Tag Archives: Economy

Brazil annual inflation in April likely hit lowest in nearly 10 years

FILE PHOTO: A woman looks on prices at a food market in Rio de Janeiro, Brazil, January 21, 2016. REUTERS/Pilar Olivares/File Photo

By Silvio Cascione

BRASILIA (Reuters) – Brazil’s annual inflation rate in April likely eased to its lowest level in nearly 10 years, which could help prod the central bank to make another steep interest rate cut this month, a Reuters poll showed on Monday.

The IPCA benchmark consumer price index was seen rising 4.10 percent in the 12 months through the end of April compared with a 4.41 percent increase in the year to the middle of the month, according to the median estimate of 26 economists surveyed. The data is due to be released on Wednesday.

Brazilian annual inflation has tumbled from a 12-year peak of 10.7 percent in January 2016 amid slack consumer demand stemming from a severe recession and the highest unemployment on record.

President Michel Temer has hailed the drop in inflation as evidence that his austerity agenda was putting Latin America’s largest economy on a solid footing for recovery.

As inflationary pressures have eased, the central bank has steadily cut its benchmark interest rate from 14.25 percent in October.

Last month, it slashed it by 100 basis points, taking it to 11.25 percent. It was the deepest cut to the rate in nearly eight years.

“The (inflation) numbers should strengthen the case for another 100 basis point cut this month,” said Leonardo Costa, an economist with the São Paulo-based consultancy Rosenberg & Associados.

On Monday, a central bank survey of economists forecast a central bank interest rate of 8.5 percent and 4 percent annual inflation by December.

In the month of April, consumer prices were expected to have increased 0.16 percent from March, slowing from a 0.25 percent rise in the previous month, according to the median of 28 forecasts in the Reuters poll.

Forecasts for the monthly inflation rate ranged between 0.12 percent and 0.27 percent, while estimates for the 12-month rate varied between 4.07 percent and 4.22 percent.

Housing and transportation prices probably fell in April, while education costs slowed their increase, according to economists in the Reuters poll.

A one-off cut in electricity rates also likely contributed to last month’s anticipated inflation slowdown, as the government reversed a tariff surcharge related to the Angra 3 nuclear power plant, economists said. The central bank, however, said last month that this drop, however sizable, should not have relevant implications for monetary policy.

(Reporting by Silvio Cascione Editing by W Simon)

U.S. inflation expectations edge up: NY Fed

A shopper walks by the sodas aisle at a grocery store in Los Angeles

NEW YORK (Reuters) – Measures of U.S. inflation rebounded slightly last month, according to a Federal Reserve Bank of New York survey released on Monday that also showed a sharp drop in Americans’ spending expectations.

The survey of consumer expectations, one of several gauges of prices for the U.S. central bank, showed median inflation expectations for one year ahead edged up to 2.8 percent in April, from 2.7 percent in March. The three-year measure was 2.9 percent, compared to 2.7 percent a month earlier.

The bump, which the New York Fed said was driven by those with lower income and education, keeps the price measures roughly in a range since late last year.

The central bank has raised interest rates twice since December in large part on expectations that inflation will keep edging higher.

The survey also showed median household spending growth expectations dropped to 2.6 percent last month, from 3.3 percent in March. It was the lowest level since the New York Fed began measuring in mid-2013.

The internet-based survey is done by a third party and taps a rotating panel of 1,200 household heads.

(Reporting by Jonathan Spicer; Editing by Chizu Nomiyama)

Oil spill leaves commodities spinning, safe-havens shine

Investors look at an electronic board showing stock information at a brokerage house in Shanghai, China, March 7, 2016. REUTERS/Aly Song/File Photo

By Marc Jones

LONDON (Reuters) – A slump in oil prices to the lowest in almost six months rattled markets on Friday, prompting a rally in safe-haven bonds, the yen and gold and taking the shine off a record-breaking week for world stocks.

Bourses flinched in both Asia and Europe and Wall Street also looked set for a subdued start as investors, who had been expecting to spend the day mostly looking ahead to U.S. jobs data and Sunday’s French elections, were caught off guard.

Traders had had to duck for cover overnight as both Brent <LCOc1> and U.S. <CLc1> crude fell more than 3 percent amid record trading volumes on mounting concerns about global oversupply.

Things only fully stabilized when Saudi Arabia’s OPEC chief hit the wires in European hours, saying there was a growing consensus among oil pumping countries that they needed to continue to “rebalance” the market.

Brent clawed back to $46.86 a barrel almost two dollars better off than its overnight low, but the scars left it an eye-watering 6 percent lower than at the start of the week.

“The whole commodity complex has been affected by this and it could have some pretty big implications if it continues for much longer,” said Saxo bank’s head of FX strategy John Hardy.

“If you look at global risk appetite, equities have been pretty quiet and that feeds into FX as well if carries on and there is a risk switch.”

Big commodity price drops do not just have an immediate impact on financial markets either.

As was seen during a slump between 2014 and 2016, they cause major headaches for countries that rely on their revenues. They also unleash deflationary forces, but can help energy-importing economies, firms and households by lowering their energy bills.

Oil has not been the only commodity that has suffered this week. Chinese iron ore futures <DCIOcv1> fell almost 7 percent in Shanghai overnight after tumbling 8 percent on Thursday.

Mining giant Rio Tinto <RIO.L> hit a six-month low, Glencore <GLEN.L> was set for its worst weekly loss in two months and copper miner Antofagasta <ANTO.L> since December.

The Canadian dollar <CAD=>, the Australian dollar <AUD=> and Russia’s rouble <RUB=> – some of the world’s most commodity- sensitive currencies – were all sent spinning, falling respectively to 14-month, four-month and seven-week lows.

They all fought back, though, after the Saudi OPEC governor’s comments to Reuters that: “A six-month extension (to production cuts) may be needed to rebalance the market, but the length of the extension is not firm yet.”

Rio Tinto <RIO.L> hit a six-month low on Friday, and Glencore <GLEN.L> was set for its worst weekly losses in two months, while for copper miner Antofagasta <ANTO.L> since December

LE PEN TO THE SWORD?

In calmer waters, the euro <EUR=> touched a six-month high of almost $1.10 ahead of France’s weekend election, in which polls now expect centrist Emmanuel Macron to convincingly beat right-wing and anti-euro rival Marine Le Pen.

The gap between French and German 10-year government borrowing costs also hit a six-month low and despite the dip on the day, European shares <.STOXX> were heading for a healthy 1.2 percent rise for the week. World shares <.MIWD00000PUS> hit a record high on Wednesday.

“I think now this election is no longer an issue and the market is already starting to focus on new issues: inflation, the (euro zone) economy, and the U.S. data,” said DZ Bank strategist Daniel Lenz.

He was referring to U.S. non-farm payroll numbers due out at 1230 GMT (8:30 a.m. EDT) are expected to show 185,000 jobs were created in April following March’s underwhelming 98,000 figure.

The dollar <.DXY> and U.S. government bond yields <US10YT=RR> had both been nudged lower by the commodity market worries. It is set to be the fourth weekly fall on the trot for the greenback which is now at its lowest since November.

The yen <JPY=> and gold <XAU=> rose in tandem as investors took refuge in safe havens, though the latter remained on track for its biggest weekly decline in nearly six months on bets that U.S. interest rates will rise again in the coming months.

“I think the payrolls will be under consensus,” said fund manager Hermes chief economist Neil Williams.

“It fits with my view that the U.S. is going to peak out at a far lower interest rate than markets expect. The Fed’s dot plots says 3 percent, but I’m going closer to 1.5 percent.”

Emerging markets were also caught in the commodities sell-off. The main emerging currencies were all on track for weekly losses and MSCI’s closely-followed EM stocks index <.MSCIEF> hit a 10-day low.

China markets have also been wobbling in recent weeks but the commodity market woes have been the central focus.

Brent traded volumes on Thursday reached an all-time high of nearly 542,000 contracts, suggesting that big betting hedge funds may have been ripping out long positions.

“It is now-or-never for oil bulls,” said U.S. commodity analysis firm The Schork Report. “They either put up a defence here or risk further emboldening the bears for a run at the $40 threshold (for WTI).”

(Addition Reporting by Abhinav Ramnarayan, Veronica Brown and Helen Reid in London; Editing by Hugh Lawson and Ed Osmond)

U.S. job growth rebounds sharply, unemployment rate hits 4.4 percent

A job seeker fills out an application at the King Soopers grocery store table at a job fair at the Denver Workforce Center in Denver, Colorado, U.S. February 15, 2017. REUTERS/Rick Wilking

By Lucia Mutikani

WASHINGTON – U.S. job growth rebounded sharply in April and the unemployment rate dropped to a near 17-year low of 4.4 percent, signs of a tightening labor market that could seal the case for an interest rate increase next month despite moderate wage growth.

Nonfarm payrolls jumped by 211,000 jobs last month, the Labor Department said on Friday, well above the monthly average of 185,000 for this year and a jump from the gain of 79,000 in March.

Job gains were driven by a surge in hiring in the leisure and hospitality sector as well as business and professional services.

The drop of one-tenth of a percentage point in the unemployment rate took it to its lowest level since May 2007.

The decline reflected both an increase in hiring and people leaving the labor force.

The labor force participation rate, or the share of

working-age Americans who are employed or at least looking for a job, fell to 62.9 percent from an 11-month high of 63 percent.

The rebound in hiring supports the Federal Reserve’s contention that the pedestrian 0.7 percent annualized economic growth pace in the first quarter was likely “transitory,” and its optimism that economic activity would expand at a “moderate”

pace.

The Fed on Wednesday kept its benchmark overnight interest rate unchanged and said it expected labor market conditions would “strengthen somewhat further.”

The U.S. central bank raised its overnight interest rate by a quarter of a percentage point in March and has forecast two more increases this year.

Average hourly earnings rose seven cents, or 0.3 percent, last month, partly because of a calendar quirk. While that lowered the year-on-year increase to 2.5 percent, the lowest since August 2016, there are signs that wage growth is accelerating as labor market slack diminishes.

A government report last week showed private sector wages recorded their biggest gain in 10 years in the first quarter.

NEAR FULL EMPLOYMENT

The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population. Job growth averaged 178,000 per month in the first quarter.

With the labor market expected to hit a level consistent with full employment this year, payroll gains could slow amid growing anecdotal evidence that firms are struggling to find qualified workers.

Construction payrolls rose 5,000 last month and manufacturing employment advanced by 6,000 jobs. Leisure and hospitality payrolls jumped by 55,000 in April. Professional and business services payrolls rose by 39,000.

Retail payrolls gained 6,300 after two straight months of declines. Retailers including J.C. Penney Co Inc <JCP.N>, Macy’s Inc <M.N> and Abercrombie & Fitch <ANF.N> have announced thousands of layoffs as they shift toward online sales and scale back on brick-and-mortar operations.

Government payrolls jumped 17,000 last month.

Other labor market measures also showed strength last month.

A broad measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, dropped to 8.6 percent from 8.9 percent in March.

The employment-to-population ratio rose one-tenth of percentage point to a fresh eight-year high of 60.2 percent.

((Reporting by Lucia Mutikani; Editing by Paul Simao))

Mexico, Canada seek U.S. soft spots to bolster NAFTA defense

FILE PHOTO: Canada's Prime Minister Justin Trudeau (R) and Mexico's President Enrique Pena Nieto arrive at a news conference on Parliament Hill in Ottawa, Ontario, Canada on June 28, 2016. REUTERS/Chris Wattie/File Photo

By Dave Graham and David Ljunggren

MEXICO CITY/OTTAWA (Reuters) – From launching a data-mining drive aiming to find supply-chain pressure points to sending officials to mobilize allies in key U.S. states, Mexico and Canada are bolstering their defenses of a regional trade pact President Donald Trump vows to rewrite.

Trump has blamed the North American Free Trade Agreement (NAFTA) for the loss of millions of manufacturing jobs and has threatened to tear it up if he fails to get a better deal.

Fearing the massive disruptions a U.S. pullout could cause, the United States’ neighbors and two biggest export markets have focused on sectors most exposed to a breakdown in free trade and with the political clout to influence Washington.

That encompasses many of the states that swept Trump to power in November and senior politicians such as Vice President Mike Pence, a former Indiana governor or Wisconsin representative and House Speaker Paul Ryan.

Prominent CEOs on Trump’s business councils are also key targets, according to people familiar with the lobbying push.

Mexico, for example, has picked out the governors of Texas, Arizona and Indiana as potential allies.

Decision makers in Michigan, North Carolina, Minnesota, Illinois, Tennessee, Wisconsin, Ohio, Florida, Pennsylvania, Nebraska, California and New Mexico are also on Mexico’s priority list, according to people involved in talks.

Mexican and U.S. officials and executives have had “hundreds” of meetings since Trump took office, said Moises Kalach, foreign trade chief of the Mexican private sector team leading the defense of NAFTA. (Graphic:http://tmsnrt.rs/2oYClp2)

Canada has drawn up a list of 11 U.S. states, largely overlapping with Mexico’s targets, that stand to lose the most if the trade pact enacted in 1994 unravels.

To identify potential allies among U.S. companies and industries, Mexican business lobby Consejo Coordinador Empresarial (CCE) recruited IQOM, a consultancy led by former NAFTA negotiators Herminio Blanco and Jaime Zabludovsky.

In one case, the analysis found that in Indiana, one type of engine made up about a fifth of the state’s $5 billion exports to Mexico. Kalach’s team identified one local supplier of the product and put it touch with its main Mexican client.

“We said: talk to the governor, talk to the members of congress, talk to your ex-governor, Vice President Pence, and explain that if this goes wrong, the company is done,” Kalach said. He declined to reveal the name of the company and Reuters could not immediately verify its identity.

Trump rattled the two nations last week when his administration said he was considering an executive order to withdraw from the trade pact, which has been in force since 1994. He later said he would try to renegotiate the deal first and Kalach said the lobbying effort deserved much credit for Trump’s u-turn.

“There was huge mobilization,” he said. “I can tell you the phone did not stop ringing in (Commerce Secretary Wilbur) Ross’s office. It did not stop ringing in (National Economic Council Director) Gary Cohn’s office, in the office of (White House Chief of Staff Reince) Priebus. The visits to the White House from pro-NAFTA allies did not stop all afternoon.”

Among those calling the White House and other senior administration officials were U.S. Chamber of Commerce chief Tom Donohue, officials from the Business Roundtable and CEOs from both lobbies, according to people familiar with the discussions.

PRIME TARGET

Mexico has been the prime target of NAFTA critics, who blame it for lost manufacturing jobs and widening U.S. trade deficits. Canada had managed to keep a lower profile, concentrating on seeking U.S. allies in case of an open conflict.

That changed in late April when the Trump administration attacked Ottawa over support for dairy farmers and slapped preliminary duties on softwood lumber imports.

Despite an apparently weaker position – Canada and Mexico jointly absorb about a third of U.S. exports, but rely on U.S. demand for three quarters of their own – the two have managed to even up the odds in the past by exploiting certain weak spots.

When Washington clashed with Ottawa in 2013 over meat-labeling rules, Canada retaliated by targeting exports from the states of key U.S. legislators. A similar policy is again under consideration.

Mexico is taking a leaf out of a 2011 trucking dispute to identify U.S. interests that are most exposed, such as $2.3 billion of yellow corn exports.

Mexico is also targeting members of Trump advisory bodies, the Strategic and Policy Forum and the Manufacturing Council, led by Blackstone Group LP’s Stephen Schwarzman and Dow Chemical Co boss Andrew Liveris respectively.

Senior Trump administration officials and Republican lawmakers in charge of trade, agriculture and finance committees also feature among top lobbying targets.

Canada has spread the task of lobbying the United States among ministries, official say, and is particularly keen to avoid disruption to the highly-integrated auto industry.

A core component of Mexico’s strategy is to argue the three nations have a common interest in fending off Asian competition and exploring scope to source more content regionally.

The defenders of NAFTA also say that it supports millions of jobs in the United States, and point out that U.S. trade shortfalls with Canada and Mexico have declined over the past decade even as the deficit with China continued to climb.

Part of IQOM’s mission is to identify sectors where NAFTA rules of origin could be modified to increase regional content.

For example, U.S., Canadian and Mexican officials are debating how the NAFTA region can reduce auto parts imports from China, Japan, South Korea or Germany, Mexican officials say.

“The key thing is to see how we can get a win-win on the products most used in our countries, and to develop common manufacturing platforms that allow us just to buy between ourselves the biggest amount of inputs we need,” said Luis Aguirre, vice-president of Mexican industry group Concamin.

Graphic: Trade battles – http://tmsnrt.rs/2pAdPcp

(Additional reporting by Michael O’Boyle Alexandra Alper, Ana Isabel Martinez, Ginger Gibson and Adriana Barrera; Editing by Tomasz Janowski)

U.S. coaxes Mexico into Trump plan to overhaul Central America

A member of the military police keeps watch during a routine foot patrol at El Pedregal neighbourhood Tegucigalpa, Honduras, May 3, 2017. REUTERS/Jorge Cabrera

By Gabriel Stargardter

MEXICO CITY (Reuters) – The United States is plotting an ambitious attempt to shore up Central America, with the administration of President Donald Trump pressing Mexico to do more to stem the flow of migrants fleeing violence and poverty in the region, U.S. and Mexican officials say.

The U.S. vision is being shaped by Department of Homeland Security (DHS) Secretary John Kelly, who is due to give a speech about his goals for Central America in Washington on Thursday.

Kelly, who knows Honduras, Guatemala and El Salvador well from his time as chief of the U.S. Southern Command, helped the administration of former President Barack Obama design his Alliance for Prosperity. That $750-million initiative sought to curtail Central American migration through development projects as well as law-and-order funding to crack down on the region’s dominant gangs.

Kelly aims to re-tool the Obama-era alliance without a large increase in American funding by pressing Mexico to shoulder more responsibility for governance and security in Central America, and by drumming up fresh private investment for the region, U.S. and Mexican diplomats say.

“What we’re going to see is … greater engagement directly between the Central Americans and Mexican government … (and) a more intense effort to integrate the economic side of this effort with the security side,” William Brownfield, the U.S. assistant secretary for International Narcotics and Law Enforcement Affairs, told Reuters.

“We’re going to see a strategy that has already been developed, but it is going to be pushed harder and more aggressively in the coming year, and the year after.”

The reshaped alliance stands in contrast to some of the isolationist views jostling for power in the White House. Still it’s consistent with Trump’s foreign policy efforts to pressure China to do more to tackle the North Korea nuclear threat and to get European allies to pick up more of the tab for NATO.

The plan also puts Mexico in a delicate spot. President Enrique Pena Nieto has repeatedly expressed his desire to preserve the North American Free Trade Agreement (NAFTA), which has become a pillar of Mexico’s economy.

But he must avoid the appearance of capitulating to Trump, who has enraged the Mexican public with his threats to withdraw from NAFTA and force Mexico to pay for his proposed border wall.

“We want to be on good terms with them, because we’re dealing with a much more important issue,” said a senior Mexican diplomat who was not authorized to speak publicly. “In return, we want a beneficial NAFTA renegotiation.”

Neither Kelly nor the DHS responded to requests for comment.

“The prosperity and security of Central America … represent a priority of Mexico’s foreign policy,” the country’s foreign ministry said in a statement.

“The Alliance for Prosperity … is a valuable tool that can be strengthened with the participation of other governments.”

A MAN WITH A PLAN

The new-look Alliance will be firmed up in Miami next month, when U.S., Mexican and Central American officials will meet to negotiate various issues, including Mexico’s role, according to a draft U.S. schedule obtained by Reuters.

Mexico’s Foreign Minister Luis Videgaray has said publicly Mexico is willing to work with the United States in stabilizing Central America, without giving much detail.

In private, though, local officials say cash-strapped Mexico lacks the money to invest significantly in the region – a fact that hasn’t eluded the United States.

“We do not have significant expectations of major … financial contributions by the government of Mexico at this time,” Brownfield said.

However, he said it was reasonable to expect Mexico to help train Central American officials, and deepen coordination along its southern border. Mexican government agencies could also work more closely with their southern counterparts, he added, citing the example of Colombia, which is training Central America’s police forces at the United States’ behest.

Brownfield said the re-designed plan would be executed by the State Department and development agency U.S. AID, working closely with the DHS. The Inter-American Development Bank (IADB) is working with U.S. AID to design mechanisms for luring fresh investment, he added.

IADB President Luis Alberto Moreno told Reuters the Miami meeting, coordinated with DHS officials, aimed to deliver “an investment shock” to create jobs and prevent migration.

However, the Mexican diplomat who requested anonymity expressed concern the new plan could presage a deeper militarization of Central America. The region’s armies have launched violent attacks on the powerful “Mara Salvatrucha” and “Calle 18” gangs, sparking accusations of rights abuses.

Mexico, which is also grappling with widespread violence, is open to training Central American security forces, the diplomat said, but won’t send troops to fight the gangs given its long-standing policy not to intervene in foreign conflicts.

The “Alliance for Prosperity” was cooked up by the Obama administration after a 2014 surge in child migrants from Central America. It aimed to stabilize Central America with funding for security and development. But critics say the focus skewed heavily toward funding for tackling drug smuggling and gangs.

Brownfield pointed to falling homicides in Honduras, where the murder rate has dropped to 59 killings per 100,000 people last year from 90.4 in 2012, as evidence it is starting to yield results. Still, Central America remains one of the most violent regions on earth.

Mexican diplomats say U.S. and Central American officials for years quietly pressed Mexico to join the alliance – pressure they ignored until Trump was elected, threatening to scrap NAFTA.

“Now we’re facing a different scenario because we have an American government pressuring us on lots of issues,” said the Mexican diplomat. “We want to be on good terms with the United States.”

(Additional reporting by Patricia Zengerle in Washington; Editing by Frank Jack Daniel and Marla Dickerson)

Puerto Rico requests bankruptcy protection for public debt

Puerto Rico's Governor Ricardo Rossello addresses the audience during a meeting of the Financial Oversight and Management Board for Puerto Rico at the Convention Center in San Juan, Puerto Rico March 31, 2017. REUTERS/Alvin Baez

By Nick Brown

(Reuters) – Puerto Rico’s financial oversight board on Wednesday filed for a form of bankruptcy protection under last year’s federal rescue law known as PROMESA, touching off the biggest bankruptcy in the history of the U.S. municipal debt market.

The move comes a day after several major creditors sued the U.S. territory and its Governor Ricardo Rossello over defaults on the island’s $70 billion in bonds.

The request came under Title III of the PROMESA law is an in-court debt restructuring process akin to U.S. bankruptcy protection, as Puerto Rico is barred from traditional bankruptcy because it is a U.S. territory. The case was filed in U.S. District Court in Puerto Rico.

The process will give Puerto Rico the legal ability to impose drastic discounts on creditor recoveries, but could also spook investors and prolong the island’s lack of access to debt markets.

“The governor needed to show that his primary allegiance lies with the citizens of Puerto Rico, and that was the justification for the filing,” said David Tawil, whose fund, Maglan Capital, held Puerto Rico GO debt but has since sold it. “I’m not sure whether bondholders are going to get any better treatment or recovery under this course of action.”

The legal proceeding does not mean negotiations toward a consensual restructuring agreement must stop, the governor said in a statement on Wednesday.

“It is my hope that the Government’s Title III proceedings will accelerate the negotiation process,” the governor said in the statement.

Rossello’s fiscal plan for the island, approved by the oversight board in March, forecasts Puerto Rico having only $800 million a year to pay debt, less than a quarter of what it owes. The low figure alienated creditors, and negotiations toward a restructuring deal have foundered.

In addition to its debt, Puerto Rico is facing a 45 percent poverty rate, a shrinking population and unemployment more than twice the U.S. average.

Puerto Rico and its general obligation bondholders, whose $18 billion of debt is backed by the island’s constitution, were negotiating until the last minute.

GO holders offered to accept cuts of 10 cents on the dollar, Elias Sanchez, Rossello’s liaison to the oversight board, told Reuters on Wednesday.

The government responded with an offer to repay 70 percent of claims through new bonds, and another 20 cents through a “growth” bond, payable only if Puerto Rico surpassed fiscal projections.

The sides could not reach a deal, and GO creditors sued the island on Tuesday.

(Writing by Nick Brown; Additional reporting by Jonathan Stempel; editing by Clive McKeef)

Iranians must give Rouhani second term to make good on nuclear deal: Vice President

FILE PHOTO: Iranian President Hassan Rouhani inspects the honour guard during a welcoming ceremony upon his arrival at Vnukovo International Airport in Moscow, Russia March 27, 2017. REUTERS/Maxim Shemetov/File Photo

By Alissa de Carbonnel

TEHRAN (Reuters) – Iran’s president must get a second term to secure the economic benefits that he promised would result from a diplomatic thaw with the West, Vice President Masoumeh Ebtekar said ahead of a May 19 election.

Hassan Rouhani’s hardline challengers for the presidency, some of whom are close to supreme leader Ayatollah Ali Khamenei, say he traded away too much in a 2015 deal with world powers that limited Iran’s nuclear work but failed to deliver sufficient rewards.

In a rare interview with a trio of foreign reporters at an EU-Iran business forum on Sunday, Ebtekar, one of Iran’s 12 vice presidents, said voters should not give up on Rouhani.

“He needs more time … He has to be given a chance to be able to continue his program,” said Ebtekar, one of Iran’s most prominent women politicians.

“Rouhani has done a lot to overcome some of the hurdles that the investors find when they are coming,” she said in a nod to concerns over red tape and opaque rules voiced by foreign companies that Iran hopes to attract.

As a young woman, Ebtekar was the face of the radical students who occupied the U.S. Embassy and held its staff hostage for 444 days at the time of the 1979 Islamic revolution.

Known as “Mary”, she spoke in calm, fluent English to the world’s media, putting the hostage-takers’ side of the incident that remains a painful memory for the United States and is one of the reasons Washington considers the Islamic Republic a pariah state.

At 56, she is now firmly in the reformist camp, endorsing Rouhani’s vision of a freer society and diplomatic detente after the lifting of sanctions under the deal he engineered.

If hardliners describe the nuclear deal as a limited engagement with the West on a single issue, Ebtekar sees it as the beginning of a new era of international engagement to realize what she says are the hopes of Iran’s younger generation to end its long isolation.

HIGH EXPECTATIONS

“There is a lot being done which is creating a lot of hope and optimism but at the same time the expectations for the nuclear deal are still very high,” said Ebtekar, her smiling face framed by a traditional black chador over a turquoise scarf.

With unilateral U.S. sanctions still in place, Ebtekar said voters understood that it was not Rouhani’s fault that the nuclear deal had yet to improve their daily lives.

“They understand that mostly the problem is coming from outside. Our government has done its share … now it is up to our partners in the deal to do their share as well.

“This opening up will create a better atmosphere, and I hope that they will – particularly countries like the United States – will stand up to their commitments,” Ebtekar said.

Ayatollah Khamenei’s scepticism over Rouhani’s detente policy is echoed by his strongest challenger, Ebrahim Raisi, a hardline cleric seen as a possible future supreme leader, who says Iran has no need of foreign help.

Ebtekar, however, said the election is Rouhani’s to lose, pointing to parliamentary polls in which the conservatives lost ground. The alliance of moderates and reformists that helped carry him to power in 2013, she said, “gives him a very strong position.”

Ebtekar rejected the view of Western and Gulf Arab states that Iran is an aggressor in the Middle East, saying it has peaceful intentions but also had the right to defend itself from foreign threats.

Iran’s backing of Syrian President Bashar al-Assad, the militant Lebanese group Hezbollah and alleged support for Yemen’s Houthi fighters has put it at odds with the United States and regional rival Saudi Arabia.

“We are looking forward to play our role to promote peace and also security in the region,” Ebtekar said.

“But it’s natural for the people living in this region to defend themselves, it’s very natural for Lebanon to defend itself, Syria, the Palestinians. So defense is another issue.”

(Additional reporting Bozorgmehr Sharafedin; Editing by Robin Pomeroy)

U.S. private sector adds 177,000 jobs in April: ADP

A job seeker holds a "We're Hiring" card while talking to a representative from Target at a City of Boston Neighborhood Career Fair on May Day in Boston, Massachusetts, U.S., May 1, 2017. REUTERS/Brian Snyder

(Reuters) – U.S. private employers added 177,000 jobs in April, slightly above economists’ expectations, a report by a payrolls processor showed on Wednesday.

Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 175,000 jobs, with estimates ranging from 140,000 to 236,000.

Private payroll gains in the month earlier were revised down to 255,000 from an originally reported 263,000 increase.

The report is jointly developed with Moody’s Analytics.

The ADP figures come ahead of the U.S. Labor Department’s more comprehensive non-farm payrolls report on Friday, which includes both public and private-sector employment.

Economists polled by Reuters are looking for U.S. private payroll employment to have grown by 185,000 jobs in April, up from 89,000 the month before. Total non-farm employment is expected to have risen by 185,000.

The unemployment rate is forecast to tick up to 4.6 percent from the 4.5 percent recorded a month earlier.

(Reporting by Richard Leong; Editing by Chizu Nomiyama)

Wall St. flat as Fed meet kicks off; Nasdaq hits record

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 1, 2017. REUTERS/Brendan McDermid

By Tanya Agrawal

(Reuters) – Wall Street was little changed on Tuesday, with the Nasdaq Composite edging lower after eking out another record high, as the Federal Reserve’s meeting kicks off.

While the Fed is widely expected to stand pat on interest rates, investors are awaiting the central bank’s statement, due on Wednesday, for clues regarding the future path of rate hikes.

“While no one expects any changes to policy, the 500-word statement will probably provide some direction to the dollar,” said Hussein Sayed, chief market strategist at FXTM.

“‘Will the Fed acknowledge a slowdown in growth and thus send rate hike expectations lower for 2017?’ The Fed’s statement should be answering these questions, and based on that, traders will act.”

Strong corporate earnings for the first quarter have largely outweighed concerns about patches of weak economic data, including a report last week that showed the U.S. economy grew at its slowest pace in three years in the first quarter.

At 9:50 a.m. ET (1350 GMT) the Dow Jones Industrial Average <.DJI> was up 5.59 points, or 0.03 percent, at 20,919.05. The S&P 500 <.SPX> was down 1.45 points, or 0.06 percent, at 2,386.88 and the Nasdaq Composite <.IXIC> was down 6.52 points, or 0.11 percent, at 6,085.09.

Ten of the 11 major S&P 500 sectors were higher, with the industrials index’s <.SPLRCI> 0.34 percent rise leading the advancers.

Investors are bracing for another heavy week of corporate reports to see if quarterly earnings will keep on exceeding expectations.

Overall, profits at S&P 500 companies are estimated to have risen 13.6 percent in the first quarter, the most since 2011, according to Thomson Reuters I/B/E/S.

Shares of Apple <AAPL.O> rose as much as 0.8 percent to $147.69, hitting a record high for the second straight day. The stock was the biggest boost on the S&P and Nasdaq. The iPhone maker is due to report results after the close of market.

Dow component Pfizer <PFE.N> was down 1.2 percent at $33.36 after the drugmaker’s quarterly revenue missed estimates.

MasterCard <MA.N> rose 2.1 percent to $118.73 as the world’s second-largest payments network’s quarterly profit rose.

Advanced Micro Devices <AMD.O> tumbled 16.2 percent to $11.45 after the chipmaker’s second-quarter gross margins forecast raised some concerns.

Coach <COH.N> rose 6.2 percent to $41.12 after the handbag maker reported a higher-than-expected quarterly profit.

Declining issues outnumbered advancers on the NYSE by 1,321 to 1,263. On the Nasdaq, 1,300 issues fell and 1,052 advanced.

The S&P 500 index showed 30 new 52-week highs and four new lows, while the Nasdaq recorded 91 new highs and 19 new lows.

(Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D’Souza)