Written by Econintersect
Early Bird Headlines 31 July 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 close narrowly mixed; Nikkei ends higher after Bank of Japan decision (CNBC) Asian shares closed narrowly mixed on Tuesday as investors digested the Bank of Japan’s decision to keep policy steady. The mixed showing also came on the back of Wall Street posting losses amid weakness in the technology sector. The dollar index was mostly steady at 94.341. September Brent crude futures fell $0.46 cents(0.6%) to $74.51 a barrel by 0356 GMT after rising nearly 1% on Monday. U.S. West Texas Intermediate crude futures (WTI) were down $0.43 (0.6) at $69.70 a barrel, after rising more than 2% in the previous session. Spot gold was up 0.1% at $1,222.28 an ounce at 0041 GMT.
U.S.
- GOP leaders hope to circumvent Trump on shutdown (The Hill) Senate GOP leaders are carefully planning an appropriations process that will diminish the chances of President Trump triggering a government shutdown weeks before Election Day. Senate Majority Leader Mitch McConnell (R, KY) on Monday expressed confidence that a shutdown would be avoided despite the threats from Trump, who is seen as the wildcard in the debate. Trump is threatening to force a shutdown if Congress does not provide funding for his border wall.
- Layoffs from Trump tariffs are piling up. So are calls for more bailouts. (The Washington Post) Jane Hardy, the chief executive of a company that makes lawn-care equipment, says she had to lay off 75 employees this summer because of President Trump’s trade war. As she fights to keep her southern Indiana business going, Hardy is one of several manufacturers warning the White House that, unless they see relief from the tariffs soon, job losses will mount and factory closures are likely. Trump has repeatedly said he would protect American farmers in the trade war, last week setting aside $12 billion to help them, but he is facing pressure to extend aid to other industries if the tariffs remain in place or get extended to more products.
Extending those bailouts would be an expensive proposition. The U.S. Chamber of Commerce on Monday estimated the total price tag could hit $39 billion if Trump compensated the losses across all industries. It would take $7.6 billion to help car and automobile parts manufacturers alone, the Chamber said, calling it a “slippery slope” for Trump to determine who gets help and who doesn’t. The Chamber has been a vocal critic of the tariffs.
- Ex-New York mayor gives rambling 32-minute CNN interview
- Won’t discuss ‘very nasty’ link between Mueller and Trump
- How Trump Allies Shifted Their Defense as Evidence of Contacts With Russians Grew (The New York Times) In the days after the 2016 presidential election, Donald J. Trump’s advisers had an unequivocal message about contacts between Russians and members of the campaign team: There were none. In the ensuing months, as numerous such communications were revealed, the message changed: There was no collusion with Russia’s effort to disrupt the election. On Monday, President Trump’s lawyer Rudolph W. Giuliani consistently presented a third line of defense: Even if Mr. Trump did collude with the Russians, he committed no crime.
- Trump highlights praise from judge on reuniting families his administration divided (The Hill) President Trump on Monday highlighted praise from a federal judge to tout his administration’s efforts to reunify migrant families that were separated under his administration’s own policy. In a tweet, Trump said a federal judge stated Monday that his administration gets “great credit” for reuniting families. The president seemed to be referring to comments made Friday by U.S. District Judge Dana Sabraw. Trump thanked Sabraw, and encouraged followers to “look at the previous administrations record – not good!“
- Senators want investigation of immigrant abuse allegations (Asociated Press) The bipartisan leaders of the Senate Judiciary Committee asked federal investigators late Monday to examine allegations of sexual, physical and emotional abuse of immigrants held at government detention facilities, saying that the mistreatment may have been occurring since 2014 or earlier.
With President Donald Trump already under fire for separating thousands of migrant children from their detained parents, the request for an investigation by Sen. Chuck Grassley, R-Iowa, and Dianne Feinstein, D-Calif., elevated yet another issue to the administration’s list of immigration problems.
- Stimulated Growth (The Daily Shot) A significant portion of this year’s GDP growth is due to the federal government stimulus. But the party ends in 2020.
EU
- ECB Balance Sheet Projections (The Daily Shot) The ECB didn’t provide much new information regarding policy direction. Here is the ECB balance sheet forecast from UBS:
UK
- Thousands of mothers left to cope alone with mental illness (The Guardian) Thousands of women are having to cope alone with mental health problems caused by pregnancy or giving birth because the NHS cannot provide the necessary help, a leaked report has revealed. While up to one in five mothers have problems such as postnatal depression and post-traumatic stress disorder linked to childbirth, many are going untreated because specialist NHS care for them is so limited and the “gap” in help so wide, the research found.
Germany​
- German court orders far-right party to retract claim that government funds went to Clinton campaign (The Hill) A Berlin court ordered Germany’s far-right party to retract a false accusation that the country’s environment ministry gave money to Hillary Clinton during her 2016 presidential campaign. Georg Pazderski, leader of the far-right Alternative for Germany (AFD) party, was ordered to scrub its website of the accusation and issue a correction stating that the German ministry “paid no money whatsoever to support the election campaign of Hillary Clinton,” Deutsche Welle news reported Monday. Pazderski and his party claimed that millions that Germany’s Federal Environment Ministry donated to the Clinton Foundation’s climate initiatives in Africa were really funneled into Clinton’s campaign. The Clinton Foundation was funding projects in Africa as part of the International Climate Initiative, the newspaper reported.
Spain
- Spain’s foreign minister scorns mass immigration claim (The Guardian) Spain’s foreign minister has rejected suggestions the country is experiencing mass immigration, calling instead for perspective on the issue and arguing that Europe needs new blood to make up for a low birth rate. Around 21,000 migrants and refugees have arrived in Spain by sea this year, placing the country’s reception infrastructure under severe strain. Last week, 600 people entered Europe by storming the fences separating Morocco from the Spanish enclave of Ceuta and threw quicklime and excrement at police officers.
Josep Borrell insisted on Monday, however, that Spain’s problems were dwarfed by those of some Middle Eastern countries hosting refugees from the war in Syria. Speaking after a meeting with his Jordanian counterpart, Ayman Safadi, he said: “We’re trivialising the word ‘mass’.“
Iran
- Pompeo sets conditions for Iran meeting after Trump says he’ll meet without preconditions (The Hill) Secretary of State Mike Pompeo listed specific conditions for President Trump to meet with Iranian leaders, hours after Trump said he would not require any preconditions.
- Iran’s Rouhani calls U.S withdrawal from nuclear deal ‘illegal’: official website (Reuters) Iranian President Hassan Rouhani said on Tuesday the U.S. withdrawal from the nuclear deal was “illegal“, and said the ball was “in Europe’s court” in terms of maintaining ties with Tehran.
Japan
- Japan’s rate decision lifts bonds, shares under tech cloud (Reuters) While the BOJ announced some tweaks to its equity purchase program and said its stimulus plan would be more flexible, the changes did not show any inclination for radical shifts from its accommodative stance. See next article.
- BoJ Balance Sheet Approaches 100% of GDP (Twitter)
North Korea
- U.S. spy agencies: North Korea is working on new missiles (The Washington Post) U.S. spy agencies are seeing signs that North Korea is constructing new missiles at a factory that produced the country’s first intercontinental ballistic missiles capable of reaching the United States, according to officials familiar with the intelligence. Newly obtained evidence, including satellite photos taken in recent weeks, indicates that work is underway on at least one and possibly two liquid-fueled ICBMs at a large research facility in Sanumdong, on the outskirts of Pyongyang. (See also North Korea: US ‘detects new activity’ at ICBM factory (The Guardian).
The findings are the latest to show ongoing activity inside North Korea’s nuclear and missile facilities at a time when the country’s leaders are engaged in arms talks with the United States. The new intelligence does not suggest an expansion of North Korea’s capabilities but shows that work on advanced weapons is continuing weeks after President Trump declared in a Twitter posting that Pyongyang was “no longer a Nuclear Threat.”
China
- China’s July manufacturing growth slows on trade dispute, softer domestic demand (Reuters) Growth in China’s manufacturing sector slowed more than expected in July, as the worsening trade dispute with Washington, bad weather and weaker domestic demand weighed on factory activity. The official Purchasing Managers’ Index (PMI) released on Tuesday fell to 51.2 in July, from 51.5 in June and below the 51.3 in a Reuters poll of economists. It was also the lowest index reading since February but remained above the 50-point mark that separates growth from contraction for a 24th straight month.
Brazil
- Estimates for Brazilian Debt (The Daily Shot) Here are some scenarios for Brazil’s debt-to-GDP ratio.