Written by Econintersect
Early Bird Headlines 15 June 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.
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Global
Asian markets turn cautious after Fed raises interest rates (CNBC) Asian equities closed mostly lower on Thursday after the U.S. Federal Reserve raised interest rates for the second time this year, as was widely expected by markets. By 0806 GMT, the index which measures the dollar‘s broader strength was up 0.2% at 97.145. Brent crude oil fell $0.30 to $46.70 a barrel, its weakest since May 5 and just above six-month lows, before recovering a little ground to trade around $46.80 by 0755 GMT. U.S. light crude was down $0.30 at $44.43, also a six-week low. Spot gold rose 0.2% to $1,262.86 per ounce by 0800 GMT. It hit a low of $1,256.65 in the previous session, its weakest since May 26. U.S. gold futures for August delivery fell 0.9% to $1,264.50 an ounce.
The Global Economy Is Rebounding, But There’s One Big Problem (Bloomberg) There’s a dark cloud building behind the world’s best period of synchronous growth among developed and emerging economies this decade — one that in time could rain down volatility in global markets. The problem, identified by strategist and hedge fund manager Stephen Jen, is a deepening imbalance in the lack of new safe-haven assets as the world’s output expands.
China and other developing nations are accumulating wealth, but failing to create sophisticated local markets that feature their own risk-free instruments. That’s left a dangerous reliance on U.S. Treasuries, according to Jen’s argument, perpetuating a bond bubble and pushing investors into riskier assets.
Gasoline’s Unusual Summer Stockpile Surge Weighs on Oil (Bloomberg) Gasoline inventories are moving in the wrong direction this summer, rising the most in the first two weeks of June since 2001. The U.S. is hoarding more than 242 million barrels of gasoline, the highest for this time of year in weekly data going back to 1990. The surge in stockpiles sent gasoline futures on the New York Mercantile Exchange plunging to the lowest since late November at $1.4294 a gallon and pulled crude oil below $45 a barrel.
U.S.
Trump is reportedly being investigated for obstruction of justice (Business Insider) See also Mueller Examining Whether Trump Sought to Slow Flynn Probe (Bloomberg). Special Counsel Robert Mueller’s investigation into Russian election interference expanded to include whether President Donald Trump attempted to obstruct justice just days after he fired former FBI Director James Comey, The Washington Post reported Wednesday.
As part of the probe, Mueller is interviewing senior intelligence officials and looking for proof of any financial crimes possibly committed by Trump’s associates, the Post reported, citing US officials.
A spokesman for Trump’s lawyer said in a statement that “the FBI leak regarding the President is outrageous, inexcusable, and illegal,” but did not dispute the accuracy of the report.
Scalise ‘will require additional operations’ (The Hill) House Majority Whip Steve Scalise (R-La.) is still in critical condition Wednesday night, and will be requiring more operations, according to MedStar Washington Hospital Center. (See also Shooting turned GOP baseball practice into ‘killing field’.) Medstar Washington said in a statement Wednesday:
“Congressman Steve Scalise sustained a single rifle shot to the left hip. The bullet travelled across his pelvis, fracturing bones, injuring internal organs, and causing severe bleeding.”
Trump Chooses Democrat Who Backed Net Neutrality for FCC (Bloomberg) Democrat Jessica Rosenworcel was chosen to return to the Federal Communications Commission, where she supported net neutrality rules and stricter media ownership limits that now may be undone under Republican leadership.
Rosenworcel, 45, an FCC commissioner from 2012 until January, will be nominated by President Donald Trump, the White House said in an emailed statement late Tuesday. She languished without a vote from the Republican-majority Senate for more than a year after her May 2015 renomination by President Barack Obama. She has the support of Senate Minority Leader Chuck Schumer.
Federal Ethics Chief Calls Waiver Affecting Bannon ‘Problematic’ (Bloomberg) A White House ethics waiver that allows chief strategist Steve Bannon to talk to his former employer Breitbart News is “problematic,” the top federal ethics official said in a letter Tuesday.
President Donald Trump’s appointees are required to sign an ethics pledge saying they’ll avoid particular matters involving former employees for two years. But the waiver, one of several pertaining to its staff members that the White House released May 31, allows staffers to “participate in communications and meetings with news organizations regarding broad policy matters.”
The unsigned, undated waiver could be applied retroactively — essentially allowing staff members who violated an ethics pledge to avoid disciplinary action, wrote Walter Shaub, the director of the federal Office of Government Ethics.
U.S. Inflation Turned To Deflation In May, Dropping 0.1% (Seeking Alpha) The U.S. is in a clear period of disinflation since the beginning of the year. For in-depth analysis see May 2017 CPI: Year-over-Year Inflation Rate Again Moderates.
UK
Fire in London apartment building leaves 12 dead, dozens hospitalized (PBS NewHour) Twelve people have died and dozens more were hospitalized after a fire engulfed a high-rise apartment building in London early Wednesday morning, Metropolitan Police confirmed and Reuters reported. Second piicture below from Huge fire engulfs London tower block, fatalities reported (CNBC)
The fire began at about 1 a.m. in Grenfell Tower, a 24-story building in the North Kensington neighborhood and part of Lancaster West Estate, a larger residential complex. About 200 people live in the tower.
Forty fire trucks and more than 20 ambulances responded to the fire, while witnesses described hearing screams for help as it continued to burn for hours, starting at the second floor and spreading to the top of the building.
Turkey
12 Turkish agents to be charged over embassy-area brawl in Washington D.C. (Business Insider) Police are set to announce charges against a dozen Turkish security agents who were involved in a violent altercation when Turkey’s president visited Washington last month, a US official said Wednesday.
The DC police are expected to say that seven men are being charged for felonies, and another five for misdemeanors. The official wasn’t authorized to speak publicly on the matter and spoke only on condition of anonymity ahead of a Thursday news conference that includes Washington’s mayor and police chief.
India
India’s $150 billion IT industry has a new mantra: Re-skill or perish (Quartz) India’s $150-billion information technology (IT) industry has been pushed into a corner lately. Between the pressure to transition in the age of automation, US president Donald Trump’s crackdown on immigration and rumours of mass layoffs, the sector is currently engulfed in a wave of negativity.
On May 18, Nasscom, the IT industry’s trade association, decided to clear the air and set the record straight. Indian IT faces significant headwinds, industry leaders conceded, but insisted that the sector will still remain a major net hirer, adding some 150,000 to its workforce in 2018 financial year. Last fiscal, according to Nasscom, the industry hired around 170,000 new workers.
The big challenge for IT companies, however, will be to re-engineer its 3.9 million-strong human resource base to meet the demands of a fast-transforming marketplace. Not only is technology changing rapidly, with automation and big data making deep inroads, the demands of industry’s global clientele have also evolved.
Why Won’t India Cut Rates? (Bloomberg) India is confronting a growth slowdown that is born, most agree, out of a sustained crisis in private investment. It doesn’t take a meeting with the government for the MPC to know that. Yet it has ignored the pleas of officials — and of many in the private sector — and kept rates steady.
[There is] an agreement between the central bank and the government to shift to targeting consumer price inflation. A clear goal for the RBI — rather than a vague admonition that it should care about growth, prices and the exchange rate all at once — adds to its independence and clarifies its approach to monetary policy. But the government has grown increasingly frustrated. After all, not only is growth slowing, but the RBI has refused to reduce interest rates even as the inflation rate has fallen to historic lows.
North Korea
North Korea blamed for global ransomware attack: report (The Hill) The National Security Agency (NSA) linked ransomware that negatively impacted over 300,000 people in 150 countries to North Korea, according to The Washington Post. The NSA’s assessment, which is not available to the public, states that “cyber actors” thought to be sponsored by North Korea’s spy agency, the Reconnaissance General Bureau, were behind the WannaCry computer worm.
