Early Headlines: Asia Stocks Mixed, Dollar, Oil And Gold All Up, Debt Ceiling, Mnuchin Dealings, ECB Balance Sheet, No Deal Brexit, France IP Shrinks, China Slowdown, Vale Cuts Iron, Maduro Holds On With Putin Aid, And More.

Written by Econintersect

Early Bird Headlines 30 January 2019

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

• Stocks in Asia mixed ahead of US-China talks (CNBC) Major stock markets in Asia closed mixed on Wednesday, as investors awaited the start of U.S.-China trade talks later in the day stateside. The U.S. dollar index was higher at 95.818 after seeing lows around 95.6 yesterday. Brent crude futures and U.S. crude futures both slipped slightly to $61.28 per barrel and $53.28 per barrel, respectively. Spot gold was up 0.2% at $1,313.91 per ounce by 0245 GMT, after touching its highest since May 15 at $1,314.10 early in the session.

U.S.

• Graham Pushes Trump to Add Debt Limit Increase to Border Security Talks (Bloomberg) A top Senate ally (Sen. Lindsey Graham – R, SC) is urging President Donald Trump to seek a U.S. debt limit increase as part of border security talks aimed at preventing another government shutdown, even as other lawmakers say the negotiations can’t succeed if they get too complicated.
• Some Dems float idea of primary challenge for Ocasio-Cortez (The Hill) Rep. Alexandria Ocasio-Cortez (D, NY) has infuriated colleagues by aligning with a progressive outside group that’s threatening to primary entrenched Democrats. Now some of those lawmakers are turning the tables on her and are discussing recruiting a primary challenger to run against the social media sensation. At least one House Democrat has been privately urging members of the New York delegation to recruit a local politician from the Bronx or Queens to challenge Ocasio-Cortez.
• A House Democrat Is Targeting Steven Mnuchin’s Business Dealings In The Russian Sanctions Fight (BuzzFeed News) A House Democrat is demanding answers about an alleged business deal that Treasury Secretary Steven Mnuchin had with an associate of a Russian oligarch whose companies recently received US sanctions relief. California Rep. Jackie Speier, a member of the House Intelligence Committee, sent a letter to Mnuchin last week seeking answers about a deal he reportedly made in 2017 with an associate of Oleg Deripaska’s, the billionaire aluminum magnate whose companies Treasury surprisingly announced it would be taking off the formal sanctions list in December. The letter, sent Wednesday, was obtained by BuzzFeed News.
• Pelosi puts tight grip on talk of Trump impeachment (The Hill) Speaker Nancy Pelosi (D, CA) is keeping her troops in line on one of the most divisive issues facing Democrats internally and the country more broadly: the impeachment of President Trump.As the minority leader over the past two years, Pelosi faced a small but intensifying push from rank-and-file Democrats to oust the president – a movement that won two floor votes in the last Congress and the support of 66 House Democrats in early 2018. Yet in the weeks since taking the Speaker’s gavel, Pelosi has tamped down the impeachment talk in her ranks.
• The Fed Neither “Has” Nor “Doesn’t Have” Dollars (YouTube) Warren Mosler, one of the founders of Modern Money Theory, on how the Federal Reserve neither “has” nor “doesn’t have” dollars because it is the source of dollars, much like the scorekeeper in a game neither “has” nor “doesn’t have” points because it is the source of points. It simply increases or decreases the account of whomever it transacts with. This is true of any government/central bank which issues its own currency. However, on a gold standard or other fixed exchange rate regime, the government/central bank must be careful about the effects of its spending and taxing, because they may negatively affect its ability to maintain the exchange peg.

• Yield Curves Steepen Just Before Recessions (Twitter)

EU

• ECB Balance Sheet Appears To Be Topping (Twitter) Is the euro QE really ending? Just as the Eurozone appears poised to go into recession?

UK

• Goldman Sachs ups ‘no-deal’ likelihood after UK parliament amendment vote (Reuters) Goldman Sachs nudged up its estimated probability of a “no-deal” Brexit on Wednesday after British lawmakers instructed Prime Minister Theresa May to reopen a Brexit treaty with the European Union to replace a controversial Irish border arrangement. See also British lawmakers instruct May to change Brexit deal; EU says ‘No’.

France

• French IP Shrinks (Twitter)

Iran

• Meet The Iranian Influencers Whose Livelihoods Will Be Stripped Away By A Ban On Instagram (BuzzFeed News) A looming ban on Instagram in Iran (one of the last major social networks still permitted by the country’s internet censors) has Iranian influencers, entrepreneurs, and gender-equality activists worried about the future. Authorities say the anticipated move is to block immoral and obscene content, but critics say it’s a naked attempt to crack down on one of the last remaining areas of online freedom for Iranians, especially for women and other marginalized groups, including ethnic minorities and the LGBT community.

India

• Peter Thiel’s advice helped this 25-year-old build one of India’s most valuable start-ups (CNBC) In India, Ritesh Agarwal is something of a household name. Or, rather, a hotel name. The 25-year-old tech star is founder and CEO of the country’s largest hospitality chain, OYO, and, as of last year, its youngest major self-made entrepreneur, worth an estimated $365 million. In just six short years, Agarwal has turned his budget accommodation bookings platform into a network of more than 13,000 properties spanning seven countries. In the process, he has also responded to a growing demand for standardized, low-cost accommodation.

• As Huawei faces trouble in the West, it could find solace in India (CNBC)

• As Huawei faces problems selling its 5G equipment in the West, it may be welcome in developing countries that are price-sensitive, according to analysts.
• India invited Huawei to participate in its 5G field trials in December, even as the U.S., the U.K., Canada, Australia, New Zealand and Japan sought to block the Chinese company.
• Washington may now pressure New Delhi to ban Huawei’s 5G services after the U.S. Justice Department pressed criminal charges against the company’s chief financial officer.

China

• Avoid these sectors amid China’s slowdown, analysts say (CNBC)

• Goldman Sachs last week warned its clients about companies with big revenues from China.
• Sectors such as information technology, semiconductor, industrial and consumer discretionary have a large exposure to the Greater China market, said Margaret Yang, market analyst at CMC Markets.
• Even Smartphone sales have slowed.
• “We see pricing headwind for stocks closely related to China,” said Toby Wu, senior analyst at investment platform eToro.

• China’s Gloomy Companies Are Slashing Profit Forecasts (Bloomberg) Chinese executives are sounding warning bells over the world’s second-largest economy. At least 20 companies, including China Life Insurance Co. and Chongqing Changan Automobile Co., told investors late Tuesday that full-year earnings would fall well short of expectations. Reasons they cited included the country’s economic slowdown, as well as recent changes to accounting rules and the equity market’s $2.3 trillion rout last year, the world’s biggest loss of value.

Brazil

• Exclusive: Vale eyed dam design changes in 2009 that may have prevented disaster (Reuters) Brazilian miner Vale SA identified concerns around its tailings dams in 2009 and studied but did not implement several steps that could have prevented or lessened the damage from last week’s deadly disaster, according to a corporate presentation seen by Reuters.
• Vale to cut production 10% as miner responds to Brazil disaster (Financial Times) Iron ore miner Vale has announced plans halt 40 million tons of production. That is about 10% of its annual output. The company will replace dams similar to the one that burst last week, killing at least 84 people and leaving hundreds missing.

Venezuela

• Venezuela’s Maduro says Putin has helped us on all fronts: Russia’s Sputnik (Reuters) President Nicolas Maduro said on Wednesday his Russian counterpart Vladimir Putin had given Venezuela support on all fronts and that Caracas was grateful, Russia’s Sputnik news agency reported.
• Venezuela’s Maduro calls U.S. sanctions on oil company illegal: RIA (Reuters) President Nicolas Maduro on Wednesday called U.S. sanctions imposed on Venezuela’s state oil company PDVSA this week illegal, Russian RIA news agency reported.
• Venezuela targets Guaido with probe, travel ban, asset freeze (Reuters) Venezuela’s government struck back at self-declared interim president Juan Guaido on Tuesday, with the Supreme Court imposing a travel ban and freeze on his bank accounts despite a warning from Washington of “serious consequences” if it did so.

Mexico

• U.S. sends first Central American asylum seeker to Mexico under new policy (Reuters) The United States sent the first Central American asylum seeker back to Mexico through a crossing at the border city of Tijuana on Tuesday as part of a hardened immigration policy, an official at Mexico’s national migration institute said.

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