Written by Econintersect
Early Bird Headlines 01 February 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
Asian shares mostly higher, FOMC meeting eyed (CNBC) Asian shares were mostly higher on Wednesday after China’s manufacturing sector showed signs of expansion in January and as investors looked ahead to the first review of policy this year by the Fed. The dollar index remained under pressure trading at 99.691.
Oil prices dip as rising US supplies offset OPEC cuts (Reuters, CNBC) Oil dipped in Asia trading hours on Wednesday, weighed down by ongoing high supplies despite an OPEC-led production cut, but prices remained within a narrow trading band that has been in place since late January. Brent crude futures, the international benchmark for oil prices, were trading at $55.44 per barrel at 0423 GMT, down $0.14 from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $52.74 a barrel, down $0.07.
These Countries Are Struggling the Most to Support Their Retirees (Bloomberg)
U.S.
Gorsuch Takes Stage as Trump Picks Conservative to Supreme Court (Bloomberg) President Donald Trump’s Supreme Court nominee Neil Gorsuch will meet with senators Wednesday at the start of what promises to be a contentious confirmation fight as Republicans look to entrench a conservative majority on the court for a generation. Gorsuch, 49, is a champion of religious liberty known for his crisp and, at times, pointed writing style. He has faulted liberals for an “overweening addiction to the courtroom“. Educated in Ivy League schools and the University of Oxford, he has served on the federal appeals court in Denver since being appointed by President George W. Bush in 2006.
Paul Ryan urges Republicans to back travel ban despite anger over its rollout (The Guardian) Paul Ryan has urged Republicans to stand by Donald Trump’s travel ban on people from seven Muslim-majority countries, throwing his support behind the restrictive policy despite its mixed reactions from lawmakers on Capitol Hill. Top congressional Republicans are miffed that they were neither consulted nor briefed on suspension of travel from seven Muslim-majority countries, and they say ‘chaos ensued’.
State Dept. Officials Should Quit if They Disagree With Trump, White House Warns (The New York Times) The White House on Monday warned State Department officials that they should leave their jobs if they did not agree with President Trump’s agenda, an extraordinary effort to stamp out a wave of internal dissent against Mr. Trump’s temporary ban on entry visas for people from seven predominantly Muslim countries. Career officials at the State Department are circulating a so-called dissent cable, which says that Mr. Trump’s executive order closing the nation’s doors to more than 200 million people with the intention of weeding out a handful of would-be terrorists will not make the nation safer, and might instead deepen the threat.
How Trump’s travel ban differs from Obama’s visa restrictions (The Conversation) Trump has pointed the finger at Obama for creating the list of seven countries in his new travel ban. Trump has compared his new policy with an alleged visa ban for refugees from Iraq for six months, issued in 2011 under his predecessor. More recently, legislation that imposes travel restrictions on travellers from the seven countries had already passed congress under the Obama administration. This author says:
Trump’s new order, however, differs from the December 2015 law in its scale. Under the new rules, the US is detaining people that have already undergone lengthy vetting procedures. Imposing a blanket travel ban against entire nationalities not only violates commitments the US made under international law and is controversial constitutionally, it is also imprudent policy. Jihadist groups are already celebrating the new travel ban as a propaganda success, bolstering their claim that the US is waging a war on Islam – despite Trump’s attempts to underline that the travel ban is “not about religion”.
The U.S. Dollar Gets an Injection of Political Risk (Bloomberg) Currency traders have long been used to analyzing political risk — just not so much when it comes to the U.S. dollar. The greenback has been rattled this week by political concerns, spurring debate over the long-term implications of Trump administration policies and their impact on demand for assets denominated in the world’s reserve currency. It’s a relatively unfamiliar dynamic for those accustomed to looking at bond-yield differentials when attempting to gauge the dollar’s outlook.
UK
Labour and Tory ‘Remoaners’ are plotting to ‘delay and dilute Brexit’ (The Telegraph) Pro-European Union MPs who claim they want more details about Brexit are seeking to “obfuscate, delay and dilute” the result of the referendum, Michael Gove has said. As many as 100 MPs – mainly from the Labour Party and the Scottish National Party – will on Wednesday vote against a law to trigger the start of Britain’s exit from the EU.
UK growth forecast upgraded amid warning over inflation (The Guardian) The surprising resilience of consumer spending in the months since the Brexit vote has forced one of the UK’s leading economic thinktanks to revise up its growth forecasts for the second time since the referendum. In its quarterly health check of the economy, the National Institute for Economic and Social Research (NIESR) said it now expected growth of 1.7% this year – only slightly down from the 2% recorded in 2016.
Why three UK airports have ditched security screenings and bag checks (The Telegraph) Campbeltown Airport on the west coast of Scotland made aviation history on Monday, becoming the first airport to operate flights in mainland Britain without any security screenings for nearly 50 years. The ban on sharp objects, firearms and liquids in containers more than 100ml still applies, but passengers are only required to verbally confirm they are not carrying these items before boarding flights. Passengers taking a flight to Campbeltown from Glasgow (the only destination that is directly served by the airport) will still need to go through the standard full security checks at Glasgow Airport. The new arrangements have also been rolled out at Barra Airport and Tiree Airport, which are also operated by HIAL.
Not long ago, there was a British European identity – so what happened? (The Conversation) The author writes:
I recently came across news footage from 1948 which sheds some interesting light on how British-European identity developed. Among other things, the film features a group of British children, orphaned by the war, boarding a ship for a sponsored holiday to Belgium. The narrator explains that through such travels, “our children will be more than British: they’ll be Europeans”.
Iraq
The battle for Mosul: ‘I have never seen such hard fighting like this’ (The Guardian) Iraqi forces have been trying to oust Isis since October but they must fight among, protect and win over the many thousands of civilians in the city, finds Ghaith Abdul-Ahad in a report made in collaboration with PBS Frontline.
India
Highlights – India unveils budget for recovery and the poor after cash crunch (Reuters) Here is the summary of India’s new $322 billion budget. It is approximately 15% of GDP and will create a deficit of about 3.2% of GDP.
FISCAL DEFICIT
* Projects 2017/18 fiscal deficit at 3.2 percent of GDP
* Government remains committed to 2018/19 fiscal deficit at 3 percent of GDP
* The 2017/18 budget seeks to pursue prudent fiscal management to preserve financial stability
GROWTH
* Jaitley says India seen as an engine of global growth
EXPENDITURE
* Estimates 2017/18 total expenditure at 21.47 trillion rupees
* Capital spending raised by 25.4 percent on year in 2017/18
BORROWING
* 2017/18 net market borrowing estimated at 3.48 trillion rupees
* 2017/18 gross market borrowing seen at 6.05 trillion rupees
* Government to switch 250 billion rupees of bonds in 2017/18
INFLATION
* Consumer price index inflation is expected to remain within the central bank’s mandated range of 2 to 6 percent
India’s Annual Budget Presentation (Bloomberg) Loads of details, lots of graphics here.
Budget 2017: Jaitley Outlines 10 Themes To ‘Transform, Energise And Clean India’ (Bloomberg Quint) Finance Minister Arun Jaitley announced ten distinct themes in his Budget speech on Wednesday, thereby setting the agenda for the financial year 2017-2018:
Farmers
Rural Population
Youth
Poor and Underprevilaged
Infrastructure
Financial Sector
Digital Economy
Public Service – effective governance
Prudent Fiscal Management
Tax Administration “honouring the honest”
Jaitley Vows Prudent Spending for Rural India in Pre-Poll Budget (Bloomberg) India will spend more in rural areas after advisers warned of a steep slowdown triggered by Prime Minister Narendra Modi’s cash ban. The government will seek to provide a record 10 trillion rupees ($148 billion) in loans to farmers in the year starting April 1, Finance Minister Arun Jaitley said Wednesday in New Delhi, while announcing the budget. He also boosted allocations for a guaranteed rural jobs program and an irrigation fund. The government is trying to curry favor ahead of key state elections this year.
China
Chinese manufacturing expands in January, official PMI shows, pointing to economic stabilization (CNBC) China’s official manufacturing Purchasing Managers’ Index (PMI) showed the industrial sector continued to expand in January and a tad faster than expected, as the mainland economy shows signs of stabilizing. The manufacturing PMI came in at 51.3 in January, down a smidgen from 51.4 in December, but still better than a Reuters poll forecast of 51.2. A reading above 50 indicates expansion, while a reading below signals contraction. The official non-manufacturing PMI, which takes a reading on the services sector, rose to 54.6 in January from 54.5 in December.
