Written by Econintersect
Early Bird Headlines 15 March 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 stocks mostly lower, Toshiba plunges 12% as delisting threat looms (CNBC) Asian equities struggled on Wednesday, as traders awaited a rates decision from the U.S. Federal Reserve and Dutch elections. The dollar remained relatively strong against the basket of currencies, trading at 101.65 at pm HK/SIN, above levels around 101.4 seen yesterday. Oil and gold also rose. Spot gold edged up 0.3% to $1,201.64 per ounce by 0313 GMT. U.S. gold futures were down 0.1% at $1,201 per ounce.
Oil prices jump after data shows surprise US stock draw (CNBC) It’s not exactly what we would call a jump, but oil prices are up significantly in Asia during Wednesday trading.
Oil prices rebounded from three-month lows on Wednesday after industry data showed a surprise drawdown in U.S. crude stockpiles and as Goldman Sachs put a positive spin on OPEC’s compliance with output cuts.
U.S. West Texas Intermediate crude was trading up 83 cents, or 1.7 percent, at $48.42 a barrel by 0536 GMT. That came after the contract fell for a seventh session on Tuesday in its longest losing streak since January 2016.
Brent futures were up 76 cents, or 1.5 percent, at $51.68, after settling down 43 cents at $50.92 on Tuesday, their lowest finish since November.
Investors Are Betting Against Trump’s Trade War (Bloomberg) The unpredictable novice in the White House is making emerging markets seem less dangerous by comparison, say strategists like Goldman Sachs Group Inc.’s Kamakshya Trivedi.
And that’s giving him the confidence to recommend buying local-currency assets in countries like Russia and Brazil, ignoring the wreckage of previous Federal Reserve tightening cycles.
With economies in the strongest position they’ve been in years to withstand higher U.S. interest rates, investors are counting on developing countries to keep offering big returns, and they’re skeptical U.S. President Donald Trump will deliver enough of his protectionist agenda to stand in their way.
Poor Pay Rises Around the World Leave Economists Puzzled (Bloomberg) Unemployment is falling almost everywhere. Wages aren’t rising much anywhere. Part of the problem may derive from low productivity improvement, but economists say that does not explain all that is going on.
From York, U.K. to Montreal, and Osaka to Seattle, it’s a pretty good time to be looking for a job as a member of the labor force in many developed countries.
Unemployment rates in Group of 7 nations such as Canada, the U.S., Britain, Japan and Germany are nearing or even slightly below what officials describe as a maxed-out jobs market.
But wage gains worldwide have been only creeping along. For developed economies, that means the powerful cycle of higher compensation fueling stronger demand and then business investment and, eventually, a little more pricing power, has proven elusive.
U.S.
Pressure mounts for changes to ObamaCare bill (The Hill) House Republican leaders are coming under intense pressure to change their ObamaCare repeal-and-replace bill ahead of a possible floor vote next week.
White House spokesman Sean Spicer on Tuesday said the administration is working with House leadership on a manager’s amendment that would make changes to the legislation. Those changes, which GOP leadership offices declined to discuss, could be aimed at bringing conservatives on board.
Yet any changes to the bill could further alienate moderate members who are worried about lost coverage and price spikes for lower-income and older people. Their fears were heightened by a Congressional Budget Office (CBO) report, released Monday, that found the bill could result in 24 million people becoming uninsured over the next decade.
In Trump presidency, nearly 2,500 refugees have entered U.S. from six travel-restricted countries (Pew Research Center) A total of 2,466 refugees from six countries under new travel restrictions – Iran, Libya, Somalia, Sudan, Syria and Yemen – have resettled in the United States since Donald Trump became president, according to a Pew Research Center analysis of U.S. State Department data. The number of refugees from the six travel-restricted countries represents 32% of all refugees who have entered the U.S. since Trump took office. Including refugees from countries with no travel restrictions, a total of 7,594 refugees have entered the U.S. during Trump’s first seven weeks in office (Jan. 21 to March 10). Of these refugees, 3,410 are Muslims (45%) and 3,292 are Christians (43%), with other religions or the religiously unaffiliated accounting for the rest.
Trump Paid $38 Million Tax on $150 Million Income, Return Shows (Bloomberg) See also Journalist mailed Trump’s tax return: ‘Entirely possible’ he leaked it himself (The Hill). President Donald Trump made more than $152.7 million and paid $38.4 million in federal taxes in 2005, according to two pages of his federal income tax return for that year that were broadcast by MSNBC and posted online.
The White House confirmed those amounts in an emailed statement after the network said it planned to release the returns. The amounts reported on MSNBC suggested Trump paid an effective tax rate of roughly 24 percent to 25 percent in 2005. Trump has refused to make his tax returns public.
During an appearance on “The Rachel Maddow Show,” veteran tax journalist David Cay Johnston said he got the returns when they “came in the mail over the transom” but doesn’t know who sent them. The tax returns that Maddow displayed on air revealed a stamp that read “Client Copy.”
Click to view both pages of return.
UK
The great unknowns of Brexit (Financial Times) The author says:
It seems to me likely that Brexit will work out badly for Britain and fairly badly for the EU. But there are so many different variables involved that nobody sensible can be sure.
The UK Trade Balance with the EU (Twitter)
Scots want to remain in UK, new poll reveals(The Times) Nicola Sturgeon’s threat to hold another Scottish independence referendum may be hollow. Scottish voters are opposed to independence, with support for staying in the United Kingdom at its strongest for two and a half years, a poll for The Times reveals. It found that 57 per cent of voters backed staying inside the UK and 43 per cent wanted independence, once “don’t knows” and those not prepared to vote were excluded. This not too far greater a spread then the official 2014 referendum, but slightly more against independence. The 2014 vote was 55% to 45% to continue Scotland in the UK.
Russia
Russian Foreign Policy Is Incomprehensible for a Reason (Bloomberg) Putin appears to put more faith in the wise Soviet-trained professionals who make his official foreign policy, but he also appears grudgingly to agree with some of the nationalists’ ideas. That introduces an element of unpredictability into Russia’s game of restoring the Soviet Union’s international influence.
India
Modi’s Approach to Foreign Policy Has Disrupted India’s Ties With China (The Wire) Hat tip to Sanjeev Kulkarni. Modi has turned India into a military and diplomatic ally of the U.S. In China’s eyes, this has transformed India from a like-minded country, that shared its opposition to the U.S.’s attempt to create a unipolar world, into an adversary.
Understanding Modi’s Magical Appeal (Bloomberg)
Donald Trump’s white, working-class voters don’t seem to mind his cabinet of plutocrats. Likewise, Modi’s poor supporters don’t seem to have noticed that their loudest champion came to power with the help of the richest people in India, and remains closely allied to them.
In fact, dwelling on such apparent inconsistencies makes us badly prepared for the political upheavals of our time. We must grasp that mass politics is often irrational rather than a negotiation between rational interests. Far from being a logical affair, it is “magic,” as the Austrian writer Hugo von Hofmannsthal, who lived through the first great onslaught of demagogues in modern history, wrote.
Japan
Japan could lead a resurgent TPP: Asian Trade Centre (CNBC) The 11 non-U.S. countries who signed on to the Trans-Pacific Partnership (TPP) should realize that the trade pact can survive without buy-in from Washington, and that Japan could lead the way, an expert from the Asian Trade Centre said Wednesday. Deborah Kay Elms, executive director at the Asian Trade Centre, told CNBC:
“If you look at what the U.S. committed in the TPP, the reality is they did very little, in part because the U.S. market is already open.”
