Written by Econintersect
Early Bird Headlines 28 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.
Asia markets mixed as investors await key speech from President Trump (CNBC) Asia markets finished mixed on Tuesday, despite U.S. gains, as investors await a key speech from President Donald Trump. Oil, gold and the U.S. dollar were little changed.
Trump says Obama behind leaks (CNN) President Donald Trump said he believes former President Barack Obama has been behind the leaks within his administration and the sizable, angry town hall crowds Republicans have faced across the country. Trump was asked in an interview on Fox News‘ “Fox and Friends” if he believed Obama was responsible for the town hall protests against Republicans this month. Trump says “that’s politics“.
GOP Obamacare Plan Suffers Blow With Rejection by Key Republican (Bloomberg) The leader of the largest group of House conservatives said Monday he couldn’t support the party’s existing Obamacare replacement strategy. Representative Mark Walker, who chairs the 170-member Republican Study Committee, also said he won’t recommend his colleagues do so, either. Walker said in a statement, warning that the emerging GOP plan would appear to create a new, expensive entitlement program:
“There are serious problems with what appears to be our current path to repeal and replace Obamacare.”
Rolling Back Dodd-Frank: Is It A Good Idea? (Bloomberg) This Op Ed argues for less regulation of banking.
Time and again banks have been subject to unfair and capricious regulatory decisions in the post-crisis era which do not square with precedent. Rather, these decisions are frequently based on new unwritten policies adopted without prior notice, public comment or other elements of proper administrative procedure. Banks rarely appeal these decisions or comment publicly on them because of fear of retribution by regulators.
Sterling tumbles against the dollar on speculation over another Scottish independence referendum (City A.M.) Concerns around a renewed push for Scottish independence have increased in strength since the EU referendum, however yesterday The Times reported that Theresa May is preparing for another vote. The pound tumbled to $1.2392 against the dollar in the early hours of this morning, and at pixel time was down 0.5%, hovering around $1.24.
U.K. Economic Momentum at Risk as Consumer Confidence Wanes (Bloomberg) U.K. consumer confidence weakened this month as the pound’s slide, rising prices and weak pay growth began to weigh on the powerhouse of Britain’s economy. GfK’s household-sentiment index fell in February, remaining below zero for a 10th month, and the appetite for making major purchases decreased, indicating that Britons may be starting to rein in spending. A separate gauge by YouGov and the Centre for Economics and Business Research also declined, with an index of job security slumping to the lowest since 2014.
The costs of running a business in London are starting to outweigh the benefits (City A.M.) Three quarters (74%) of businesses who responded to a recent survey by the Federation of Small Businesses said business rates (assessments) were one of the main issues affecting their company, followed by economic uncertainty on 36%, and recruiting the right staff on 33%. London is in serious danger of losing its vital support system of micro and small businesses. Our data shows that the average micro business will have to pay £17,000 ($21,250) in business rates from April this year following the much-criticised revaluation.
Government cuts discount rate: Insurance sector says “crazy” decision will cost the industry billions (City A.M.) The discount rate, mandated by the Ministry of Justice and the reference to which insurers discount compensation on personal injury claims, is to be adjusted from 2.5% to minus 0.75%. The insurance sector has lobbied the government hard against a large downward adjustment with the Association of British Insurers (ABI) going to court to challenge the move. A lower discount rate increases the up front value of claims.
French inflation softens to 1.4% in Feb; Q4 growth confirmed at 0.4% (Financial Times) France’s inflation rate dipped unexpectedly this month, falling back to 1.4% after hitting its highest level in four years at the start of 2017. A preliminary reading from Insee this morning said annual inflation had softened from January’s 1.6% this month and came in lower than the 1.7% forecast by economists for February. Consumer prices have been on the march across Europe on the back of climbing energy prices but today’s figures point to an uneven inflationary performance across the eurozone. By contrast, inflation hit 3.1% in Spain this month. GDP growth in the eurozone’s second largest economy was also confirmed at a 0.4% pace in the three months to the end of December – its best quarter since the start of last year and matching the rate in Germany in the period. The economy grew 1.1% in 2016 as a whole, softer than Germany’s 1.9% and the eurozone average of 1.7% last year.
Turkey Said to Seek U.S. Support to Attack IS Syria Bastion (Bloomberg) Turkey is seeking U.S. support to launch a ground offensive against Islamic State’s main stronghold in Syria, an operation that could see troops passing through areas controlled by Kurdish militants hostile to Ankara, according to a Turkish official familiar with the talks. The attack on Raqqa could start within a month but hinges on support from the U.S., which would include airstrikes and intelligence sharing, the official said on condition of anonymity. The American stance on the proposal has become more positive in the latest round of talks, the official said.
Russia Looks to Exploit White House ‘Turbulence,’ Analysts Say (The New York Times) The Kremlin, increasingly convinced that President Trump will not fundamentally change relations with Russia, is instead seeking to bolster its global influence by exploiting what it considers weakness in Washington, according to political advisers, diplomats, journalists and other analysts. Russia has continued to test the United States on the military front, with fighter jets flying close to an American warship in the Black Sea this month and a Russian naval vessel steaming conspicuously in the Atlantic off the coast of Delaware. Alexei A. Venediktov, the editor in chief of Echo of Moscow, a liberal radio station, said of President Trump:
“They think he is unstable, that he can be manipulated, that he is authoritarian and a person without a team.”
OECD urges Indian tax reform to resolve inequality (CNBC) India must move quickly to overhaul its tax system if it is to succeed in pursuing an inclusive growth agenda and maintain its position as the G20’s fastest-growing economy, the Organization for Economic Co-operation and Development (OECD) has said. In its annual economic survey, the multi-country forum praised India’s continued economic growth, which, at 7.5%, was the highest level of G20 countries; however, it urged the Indian government to focus on tax reforms to ensure wealth is distributed more evenly across what is a famously economically imbalanced society.
`Big Money’ Missing India Stock Rally as Earnings Signal Awaited (Bloomberg) Overseas investors are in a bind: Bank of America Merrill Lynch estimates it will take at least till September to gauge the earnings-growth potential of Indian companies given jolts on the policy front, yet the nation’s benchmark index is among Asia’s best performing this year.
The S&P BSE Sensex has advanced 4.2% so far in February as offshore fund managers ended four months of sales to invest a net $1.4 billion in local stocks. The “big money” is still awaiting clarity on the impact of a liquidity crunch after the government scrapped 86 percent of currency bills in November, said Deepak Ramachandra, the Mumbai-based head of institutional equity sales at Bank of America Merrill Lynch. There’s also the roll-out of a nationwide sales tax — scheduled for July 1 — to contend with, he said.
North Korea executed 5 security officials, South Korea says (CNN) Five North Korean officials have been executed by anti-aircraft guns, according to South Korean lawmakers. The deputy minister-level officials had worked under the recently fired state security chief Kim Won Hong, and are believed to have been executed for making false reports to North Korean leader Kim Jong Un, according to two parliamentarians who had been briefed by South Korea’s National Intelligence Service (NIS).