept of Insurance estimates wildfires losses at $1.05 billion

By Suzanne Barlyn and Sangameswaran S

(Reuters) – The California Department of Insurance said on Thursday its preliminary estimate for insured wildfire losses was $1.05 billion, based on claims received by the state’s eight largest insurers, adding that it expected the numbers to rise.

Insurers have received 601 claims for commercial property losses, 4,177 claims for partial residential losses and 3,000 claims for auto losses, said California Insurance Commissioner Dave Jones during a media call.

Since erupting on Oct. 8 and 9, the blazes in parts of Northern California have blackened more than 245,000 acres, (86,200 hectares) and destroyed an estimated 6,900 structures as of Thursday, including homes, wineries and other commercial buildings.

More than 15,000 people remain displaced, the California Department of Forestry and Fire Protection, said on Thursday.

A fire that started Monday in the Santa Cruz Mountains now threatens 300 homes, Jones said.

Residents of Northern California’s wine country left homeless by the state’s deadliest-ever wildfires could be temporarily housed in federal government trailers, officials said on Wednesday, as the death toll from the blazes rose to 42.

Moody’s Investor Service estimated insured losses at $4.6 billion on Monday, based on an earlier figure of 5,700 destroyed structures, according to a report.

Insurer Travelers Cos Inc <TRV.N>, which announced its third quarter results on Thursday, also warned investors of large claims likely this quarter from the wildfires.

The company paused a share repurchase plan in September to conserve cash as it reviewed claims from Hurricanes Harvey and Irma, which made landfall in September and October, and it is still evaluating that position in the light of wildfire claims, said Travelers Chief Executive Alan Schnitzer on a conference call with analysts.

State Farm is California’s largest homeowners insurer and sixth-largest commercial fire insurer, according to a Moody’s analysis.

The insurer, as of Thursday, received 3,220 homeowners insurance claims and 1,110 auto insurance claims, mostly from damage sustained in Napa and Sonoma Counties, a spokesman said.

Other large insurers in California include Farmers Insurance, CSAA Insurance Group, Travelers and Allstate Corp <ALL.N> and Chubb Ltd. <CB.N>.

(Reporting by Sangameswaran S in Bengaluru and Suzanne Barlyn in New York; Editing by Shounak Dasgupta and David Gregorio)

U.S. jobless claims hit more than 44-year low

U.S. jobless claims hit more than 44-year low

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits dropped to its lowest level in more than 44 years last week, pointing to a rebound in job growth after a hurricane-related decline in employment in September.

The labor market outlook was also bolstered by another report on Thursday showing a measure of factory employment in the mid-Atlantic region rising to a record high in October. The signs of labor market strength could cement expectations that the Federal Reserve will raise interest rates in December.

Initial claims for state unemployment benefits fell 22,000 to a seasonally adjusted 222,000 for the week ended Oct. 14, the lowest level since March 1973, the Labor Department said.

But the decrease in claims, which was the largest since April, was probably exaggerated by the Columbus Day holiday on Monday.

Claims are declining as the effects of Hurricanes Harvey and Irma wash out of the data. The hurricanes, which lashed Texas and Florida, boosted claims to 298,000 in early September.

A Labor Department official said claims for the Virgin Islands and Puerto Rico continued to be impacted by Irma and Hurricane Maria, which destroyed infrastructure. As a result the Labor Department continued to estimate claims for the islands.

Nonfarm payrolls dropped by 33,000 jobs in September as Hurricanes Irma and Harvey left more than 100,000 restaurant workers temporarily unemployed. The Virgin Islands and Puerto Rico are not included in nonfarm payrolls.

Economists had forecast claims falling to 240,000 in the latest week. The dollar pared losses against a basket of currencies after the data, while prices for U.S. Treasuries were unchanged.

LABOR MARKET TIGHTENING

Last week marked the 137th consecutive week that claims remained below the 300,000 threshold, which is associated with a strong labor market.

That is the longest such stretch since 1970, when the labor market was smaller. The labor market is near full employment, with the jobless rate at a more than 16-1/2-year low of 4.2 percent.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 9,500 to 248,250 last week.

The claims data covered the survey week for October nonfarm payrolls. The four-week average of claims fell 20,500 between the September and October survey periods, supporting views of a rebound in job growth this month.

In a separate report on Thursday, the Philadelphia Fed said its measure of factory employment in the mid-Atlantic region soared 24 points to a record high reading of 30.6 in October.

The average workweek index also increased 8 points to a reading of 19.4. It said no firms reported decreases in employment this month. The robust labor market readings helped to lift the Philadelphia Fed’s current manufacturing activity index four points to a five-month high of 27.9 in October, offsetting declines in new orders and shipments measures.

The claims report also showed the number of people still receiving benefits after an initial week of aid decreased 16,000 to 1.89 million in the week ended Oct. 7, the lowest level since December 1973.

The so-called continuing claims have now been below the 2 million mark for 27 straight weeks, pointing to diminishing labor market slack. The four-week moving average of

continuing claims dropped 22,750 to 1.91 million, the lowest level since January 1974. That was the 25th consecutive week that this measure remained below the 2 million market.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Canada’s oil sands survive, but can’t thrive in a $50 oil world

FILE PHOTO - Giant dump trucks dump raw tar sands for processing at the Suncor tar sands mining operations near Fort McMurray, Alberta, Canada on September 17, 2014. REUTERS/Todd Korol/File Photo

By Nia Williams

CALGARY, Alberta (Reuters) – Canada’s oil sands producers are stuck in a rut.

The nation’s oil firms are retrenching, with large producers planning little or no further expansion and some smaller projects struggling even to cover their operating costs.

As the era of large new projects comes to a close, many mid-sized producers – those with fewer assets and producing less than 100,000 barrels of oil a day in the oil sands – have shelved expansion plans, unable to earn back the high start-up costs with crude at around $50 per barrel. Larger Canadian producers, meanwhile, focus on projects that in the past were associated with smaller names.

The last three years have seen dozens of new projects mothballed and expansions put on hold, meaning millions of barrels of crude from the world’s third-largest reserves may never be extracted.

Where industry groups in 2014 expected Canada’s oil sands output to more than double to nearly 5 million barrels per day (bpd) by 2030, that forecast has been knocked down to 3.7 million bpd.

This follows a spell of consolidation that has seen foreign majors sell off more than $23 billion in Canadian assets in a year and turn to U.S. shale patches such as the Permian basin in Texas, which produce returns more quickly and where proximity to refiners means the barrels fetch a better price.

“We cannot compete with that huge sucking noise to the south that is called the Permian. Investment dollars are spiraling away down there,” Derek Evans, chief executive of small oil sands producer Pengrowth Energy <PGF.TO> told Reuters in an interview.

Permian production rose 21 percent in 12 months through July compared to a 9 percent increase in Alberta’s oil sands, according to Canadian and U.S. government data.

COSTLY STARTUP PHASE

Mid-sized producers are hurting the most, due to start-up costs that far exceed those in other major producing areas. Oil sands producers have slashed operating costs by a third since 2014, but building a new thermal project – in which steam is pumped as deep as one kilometer (1094 yards)underground to liquefy tar-like bitumen and bring it to the surface – requires U.S. crude benchmark at around $60 a barrel to break even, analysts estimate.

The North American benchmark West Texas Intermediate crude <CLc1> has traded between $42 and $55 a barrel so far this year. The U.S. Energy Information Administration forecasts it will average $49.69 a barrel in 2017 and $50.57 a barrel next year.

There are around half a dozen thermal projects in the costly start-up phase, when engineers steadily increase steam pressure to bring a reservoir’s production up to full capacity.

One of those is Athabasca Oil Corp’s <ATH.TO> Hangingstone project. It was originally conceived as a 80,000 bpd project, but instead will bring output to only 12,000 bpd from the current 9,000 bpd. The project can break even with U.S. crude prices of at least $53 a barrel, meaning right now Athabasca keeps losing money on Hangingstone production. Size is crucial in the oil sands; the more bitumen a company can squeeze out of a plant, the lower fixed costs per barrel will be.

“(Athabasca) was a company built when oil was $100 a barrel. In those days we were going to find funding for joint ventures and build greenfield projects to a massive size. The reality is the world changed,” chief executive Rob Broen told Reuters.

Quarterly filings show why smaller players are struggling. Transportation and marketing costs at Hangingstone, along with the cost of natural gas used to produce steam to extract oil, and other operating costs are much higher compared with Cenovus Energy’s <CVE.TO> Christina Lake project, one of the highest-quality and biggest bitumen reservoirs in the oil sands.

Pengrowth’s development plans are on hold as well, Evans said, because the company needs U.S. crude to stay at $55 for a sustained period to justify investment in its 14,000 bpd Lindbergh thermal project, at one point intended to grow as large as 40,000 bpd.

THE BIG GO SMALL

Large producers have pulled back in response to lower global prices as well. For example, Suncor Energy’s <SU.TO> 194,000 bpd Fort Hills mine, due to start producing oil by the end of this year, is the company’s last megaproject.

Canadian Natural <CNQ.TO> restarted construction on its 40,000 bpd Kirby North project last November, one of a handful of smaller projects to start producing in 2019.

Other companies like MEG Energy <MEG.TO> are planning expansions at existing sites in 20,000 bpd “modules” rather than starting large new projects from scratch. But even such more modest investments are out of reach for smaller companies like Athabasca and Pengrowth.

“It’s very hard (for a small company) to drag itself out of the financing black hole it would have to get in to build a project to start with,” said Nick Lupick, an analyst at AltaCorp Capital. “A large company can take that on their balance sheet without having to leverage too highly.”

(Reporting by Nia Williams; Editing by David Gaffen and Tomasz Janowski)

Dow tops 23,000-mark for the first time on strong earnings

Dow tops 23,000-mark for the first time on strong earnings

By Sruthi Shankar

(Reuters) – The Dow Jones Industrial Average breached the 23,000-mark for the first time on Tuesday, powered by strong earnings from UnitedHealth and Johnson & Johnson.

The blue-chip index has surpassed four similar 1,000-point milestones this year, indicating investor faith in the bull-run despite lofty stock valuations.

The broader market, however, was weighed down by losses in industrial, financial and technology stocks.

Shares of the largest U.S. health insurer <UNH.N> touched a life high, rising as much as 5.83 percent, after the company reported a stronger-than-expected profit and raised its full-year earnings forecast.

That, along with a 2.6 percent rise in Johnson & Johnson <JNJ.N>, led a 1 percent gain in the S&P healthcare sector <.SPXHC>.

Goldman Sachs <GS.N> dipped 2.07 percent despite reporting a profit beat and smaller-than-expected trading revenue fall. Morgan Stanley <MS.N> rose 0.92 percent as its wealth management business insulated the bank from weakness in trading revenue.

“There was some good earnings, real good economic data in spite of the hurricanes,” said Peter Cardillo, chief market economist at First Standard Financial in New York.

“We’re not seeing a market that’s galloping along here. The market from a technical perspective is tired. What you’re seeing is some hesitancy but not any major declines.”

Treasury yields and dollar gained after a report that U.S. President Donald Trump was impressed by his meeting with economist John Taylor, who is considered to favor higher interest rates than current Federal Reserve Chair Janet Yellen.

The equity market, however, was not impacted by a report that Trump is likely to announce his choice before going to Asia in early November.

At 12:33 a.m. ET, the S&P 500 <.SPX> was down 1.1 points, or 0.04 percent, at 2,556.54 and the Nasdaq Composite <.IXIC> was down 2.98 points, or 0.05 percent, at 6,621.02.

The Dow Jones Industrial Average <.DJI> was up 19.47 points, or 0.08 percent, at 22,976.43, after briefly hitting the 23,000 mark, when only eight of its 30 components were making gains.

Nine of the 11 major S&P indexes were lower, led by a 0.42 percent drop in industrials <.SPLRCI> index.

General Electric’s <GE.N> 1.15 percent fall led losses in the industrial sector, while drop in shares of Microsoft <MSFT.O> and Intel <INTC.O> weighed on the tech sector.

Netflix <NFLX.O> slipped 1.15 percent after touching a record high as more subscribers signed up for its popular original content in the latest quarter.

(ht Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)

U.S. jobless claims fall to more than one-month low

Pedestrians pass a sign advertising a sale and a job opening at a shop on Newbury Street in Boston, Massachusetts, U.S., October 11, 2017. REUTERS/Brian Snyder

WASHINGTON (Reuters) – The number of Americans filing for unemployment benefits fell to more than a one-month low last week as claims in Texas and Florida continued to decline after being boosted by Hurricanes Harvey and Irma.

Initial claims for state unemployment benefits decreased 15,000 to a seasonally adjusted 243,000 for the week ended Oct. 7, the lowest level since late August, the Labor Department said on Thursday. Data for the prior week was revised to show 2,000 fewer applications received than previously reported.

A Labor Department official said Harvey and Irma along with Hurricane Maria affected claims for Texas, Florida, South Carolina, Puerto Rico and the Virgin Islands. In addition, claims for Virginia were estimated.

Economists polled by Reuters had forecast claims falling to 251,000 in the latest week. Claims have been declining since surging to an almost three-year high of 298,000 at the start of September as workers displaced by the hurricanes were left temporarily unemployed.

As a result of Harvey and Irma, nonfarm payrolls dropped by 33,000 jobs last month, the first decrease in employment in seven years. A rebound in job growth is expected in October, boosted by the return of the dislocated workers as well as the start of rebuilding and clean-up efforts in storm-ravaged areas.

Underscoring the labor market’s underlying strength, claims have now been below the 300,000 threshold, which is associated with a robust labor market, for 136 straight weeks. That is the longest such stretch since 1970, when the labor market was smaller.

The labor market is near full employment, with the jobless rate at more than a 16-1/2-year low of 4.2 percent.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 9,500 to 257,500 last week.

The claims report also showed the number of people still receiving benefits after an initial week of aid dropped 32,000 to 1.89 million in the week ended Sept. 30, the lowest level since December 1973.

The so-called unadjusted continuing claims for Texas and Florida fell, suggesting some of the workers affected by Harvey and Irma had returned to their jobs. The unemployment rate among people receiving jobless benefits fell one-tenth of a percentage point to 1.3 percent.

Overall continuing claims have now been below the 2 million mark for 26 straight weeks, indicating that labor market slack continues to diminish. The four-week moving average of continuing claims fell 11,500 to 1.93 million, remaining below the 2 million level for the 24th consecutive week.

(Reporting by Lucia Mutikani; Editing by Paul Simao)

EU lawmakers give tentative nod to Brexit clearing law that could clobber Britain

European Commission President Jean-Claude Juncker addresses the European Parliament during a debate on The State of the European Union in Strasbourg, France, September 13, 2017. REUTERS/Christian Hartmann

By Huw Jones

LONDON (Reuters) – European Union lawmakers on Tuesday gave broad support to a law that could end the City of London’s global dominance in clearing euro-denominated financial contracts after Brexit.

The plan has raised hackles in Britain, where it threatens both job losses and tax revenues.

The draft EU law proposes that a foreign clearing house — which stands between two sides of a transaction to ensure its smooth completion — must be subject to more intense supervision by the bloc’s regulators if it wants to serve customers in the EU.

But if a clearing house is systemically important to the euro zone, then euro-denominated business with EU based customers must move to the bloc.

The draft law is anathema to Britain, which voted to leave the EU in a referendum last year.

It is home to LCH, an arm of the London Stock Exchange that clears most euro-denominated swaps in Europe. Financial services represent Britain’s biggest tax earning sector and the LSE has warned that thousands of jobs could leave the UK if euro clearing was forced out.

In the first debate in the European Parliament on Tuesday, lawmakers from the two biggest parties, the center right European People’s Party and the center-left Progressive Alliance of Socialists and Democrats, gave broad backing to the draft law, but called for some changes.

“It’s a good proposal from the European Commission,” Polish center-right MEP Danuta Huebner told parliament’s economic affairs committee.

“In principle, I support the proposal, which I find necessary,” added Roberto Gualtieri, an Italian center-left lawmaker who chairs the committee.

The European Parliament and EU states have final say on the reform, with changes expected during the approval process.

No timetable has been agreed for approving the law and, separately, there has been scant agreement on any new relationship between the EU and Britain.

That means LCH’s European customers don’t know at the moment if they can continue using the London clearer after Brexit.

Exploit this uncertainty, Frankfurt-based Eurex unveiled a “Brexit-proof” package of sweeteners on Monday to woo LCH customers.

BREXIT PROTECTIONISM

Huebner said parts of the draft law were too complex, creating uncertainty over how exactly EU regulators and the European Central Bank would decide when euro clearing conducted outside the bloc must move to the EU.

“We have to do everything to avoid potential inconsistency in decision-making,” Huebner said. “We must not politicize the whole process.”

Gualtieri said there was a need to “upgrade” EU supervision of clearing, but lawmakers should be “very cautious, reflective and in a listening mood” given the potential consequences.

Others said there was need to avoid protectionism or using clearing as a stick to beat Britain given that the UK was already “fighting with itself”.

Kay Swinburne, a British center-right lawmaker, a lone voice in outright opposition, said a regional restriction on a global currency is the wrong approach.

“There is a reason why we have done so much work at the global level, and I really hope that we are not going to throw all of that away to have some protectionism with regards to a Brexit decision,” Swinburne added.

Banks and the LSE have warned that forcing out some clearing would split markets and bump up costs for EU companies who use swaps to insure against adverse moves in borrowing costs, raw material prices, and currency swings.

(Reporting by Huw Jones Editing by Jeremy Gaunt)

Venezuela’s January-September inflation 536 percent: National Assembly

People buy food and other staple goods inside a supermarket in Caracas, Venezuela, July 25, 2017. REUTERS/Ueslei Marcelino

CARACAS (Reuters) – Inflation in Venezuela’s crisis-hit economy was 536.2 percent in the nine months to September, largely due to the rapid depreciation of the local currency on the black market, the opposition-controlled National Assembly said on Friday.

The government stopped releasing price data more than a year ago, but congress has published its own figures since January and they have been close to private economists’ estimates.

As well as the alarming Jan-Sept cumulative rise, the legislative body – which has been sidelined by President Nicolas Maduro’s government – put monthly inflation at 36.3 percent for September, compared with 34 percent in August.

Opponents say Maduro and his predecessor, Hugo Chavez, have wrecked a once-prosperous economy with 18 years of state-led socialist policies from nationalizations to currency controls.

The government says it is victim of an “economic war”, including speculation and hoarding, by pro-opposition businessmen.

The country’s bolivar currency has weakened sharply in recent weeks on the widely-watched black market rate.

On Friday, $1 was worth nearly 27,000 bolivars on the black market, versus 22 when Maduro took power in April 2013 and 18,500 at the start of September this year.

Opposition lawmaker and economist Angel Alvarado said the government’s restriction of dollars available via official currency exchange mechanisms had pressured prices in September.

“The government strategy is only making Venezuelans poorer by the day,” he said, adding that families were now spending 80 percent of income on food.

Prices in Venezuela, which has long had one of the highest inflation rates in the world, rose 180.9 percent in 2015 and 274 percent in 2016, according to official figures, although many economists believe the real data was worse.

(Reporting by Caracas newsroom; Editing by Jonathan Oatis)