Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.
Asia shares rise despite weak China, Japan data; firmer yuan helps (Reuters) Asian shares snapped a five-session losing streak on Monday as China's central bank fixed the yuan sharply stronger, easing fears of depreciation for now, though a string of weak data from Japan to China and Indonesia suggested the bounce may be short-lived. European shares were set to follow Asia higher. Financial spreadbetters expected Britain's FTSE 100 .FTSE to open as much as 1.4% higher, with Germany's DAX .GDAXI and France's CAC 40 .FCHI both seen up nearly 1.3%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 2.3%, after losing 10%t of its value so far this year. Japan's Nikkei .N225 jumped 7.2%t, shrugging off data that showed Japan's economy contracted more than expected in the final quarter of 2015, after losing 11% last week. The Shanghai Composite Index .SSEC was down 0.7%.
Here's Why ECB and BOJ Can't Copy Danish Negative Rate Success (Bloomberg) According to Scandinavia's biggest bank, the extreme measure of negative interest rates only helps central banks defending a currency regime. For those trying to stimulate the economy, negative rates are the wrong tool. That's good news for Denmark and Switzerland, and bad news for the euro zone, Japan and Sweden.
Oil majors' business model under increasing pressure (Financial Times) BP, Chevron and Exxon walk a fine line between paying dividends and investing in operations. The executives of the largest energy companies seem to be waiting for a price rebound. But what if it doesn't?
New York Shivers Its Way to Record Cold Temperatures Sunday (Bloomberg) New York's Central Park got as low as minus 1 degree Fahrenheit (minus 18 Celsius) Sunday morning, breaking a record for 14 February set in 1916. It was the first reading below zero in Central Park since 1985. Records were set at many other locations, including Boston (9 below). In Canada, Toronto reached -16. See Record-breaking cold sweeps Eastern U.S. (CNN) - About 20 cities across the East endured record-breaking cold Sunday.
Dijsselbloem rejects calls for looser banking rules (Reuters) Eurogroup chairman Jeroen Dijsselbloem rejected calls for banking union regulations to be loosened after weeks of falling bank shares, saying new European bail-in rules had caused investors to look "more critically" at risks born by banks.
EU refugee crisis failures are a mark of its absolute decline (City A.M.) Once lost, respect in the international affairs arena is almost impossible to regain. This past week, an extraordinary exchange was reported which starkly highlights the EU's absolute decline, and the contempt with which it is increasingly held. In essence, the EU and Germany's refugee policy - such as it is - seems to wholly consist of subsidising the Turks to serve as Europe's gatekeeper, keeping the crisis as far away from them as the Turkish President can manage. It amounts to less of a policy than a bribe. This would be farcical, if real people were not suffering and dying as a result of this breathtaking policy incompetence. The European political establishment seems to have forgotten what constructing a policy looks like. This column attempts to provide suggestions on how todo that (construct a workable policy).
GDP up by 0.3 pct in eurozone in Q4 (Xinhuanet) Seasonally adjusted GDP rose by 0.3% in both the 19-country eurozone and the wider 28-member European Union (EU) during the fourth quarter (Q4) of 2015, compared with the previous quarter, the EU said Friday. Releasing its flash (preliminary) estimate on the GDP growth in Q4 last year, the Eurostat, or the EU statistical office, also said by annual comparison, seasonally adjusted GDP rose by 1.5% in the euro area and by 1.8% in the EU in Q4.
We're staying: HSBC to keep headquarters in UK (City A.M.) Global banking giant HSBC revealed late last night that it has decided to keep its headquarters in London, ending months of uncertainty over whether it would quit the UK and move to a rival financial center. A statement from the bank called the UK an "important and globally connected economy", with "an internationally respected regulatory framework and legal system". It also pointed to London's status as a renowned financial center with a strong talent pool.
How did Britain fall out of love with privatisation? (TheConversation) From the end of the 1970s, the British electorate voted four times in a row to give the Conservative Party a mandate to implement an extensive privatisation program. Noe YouGov polls show that a majority of British people now support the nationalisation of the railways (66%) and energy sector (68%). The ideological basis of neoliberal views around privatisation has gradually become clearer with the arrival of more and more evidence in the last two decades. Research has laid bare the myth that privatisation is somehow a panacea for improving public services and utilities. Britain did see short-term improvements in some cases such as energy. But over the long term, it has become clear that private services do not deliver good value. Charges have remained high and service quality is often dismissed as poor or indifferent.
UK rents rise at slowest pace in three years (City A.M.) UK rents rose at their slowest pace in three years in January, new research out today shows, despite still being well above their pre-crisis peak. Countrywide's monthly lettings index shows average rents rose by 1.2% year-on-year in January to £906 ($1,360) per month - the slowest rate of growth since 2012. But any rise is a sign that recent rental rises have put prices further out of reach for renters and the slowing rise appears to reflect dampened demand.
Syria calls for UN action on Turkish attacks on Kurds (BBC News) Syria has condemned Turkish military action against Kurdish fighters in northern Syria and described it as a violation of its sovereignty. It called on the UN Security Council to take action. Turkey carried out a second day of shelling on Sunday of Kurdish forces advancing in northern Aleppo province.
Why Digital India took on Facebook and won (The Conversation) This week marked a significant event in the life of Digital India, in a country that is home to more than 400 million internet users. The Telecom Regulatory Authority of India (TRAI) passed a regulation prohibiting discriminatory tariffs on internet connections sold to end customers by telecom service providers. The verdict states in no uncertain terms that any form of differential pricing based on the content accessed by users is disallowed. Further:
TRAI's verdict not only affects Facebook's Free Basics but also a host of other similar programs which charge on a differential basis, mostly by providing free access to certain select music and video websites. It has seen such practices as unfair and anti-competitive, as marketing gimmicks that trap hapless customers.
This is a verdict strongly in favor of the principle of network neutrality (or net neutrality for short). And by implication, it makes Facebook's "Free Basics" program illegal in India.
Japan's economy contracts in fourth quarter (BBC News) Japan's economy contracted in the final three months of 2015, adding to a string of setbacks for the government's economic reform policy. Between October and December, it shrank by 0.4% compared with the previous quarter. The annualized rate was -1.4%. However, reports that Japan was in another recession earlier in the weekend were incorrect because the third quarter, which had previously been reported as negative were revised up to a positive number.
Japan Finance Minister says will take necessary steps to deal with forex volatility (Channel News Asia) Japanese Finance Minister Taro Aso said on Friday (Feb 12) the government would take necessary steps to deal with currency volatility, the minister's strongest hint of intervention since the yen began its surge this month. The dollar fell below 111 yen on Thursday to hit its lowest level since October 2014, triggering market speculation that Tokyo could conduct yen-selling intervention to prevent a further yen spike from hurting the export-reliant economy.
Corruption charges fail to faze Chinese investors (The Conversation) In 2014 alone, more than 70 top executives of China's state owned enterprises (SOEs) were investigated for corruption, as part of China's anti-corruption campaign. If this happened in western economies, corruption allegations would have sent the values of the affiliated firms south. But things are somewhat more complicated in China. If the sharemarket reaction is of any indication, then Chinese investors did not seem to care much about things like that.
China's central bank boss plays down currency fears (City A.M.) The Chinese government fears a sharp devaluation of the yuan could destabilise the economy. Many businesses in China have borrowed in dollars, but get their earnings in yuan. This so called currency mismatch leaves them vulnerable to exchange rate movements. China's long term plan is to move to a system without any foreign exchange control. If that plan is pursued when there is a steepening rate of decline in FX reserves, the risks become greater for more rapid devaluation and increased distress for Chinese business debt.
What needs to happen now to get medicinal cannabis to those who need it? (The Conversation) The government seems, sensibly, to prefer a single national system for medicinal cannabis rather than see eight different state and territory systems. There has been considerable negotiation between the Commonwealth, states and territories to this end. More will be needed.
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