Written by Econintersect
Early Bird Headlines 05 January 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.
Global
Asia stocks mixed, Hang Seng up more than 1 percent (CNBC) Japanese shares were under pressure on Thursday after jumping more than 2% in its previous session with a stronger yen weighing on exporters. The dollar fell against a basket of currencies from its highest levels in 14 years this week. The greenback traded at 102.22 on Thursday during Asian hours, slipping from Wednesday’s high at 103.44. During Asian trade, the West Texas Intermediate futures slipped 0.19% at $53.16 per barrel, while global benchmark Brent dipped 0.2% to $56.30.
Prices Are Rising Across the Globe. That’s a Good Thing, Right? (Bloomberg) From goods leaving the factory floor in China’s industrial towns to gasoline at the pump in Europe and America, prices that stayed low for years are finally going up. So that’s a good sign, right? After a period of central bankers fretting about deflation and resorting to bizarre techniques like negative rates to respond, the easy answer is “yes.” But whether faster price gains mean that the world is finally healing from the Great Recession may be revealed only by what happens next.
Bitcoin continues atmospheric rise (Twitter) Big spike in the yuan (see article under China later, below).
U.S.
Trump Sows Dismay in Rural America With Late Agriculture Choice (Bloomberg) Some folks in American farm country are wondering why they aren’t getting more love from Donald Trump. In the two months since the election, the president-elect selected 13 of 15 cabinet posts, from the departments of State to Justice to Health and Human Services. But he’s left to the end his candidate to lead the U.S. Department of Agriculture, the agency most connected to rural voters who helped propel him into office. Trump will be inaugurated Jan. 20. Agriculture and Veterans Affairs are the only two cabinet posts the president-elect has yet to fill. Among seven additional senior positions, Trump has named all but his chairman of the Council of Economic Advisers.
Battle lines drawn on ObamaCare repeal (The Hill) Democrats and Republicans are honing their lines of attack for a battle over ObamaCare repeal that is likely to consume Washington for much of the year. House Republicans discussed getting a repeal bill to Trump’s desk by Feb. 20, a fast timetable.
Trump plans executive actions for ObamaCare repeal (The Hill) Pence said Trump plans to take executive actions to start unwinding ObamaCare on day one, but did not get into specifics. Pence told reporters:
“It will be an orderly transition to something better … using executive authority to ensure it’s an orderly transition. We’re working now on a series of executive orders that will enable that orderly transition to take place even as Congress appropriately debates alternatives to and replacements for ObamaCare.”
Here are the fastest growing and shrinking states in the US (Business Insider) Utah is the fastest growing state and West Virginia the fastest shrinking.
EU
Income loss in European periphery is catastrophic (Twitter) And Northern EU, along with the U.S. is not too swift either.
UK
May’s Quick Choice of New Brexit Envoy Shows She Wants Control (Bloomberg) Theresa May moved decisively to silence mounting criticism that she has no plan for Brexit on Wednesday, by naming career diplomat Tim Barrow as the U.K.’s next ambassador to the European Union barely 24 hours after his predecessor resigned. The U.K. premier’s readiness to take such a crucial decision so quickly also suggests a weakness: the criticism of her approach to Brexit must have stung.
Busy roads put millions at higher risk of dementia (The Times) More than ten million Britons are at a higher risk of dementia because they live near a busy road, scientists have concluded. Those living in big cities were up to 12% more likely to develop dementia as a result of traffic fumes, according to a study of more than six million people. The risk rose the closer that people lived to heavy traffic. The scientists said that their findings were “of real public health significance” and the results would increase pressure for tougher curbs on pollution.
India
Indians Said to Deposit 97% of Notes Banned to Curb Graft (Bloomberg Quint) Indians have deposited nearly all the currency bills outlawed at the end of the deadline last year, according to people with knowledge of the matter, dealing a blow to Prime Minister Narendra Modi’s drive to unearth unaccounted wealth and fight corruption. Banks have received 14.97 trillion rupees ($220 billion) as of Dec. 30, the deadline for handing in the old bank notes, the people said, asking not to be identified citing rules for speaking with the media. The government had initially estimated about 5 trillion rupees of the 15.4 trillion rupees rendered worthless by the sudden move on Nov. 9 to remain undeclared as it may have escaped the tax net illegally, known locally as black money. A full validation of the bank notes is a set back for Modi who had been relying on this move to burnish his administration’s corruption fighting credentials and boost its popularity ahead of key state elections. The anti-corruption measure has dented economic growth and forced millions into lengthy bank queues, although it remains broadly popular.
China
Enough With the Tweets, China’s State Media Tells Trump (The New York Times) Twitter is banned in China but is seems that government officials have no problems reading Donald Trump’s tweets – and they don’t like them The NYT offers the transalation of a Xinhuanet headline: “An obsession with ‘Twitter foreign policy’ is undesirable.”
All Aboard China’s ‘New Silk Road’ Express (Foreign Policy) China’s “New Silk Road” just got a glitzy new route: a freight train service from the Zheijang province in eastern China all the way to London. China Railway Corp. announced on Monday the departure of the first train from Yiwu, a city of 1 million near Shanghai. It’s an impressive logistical feat, connecting 7,500 miles of rails to reach one of Europe’s largest capitals in 16 days. More importantly, the Yiwu-London line lays bare the geopolitical ambitions underpinning China’s “One Belt, One Road” policy that aims to re-create the ancient “Silk Road” trade route that connected China with Central Asia, the Middle East, and Europe. Until recently a U.S. ambition to help bring security to Central Asia, this “New Silk Road” could take on even more importance if the U.S.-China trade relationship goes south, as early and hawkish postures by President-elect Donald Trump and his team have indicated.
China’s offshore yuan surges most against dollar in a year (CNBC) China’s yuan stayed near its highest levels in a year against the greenback in offshore trade Thursday, offering some relief to a currency bedevilled by capital outflow concerns recently. On Thursday, dollar was fetching 6.8863 yuan at 11:09 a.m. HK/SIN in offshore trade. The pair had fallen as low as 6.8648 around 9:00 a.m. HK/SIN. On Wednesday, the dollar/yuan pair had its largest drop in a year in the offshore market, falling from as high as 6.9688 to as low as 6.8658. In part, that reflected the yuan’s climb onshore, as well as move by the People’s Bank of China (PBOC) to set its yuan mid-point at 6.9307 against the dollar, down from 6.9526 on Wednesday. China’s central bank does not allow the currency to move more than 2% from its daily fixing in onshore trade. While policymakers cannot closely control offshore trade of the currency, it usually remains relatively close to its onshore counterpart. But analysts noted that the offshore yuan’s move was also driven by mainland policymakers’ apparent efforts to tighten capital controls. See Bears Scramble for Yuan as China Chokes Flows, Aids Currency (Bloomberg)
Key renminbi borrowing rate spikes to one-year high (Financial Times) A closely-watched borrowing rate in Hong Kong for renminbi more than doubled to hit its highest level since the bout of volatility that struck China’s stock and currency market last January. The Hong Kong interbank borrowing rate for offshore renminbi (CNH) overnight loans – or CNH Hibor for short – jumped to 38.335%, the second-highest level on record, from 16.94767% on Wednesday.
