Early Headlines: Asia Stocks And Gold Down, Dollar And Oil Flat, Pound Weakens, EM Inflows, Jobs Guarantee, Teachers’ Strikes Spread, EZ Construction, China Financial Reforms, And More

Written by Econintersect

Early Bird Headlines 20 April 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 markets slip as technology stocks decline (CNBC) Negativity on Wall Street flowed through to Asian markets on Friday, with regional stock indexes tracking moderately lower amid declines in the technology sector. The dollar index was flat at 89.960. U.S. West Texas Intermediate crude was nearly flat at $68.25 per barrel, after touching a more than three-year high in the last session. Brent crude futures were little changed at $73.74. Spot gold was down 0.3% at $1,341.33 an ounce at 0215 GMT.

• Money Floods into Emerging Markets (The Daily Shot) EM equity ETF inflows continue.

U.S.

• Comey Memos Show Trump Sought Loyalty, Tried to End Flynn Probe (Bloomberg) President Donald Trump praised James Comey for his honorable conduct during the 2016 campaign, sought out his loyalty, and asked the FBI director to let go an investigation into his former national security adviser, according to memos Comey wrote to document private conversations. These aspects of Comey’s conversations with Trump before he was fired by the president in May 2017 are detailed in memos the Justice Department turned over Thursday to House committees. The memos track broadly with accounts of those conversations Comey has given in public testimony to Congress and his new bestselling book. The memos are available: READ: Comey’s memos on conversations with Trump (The Hill).
• Justice Dept inspector asks US attorney to consider criminal charges for McCabe: reports (The Hill) Justice Department Inspector General Michael Horowitz has issued a criminal referral to the U.S. Attorney’s Office in D.C. related to fired FBI Deputy Director Andrew McCabe, a lawyer for McCabe confirmed on Thursday.

• Rosenstein Tells Trump He’s Not a Target in Mueller, Cohen Probes (Bloomberg) Deputy Attorney General Rod Rosenstein told President Donald Trump last week that he isn’t a target of any part of Special Counsel Robert Mueller’s investigation or the probe into his longtime lawyer, Michael Cohen, according to several people familiar with the matter. Rosenstein, who brought up the investigations himself, offered the assurance during a meeting with Trump at the White House last Thursday, a development that helped tamp down the president’s desire to remove Rosenstein or Mueller, the people said.
• Trump hires Giuliani, two other attorneys amid mounting legal turmoil over Russia (The Washington Post) Former New York mayor Rudolph W. Giuliani and two other former federal prosecutors joined President Trump’s legal team Thursday following weeks of turbulence and struggles to find attorneys who would agree to represent the president in the ongoing federal probe into Russian election interference. The reshuffling comes at a particularly tense juncture for Trump, who aides said is increasingly frustrated by special counsel Robert S. Mueller III’s investigation and with the senior officials at the Justice Department.

Some Trump advisers are concerned that the president could use his ­executive authority to close or diminish the special counsel probe, which has spawned a parallel investigation in New York targeting his personal attorney.

• Cohen drops libel suits against BuzzFeed, Fusion GPS (Politico) Embattled attorney Michael Cohen has dropped a pair of much-touted libel suits against BuzzFeed and the private investigation firm Fusion GPS over publication of the so-called dossier detailing alleged ties between President Donald Trump and Russia. Cohen abandoned the suits late Wednesday as he continues to fight to recover documents and electronic files seized from his home, office and hotel room last week by federal authorities as part of what appears to be a broad criminal investigation into his conduct. Cohen’s attorney David Schwartz said:

“The decision to voluntarily discontinue these cases was a difficult one. We believe the defendants defamed my client, and vindicating Mr. Cohen’s rights was – and still remains – important. But given the events that have unfolded, and the time, attention, and resources needed to prosecute these matters, we have dismissed the matters, despite their merits.”

• Goldberg predicts Cohen will cooperate with prosecutors because he’s ‘not suited’ for life in jail (The Hill) One of President Trump’s former attorneys predicted Thursday that Michael Cohen may flip and begin cooperating with Robert Mueller’s investigation against Trump over his fears of being sentenced to prison.

Jay Goldberg, who told the president not to trust Cohen during a phone call last Friday, told CNN in an interview that Cohen’s character would not stand up to threats of imprisonment.

• U.S. Jobs Guarantee Held Out as Path to True ‘Full Employment’ (Bloomberg) A U.S. program that guarantees jobs for the unemployed would attract about 15 million people even amid the lowest jobless rate since 2000, helping bring the economy to true full-employment status, according to a left-leaning group of academics. The cost, in terms of adding to the federal budget deficit, would be as much as $378 billion annually in the first five years and $415 billion each of the following five years, according to the paper released Tuesday by researchers including Stephanie Kelton, a former economic adviser for 2016 presidential candidate Bernie Sanders. That’s assuming the program started in the first quarter of this year, offered $15-an-hour wages plus health insurance and childcare, and ran for a 10-year forecast period. For full paper go to Public Service Employment: A Path to Full Employment.
• Puerto Rico’s Archbishop Pushes Debt Jubilee (Bloomberg) The archbishop of San Juan urged Puerto Rico’s fiscal control board to declare a moratorium on bond payments, a Biblical debt jubilee. At a meeting Thursday in the capital of the bankrupt commonwealth, Roberto Gonzalez Nieves said a multiyear break from debt service would give the island time to rebuild its economy and help its most vulnerable. The archbishop said:

“No debt should be paid until Puerto Rico sees positive economic growth, a reduction in child poverty and the island rebuilds from the hurricane.”

• Teacher Strikes Continue to Spread – A Symptom of Public Education Underfunding (The Real News Network) Teachers are striking, or walking out, as some call it, in states around the country: West Virginia, Oklahoma, Kentucky, Arizona, and this week in Colorado. Until now the walkouts or strikes have been in solidly Republican states. But with Colorado a mostly Democratic state joins the movement. The big issue in all of these states is that teachers generally earn less and have fewer benefits than other college graduates. But is low pay the main issue here, and why is the movement gaining momentum now.

• A majority of U.S. teens fear a shooting could happen at their school, and most parents share their concern (Pew Research Center) When it comes to what can be done to prevent gun violence in schools, far more teens view proposals focused on mental illness, assault-style weapon bans and the use of metal detectors in schools as potentially effective than say the same about allowing teachers and school officials to carry guns in schools.

EU

• Construction Industries Improving in the Eurozone (The Daily Shot) Improved construction activity should pull more euro area residents into the labor force (as pay improves).

UK

• Sterling falls as Carney suggests that interest rates may not rise next month (City A.M.) Bank of England boss Mark Carney has suggested that interest rates may not rise next month, leading sterling to fall against the euro and the dollar. The pound went down 0.75% to €1.14 against the euro and $1.41 against the US dollar as markets reacted to the fact that interest rates might not be rising in the near future after all. Last month, the Monetary Policy Committee voted 7-2 to hold interest rates, but suggested that a rise could be coming in May.

Germany​

• Deutsche Bank Inadvertently Made a $35 Billion Payment in a Single Transaction (Bloomberg) A routine payment went awry at Deutsche Bank AG last month when Germany’s biggest lender inadvertently sent 28 billion euros ($35 billion) to an exchange as part of its daily dealings in derivatives, according to a person familiar with the matter.

The errant transfer occurred about a week before Easter as Deutsche Bank was conducting a daily collateral adjustment, the person said. The sum, which far exceeded the amount it was due to post, landed in an account at Deutsche Boerse AG’s Eurex clearinghouse.

Russia

Russia is opposed to ‘sanction-swapping’ with the US – but is prepared to defend itself, finance minister says (CNBC)

• The U.S. slapped sanctions on several Russian oligarchs, businesses and agencies thought to have ties to Russian President Vladimir Putin earlier this month.
• The move prompted a dramatic market sell-off in Moscow, with investors seen dumping Russian assets amid elevated concerns over the country’s economic position.

China

• China’s financial reforms: not what they’re cracked up to be (South China Morning Post) Beijing is over promising and under performing. It should learn from India: you can have much greater foreign access and still keep control. China’s economic size continues to grow but its financial system remains immature and of limited interest to foreign capital.
• In a Trade War, China Might Boycott U.S. Goods. That Could Backfire. (The New York Times) If China calls for a boycott of American goods, Chinese workers like David Xu could be in trouble. Mr. Xu is one of thousands of residents of this port town who cash paychecks from American companies. He works as a technician at a Procter & Gamble manufacturing and distribution center here, one of the company’s biggest in China. Across town, Nike has opened a huge distribution center, its largest in Asia. In all, more than 40 other American companies have set up shop here, making chemicals, lighters and a broad range of other products for a Chinese market eager for American goods. Mr. Xu, who has worked for Procter & Gamble for 13 years, :

“There is no deep hatred for American companies. The impact of this trade conflict shouldn’t be big. After all, American companies bring so many conveniences to the lives of Chinese people.”

• U.S. Weighs Emergency Powers to Curb Tech Investments by China (Bloomberg) The Treasury Department is considering using an emergency law to curb Chinese investments in sensitive technologies in the U.S., said Heath Tarbert, an assistant secretary in the agency’s international affairs office. The move is part of President Donald Trump’s plan to punish China for what the U.S. sees as violations of American intellectual-property rights. The president asked Treasury Secretary Steven Mnuchin to consider investment restrictions on Chinese firms after the administration released the results of its probe into China’s IP practices last month.
• When Trump Met Abe … China Was ‘On Everyone’s Minds’ (South China Morning Post) Summit talk wasn’t just about the North Korea nuclear threat: US envoy says Japan and the US are ‘aligned’ on China’s steel overcapacity and intellectual property theft.
• China’s Incomes are Growing Slower than the Official GDP (The Daily Shot)