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By Nichola Saminather | SINGAPORE
Concerns about a Greek bailout, early Italian elections and comments by the European Central Bank chief about the need for continued stimulus all kept the euro under pressure on Tuesday.
European geopolitical fears sapped risk appetite, weighing on Asian stocks and lifting safe havens including the yen and gold, though trading was thin with several markets closed for holidays.
The euro EUR=EBS slid 0.3 percent to $1.1129 in its fourth session of declines.
James Woods, global investment analyst at Rivkin Securities in Sydney, attributed most of the currency's decline on Tuesday to a German press report saying Athens may opt out of its next bailout payment if creditors cannot strike a debt relief deal.
"The bailout payments are necessary to meet existing debt repayments due in July, so if Greece were to forgo this bailout payment the probability of a default would spike, reopening the discussion around a Grexit from the Euro zone," Woods said.
However, he cautioned against reading "too much into it" without more details or confirmation, adding it was unlikely Greece would forego the bailout payment at this stage.
Euro zone finance ministers failed to agree with the International Monetary Fund on Greek debt relief or to release new loans to Athens last week, but did come close enough to aim to do both at their June meeting.
Comments by former Italian Prime Minister Matteo Renzi on Sunday in favor of holding an election at the same time as Germany's in September also pulled the euro lower.
So did a statement by European Central Bank President Mario Draghi reiterating the need for "substantial" stimulus given subdued inflation.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.25 percent with U.S. and British markets closed on Monday.
China, Hong Kong and Taiwan markets are closed for holidays on Tuesday.
Japan's Nikkei .N225 dropped 0.3 percent, dragged down by a stronger yen.
South Korea's KOSPI .KS11 fell 0.5 percent as investors took profits following the market's record-breaking rally this month.
European blue-chip stocks .STOXXE fell 0.2 percent on Monday, with Italy's banking index sliding 3.4 percent, its biggest loss in nearly four months, after two lenders sought help to cover a capital shortfall.
Sterling GBP= retreated 0.15 percent to $1.2818 after British Prime Minister Theresa May's lead over the opposition Labour Party dropped to 6 percentage points in the latest poll to show a tightening race since the Manchester bombing and a U-turn over social care plans.
The dollar declined 0.4 percent to 110.815 yen JPY=.
The dollar index .DXY, which tracks the greenback against a basket of trade-weighted peers, however, advanced 0.2 percent to 97.659.
Markets are also awaiting economic indicators including French first quarter gross domestic product, German inflation data for May, and U.S. inflation for April later in the session.
In commodities, oil prices retreated, as concerns lingered about whether the extension of output cuts by OPEC and other producing countries will be enough to support prices.
U.S. crude futures CLc1 slipped about 0.1 percent to $49.77 a barrel.
Global benchmark Brent LCOc1 fell 0.4 percent to $52.09.
Gold XAU= advanced 0.1 percent to $1,268.34 an ounce....
China's Shanxi province, the country's top coal producer, has decided to suspend or hold back the development of mines until 2020, which effectively will take out of the market about of 120 million tonnes of the fossil fuel.
The province will also stop the construction of more coal mines over the period to further reduce capacity, state-owned news agency Xinhua reported, quoting a recent coal industry development plan published by the local government.
Currently, Shanxi supplies coking coal to China's top steel mills and also exports to Japan and Korea.
Coal output at Shanxi, in the country's north, will be capped by 2020 at 1 billion tonnes and capacity at 1.2 billion tonnes annually by 2020.
Currently, the province supplies coking coal to China's top steel mills and also exports to Japan and Korea.
Earlier this month, provincial authorities announced they it will close 18 collieries and cut 17 million tonnes of coal capacity by the end of the year.
China, the world’s largest coal consumer and producer, is in the midst of an aggressive plan to reduce the share of coal in its overall energy mix and consequent smog and greenhouse gas emissions.
As part of that strategy, Beijing announced in January its intention to shut down 800 million tonnes of outdated coal capacity by 2020.
The country has also made public recently its goal of modernizing its coal-fired power plants by 2020 in an effort to cut “polluting” emissions by 60%. The government also aims to add over 20 million kilowatts of installed wind power and more than 15 million kilowatts of installed photovoltaic power by the end of the decade.
With Chinese and US traders on a break, the iron ore market took a breather on Monday after wild price swings saw the steelmaking raw material fall to a more than seven-month low on Friday.
The Northern China import price of 62% Fe content ore is down 15% for in May trading at $57.80 per dry metric tonne, the lowest since mid-October according to data supplied by The Steel Index.
“There may be a slowdown in demand from the housing sector but the infrastructure sector will still be sustained”
Benchmark prices are down a whopping 37% from their February highs when ore came to within shouting distance of triple digits.
Bloomberg quotes closely followed emerging markets investor Mark Mobius as saying volatile iron ore prices and the fundamentals of the industry have to be looked at separately.
Mobius, executive chairman of Templeton Emerging Markets Group, said the while fundamentals have bee stable, the price is "subject to all kinds of external factors" including how traders are betting on the price going up or down:
“I don’t see a big, big decline in the demand for iron ore going forward, I think there’ll be continuing demand not only in China but other parts of the world,” said Mobius, who’s spent over 40 years tracking emerging markets. “If you look at Chinese imports of iron ore, it’s almost a straight line, continuing to go up,” adding that in contrast the price “is going all over the place.”
“There may be a slowdown in demand from the housing sector but the infrastructure sector will still be sustained,” Mobius said. “If the One Belt, One Road program proceeds, there’ll be continuing demand.”
Ulaanbaatar /MONTSAME/ Mongolian national currency rate against US dollar has been tightened in the last several days. According to the Bank of Mongolia, today, May 29, buy rate of one USD equals to MNT2395, and sell rate equals to MNT2406.50 on the interbank foreign exchange platform. A few days ago, for example on May 25, buy rate was MNT2405 and sell rate was MNT2411.
Tugrug rate is strenthening in direct connection to IMF’s funding within the Extended Fund Facility (EFF). IMF Executive Board approved a three-year extended arrangement under EFF for Mongolia on May 24 and the first funding of USD 38.6 million was deposited into the central bank on May 25 to increase foreign exchange reserves.
The foreign exchange reserves were planned to be raised to USD1.6 billion in 2017, 2.7 in 2018, USD3.5 billion in 2019 and USD4 billion in 2020.
Ulaanbaatar /MONTSAME/ The Asian Development Bank established a memorandum of understanding with Bank of Mongolia on realizing financial consumer protection sub-component of Supporting Financial sector development and stability of Mongolia project. Within the project, a study on financial consumer protection was carried-out and a recommendation was released. The Bank of Mongolia organized a national consultation meeting ‘Current regulations and legal situation of financial consumer protection and recommendation on improvement’, where the recommendation was introduced. The recommendation indicated the necessity of having financial consumer protection regulations, forming audit structure, supervise and reporting.
The consultation meeting was attended by representatives of Financial Regulatory Commission, Authority for Fair Competition and Customers Protection, Mongolian Bankers Association, Bank and Financial Academy and other professional unions.
The first ever project targeted to financial consumer protection covers whole financial sector and as a result of the project, financial consumer protection framework is expected to be enhanced and system and mechanism to resolve disputes in finance sector in non-judicial process to be formed.
During Thursday’s session of Parliament, MPs debated the operations of state-owned companies, health, and environmental projects.
Head of Parliament’s Standing Committee on Social Policy, Education, Culture and Science L.Enkh-Amgalan pointed out that over 90 percent of state-owned enterprises are facing deficits, but their directors are getting paid high salaries, driving expensive vehicles, and renting expensive offices. He said the state cannot afford to function this way, and that there should be a greater focus on reforming the leadership and management of stateowned companies.
Vice-Speaker of Parliament Ts.Nyamdorj said that some state-owned companies are operating by taking out loans from other companies and the state. He asked what the Mineral Resources and Petroleum Authority, Ministry of Mining and Heavy Industry, and the Government Agency for Policy Coordination on State Property are doing to address the deficits facing these state-owned enterprises.
Cabinet Secretariat J.Munkhbat stated that there should be an emphasis on improving management and addressing the deficits of Erdenes Mongol Company.
MP B.Undarmaa asked the Minister of Energy what measures are being taken to provide ger district residents with permanent electricity in the framework of ger-district re-planning projects.
Minister of Energy P.Gankhuu noted that more than 1,600 households are connected to the central electricity network, and that the ministry has announced tender bids for a project that would provide 6,000 households with permanent electricity this year.
Member of Parliament B.Saranchimeg asked Minister of Nature, Environment, and Tourism
D.Oyunkhorol what kind of projects her ministry is implementing to deal with environmental challenges and to stop desertification.
Minister D.Oyunkhorol said that the ministry is working to collaborate with international organizations to implement projects and programs to combat desertification and adapt to climate change. The ministry is working on receiving funding from international organizations fighting climate change and green loan funds to implement programs addressing environmental issues.
Deputy Minister of Health L.Byambasuren pointed out that the average monthly salary for a doctor at public hospitals is 640,000 MNT, and the average monthly salary for a nurse is 560,000 MNT. She noted that these salaries are very low considering their workload, so the ministry is working to increase the salaries of the doctors, nurses, and staff of public hospital as part of the basic guidelines for 2018’s socio-economic development.
Uvurkhangai /MONTSAME/ Uvurkhangai aimag is going to establish a meat processing factory jointly with Hai Chuan Group of Guizhou province, China and Jarves Mongolia Company of USA. During Prime Minister J.Erdnebat's visit to China, Governor of Uvurkhangai aimag G.Ganbold signed a memorandum with the parties on establishing the factory and supplying its product to international markets. Governor G.Ganbold was interviewed on the matter.
-Why China has been chosen to collaborate and how is the work going?
Uvurkhangai aimag used to maintain cooperation with foreign countries in culture, health and tourism sectors. Therefore, the Governor’s action plan in 2016-2020 indicated to bring more economic activities in foreign relations, making beneficial to the aimag. China is the closest country, with which business could be profitable. We established relations with Guizhou province and put forward a request to support the aimag on establishing the meat processing factory and increasing green space. Guizhou province' authorities connected us with four of the largest meat factories, one of which was Hai Chuan group.
The group has a leading position in meat processing and production on the Chinese market. Jarvis Mongolia of USA is a company which supplies 85 per cent of global meat processing machinery and has built over 1000 meat factories in China in the last few years.
Hai Chuan Group and Jarvis Mongolia have a cooperation for a long period and we previously had talks with ‘Jarvis Mongolia’ Company about having a 'healthy livestock area' in Uvurkhangai aimag and agreed to develop trilateral cooperation. The cooperation issue was raised at the Government and Ministerial level and was solved within three months. During the PM’s visit, Mongolian and Chinese ministers in charge of agriculture talked about establishing the healthy animal area.
-When is the factory planned to start operations?
A meat processing factory building owned by Just Agro Company in Uvurkhangai aimag had been under collateral for MNT3 billion to the State Bank and the Government has freed the collateral, transferring the factory building to the local property. We will expand the factory, renovate equipment and start operations of thermal processing factory, producing ham, sausage and canned meat products. Further, when the healthy animal area is established, we will have a possibility to export fresh meat to the Chinese market. Hai Chuan Company will make marketing of fresh meat supply to the Chinese market with labels of the company. Therefore, there will be no problem concerning the sales and price.
-Will animal and meat be supplied from local herders, won't they?
Of course. As the meat factory is being built in Uvurkhangai aimag, which would be a healthy animal area, local herders will have more possibility to sell their animals and meat. Uvurkhangai aimag and surrounding 4-5 soums of other aimags have 35 per cent of the total livestock population of Mongolia.
What measures are being taken to make livestock healthy, free of animal diseases?
We vaccinated 70000 heads of livestock when smallpox spread in neighboring aimags in December. We are paying attention to use high quality medicine and vaccination and 20-40 veterinarians will be involved in 6-month to 1-year trainings in Guizhou province.
More than a third of British Airways flights from Heathrow were cancelled as thousands of passengers faced a second day of disruption.
The airline was hit by a worldwide computer system power failure on Saturday, causing cancellations and delays for thousands of passengers.
All long-haul services left from Heathrow, but with delays, BA said.
The airline has urged people to check the status of flights before travelling to the airport.
The airline apologised to customers for the issue, which is thought to have been caused by a problem with the IT system's power supply.
In a statement released on Sunday, chief executive Alex Cruz said: "I know this has been a horrible time for customers. We're not there yet, but we are doing our very best to sort things out for you."
The BBC's Phillip Norton, who has been stranded at Rome airport since Saturday, has been told he won't be able to fly back to London until Tuesday.
The airline is liable to reimburse thousands of passengers for refreshments and hotel costs.
Customers displaced by flight cancellations can claim up to £200 a day for a room (based on two people sharing), £50 for transport between the hotel and airport, and £25 a day per adult for meals and refreshments.
One traveller from Seattle said she had spent the evening sleeping on the floor of a hotel conference room.
Ashley Tracey, who was trying to get to Mumbai for her friend's wedding, said she had been queuing to rebook her flight for six hours.
She said: "There's no information I can't seem to get through online, I don't live here so I don't have a phone that works here."
At the scene
On Sunday morning, Heathrow Terminal 5 descended into chaos again as people arrived to rebook flights after theirs were cancelled yesterday as well as new arrivals hoping they had not been affected by the company's IT failure.
Many people told me about the lack of knowledge or information provided by BA staff.
One American woman on a stop-over described how an employee asked what the queue they were standing in was for.
Some passengers slept on yoga mats provided by the airline as conference rooms were opened to provide somewhere more comfortable to rest.
A number of people arrived at the airport for 05:00 and were still none the wiser by lunch time whether they'd be home any time soon.
As the day has progressed, British Airways appears to have more of a grip on the situation. The departure lounge has calmed down and many have rearranged their flights.
But the terminal is still full of hour-long queues and for many this wasn't how they had hoped to spend their Bank Holiday weekend.
There have been reports that some passengers who departed from Heathrow on Saturday found their luggage was not at their destination when they landed.
Terry Page, 28, arrived in Fort Worth, Texas after delays and said "about 50" passengers did not have their check-in luggage.
Ulaanbaatar /MONTSAME/ Within the framework of a joint research for studying the opportunities to establish Economic Partnership Agreement between Mongolia and the Republic of Korea, the Ministry of Foreign Affairs of Mongolia held a Mongolia-Korea Workshop on Trade Policy in cooperation with Korea Institute for International Economic Policy (KIEP) at Corporate Convention Center on May 25-26.
The workshop held seminars on ROK’s foreign trade policy, practices of free trade agreements and current trade issues of the two countries.
During the event, the researchers led by Lee Jae Young, Vice President of Europe, Americas and Eurasia Department of KIEP and professors from the ROK and National University of Mongolia delivered presentations and held colloquium during the two-day workshop.