Written by Econintersect
Early Bird Headlines 22 March 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 trade mixed after Fed raises rates; dollar downbeat (CNBC) Asian markets traded mixed Thursday in what proved to be a choppy session after the U.S. Federal Reserve raised interest rates for the first time this year. The dollar indexwas down to 89.537 at 12:21 p.m. HK/SIN. U.S. West Texas Intermediate crude edged higher by 0.08% to trade at $65.22 per barrel and Brent crude futures were flat at $69.47. Spot gold rose 0.1% to $1,333.41 per ounce at 0030 GMT. Prices rose 1.6% in the previous session, the biggest one day percentage gain since May 17, 2017.
- The five biggest geopolitical risks for the rest of 2018 (CNBC) Four of the five biggest threats to the global political system this year are directly related to President Donald Trump’s administration, according to an assessment from a Washington-based policy think tank.
- A Road To Right Wing Authoritarian Government (Social Europe) Economics professor Simon Wren Lewis discusses the oft repeated path to the rise of authoritarian government. He see a wolf in sheep’s clothing scenario and goes through the history, case by case. Most recently, he points out, popuism based on social campaign promises have elected right wing authoritarian (or authoritarian wanna be) governments in Hungary, Poland and the U.S.. Wren-Lewis lays the enabler role in these situations on a media which does not dominate middle ground among the various political parties. If the media is significantly divided left or right then there is nothing forcing debate. Candidates end up talking to their own crowd only.
U.S.
- READ: House releases 2,232-page spending bill (The Hill) The House on Wednesday released the legislative text of its $1.3 trillion omnibus spending bill. The bill, totaling 2232 pages, will fund the government through the fiscal year ending Sept. 30. All 2,232 pages are attached to this article.
- Bill Gross: The Fed won’t be able to hike rates as high as they’d like (CNBC) See also next two articles.
- Bill Gross says he is amazed bonds didn’t react more significantly to the latest Fed rate hike path.
- The central bank hiked interest rates on Wednesday by a quarter point.
- Longer term bonds either failed to increase rates or actually moved to lower rartes.
- He believes the central bank will be “limited going forward” on rate hikes.
- Just Don’t Invert The Yield Curve (Seeking Alpha) David Merkel points out that the Fed has, in the past, made the mistake of inversting the yield curve by too aggressively raising the benchmark rate. In the preceding article Bill Gross makes the implicit assumption that the Fed will be limited in how much they can raise their rate beause they won’t want to inveert the yield curve. In the next article Wolf Richter shows that they seem not to be thinking about that.
- Fed’s “Dot Plot” is on the Verge of Four Rate Hikes in 2018 (Wolf Street) See also preceding two articles. Today’s rate hike is included in the Fed’s dot plot. After the 25-basis-point increase, the Fed’s target range for the federal funds rate is 1.5% to 1.75%. The “dot plot” is where the FOMC members indicate their projection of where the midpoint for the Fed’s target range for the federal funds rate should be by year-end. It indicates how many rate hikes each member of the FOMC envisions for 2018.
- Austin bomber: Deceased suspect named in Texas blasts (BBC) Police have named the suspect they say carried out a deadly series of parcel bombs in the Texas city of Austin as Mark Anthony Conditt, 23. He was killed after detonating an explosive as officers approached his car following a chase in Round Rock, north of the Texas state capital. Investigators say with a “reasonable level of certainty” there are no more devices to endanger the public. Police told reporters that Conditt – suspected of five blasts that killed two people and injured six others – made a video “confession” on his phone.
France
- France’s Sarkozy told he suspected of taking Gaddafi election money (Reuters) Former French president Nicolas Sarkozy was told after two days in custody on Wednesday that he is being formally treated as a suspect as magistrates investigate claims his 2007 election campaign got funding from late Libyan leader Muammar Gaddafi.
India
- India takes down local website of Cambridge Analytica (BBC) Hat tip to Sanjeev Kulkarni. India has taken down the local website of Cambridge Analytica following allegations the company used personal data of 50 million Facebook members to influence the US presidential election. SCL India, a venture between the SCL group in London and Ovleno Business Intelligence, says both India’s major political parties are its clients. The company has no charges against it. Facebook would also face “tough action” if it was found to have misused Indians’ data, the IT minister warned.
- Things could turn bad for India’s economy in 2018: Credit Suisse (CNBC)
- India is one of the most vulnerable Asian economies should another round of “taper tantrum” – a wave of selloffs – occurs, said Santitarn Sathirathai, Credit Suisse’s head of emerging Asia economics.
- The huge inflows into India’s bond and stock markets mean a reversal is also likely to happen when there’s a spike in U.S. yields, said Sathirathai.
Japan
- Over a third of economists push back timing of BOJ’s stimulus exit: Reuters poll (Reuters) More than a third of economists polled by Reuters this month have pushed back their forecasts for when the Bank of Japan will exit its super-easy stimulus, pointing to concerns about the yen’s appreciation and subdued consumer inflation.
Governor Haruhiko Kuroda has repeatedly said the BOJ is in no rush to follow other central banks in dialing back its crisis-mode stimulus, with inflation still well below the bank’s 2 percent target.
Kuroda, who will serve another five-year term, also said earlier this month he did not expect the central bank to debate an exit from its current monetary policy during fiscal year 2018, which starts in April.
China
- Trump to announce crackdown on China trade practices Thursday (The Hill) President Trump on Thursday will announce plans to crack down on China with what could possibly be billions in tariffs and restrictions on investment, a move some fear could set off a trade war. Although specific details of the Trump administration’s plan are still unknown, there have been media reports that the president may decide to apply tariffs between $30 billion and $50 billion on Chinese imports in response to Beijing’s wide-ranging, lax policies on intellectual property.
- Chinese consumers are increasingly preferring to buy domestic: Credit Suisse (CNBC)
- Chinese consumers, especially the younger ones, increasingly favor local brands, Credit Suisse’s Emerging Consumer Survey found.
- That trend is seen in products such as sportswear and home appliances, but not in infant formula milk and cars, said Charlie Chen, Credit Suisse’s head of China consumer research.
- Within China’s consumer sector, the bank’s stock picks include China Resources Beer, beverage firm Wuliangye and dairy products company Mengniu.
Peru
- Pedro Pablo Kuczynski: Under fire Peru president resigns (BBC) Peru’s President Pedro Pablo Kuczynski has quit over a vote-buying scandal. He has denied wrongdoing but said on Wednesday that he did not want to be an obstacle to the country’s development. Party leaders in Congress later agreed to accept President Kuczynski’s resignation. He had been facing an impeachment vote on Thursday. Pressure has been growing after footage emerged of his allies offering opposition politicians financial rewards if they backed him in the vote.
