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posted on 08 June 2017

Early Headlines: Asia Stocks Mixed, Dollar Steady, Oil Rebounds, Gold Down, Wells Fargo Mortgages, Iraqi Kurds To Vote For Independence, Aramco IPO Mirage, Japan GDP Misses, Oz GDP Strong, And More

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Early Bird Headlines 08 June 2017

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.

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Global

  • Cautious trade in Asia ahead of UK election, Comey testimony; oil recovers slightly (CNBC) Asian markets were slightly higher on Thursday ahead of key risk events later in the day, with apparent land-to-ship missiles fired by North Korea in the morning added to the mix. The dollar was mostly steady against a basket of rival currencies at 96.733 at 12:02 p.m. HK/SIN, off an overnight low of 96.511. U.S. crude futures were up $0.24, or 0.5%, at $45.98 a barrel at 0026 GMT. On Wednesday. They closed down 5%, or $2.47 a barrel, in the previous session to the lowest settlement since May 4. Brent crude prices were $0.29 cents, or 0.6%, higher at a $48.35 a barrel, having fallen 4% in the previous session, also the lowest since May 4. Spot gold was down 0.2%, to $1,284.24 per ounce at 0439 GMT. U.S. gold futures for August delivery dipped 0.5% to $1,286.80 an ounce.

asia.pac.2017.jun.08

U.S.

  • A Federal Regulator Is Probing Wells Fargo’s Mortgage Practices (ProPublica) The Consumer Financial Protection Bureau is conducting an investigation into alleged improprieties in Wells Fargo’s mortgage fee practices. The CFPB is looking into allegations, first reported by ProPublica in January, that the bank inappropriately charged customers fees to extend their promised interest rates when their paperwork was delayed. The CFPB probe is in its early stages, according to a person familiar with it, and there is no certainty that the agency will take action. The CFPB has the power to levy fines and seek restitution if it finds a financial firm has violated the law. A CFPB spokesperson declined to comment. Wells Fargo is also conducting its own internal review, overseen by the law firm Winston & Strawn.

  • Why You Should Be Skeptical About Polls on Impeaching Trump (Time) The numbers are stark: Among registered voters in a Politico/Morning Consult poll at the end of May, 43% want Congress to begin impeachment proceedings against President Trump, up from 38% the week before. But experts say the polls may mean less than they appear to show.

Three polls by CNN/ORC showed roughly similar numbers of adults-about 30%-wanted to impeach President Clinton in 1998, President Bush in 2006 and President Obama in 2014, even though the presidents were in very different circumstances. And Gallup polls from the Watergate era show a clear majority of Americans didn’t support impeaching Nixon and removing him from office until August of

  • Intel Chiefs Dodge Questions on Alleged Trump Interference in Russia Investigation (The Atlantic) In a series of at times tense exchanges on Wednesday, top U.S. intelligence officials repeatedly declined or evaded questions from lawmakers on the Senate Intelligence Committee about their interactions with President Trump and whether the administration ever directed them to intervene in the ongoing federal Russia investigations. Instead, senior administration officials offered up a blanket, albeit vague, defense of the administration. National Security Agency Director Michael Rogers insisted that he has “never been directed to do anything I believe to be illegal, immoral, unethical, or inappropriate," and does not remember feeling “pressured to do so." Director of National Intelligence Daniel Coats told the panel that he has “never been pressured - I've never felt pressure to intervene or interfere in any way with shaping intelligence in a political way or in relationship to an ongoing investigation," referring to his interactions with the president or other administration officials. Deputy Attorney General Rod Rosenstein and Acting FBI Director Andrew McCabe also testified during the hearing.

  • Fox News Host Suggests Press Covers Russia Investigation Too Much - Because Benghazi! (Crooks and Liars) Fox host Jon Scott came up with the FNC all-purpose GOP talking point, Benghazi, as an explanation of the media furor over the Russia investigation. The argument is something like media is extracting "payback" for the lengthy GOP investigation of Benghazi, a disaster that occurred under the State Department administration of Hillary Clinton.

Germany

Iraq

  • Iraqi Kurds to hold independence referendum in September (Deutsche Welle) The Iraqi Kurds will hold a independence referendum in September that is sure to pass. The referendum is more about gaining bargaining chips with Baghdad and overcoming Kurdish divisions than a drive for statehood.

Saudi Arabia

  • Aramco IPO Mirage (Behind the Balance Sheet) Stephen Clapburn writes that an IPO of Saudi Aramco in late 2018 at a valuation of $2 trillion, which has been widely followed in the media, may be a huge dose of hype. He believes the Aramco IPO is unlikely to happen in 2018, if at all, for three main reasons: timing, the oil price, and valuation. One of the many areas discussed here is the unbelievable constant level of Saudi oil reserves, mostly likely a non-verified number simply pulled out of thin air. See first graph below. Another area is the very probable rising cost of production, also hidden from public view. See second graph below.

North Korea

The launches come less than a week after the United Nations Security Council passed fresh sanctions on the reclusive state, which said it would continued to pursue its nuclear and missile program without delay.

The warship-killing cruise missiles were launched Thursday morning from the North Korean coastal city of Wonsan and flew about 200km, South Korea's Office of Joint Chiefs of Staff said in a statement.

Japan

  • Japan first quarter GDP up 0.3% on quarter, 1.0% on year, missing expectations (CNBC) Japan on Thursday said GDP for the first quarter came in weaker than expected with a 0.3% gain on quarter and at a 1.0% pace annually, with the year-on-year figure revised down from a preliminary estimate of a 2.2% growth. A Reuters poll of analysts saw quarter figures up 0.6% and the annual level at a gain of 2.4%. After the data, Japan's cabinet office said its view the economy is in moderate recovery remains intact.

China

  • US state of California signs accord with China for green technology development (Deutsche Welle) California governor Jerry Brown met with Chinese leaders on Tuesday in Beijing and signed a memorandum of understanding to develop more green technology and reduce greenhouse emissions. The agreement builds on subnational pacts Brown signed with officials in Sichuan and Jiangsu provinces earlier this week. Brown told President Xi Jinping in a 45-minute meeting:

"I have proposed that California will cut its greenhouse gases 40 per cent below 1990 levels and that we'll have 50 per cent of our electricity from renewables. "To keep that goal, we need a very close partnership with China - with your businesses, with your provinces, with your universities,"

Australia

  • Gross domestic product rose 0.3% from prior quarter; economists estimated 0.3% gain

  • Economy grew 1.7% from a year earlier, compared with a forecast 1.6% increase

  • Household savings ratio was 4.7%; household spending rose 0.5% q/q

  • Investment in total dwellings fell 4.4% in the quarter

  • Aussie dollar bought 75.40 U.S. cents at 12.52 p.m. in Sydney, compared with 75.03 cents before report

South Africa

  • South Africa fell into recession, data show (MarketWatch) South Africa's economy fell into a technical recession in the first quarter of 2017, the country's statistics office confirmed Tuesday. The gross domestic product of Africa's most developed economy shrank at an annualized rate of 0.7% in the first three months of the year, following a contraction of 0.3% in the fourth quarter of 2016, the office said. With two consecutive quarters of negative growth, South Africa's economy now meets the definition of a recession used by most economists. Its last technical recession ended in 2009.

The statistics office said 12.8% output growth in the mining and quarrying industry failed to make up for a 5.9% contraction in the trade, catering and accommodation sector and a 3.7% decline in output from manufacturing.

The disappointing growth reading followed last week's announcement by the statistics office that unemployment spiked to 27.7% in the first quarter--the highest jobless rate since 2003.

Canada

  • Canada military budget to dramatically increase over next decade (Deutsche Welle) Canadian Defense Minister Harjit Sajjan announced Wednesday that the country's military spending would increase by 70% over the next decade. Sajjan said the increased spending would create "a Canada that is strong at home, secure in North America and engaged in the world".

The plan envisages raising military spending to 1.4 percent of GDP in 10 years. Canada currently spends 18.9 billion Canadian dollars ($14 billion, 12.4 billion euros) on military spending, but that amount would increase to 32.7 billion Canadian dollars by 2026.

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