Written by Econintersect
Early Bird Headlines 28 February 2018
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, published Monday, Wednesday and Friday, 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 shares fall following Fed Chair Powell’s testimony; China PMI misses forecast (CNBC) Asian markets declined on Wednesday following a congressional testimony from the Federal Reserve’s new chief. Losses steepened as the session progressed. The dollar index was steady at 90.384. U.S. West Texas Intermediate crude futures slipped 0.65% to trade at $62.60 per barrel. Brent crude futures declined 0.6% to trade at $66.23. Spot gold was flat at $1,317.81 an ounce at 0116 GMT.
U.S.
- Trump’s Economic Gamble Might Actually Make Sense (Bloomberg) The president is betting that deficits can spur productivity. Here is the conclusion of this article:
Most policymakers, economists, and investors aren’t worried about a period of inflation like what the world experienced in the 1970s. In advanced economies, central banks have the tools they need to fight it. Slow productivity growth, by contrast, has become a real concern, especially as countries seek the resources to take care of aging populations and still invest in their futures.
Republicans and Democrats may disagree on the best way to create deficits, whether it be tax cuts and military spending or investments in infrastructure and education. But the balance of risks leans toward trying this experiment. Be it the Trump administration or the next, someone was eventually going to take the gamble.
- U.S. intel: Russia compromised seven states prior to 2016 election (NBC News) The U.S. intelligence community developed substantial evidence that state websites or voter registration systems in seven states were compromised by Russian-backed covert operatives prior to the 2016 election – but never told the states involved, according to multiple U.S. officials.
- Mueller team asks about Trump’s Russian business dealings as he weighed a run for president (CNN) Investigators for special counsel Robert Mueller have recently been asking witnesses about Donald Trump’s business activities in Russia prior to the 2016 presidential campaign as he considered a run for president, according to three people familiar with the matter.
Questions to some witnesses during wide-ranging interviews included the timing of Trump’s decision to seek the presidency, potentially compromising information the Russians may have had about him, and why efforts to brand a Trump Tower in Moscow fell through, two sources said.
- Mulvaney Says His CFPB Is Keeping Elizabeth Warren Up at Night (Bloomberg) If Senator Elizabeth Warren is having sleepless nights worrying about the fate of financial regulation in Republican hands, she has only herself to blame, acting Consumer Financial Protection Bureau Director Mick Mulvaney said Tuesday. Concerns raised by the Massachusetts Democrat about Republican control of the agency she’s credited with conceiving and designing “doesn’t bother me at all,” Mulvaney said at the Credit Union National Association conference in Washington. Mulvaney has embarqed on a series of moves to reduce regulation by the CFPB.
- Supreme Court curbs rights of immigrants awaiting deportation (Reuters) The U.S. Supreme Court on Tuesday curbed the ability of immigrants held in long-term detention during deportation proceedings to argue for their release in a ruling in sync with President Donald Trump’s get-tough approach toward immigration. The vote was 5-3. Three liberals dissented, including Justice Stephen Breyer, who sharply criticized the decision. Another liberal, Justice Elena Kagan, did not participate. Breyer wrote:
“We need only recall the words of the Declaration of Independence, in particular its insistence that all men and women have ‘certain unalienable Rights,’ and that among them is the right to ‘Liberty’.”
- Simply Unaffordable! Housing Prices in 20 U.S. Cities Advance at a Healthy Pace (6.30% Price Growth Versus 2.43% Earnings Growth) (Confounded Interest) Hat tipto Lee Adler, Wall Street Examiner. Home prices continue to soar even as wage growth for most workers is 2.6 times lower than home price growth. The author says the housing market is simply unaffordable. See also Case-Shiller 20 City Home Price Index December 2017 Now at 6.3 % Year-over-Year Growth.
- Five Charts to Help You Understand Tuesday’s U.S. Economic Data (Bloomberg) For more details about the data in the second chart, see February 2018 Conference Board Consumer Confidence Highest Since 2000. Here are three of the charts:
UK
- Good news for consumers: Food price inflation slowed last month (City A.M.) Price inflation on food products slowed last month in a sign that inflationary pressures are easing for consumers.
Food inflation eased to 1.6 per cent, from 1.9 per cent in January, with fresh food inflation slowing dramatically from 1.7 per cent to 0.9 per cent.
Helen Dickinson, chief executive of the BRC, said the figures showed retailers are now passed the peak of the inflationary pressures caused by the fall in the value of the pound after the Brexit vote.
- EU to publish draft Brexit withdrawal treaty as Boris Johnson appears to raise the prospect of a hard Irish border (City A.M.) The EU is set to publish the first draft of a Brexit withdrawal treaty tomorrow, which officials have said will cross a number of British red lines. Though the EU’s chief negotiator Michel Barnier said there would be “no surprises” in the draft, he added he was “worried by the time, which is short” for agreeing a transition deal ready for the treaty to be ratified in March 2019. Barnier said, of the idea that Britain could maintain EU rules in some sectors while diverging in others:
“It is illusory to imagine we will accept cherry-picking.”
Afghanistan
- Afghanistan’s Ghani offers peace talks with Taliban ‘without condition’ (Reuters) Afghan President Ashraf Ghani offered recognition of Taliban insurgents as a legitimate political group on Wednesday as part of a proposed political process that could lead to talks aimed at ending more than 16 years of war.
China
- China’s official manufacturing Purchasing Managers’ Index for February was 50.3.
- Economists in a Reuters poll had expected official PMI to come in at 51.2 in February, a tick lower than the 51.3 in January.
Official services PMI meanwhile fell to 54.4 in February from 55.3 in January.
Economists are expecting the Chinese economy to cool in 2018 after an unexpectedly strong showing in 2017 as the government cracks down on polluting industries and high debt levels.
- China’s military flexes muscles for domestic objective: more funding (Reuters) With stealth jets entering service, leaked pictures of new high-tech naval artillery and proud reports of maneuvers that “dare to shine the sword,” China’s armed forces are putting on a show of power as they lobby for greater defense spending.
- China expresses ‘strong dissatisfaction’ with U.S. duties on Chinese aluminum foil (Reuters) China has expressed “strong dissatisfaction” with the United States imposing antidumping and countervailing duties on Chinese aluminum foil, the Ministry of Commerce (MOFCOM) said in a statement on Wednesday. Wang Hejun, the head of MOFCOM’s Trade Remedy and Investigation Bureau, said in the statement:
“The U.S. has disregarded the WTO rules and seriously damaged the interests of China’s aluminum foil exporters. China is strongly dissatisfied with this.”
- China’s Tianjin city issues first 2018 Level 2 pollution alert from March 1 (Reuters) China’s smog-prone port city of Tianjin issued its first level 2 “orange” pollution alert this year effective from March 1, the city government said in a statement on its website on Wednesday.
