Norwegian CEO Bjørn Kjos steps down - International Flight Network

A Norwegian Air Shuttle Boeing 737-800. Photo: © Andy Mitchell

Norwegian Air Shuttle founder and CEO Bjørn Kjos will step down effective immediately, the company has announced.

The 72-years old Kjos took over as CEO of the company in 2002 and is responsible for the rapid expansion in previous years. He transformed the 1993-established Norwegian regional carrier into Europe’s third biggest low-cost airline with subsidiaries in Sweden, the UK, Ireland and Argentina.

At the same time, the struggling carrier has announced a Q2 net profit of US$9.2 million and says it will cut several year-round long-haul routes to summer seasonal routes.

Norwegian has accumulated a debt of over US$500 million during the past years and has seen two failed takeover bids from British Airways parent IAG (International Airlines Group).

The airline originally started only with short-haul flights in Norway before Kjos took the role as CEO and transformed Norwegian into a rapidly expanding airline. Long-haul flights were started in early 2013 with flights from Oslo and Stockholm to New York and Bangkok. Norwegian and its various subsidiaries operate a combined fleet of 162 aircraft, most of them being Boeing 737-800 and the currently grounded 737 MAX 8 as well as 36 Boeing 787 Dreamliner aircraft.

Previously, the airline announced that it will close several crew bases to improve its overall operation. The Argentinian subsidiary is also not doing as well as expected and has been given a few more months to improve load factors and revenue, otherwise it would be shut down. 90 ordered Airbus A320neo family aircraft (ordered by Norwegian’s leasing company Arctic Aviation Assets) have also been put up for sale.

Jan-Hendrik is an aviation enthusiast from southern Germany, loves to travel the world and fly on as many aircraft as possible. His first flight was with a Condor 757 to Spain and has been into aviation ever since. He is most interested in aircraft deliveries and passenger experience (PaxEx).

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2019-07-11 09:22:33Z
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GLOBAL MARKETS-Stocks gain, dollar sags as Fed chief shores up rate cut prospects - Reuters

LONDON (Reuters) - World stocks rose, global bond yields fell and the dollar weakened after Federal Reserve Chairman Jerome Powell bolstered expectations the Fed would cut U.S. interest rates soon.

FILE PHOTO: People walk through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett/File photo

The pan-European STOXX 600 climbed 0.2% after losing 1.4% over the past four sessions. Germany’s DAX futures rose and Britain’s FTSE futures gained 0.3%. The oil and gas sector as well as defensive stocks led the gains.

In his first day of testimony before Congress on Wednesday, Powell confirmed the U.S. economy was still under threat from disappointing factory activity, tame inflation and a simmering trade war, and said the Fed stood ready to “act as appropriate”.

“Powell’s statement confirmed we are going in the direction of a cutting cycle,” said Charles Zerah, a fund manager at Carmignac. “The main question now is, are investors pricing too much in terms of rate cuts by year end? The way you see equity markets behaving, risk is that what markets are pricing could lead to disappointment.”

The Europe gains follow healthy rises in Asia, where MSCI’s broadest index of Asia-Pacific shares ex-Japan rose 1%. Japan’s Nikkei added 0.5%.

U.S. futures pointed to a stronger opening for Wall Street as well with E-Minis for the S&P500 at 0.2%.

U.S. stocks ended higher on Wednesday and the S&P 500 briefly crossed 3,000 points for the first time following Powell’s remarks.

Some questioned how much momentum there was behind the latest rally.

“We are in the camp and have been all year, and arguably wrongly, that the Fed becoming more dovish and cutting rates is not good for risk assets,” said Neil Dwane, global strategist and portfolio manager at Allianz Global Investors. Nine of 12 Fed rate cutting cycles had not stopped a recession, he noted.

“Given we are in the longest expansion and have only had rates lifted to 2.5%, for me it begs the question, is a soft landing possible?”

A strong June U.S. jobs report earlier this month heightened expectations the Fed was more likely to cut by 25 basis points than by 50. But Powell’s cautious stance helped fuel bets on heftier easing at its next policy meeting on July 30-31.

The chance of a 50 bps cut rose to 27.6% from 3.3% on Tuesday, according to CME Group’s FedWatch tool.

Minutes from the Fed’s last meeting, in mid-June, however, showed some policymakers felt there was not yet a strong case for easing.

The rate cut prospects also weighed on the dollar. The dollar index against a basket of six major currencies slipped 0.2% to 96.929, extending losses for a second straight session after reaching a three-week peak on Tuesday.

The dollar was down 0.4% at 108.03 yen, forced off a six-week high of 108.990 the previous day. It was still some distance from a six-month trough of 106.780 set on June 25. The euro nudged up 0.23% to $1.1275.

In fixed-income markets, the 10-year U.S. Treasury yield fell to 2.037% after dropping on Wednesday from a three-week high of 2.113%.

Euro zone government bond yields also fell. Germany’s 10-year government bond yield dropped to minus 0.32% on expectations that monetary easing in the euro zone will not be far behind the Fed.

FILE PHOTO: A woman walks past an electric screen showing world markets indices outside a brokerage in Tokyo, Japan, July 1, 2019. REUTERS/Issei Kato

In commodities, U.S. crude oil futures climbed to a six-week high as oil rigs in the Gulf of Mexico were evacuated before a storm, while an incident with a British tanker in the Middle East highlighted ongoing tensions in the region.

U.S. crude oil futures gained 42 cents to trade at $60.84 per barrel. Brent crude futures rose 47 cents to $67.48.

Spot gold gained to $1,426 an ounce, its highest since July 3, on the reinforced expectations for a Fed rate cut.

Reporting Karin Strohecker; additional reporting by Sujata Rao and Marc Jones in London, Shinichi Saoshiro in Tokyo; editing by Larry King

Our Standards:The Thomson Reuters Trust Principles.

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2019-07-11 08:55:00Z
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Fed rate cut would ease pressure on China's central bank, analysts say - CNBC

Pedestrians walk past the People's Bank of China headquarters in Beijing, China, on Monday, Jan. 7, 2019.

Giulia Marchi | Bloomberg | Getty Images

A widely expected interest rate cut by the U.S. Federal Reserve would give China more breathing room in shoring up its slowing economy, some analysts said.

Overnight, markets took Fed Chairman Jerome Powell's comments during the first of a two-day Congressional testimony as affirming expectations for easier monetary policy in the U.S. The S&P 500 briefly topped 3,000 for the first time, and Treasury yields edged lower.

A looser monetary policy environment would reduce pressure on China's central bank to ease monetary policy. Amid trade tensions with the U.S., China's economy has struggled to gain momentum.

Private surveys released last week by Caixin showed services activity fell in June to its lowest since February, and the manufacturing sector contracted, after three months of expansion.

Among several measures to support the economy over the last several months, the People's Bank of China (PBoC) has made targeted attempts to lower financing costs to privately run enterprises, which account for the majority of the country's economic growth and employment.

"If the Fed does go ahead and cut rates, which I don't think is a given ... it simply means the PBoC has a little breathing room to see if the policies it has implemented have an impact on the real economy," Hannah Anderson, global market strategist at J.P. Morgan Asset Management, told CNBC on Thursday by phone.

The central bank will also face less pressure to allow the yuan to depreciate, making it easier to maintain a goal of keeping the exchange rate stable, she said, while higher Treasury prices would boost the paper value of the PBoC's holdings, increasing confidence.

The U.S. dollar index fell about 0.4% overnight amid Powell's comments. The People's Bank of China set the mid-point of the yuan mildly stronger against the greenback on Thursday at 6.8677.

Some analysts expect if the Fed cuts rates, it will go so far as to prompt China's central bank to take similar action.

"If (make that when) the Fed cuts rates then it's quite likely the PBOC will follow suit," Leland Miller, chief executive officer of China Beige Book, said in an email. The firm publishes a quarterly review of the Chinese economy based on a survey of more than 3,300 Chinese firms.

"But a benchmark interest rate cut is almost purely a symbolic move that won't affect most corporates," Miller said. He noted that "only a small subset of (state-owned enterprises) pay the benchmark rate, and most of those firms don't have to repay their loans anyway."

A Reuters poll released on Wednesday showed economists anticipate the People's Bank of China will keep its benchmark rate unchanged this year, while reducing banks' reserve requirement ratio twice in the second half of this year.

While easing monetary policy would help support growth, Beijing has also turned to fiscal tools such as tax cuts to boost the economy in the latest round of stimulus.

However, Larry Hu, chief China economist at Macquarie, said he does not expect the Chinese central bank to follow the Fed in cutting the benchmark interest rate, since economic data doesn't indicate enough of a slowdown to warrant a major policy change right now.

"In the US, it's significant for the Fed to cut rate(s)," Hu said in a note Wednesday. "But in China, stimulating infra(structure) and property ... is what really matters."

Instead, he anticipates policymakers will wait until the fourth quarter to possibly cut the benchmark rate, or take some similar action. China's benchmark 1-year lending rate has stayed the same since 2015, Hu noted.

Reuters' poll showed China's economic growth is expected to slow to a 29-year low of 6.2% this year, amid uncertainty from the ongoing trade dispute with the U.S.

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2019-07-11 07:01:56Z
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As politicians point fingers over Bombardier's Thunder Bay layoffs, it's worth deconstructing who's to blame for what - The Globe and Mail

On the one hand, Doug Ford’s Ontario government has left the province’s transit requirements sitting unfunded while it claims to have a bigger, better transit plan for which it has offered only laughably vague details.

On the other hand, Justin Trudeau’s federal government was pushing the bounds of cynicism when it started telling people that is the only reason that Bombardier is laying off 550 workers at its Thunder Bay rail-car plant.

When that depressing news hit the Northern Ontario town, the federal and provincial governments were quick to spring into action to deal with what mattered most: pinning the blame on someone else.

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So it’s worth deconstructing who, in this childish squabble, is to blame for what.

The feds came out of the gates Monday morning, as Patty Hajdu, the Minister of Employment, Workforce Development and Labour – and also the MP for Thunder Bay-Superior North – charged that Ontario’s government had let critical investments in public transit lapse. She also complained that Mr. Ford himself had promised a new contract for the Bombardier government only months ago. “Where is he now?” she said.

There was a quick response: Ontario’s Economic Development Minister, Vic Fedeli, and then Mr. Ford said Ontario has a $28.5-billion transit expansion plan, and the federal government has to pay its share, too, or it risks Bombardier jobs. “Where is their money?” Mr. Ford said. Mr. Ford also said Ontario does have a contract for the plant – a $130-million order for 36 rail cars.

One problem is that Mr. Ford has been talking about that rail-car order as if it is signed, sealed and delivered. But it’s a commercial contract being negotiated by Metrolinx, the provincial Crown corporation for transit in the Golden Horseshoe region of Southern Ontario, and it’s not a done deal yet. Maybe it will come. But a 36-car order will provide the plant work for months, not years.

The bigger federal-provincial spitting match is about who has slowed down new transit projects. And if these layoffs were really all about that, the feds would be right: It was the Ontario government, and Mr. Ford’s back-of-envelope vision for a transit plan that’s all his own, that has put a pause on funding transit projects in the Greater Toronto Area.

Big transit projects usually get going with money from federal infrastructure programs: Municipalities submit projects, provinces set priorities, and all three levels of government share the cost.

But after Mr. Ford’s government took office, it took roughly a year before it started opening the door to proposals. And it has never really opened the process for Greater Toronto Area transit proposals. Instead, Ontario announced an outline for its own $28.5-billion transit plan, and asked Ottawa for $11.5-billion.

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Never mind that that’s more than the entire transit infrastructure fund for Ontario, or that the plan called for the province to take over Toronto’s subways and that hasn’t been worked out. There is no actual proposal for Ontario’s plan – the kind with construction plans, ridership studies, cost analysis and so on. There are recent proposals for four particular projects that would be part of that plan. Mr. Ford’s demand to see Ottawa’s money is immature rhetoric in place of nitty-gritty work. In the meantime, the feds have essentially had no GTA transit project to fund for a year.

But it takes a cynical politician’s twist to assert baldly that the infrastructure-funding slowdown led to Bombardier’s layoffs. The Liberals jumped at a chance to pin it on Mr. Ford.

Infrastructure proposals move at a snail’s pace through approvals and planning to orders. Even if the Toronto Transit Commission had riches at its disposal, it’s not certain it would place a big immediate order for rail cars, or that it would go to Bombardier. Both the TTC and Metrolinx have complained of problems or delays with recent Bombardier orders, as it happens. Maybe without the funding slowdown, Bombardier might have received more work, but it wasn’t the smoking gun that killed those jobs.

The company itself cited some other reasons for its layoffs, such as the cyclical nature of the business, and Buy American rules in the United States which, it said, make it hard to win U.S. orders for Canadian-made rail cars.

So blame Mr. Ford’s government for his unplanned transit plans, and blame the Liberals for being so quick to drop all the blame at the feet of their favourite political adversary. Blame both for spending the day finger-pointing.

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July 11, 2019 at 07:56AM

Bank of Canada maintains overnight rate target at 1 ¾ percent - Bank of Canada

Available as: PDF

The Bank of Canada today maintained its target for the overnight rate at 1 ¾ percent. The Bank Rate is correspondingly 2 percent and the deposit rate is 1 ½ percent.

Evidence has been accumulating that ongoing trade tensions are having a material effect on the global economic outlook. The Bank had already incorporated such negative effects in previous Monetary Policy Reports (MPR) and in this forecast has made further adjustments in light of weaker sentiment and activity in major economies. Trade conflicts between the United States and China, in particular, are curbing manufacturing activity and business investment and pushing down commodity prices.

Policy is responding to the slowdown: central banks in the US and Europe have signalled their readiness to provide more accommodative monetary policy and further policy stimulus has been implemented in China. In this context, global financial conditions have eased substantially. The Bank now expects global GDP to grow by 3 percent in 2019 and to strengthen to around 3 ¼ percent in 2020 and 2021, with the US slowing to a pace near its potential. Escalation of trade conflicts remains the biggest downside risk to the global and Canadian outlooks.

Following temporary weakness in late 2018 and early 2019, Canada’s economy is returning to growth around potential, as expected. Growth in the second quarter appears to be stronger than predicted due to some temporary factors, including the reversal of weather-related slowdowns in the first quarter and a surge in oil production. Consumption is being supported by a healthy labour market. At the national level, the housing market is stabilizing, although there are still significant adjustments underway in some regions. A material decline in longer-term mortgage rates is supporting housing activity. Exports rebounded in the second quarter and will grow moderately as foreign demand continues to expand. However, ongoing trade conflicts and competitiveness challenges are dampening the outlook for trade and investment. The Bank projects real GDP growth to average 1.3 percent in 2019 and about 2 percent in 2020 and 2021.

Inflation remains around the 2 percent target, with some recent upward pressure from higher food and automobile prices. Core measures of inflation are also close to 2 percent. CPI inflation will likely dip this year because of the dynamics of gasoline prices and some other temporary factors. As slack in the economy is absorbed and these temporary effects wane, inflation is expected to return sustainably to 2 percent by mid-2020.

Recent data show the Canadian economy is returning to potential growth. However, the outlook is clouded by persistent trade tensions. Taken together, the degree of accommodation being provided by the current policy interest rate remains appropriate. As Governing Council continues to monitor incoming data, it will pay particular attention to developments in the energy sector and the impact of trade conflicts on the prospects for Canadian growth and inflation.

Information note

The next scheduled date for announcing the overnight rate target is September 4, 2019. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on October 30, 2019.

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July 10, 2019 at 08:52PM

Powell's Statement Highly Supportive Of Monetary Easing - Kitco News

Gold prices went into overdrive today rekindling the dynamic rally which had been consolidating ever since reaching the yearly high at $1442, and $1440 6 trading days later. Gold which had found support just above $1388 the low achieved in trading yesterday skyrocketed well past $1400 an ounce. As of 5:48 PM EDT gold futures basis the most active August contract is currently up $19.50 (+1.39%) and fixed at $1420 per ounce.

This dramatic rise is occurring in conjunction with U.S. Treasury yields which dropped sharply from their highs achieved on Wednesday, and U.S. equities which were once again in full rally mode. Underlying these dramatic price changes are recent statements and remarks by the Federal Reserve Chairman Jerome Powell.

In a testimony today before Congress Powell said that “ongoing trade fights with China and other countries have contributed to slower growth at home and abroad and pose more risk to the US economy.” He also elaborated when he said that the Fed, for its part, is prepared to “act as appropriate to sustain the expansion.”

According to analysts and economists, Powell restated the current Federal Reserve’s stance, using a phrase that economists say points strongly to a rate cut at the bank’s next meeting at the end of July.

Interestingly enough the chairman downplayed positive economic data by not focusing on a rebound in consumer spending during the spring and a surge of a hiring in June that lessened concerns immediately following a dismal employment report in May. On the contrary he emphasized trade tensions and slower growth around the world.

A statement released in relationship to the current fed monetary policy said, “At our January, March, and May meetings, we stated that we would be patient as we determined what future adjustments to the federal funds rate might be appropriate to support our goals of maximum employment and price stability.”

During the May FOMC meeting, the statement said that they were mindful of the ongoing crosscurrents from global growth and trade, but there was tentative evidence that these crosscurrents were moderating.

However, the statement went on to say, “Since our May meeting, however, these crosscurrents have reemerged, creating greater uncertainty. Apparent progress on trade turned to greater uncertainty, and our contacts in business and agriculture report heightened concerns over trade developments. Growth indicators from around the world have disappointed on net, raising concerns that weakness in the global economy will continue to affect the U.S. economy. These concerns may have contributed to the drop in business confidence in some recent surveys and may have started to show through to incoming data.”

The fact that Chairman Powell once again reiterated a strong potential for rate cuts and a more dovish monetary policy will not only have the opportunity to revitalize and re-energize our economic expansion and continued rally in U.S. equities, but more importantly be a catalyst taking gold prices substantially higher.

For those who would like more information, simply use this link.

Wishing you as always, good trading,

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July 11, 2019 at 05:31AM

Eat Smart kale salad bags recalled due to possible listeria contamination - 680 News

Eat Smart brand kale salad bags are being recalled due to possible listeria contamination.

The Canadian Food Inspection Agency says the 794-gram salad bags with best before dates of July 17 are being recalled in six provinces — Ontario, Quebec, New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island.

The agency says the recall was triggered by test results and it is conducting a food safety investigation, which may lead to the recall of other products.

It says food contaminated with listeria may not look or smell spoiled but can still make people sick.

It says symptoms of illness can include vomiting, nausea, persistent fever, muscle aches, severe headache and neck stiffness, and pregnant women, the elderly and people with weakened immune systems are particularly at risk.

The agency says there have been no reported illnesses associated with the salad.

Click here for more information on the recall.

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July 10, 2019 at 04:01PM