Written by Econintersect
Early Bird Headlines 10 Oct 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
- Asia stocks broadly gain as a poll forecasts yuan recovery (CNBC) Stocks in Asia saw broad gains on Wednesday. The U.S. dollar index was at 95.682 as of 4:06 p.m. HK/SIN, off its highs above yesterday’s 96.0 mark. As of 4:08 p.m. HK/SIN, the global benchmark Brent crude futurescontract declined by 0.26% to $84.78 per barrel, while the U.S. West Texas Intermediate (WTI) crude futures contract saw a partial recovery from its earlier losses but remained lower by 0.28% at $74.75 per barrel. Spot gold was little changed at $1,189.05 an ounce at 0513 GMT, moving largely within a slim $3 range during the session.
- Trade tensions could trigger another global financial crisis, but investors appear complacent: IMF (CNBC)
- Stock prices – particularly those in the U.S. – have hit record-high levels multiple times over the past year, which is an indication that investors have continued to take on risks.
- Yet the International Monetary Fund warned on Wednesday that “a further escalation of trade tensions, as well as rising geopolitical risks and policy uncertainty in major economies, could lead to a sudden deterioration in risk sentiment.”
- According to the organization, that could trigger “a broad-based correction in global capital markets and a sharp tightening of global financial conditions.”
U.S.
- U.S. markets are “going it alone” and investors are underestimating the amount of risk in the economy, the chief investment officer at Danish investment bank Saxo Bank, told CNBC.
- “What we’re saying (to investors) at a bare minimum, is do acknowledge the fact that the U.S. is expensive by reducing (exposure to) the U.S.,” Steen Jakobsen said.
- The International Monetary Fund (IMF) warned Wednesday that there could be “a sudden deterioration in risk sentiment.”
- Nikki Haley resigns as US ambassador to UN, shocking fellow diplomats (The Guardian) Nikki Haley has resigned as the US ambassador to the United Nations and will leave her post in January, in a move that stunned allied diplomats and other senior officials. Haley and Donald Trump announced her departure in the Oval Office. The timing came as a surprise to her colleagues at the state department and at the UN security council. Both the president and the outgoing envoy heaped praise on each other, to emphasise that she was not leaving on hard terms.
- GOP on timing of Haley’s announcement: ‘Unusual’ and ‘odd’ (The Hill) Republicans on Capitol Hill and party strategists are surprised and a bit annoyed by the timing of Nikki Haley’s decision to resign from the Trump administration. Publicly, Republican lawmakers are effusively praising Haley, the U.S. ambassador to the United Nations, who is a star among the party’s conservative base. But privately they’re scratching their heads about the timing of the announcement, which stole attention from Justice Brett Kavanaugh’s first day on the Supreme Court.
One of the most puzzling elements of Haley’s departure is that it was announced less than a month before the midterm elections even though she’s not stepping down until the end of the year. That has sparked speculation on why she went public on Tuesday instead of waiting another month or so.
- Former FBI lawyer: Plot to record, remove Trump not a joke (The Hill) Don’t tell former FBI general counsel James Baker that those now-infamous discussions about secretly recording President Trump and using the tapes to remove him from office were a joke. He apparently doesn’t believe it. And he held quite the vantage point – he was on the inside of the bureau’s leadership in May 2017, when the discussions occurred.
Baker told Congress last week that his boss – then-acting FBI Director Andrew McCabe – was dead serious about the idea of surreptitiously recording the 45th president and using the evidence to make the case that Trump should be removed from office, according to my sources.
- Recession Probability is Receding (The Daily Shot) Models show that the probability of a recession next year has diminished (pushed out to 2020).
- The Evolution of Trump’s Bizarre Lie About New U.S. Steel Plants (Daily Beast) It wasn’t true when Donald Trump claimed U.S. Steel was opening six new plants, and it wasn’t true Monday when he bumped that number to ‘eight or nine.’
EU
- Migration: new map of Europe reveals real frontiers for refugees (The Conversation) Migration maps tend to produce an image of Europe being “invaded” and overwhelmed by desperate women, men and children in search of asylum. At the same time, migrants’ journeys are represented as fundamentally linear, going from a point A to a point B. But what about the places where migrants have remained stranded for a long time, due to the closure of national borders and the suspension of the Schengen Agreement, which establishes people’s free internal movement in Europe? What memories and impressions remain in the memory of the European citizens of migrants’ passage and presence in their cities? And how is this most recent history of migration in Europe being recorded?
- EU schemes to sell visas pose money laundering risks: campaigners (Reuters) Programs run by some European Union countries to sell passports and residency permits to wealthy foreign citizens pose risks of money laundering as some of the schemes are not properly managed, campaign groups said on Wednesday.
- Lower Inflation Expectations for the EZ (The Daily Shot) Despite higher oil prices, the Eurozone’s long-term market-based inflation expectations continue to drift lower.
UK
- Halt universal credit or face summer of discontent, Gordon Brown tells PM (The Guardian) Britain is on course for a summer of discontent and poll tax-style chaos unless Theresa May scraps plans for a full national rollout of universal credit next year, the former prime minister Gordon Brown is to say. In a ferocious attack on the government’s flagship welfare reform, Brown predicts that a complex application process alongside Treasury spending cuts will plunge a million more children into poverty and increase reliance on food banks.
The former Labour leader, who sought to tackle poverty through the introduction of tax credits in the early 2000s, will say on Wednesday that the government’s amendments are cruel and that a U-turn is needed before more suffering is caused.
Italy
- Italy Default Probability Increases (Twitter)
Bulgaria
- Bulgarian arrested in Germany, charged with TV journalist’s murder (Reuters) A Bulgarian man has been detained in Germany and charged with the rape and murder of television journalist Viktoria Marinova, Bulgarian officials said on Wednesday.
Syria
- Assad’s exhausted army in need of reinforcements as Idlib battle looms (The Guardian) After seven long years, Bashar al-Assad has almost clinched victory in Syria. Just one province remains beyond his grasp, but as his Russian and Iranian allies step away from the last stages of the war they leave behind a Syrian army too weak to finish the job on its own. The regime has said a ceasefire deal in the last opposition stronghold of Idlib is a temporary measure to avoid civilian deaths. But facing the prospect of a major battle without the help of Russian airpower and Iranian-backed ground militias – both appear reluctant to commit to the final battle – the stakes are higher for Syria’s depleted and demoralised army than they have been in years.
Casualties, desertions and draft dodging have taken a heavy toll. Unlike dozens of ceasefires violated by his forces in the past, Assad appears to need this one to work, at least until he is able to strengthen his depleted forces.
India
- Indian employers under pressure to respond to surge in #MeToo allegations (Reuters) Pressure is building on major Indian employers to take allegations of sexual harassment more seriously after a surge in the number of complaints against prominent public figures in the past week.
China
- Team Trump Preps an Uppercut to the Chinese Economy (Daily Beast) As the Trump administration continues to ramp up tariffs as part of its effort to inflict economic levies on China, behind the scenes it is quietly taking steps to deal another blow to the country.
The Department of Treasury and Commerce are knee-deep in crafting new regulations that will implement restrictions against China meant to limit its ability to access U.S. technology, data, and infrastructure, current and former officials told The Daily Beast. The regulations will also propel a plan that gives the government the jurisdiction to review Chinese investment into American companies that deal with or manufacture that technology.
- Weakening to Continue for Yuan (The Daily Shot) F/X forwards continue to point to a weaker yuan ahead.
Brazil
- The Military Returns to Brazilian Politics (Foreign Policy) The leader in last weekend’s Brazilian election is Jair Bolsonaro, who is now the favorite going into the final round of the election. He’ll face off against Fernando Haddad, the candidate from the Workers’ Party (Partido dos Trabalhadores, or PT). Haddad is a stand-in for party stalwart Luiz Inflcio Lula da Silva, who was disqualified from running after he was convicted with corruption and incarcerated. He’s running on a platform of ending the war on drugs, tightening gun laws, and balancing law enforcement with human rights protections. But he will sink or swim on his ability to portray himself as a competent Lula proxy.
Bolsonaro, meanwhile, is a far-right former military man who has publicly voiced his approval of Brazil’s last military regime, which ruled from 1964 to 1985. That government killed or disappeared hundreds of people during its tenure, but it also provided law and order, and many Brazilians recall the period with some nostalgia. On the campaign trail, Bolsonaro has frequently drawn comparisons to U.S. President Donald Trump.
- Jair Bolsonaro’s Brazil would be a disaster for the Amazon and global climate change (The Conversation) Bolsonaro has openly spoken of the need for a military coup and has a record of racist, misogynistic and homophobic views. He is often compared to Donald Trump in the US, and such parallels can also be seen in the protectionist economic doctrine Bolsonaro has adopted in this election, for instance a promise to end the banana trade with Ecuador to protect Brazilian producers.
Bolsonaro has previously said that, if elected, he would withdraw Brazil from the 2015 Paris Agreement on climate change, arguing that global warming is nothing more than “greenhouse fables”. Ultimately, his power to reverse the decision is limited, however. This is because the Paris deal was approved via the Brazilian congress, which is currently divided between 30 parties, and Bolsonaro would face the tricky task of convincing a broad church of conservatives.
Bolsonaro has called for the closure of both Brazil’s environment agency (IBAMA), which monitors deforestation and environmental degradation, and its Chico Mendes Institute which issues fines to negligent parties. This would eliminate any form of oversight of actions that lead to deforestation.
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