Early Headlines: Asia Stocks And Gold Up, Dollar And Oil Down, ERA May Still Live, WH Staff Turn On Each Other, US-EU Trade War, German Inflation Spikes, Real Bund Yields Negative, Japan Slows, China Mfg Strong, And More

Written by Econintersect

Early Bird Headlines 31 May 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 stocks recover after Italian political concerns ease (CNBC) Asian stocks made moderate gains on Thursday as global markets recovered after recent fears about Italy faded. The dollar index fell 0.1% to 94.070. It touched a 6-1/2 month high at 95.025 on Tuesday. Brent crude was down $0.20 (0.3%) at $77.30 per barrel at 0041 GMT, after settling the last session up 2.8%. U.S. West Texas Intermediate crude was down $0.20 at $68.01 a barrel. Spot gold rose 0.2% to $1,303.30 per ounce by 0053 GMT.

U.S.

• Conservative stalwart boosts FBI in Trump feud (The Hill) Rep. Trey Gowdy (R-S.C.), who led a House investigation into Hillary Clinton’s handling of the Benghazi terrorist attacks, offered a robust defense Wednesday of the FBI’s investigation into President Trump’s campaign and Russia. A week after he received a closed-door briefing on the bureau’s use of an informant, Gowdy told CBS News that he had seen no evidence to support Trump’s claims that a “spy” was improperly inserted into his 2016 campaign.
• New NSC chief of staff is from group that believes Muslims are plotting to take over U.S. (The Washington Post) The White House has named a new National Security Council chief of staff from a group that propagates the conspiracy theory that Islamists have infiltrated the U.S. government in a plot to take over the country.

The appointment of Fred Fleitz drew condemnation from civil rights groups this week. The Anti-Defamation League criticized what it described as “his senior leadership role with the Center for Security Policy, an Islamophobic, conspiracy-promoting organization.”

• Illinois ratifies Equal Rights Amendment – decades after deadline (The Hill) Illinois state lawmakers voted Wednesday to ratify the Equal Rights Amendment – decades after Congress’s deadline to ratify the measure expired. The Illinois House passed the measure 72-45, the Chicago Tribune reported. The state Senate had voted in favor of ratification last month, and it does not require the support of Gov. Bruce Rauner (R). The passage sets the stage for a possible legal battle over the amendment since Congress’s deadline for states to ratify the amendment expired in 1982. But supporters argue that because a 1789 amendment was ratified more than two centuries later in 1992, the Equal Rights Amendment could still be added to the Constitution, the Tribune noted. Only one more state need ratify the amendment to reach the 2/3 vote required.
• F.B.I. Official Wrote Secret Memo Fearing Trump Got a Cover Story for Comey Firing (The New York Times) The former acting F.B.I. director, Andrew G. McCabe, wrote a confidential memo last spring recounting a conversation that offered significant behind-the-scenes details on the firing of Mr. McCabe’s predecessor, James B. Comey, according to several people familiar with the discussion. Mr. Comey’s firing is a central focus of the special counsel’s investigation into whether President Trump tried to obstruct the investigation into his campaign’s ties to Russia. Mr. McCabe has turned over his memo to the special counsel, Robert S. Mueller III.

… in the meeting at the Justice Department, Mr. Rosenstein added a new detail: He said the president had originally asked him to reference Russia in his memo, the people familiar with the conversation said. Mr. Rosenstein did not elaborate on what Mr. Trump had wanted him to say.

• Trump Aides Brutally Turn on Each Other in War on Leaks (The Daily Beast) White House communications staff members openly pointed fingers at each other in a meeting with the president.

EU

• Trump looks prepared to kick off a trade war with the European Union (Business Insider)

• The Trump administration will impose steel and aluminum tariffs on imports from the European Union, according to The Wall Street Journal.
• The tariffs come after talks between the EU and US failed to produce an alternative trade deal.
• The EU is expected to respond with tariffs on US goods, setting off a likely trade war.

• Is the EU About to Collapse? Stocks Don’t Think So (Gains, Pains & Capital) Hat tip to TalkMarkets. The collapse of the Italy government means a new election. That, in turn, means a pro-Euro politician heading Italy. And that in turn means the Italy Crisis is over.

By the way, if this was a FULL-BLOWN panic… Italy’s market wouldn’t be trading at “April 2018 levels.” It would be making new lows. It isn’t. It’s at critical support after running up over 75% this year.

Germany​

• German inflation jumps above 2% (MarketWatch) Se also next article. Inflation in Germany picked up sharply and by more than expected in May, led by rising prices for energy and food. The annual inflation rate–measured by harmonized European Union standards–surged to 2.2% from 1.4% in April, the Federal Statistical Office said in a preliminary release Wednesday. That marks the highest level since February 2017, when inflation was running at the same rate. Inflation in Europe’s largest economy hence exceeded the European Central Bank’s target, with the ECB aiming to keep inflation in the eurozone at just below 2%. See Tweet:

• Real Yields on Bunds Become More Negative (Twitter)

Click for larger image.

Japan

• Japan’s Economy Wobbled A Bit In The First Quarter (TalkMarkets) Real GDP in Japan expanded 1% in the first quarter of 2018 over the same quarter of the previous year. Economic growth lost some momentum in Q1 (it declined from the previous quarter) as higher inflation and low wage increases weighed a bit on consumer spending. Moreover, industrial production lost some steam in Q1, while business confidence among large manufacturers moderated for the first time in over two years.

North Korea

• Satellite Images Show North Korea Scrubbed Nuclear Test Site Before Unilaterally Destroying It (The Daily Beast) Satellite images collect over the past couple of months indicate that North Korea removed materials of value from their nuclear test site before destroying it last week.

Click for large image.

China

• China May factory growth surpasses expectations, official PMI shows (CNBC)

• China’s official manufacturing Purchasing Managers’ Index for May was 51.9.
• Economists in a Reuters poll had expected official PMI to come in at 51.3 in May, which would have been a dip from a reading of 51.4 in April.

• China’s War on Pollution Will Change the World (Bloomberg) China is cracking down on pollution like never before, with new green policies so hard-hitting and extensive they can be felt across the world, transforming everything from electric vehicle demand to commodities markets. Click on any of the 4 graphics below for large image.