Written by Econintersect
Early Bird Headlines 08 December 2016
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.
Global
Asia markets jump after Wall Street rally; Nikkei at highest levels since January (CNBC) Asian markets rose Thursday, after major U.S. indexes had a banner session to hit record highs overnight, ahead of the European Central Bank’s last interest rate decision for the year. During Asian trade, U.S. crude futures were up 0.26% at $49.90 a barrel and Brent futures traded up 0.06% at $53.03. Oil prices came under pressure on Wednesday in the U.S. from bearish U.S. crude inventory data and doubts that the Organization of Petroleum Exporting Countries and Russia would come through with the promised output cuts.
Trump Win Set Off $2 Trillion Shock Rotation to Stocks From Debt (Bloomberg) Donald Trump’s election win sent a $2 trillion shock wave through global markets over the past month. That’s how much equities’ global market value has jumped. And that’s about the size of the loss in worth of the Bloomberg Barclays Global Aggregate Index of bonds, over the worst month for global bonds in dollar terms on record.
U.S.
Donald Trump Is Said to Intend to Keep a Stake in His Business (The New York Times, CNBC) President-elect Donald J. Trump is considering formally turning over the operational responsibility for his real estate company to his two adult sons, but he intends to keep a stake in the business and resist calls to divest, according to several people briefed on the discussions. Under a plan now being considered by the Trump family and its lawyers, Ivanka Trump, Mr. Trump’s elder daughter, would also take a leave of absence from the Trump Organization, in the surest sign that she is exploring a potential move to Washington with her husband, Jared Kushner. Mr. Kushner is discussing an as-yet undetermined role advising his father-in-law, and Ms. Trump plans on being an advocate on issues in which she has a personal interest, like child care.
Trump’s Vow to Control Drug Costs Alerts Another Industry (Bloomberg) President-elect Donald Trump promised to drive down the cost of medicines, defying investors who saw a boon in his election last month and injecting himself again into a contentious economic debate.
Is Universal Basic Income the Answer to an Automated Future? (NBC News) As we innovate ourselves away from conventional work and labor, an unlikely question begins to form: How do we feel about free money? First floated by 16th-century philosopher Thomas More as a “cure for theft,”basic income is finding new life 500 years later amid concerns over technology edging humans out of the workforce. If advanced machines are taking all the jobs, goes the thinking, then how will people earn money to support themselves? A “universal basic income” in which all citizens receive free money from their government – a figurative tax break just for being alive – is a possible solution.
EU
Euro-Dollar Volatility Spikes Ahead Of ECB Meeting (Alternative Economics) See also Kiwi Paces Rally Versus Dollar; Euro Volatility Soars Before ECB (Bloomberg).
UK
British PM May says wants orderly Brexit but admits it will be complex: FT (Reuters) British Prime Minister Theresa May said she wants a smooth and orderly Brexit but admitted that the negotiation to leave the European Union will be complex, the Financial Times reported. May said the EU did not want other members to break away as Britain plans to, meaning the talks could be tense.
Germany
Deutsche Bank Records Said to Show Silver Rigging at Other Banks (Bloomberg) Eight months after Deutsche Bank AG settled a lawsuit claiming it manipulated gold and silver prices, documents it disclosed as part of the accord provide “smoking gun” proof that UBS Group AG, HSBC Holdings Plc, Bank of Nova Scotia and other firms rigged the silver market, plaintiffs claim.
Greece
Greeks strike against austerity before budget vote, bailout review (Reuters) Greeks went on strike on Thursday to protest planned labor reforms and painful austerity cuts demanded by the country’s European Union and International Monetary Fund lenders as part of a crucial bailout review. Passenger ships remained docked at ports, city transport was disrupted and local administration offices shut down as workers joined the 24-hour nationwide walkout called by the country’s largest private and public sector unions, GSEE and ADEDY.
Italy
Italy Has A $360 Billion NPL Issue (Alternative Economics)
Iraq
Iraq Can’t Count on Kurds or Oil Companies for Help on OPEC Cuts (Bloomberg) Iraq can’t count on the self-governed Kurds in the north or international oil companies to help it cut crude production as promised at an OPEC meeting last week. That may leave the country with no option but to slash state-controlled supplies to comply with its quota. Under the deal the Organization of Petroleum Exporting Countries reached last Wednesday, Iraq must reduce crude output by 210,000 barrels a day from October levels. But to achieve that, OPEC’s second-biggest producer may have to rely on the crude it fully controls, which is less than 500,000 barrels a day. International companies including BP Plc and Royal Dutch Shell Plc pump most of Iraq’s oil, and the semi-autonomous Kurds contribute more than half a million barrels a day on top.
Russia
Russia Sells $11 Billion Stake in Rosneft to Glencore, Qatar (Bloomberg) Russia sold an €10.2-billion ($11 billion) stake in its largest oil producer to commodity trader Glencore Plc and Qatar’s sovereign wealth fund in a triumph for President Vladimir Putin, who announced the deal on state television personally. In a surprise deal that comes despite U.S. and European Union sanctions against Russia, the buyers will share a 19.5% stake in state-run Rosneft PJSC, which pumps almost 5 million barrels a day. The biggest foreign investment in Russia since the crisis in Ukraine, it also marks a stunning return to deal-making for Glencore Chief Executive Officer Ivan Glasenberg little more than a year after his company was forced to raise cash from shareholders.
India
Tourists in India forced to busk for cash after ‘demonetisation’ (news.au.com) Hat tip to Sanjeev Kulkarni. Australian and European tourists have been forced to busk and beg for money on the streets of India after “demonetisation” of high-value currency left them “virtually penniless“. Around 10 to 12 travellers were seen dancing and playing instruments in front of a crowd in Pushkar, Rajasthan, after their banknotes became worthless and ATMs ran out of cash. The group, which included holiday-makers from France and Germany, are trying to fund tickets to Delhi, where they can get help from their countries’ embassies, displaying placards reading, “You can help us” and “Money problem“.
China
China November trade data defy expectations as exports, imports expand (CNBC) China’s November exports rose 0.1% on-year on a dollar denominated basis, reversing October’s 7.3% decline, Reuters reported on Thursday citing official data. Imports meanwhile grew at the fastest pace since September 2014, rising 6.7% from a year ago. Imports into China fell 1.4% in October. That brought the November trade surplus to $44.61 billion versus $49.06 billion in October. Reuters had predicted a 5.0% decline for exports, a 1.3% decline for imports and a $46.3 billion trade surplus. In Chinese yuan terms, exports expanded expanded 5.9% while imports rose 13% from a year ago.
The Factory to the World Has a New Export: Inflation (Bloomberg) The factory to the world has a new export: inflation. And it’s shipping faster than many thought possible just a few months ago. Producer prices seen rising 6% by third quarter 2017, CBA says.
