Kenyan shilling steady, with exporter FX supply meeting demand
NAIROBI, May 9 (Reuters) - The Kenyan shilling was broadly steady on Friday as foreign exchange supply from exporters met subdued dollar appetite, traders said.
At 0900 GMT the shilling was trading at 128.75/129.75 to the U.S. currency compared with 129.00/129.50 at Thursday's close, London Stock Exchange Group data showed.
"I think it's going to trade within this band for the next week. The market is balanced," a trader said.
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Reuters
32 minutes ago
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UK lawyer loses bid to overturn misconduct findings over $3 bln windfall
LONDON, June 10 (Reuters) - A British lawyer who stood to receive up to $3 billion from Nigeria over a collapsed gas project on Tuesday lost a bid to overturn court findings that he acted corruptly out of greed. Seamus Andrew had represented Process & Industrial Developments (P&ID), a little-known British Virgin Islands-based company, in a long-running legal battle with Nigeria that ended in a court victory for Africa's most populous country. Nigeria had been facing a bill for $11 billion, representing around a third of its foreign exchange reserves, after P&ID won an arbitration case over the collapse of a 2010 gas supply deal. But London's High Court in 2023 overturned the damages bill after finding that P&ID had paid bribes in connection with the underlying contract and the resulting arbitration. P&ID had denied paying bribes and accused Nigeria of institutional incompetence. Its application to appeal against the High Court's decision was refused. The court had also found that P&ID's lawyers, including Andrew, received confidential Nigerian documents during the arbitration, which they knew they were not entitled to see, with a judge describing Andrew's conduct as "indefensible." Andrew could have received 20% of all proceeds recovered from Nigeria, up to $3 billion of the $11 billion award, after becoming a director of P&ID and acquiring a stake in the company in 2017 following the end of the arbitration. Andrew applied to the Court of Appeal to overturn the findings against him, arguing that inadequate reasons were given for the criticism and that he was not given proper notice that findings would be made against him. But his application for permission to appeal was refused, with Judge Julian Flaux ruling on Tuesday that Andrew had brought his application too late and that, in any event, the criticism was adequately reasoned, foreseeable and justified. "Overall, the finding that Mr Andrew's conduct was indefensible was plainly correct," Flaux added. Andrew said in a statement: "Although I am disappointed by the outcome of my appeal, I believe that I acted in accordance with my professional duties and I am confident that my position will be vindicated in due course."
Reuters
2 hours ago
- Reuters
TRADING DAY Buoyancy trumping uncertainty
ORLANDO, Florida, June 10 (Reuters) - TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist I'm excited to announce that I'm now part of Reuters Open Interest (ROI), an essential new source for data-driven, expert commentary on market and economic trends. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X. Global markets remain buoyant, awaiting the outcome of U.S.-China trade talks in London and U.S. inflation figures on Wednesday, both of which could have a bearing on guidance from the Federal Reserve next week and investor sentiment more broadly. In my column today I look at how the Trump administration's crackdown on immigration could cause labor market distortions and headaches for Fed officials. More on that below, but first, a roundup of the main market moves. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Buoyancy trumping uncertainty On the day The World Bank slashed global growth forecasts, warning of the "significant headwind" from tariffs and heightened uncertainty, global stocks clocked their fifth consecutive all-time high. Britain's benchmark FTSE 100 is a whisker from reaching new peaks and Germany's DAX hit an all-time high last week, while on Wall Street the Nasdaq and S&P 500 are within a couple of percentage points of new record levels also. Yet the reasons for equity investors to be fearful right now are plentiful - worries over growth, inflation, tariffs, long-term interest rates, U.S. debt and deficits, and the fact that China, the world's second-largest economy, is still mired in a low growth and deflationary funk. Something not quite adding up, right? Perhaps. On the other hand, the fiscal taps are being turned on in China and Germany, British finance minister Rachel Reeves outlines her multi-year 2 trillion pounds ($2.7 trillion) spending plan on Wednesday, and U.S. President Donald Trump's 'big beautiful bill' currently going through Congress is front-loaded with fiscal stimulus too. None of that is really fresh news but the upshot is a lot of liquidity coursing through the global economy. Right now it is something investors appear willing to accept even if the price is increased debt, and for the U.S. and UK in particular, worse public finances. Big corporate deals are being struck, like the OpenAI and Google cloud service tie-up and Meta Platforms reportedly paying $15 billion for a 49% stake in AI startup Scale AI, and implied equity and bond volatility is low. After a period of fretting more about deficits and spiking bond yields, investors may now be viewing the future with their glass half full. Fiscal stimulus is coming and interest rates around the world are being cut. The monetary outliers are Japan and the U.S., but the Bank of Japan could be near the end of its tightening cycle and the Fed may be about to begin easing later this year. On top of this, there's a general belief that Trump will back down from his hardline stance on tariffs and that a palatable deal with China will be reached, the so-called 'TACO' - Trump Always Chickens Out - trade. Fresh news on that front, at least, should be forthcoming on Wednesday. Trump immigration crackdown creates jobs distortions, Fed headaches Seismic shifts in immigration are distorting the U.S. employment picture, making it harder for investors and policymakers to know exactly how much the labor market is actually slowing. Assuming the Trump administration makes good on its pledge to reduce immigration, either by stopping the flow of people coming into the country or by deporting many already here, the labor supply will shrink. The long-term impact of lower immigration is generally agreed to be negative, as new workers are needed to replace retirees, fill job vacancies and drive economic growth. Over time, fewer new workers will likely mean lower growth. But in the short term, a smaller pool of workers results in a tighter labor market, which keeps a lid on the unemployment rate, albeit artificially and probably temporarily. This may already be playing out. Figures released last week showed that employment in May fell by 696,000 jobs. That's the biggest single monthly decline since the historic losses seen during the pandemic in early 2020. Some economists argue that the recent drop is a consequence of Trump's immigration crackdown. Nonfarm payrolls rose 139,000. Meanwhile, the unemployment rate held steady at 4.2%, which though higher than it was two years ago, is still historically low by any measure. All else being equal, this points to a tight labor market, which should put upward pressure on wages and perhaps even warrant a more hawkish policy stance from the Federal Reserve. But that is almost certainly a misreading. When labor supply and the labor force participation rate fall, this brings down a country's so-called 'breakeven' job growth. That's the number of net new jobs the economy needs to keep up with growth in the working-age population and maintain a steady unemployment rate. That figure is falling, and if the Trump administration toughens up its anti-immigration policies further, this decline is likely to accelerate. According to economists at Morgan Stanley, breakeven employment growth averaged 210,000 jobs a month last year, and is averaging 170,000 so far this year. They reckon it will fall to 90,000 by the end of this year and 80,000 next year. Ryan Sweet, chief U.S. economist at Oxford Economics, goes further, estimating that the breakeven rate is "quickly approaching" 50,000 jobs a month due to weakening labor supply growth, primarily because of reduced immigration. "The unemployment rate can remain low, but for the wrong reasons," Sweet says. If these projections prove accurate, monthly employment and job growth could continue to slow without raising the unemployment rate. The contradictory signals this sends could create confusion for both investors and policymakers. In his press conference after the most recent Fed policy meeting, Chair Jerome Powell repeatedly told reporters that the labor market is "solid". The unemployment rate "remains low," and the labor market is "at or near maximum employment." If these headline indicators are the gauge, Powell is absolutely correct. But he also stressed that policymakers are looking at the "whole huge array" of labor market indicators for a truer guide. One of those inputs in the months ahead will no doubt be net immigration. And that could generate significant uncertainty, as there are huge gray areas and wide margins of error when trying to estimate net immigration and its impact on the labor market. In January, the non-partisan Congressional Budget Office projected net immigration of 2 million people this year and 1.5 million next year, down from an estimated 3.3 million in 2023. With Trump seemingly hardening his stance on immigration, those projections could turn out to be far too high. Morgan Stanley's economists just slashed their immigration forecasts to 800,000 this year and 500,000 next year. If these figures turn out to be closer to reality, we could soon be looking at a "tight" labor market with monthly payrolls gains of well under 100,000. Pity the poor Fed Chair who has to communicate policy in that environment. What could move markets tomorrow? Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias.
Reuters
4 hours ago
- Reuters
Brazil's fiscal package to include higher tax on interest on equity
BRASILIA, June 10 (Reuters) - Brazil's Finance Minister Fernando Haddad said on Tuesday that the government's new fiscal package includes an increase in the income tax rate levied on so-called interest on equity (JCP) payments to 20% from 15%. JCP is a form of shareholder remuneration that allows companies to deduct such payments from their corporate tax base. Speaking to reporters, Haddad said that the decision to include the measure - previously proposed by the government but not voted on by Congress - came at the request of lawmakers. Haddad also confirmed that the fiscal package includes the unification of income tax rates on financial investments at 17.5%, replacing the current sliding scale of 15% to 22.5%, which varies according to the investment's holding period. The new rate would apply to all investments, including stocks and bonds, except those currently exempt from income levy, which would begin to be taxed at 5%, as Haddad had already disclosed on Sunday. The minister, who spoke after returning from a meeting with President Luiz Inacio Lula da Silva, said the additional revenue generated by the package would be used primarily to revise the previously imposed financial operation tax (IOF) hike on forfait operations. The IOF decree, which had been introduced to boost public revenues and also raised the tax on private pension funds and some credit and foreign exchange transactions, triggered strong pushback from both Congress and market players, prompting the government to seek an alternative path as lawmakers threatened to overturn the measure. Haddad defended the new fiscal measures on Tuesday, arguing that they are likely to support the strengthening of the Brazilian currency, pave the way for interest rate cuts, and help ensure compliance with this year's and 2026 fiscal targets.
