Data

Turkish President Erdogan greets his supporters during an opening ceremony in Istanbul
Turkish President Tayyip Erdogan greets his supporters during an opening ceremony in Istanbul, Turkey, June 18, 2019. Kayhan Ozer/Presidential Press Office/Handout via REUTERS

June 19, 2019

By Orhan Coskun, Humeyra Pamuk and Jonathan Spicer

ANKARA/ISTANBUL (Reuters) – Turkish President Tayyip Erdogan has gone on the warpath against the main opposition days ahead of a re-run of a mayoral vote in Istanbul, scrapping plans to avoid divisive rhetoric that some officials in his ruling AK Party believed would alienate voters.

Standing atop a bus in Istanbul on Tuesday, Erdogan claimed the opposition’s mayoral candidate Ekrem Imamoglu aligned with coup plotters, without presenting evidence, and later warned of unspecified actors targeting Turkey’s independence.

After weeks of keeping an uncharacteristically low profile, the president re-inserted himself into the campaign with his usual confrontational style.

The switch is a risk for Erdogan and the AK Party (AKP), which suffered a shock defeat in Istanbul in March local elections – a loss that some in his party believed was in part due to the president’s uncompromising style.

The loss marked one of his biggest setbacks in 16 years in power, and the AKP challenged the result.

According to interviews with five party officials, as well as their advisers, Erdogan and his party had decided in recent weeks to effectively air-brush the president from the campaign ahead of the June 23 Istanbul vote, including erasing his face from highway-side billboards and cancelling dozens of planned rallies across the city.

AKP officials had concluded that Erdogan’s uncompromising approach had become a liability with some key voters in Istanbul, especially Kurds and AKP supporters who were turned off by his polarizing rhetoric, the party insiders said.

By laying low, Erdogan also could have distanced himself in the event of another defeat, advisers added.

But things changed earlier this week with internal party polling showing Imamoglu slightly ahead, prompting Ergodan to intervene, according to two of the people.

In recent days, “Erdogan had asked party officials if it is possible to arrange a meeting or a rally to make a speech every day in Istanbul” ahead of the vote, a senior AKP official said. “That’s the new strategy.”

Defeat on Sunday for Erdogan’s hand-picked mayoral candidate, former prime minister Binali Yildirim, would serve as a further embarrassment for the president after the AKP succeeded in annulling the March result.

It would also weaken what only three months ago appeared to be his iron grip on power as Turkey battles recession, jockeys in war-torn Syria, and balances its U.S. and Russian ties.

It may embolden challengers to his rule, although it wouldn’t immediately affect the balance of power in Ankara.

An AKP spokesman declined to comment on the shifting strategy.

In public appearances in recent days, Erdogan urged supporters to help him rally voters this weekend.

“We can’t hand our Istanbul to these liars,” Erdogan said in a speech on Tuesday, referring to the main opposition Republican People’s Party (CHP) and its mayoral candidate Imamoglu.

Imamoglu has denied any links with the coup plotters.

“I know things will be said,” Imamoglu said in an interview with state broadcaster TRT Haber late Tuesday. He added: “These attacks are the attacks of those who cannot digest that we are ready for the task.”

STRATEGY ‘BACKFIRED’

Erdogan, the country’s most dominant political figure since the modern Turkish state’s founder Mustafa Kemal Ataturk, launched his own career in Istanbul and had served as its mayor.

The AKP and its Islamist predecessors had for 25 years controlled the city, which has a budget of close to $4 billion and accounts for a third of the country’s economic output.

Ahead of Turkey’s local elections in March, Erdogan held up to eight rallies a day addressing thousands of voters and millions more on live television. He delivered tough nationalist messages, asking voters to support the AKP as “a matter of survival.”

“The Erdogan campaign strategy backfired, especially among Kurds and middle-class conservatives,” in part because of his polarizing rhetoric said Galip Dalay, a visiting scholar at the University of Oxford.

After Erdogan’s Istanbul mayoral candidate Yildirim lost by some 13,000 votes, the AKP complained that the election was marred by irregularities.

Last month, Turkey’s High Election Board scheduled the re-run, a move that opponents said was politically influenced and heightened concerns about eroding rule of law and institutional independence.

According to AKP officials and insiders, the party is targeting the 1.7 million voters who stayed home on March 31, particularly conservative Kurds and AKP supporters looking for more focus on fixing the country’s stalled economy.

“People who didn’t vote and disenchanted voters, as well as Kurdish voters, will be a major factor,” said one AKP official, who added that the party was looking to boost turnout from an already high 84 percent in March to 94 percent.

The party had in recent weeks emphasized a face-to-face campaign in areas that had relatively low overall turnout and high Kurdish populations, officials say.

That included bringing several elderly Kurdish leaders from the country’s southeast to the city to build support in small neighborhood gatherings, sources close to the pro-Kurdish Peoples’ Democratic Party (HDP) told Reuters.

But a return to a prominent role for Erdogan in the campaign in the past few days followed fresh polling data and a debate on Sunday between the two mayoral candidates.

Imamoglu, who won the March vote, was gaining momentum, according to figures published Monday by polling firm Mak Danismanlik. Internal polls from the two leading parties showed the CHP candidate enjoying a narrow lead over the AKP’s Yildirim as of last week.

“Erdogan looked at the internal polls and saw that Yildirim still lagged behind, so he decided to go all in,” said one source close to the party with knowledge of the recent polling. “But it could have the opposite impact on voters and push them away.”

COURTING KURDS

In Istanbul’s working-class Esenyurt district, where turnout was low in March and the CHP ousted the AKP, resident Halil Cetin said Erdogan should step back.

“This survival rhetoric was too much at the center and people were annoyed by this, saying ‘This is a municipal vote, what kind of a survival issue could there be?’” said Cetin, originally from Turkey’s predominantly Kurdish Diyarbakir region. Yildirim “resonates,” he added.

Among the overtures the AKP has made to Kurds in recent weeks was lifting a years-long ban on lawyers visiting jailed Kurdish militant leader Abdullah Ocalan, a move that prompted several Kurdish lawmakers and thousands of prison inmates to end hunger strikes.

But such gestures were unlikely to make a meaningful impact on Kurdish voters, said HDP Group Chairman Saruhan Oluc. “These little acts have no chance of creating a positive response,” he said in an interview.

The economy remains another key challenge for AKP and Erdogan, who have seen support hurt by last year’s currency crisis that tipped Turkey’s economy into recession, devalued the lira by 30% and sent inflation soaring.

“The economy is problematic. The voters are heavily influenced by the developments in the economy and we see the impact of that by them not going to the ballot box,” the senior AKP official said.

(Additional reporting by Ali Kucukgocmen in Istanbul and Ece Toksabay and Tuvan Gumrukcu in Ankara; Editing by Jonathan Spicer and Cassell Bryan-Low)

Source: OANN

FILE PHOTO: Traders work on the floor at the NYSE in New York
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., June 4, 2019. REUTERS/Brendan McDermid/File Photo

June 19, 2019

By Shreyashi Sanyal

(Reuters) – U.S. stock index futures pointed to a flat opening for Wall Street’s main indexes on Wednesday, as investors refrained from taking positions ahead of the Federal Reserve’s policy statement that is expected to open the door to future interest rate cuts.

Bets of a rate cut have helped markets climb in June, with the S&P 500 index gaining 6% so far and about 1% away from its all-time high hit in early May.

The Fed’s statement and new economic projections are to be released at 2 p.m. ET (1800 GMT), giving investors an idea on how a prolonged U.S.-China trade conflict, President Donald Trump’s demands for a rate cut and softer-than-expected economic data have impacted monetary policy thinking.

Fed Chair Jerome Powell will hold a press conference at 2:30 p.m. ET (1830 GMT).

“Expectations remain elevated over a rate cut in July and investors will be closely scrutinizing the statement for confirmation of a cut next month,” said Lukman Otunuga, a research analyst at ForexTime Limited in London.

“Should the Fed sound less dovish than expected or completely omit any hints about taking action next month, it could send equity markets sliding.”

Global financial markets have been fired up by European Central Bank President Mario Draghi’s Tuesday volte-face on policy easing and as investors bet on a worldwide wave of central bank stimulus.

At 8:27 a.m. ET, Dow e-minis were up 17 points, or 0.06%. S&P 500 e-minis were up 0.5 points, or 0.02% and Nasdaq 100 e-minis were up 8.75 points, or 0.11%.

Sentiment was also buoyed by hopes of progress on U.S.-China trade dispute, with Beijing hinting that positive outcomes were possible in negotiations with Washington, after the world’s two largest economies agreed to revive their troubled talks at a G20 meeting this month.

Trade-sensitive industrial giants Boeing Co and Caterpillar Inc rose in premarket trading, while semiconductor companies, which source and supply products to China, also moved higher.

Boeing shares inched up 0.5% as the planemaker secured orders from Taiwan’s China Airlines and Qatar Airways at the Paris Airshow, a day after IAG placed a lifeline order for the grounded 737 MAX jet.

Among other stocks, Adobe Inc jumped 4% after the Photoshop software provider beat analysts’ estimates for quarterly profit and revenue.

TripAdvisor Inc gained 3.4% after SunTrust Robinson upgraded the company’s stock to “buy.”

(Reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru; Editing by Sriraj Kalluvila)

Source: OANN

FILE PHOTO: Traders work on the floor at the NYSE in New York
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., June 4, 2019. REUTERS/Brendan McDermid/File Photo

June 19, 2019

By Shreyashi Sanyal

(Reuters) – U.S. stock index futures pointed to a flat opening for Wall Street’s main indexes on Wednesday, as investors refrained from taking positions ahead of the Federal Reserve’s policy statement that is expected to open the door to future interest rate cuts.

Bets of a rate cut have helped markets climb in June, with the S&P 500 index gaining 6% so far and about 1% away from its all-time high hit in early May.

The Fed’s statement and new economic projections are to be released at 2 p.m. ET (1800 GMT), giving investors an idea on how a prolonged U.S.-China trade conflict, President Donald Trump’s demands for a rate cut and softer-than-expected economic data have impacted monetary policy thinking.

Fed Chair Jerome Powell will hold a press conference at 2:30 p.m. ET (1830 GMT).

“Expectations remain elevated over a rate cut in July and investors will be closely scrutinizing the statement for confirmation of a cut next month,” said Lukman Otunuga, a research analyst at ForexTime Limited in London.

“Should the Fed sound less dovish than expected or completely omit any hints about taking action next month, it could send equity markets sliding.”

Global financial markets have been fired up by European Central Bank President Mario Draghi’s Tuesday volte-face on policy easing and as investors bet on a worldwide wave of central bank stimulus.

At 8:27 a.m. ET, Dow e-minis were up 17 points, or 0.06%. S&P 500 e-minis were up 0.5 points, or 0.02% and Nasdaq 100 e-minis were up 8.75 points, or 0.11%.

Sentiment was also buoyed by hopes of progress on U.S.-China trade dispute, with Beijing hinting that positive outcomes were possible in negotiations with Washington, after the world’s two largest economies agreed to revive their troubled talks at a G20 meeting this month.

Trade-sensitive industrial giants Boeing Co and Caterpillar Inc rose in premarket trading, while semiconductor companies, which source and supply products to China, also moved higher.

Boeing shares inched up 0.5% as the planemaker secured orders from Taiwan’s China Airlines and Qatar Airways at the Paris Airshow, a day after IAG placed a lifeline order for the grounded 737 MAX jet.

Among other stocks, Adobe Inc jumped 4% after the Photoshop software provider beat analysts’ estimates for quarterly profit and revenue.

TripAdvisor Inc gained 3.4% after SunTrust Robinson upgraded the company’s stock to “buy.”

(Reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru; Editing by Sriraj Kalluvila)

Source: OANN

FILE PHOTO: Homes are seen for sale in the southwest area of Portland
FILE PHOTO: Homes are seen for sale in the southwest area of Portland, Oregon March 20, 2014. REUTERS/Steve Dipaola/File Photo

June 19, 2019

NEW YORK (Reuters) – U.S. mortgage applications declined last week from about a 33-month peak as most home borrowing costs moved up from their lowest levels since September 2017, the Mortgage Bankers Association said on Wednesday.

The Washington-based group’s seasonally adjusted index on loan requests, both to buy a home and to refinance one, fell to 511.8 in the week ended June 14. It fell 3.4% from the prior week’s 529.8, which was the highest reading since September 2016.

Interest rates on 30-year fixed-rate “conforming” mortgages, or loans whose balances are $484,350 or less, averaged 4.14% last week. They were up 2 basis points from prior week’s 4.12%, the lowest level since September 2017.

Other 30-year mortgage rates MBA tracks were unchanged to 3 basis points higher from the week before.

Meanwhile, 15-year mortgage rates averaged 3 basis points lower at 3.50%, while the average borrowing costs on five-year adjustable home loans rose 2 basis points to 3.45%.

Mortgage rates generally increased in line with higher bond yields last week as traders pared their safe-haven bond holdings after U.S. President Donald Trump called off threatened tariffs on Mexico and encouraging data on retail sales and industrial output.

MBA’s seasonally adjusted gauge on refinancing applications fell 3.5% to 1,888.8 from prior week’s 1,956.5, which was the highest since November 2016.

The refinance share of mortgage activity grew to 50.2% of total applications from 49.8% the week before.

“Borrowers were sensitive to rising rates, but the refinance share of applications was still at its highest level since January 2018, and refinance activity was at its second highest level this year,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.

The group’s barometer on loan applications for home purchases, which is seen as proxy on future housing activity, slipped 3.5% to 268.6. The latest figure was up almost 4% from a year ago.

“Strong demand from first-time buyers and low unemployment continue to push this year’s purchase activity above a year ago,” Kan said.

(Graphic: U.S. mortgage applications interactive – https://tmsnrt.rs/2RnEpRD)

(Reporting by Richard Leong; Editing by Chizu Nomiyama and Jonathan Oatis)

Source: OANN

FILE PHOTO: Outside view of a restaurant's wall decorated with hundred of bottles in Paris
FILE PHOTO: Outside view of a restaurant’s wall decorated with hundred of bottles in Paris, France, July 5, 2017. REUTERS/Charles Platiau/File Photo

June 19, 2019

PARIS (Reuters) – Sales of spirits in France fell last year, hurt by “yellow vest” anti-government protests that were at their peak during the end of the year period that accounts for a bulk of sales, French spirits association FFS said on Wednesday.

Protests late last year, which saw some of the worst street violence in Paris in decades and blocked access to shopping malls around the country, cost 0.1 percentage point of French growth in the fourth quarter last year, the INSEE statistics agency said in March.

The weekly protests gradually waned this year.

In 2018, spirits sales in French supermarkets fell 2.1% in volume to 275 million liters, and fell 1.34% in value to 4.72 billion euros compared to the year earlier, FFS said.

Not all spirits performed poorly. Sales of rum showed a 5.7% rise in value and 3.3% rise in volume, while sales of gin increased by 7.6% in value and 2.4% in volume, boosted by innovation and higher qualities.

Spirits exports hit a record high of 4.3 billion euros in 2018, up 1.8% on 2017, mainly boosted by Cognac, liqueurs and rum sales. The volume exported stood at 445 millions liters, or 53 million 12-bottle boxes, up 1.9% on the year.

This confirmed data from wine and spirits exporters group FEVS in February.

Looking ahead, FFS warned that a food law implemented in February raising the minimum price at which retailers can sell goods had added between 5% and 8% to spirit prices, but that only benefited retailers and not producers.

(Reporting by Sybille de La Hamaide, editing by Inti Landauro and Deepa Babington)

Source: OANN

FILE PHOTO: Outside view of a restaurant's wall decorated with hundred of bottles in Paris
FILE PHOTO: Outside view of a restaurant’s wall decorated with hundred of bottles in Paris, France, July 5, 2017. REUTERS/Charles Platiau/File Photo

June 19, 2019

PARIS (Reuters) – Sales of spirits in France fell last year, hurt by “yellow vest” anti-government protests that were at their peak during the end of the year period that accounts for a bulk of sales, French spirits association FFS said on Wednesday.

Protests late last year, which saw some of the worst street violence in Paris in decades and blocked access to shopping malls around the country, cost 0.1 percentage point of French growth in the fourth quarter last year, the INSEE statistics agency said in March.

The weekly protests gradually waned this year.

In 2018, spirits sales in French supermarkets fell 2.1% in volume to 275 million liters, and fell 1.34% in value to 4.72 billion euros compared to the year earlier, FFS said.

Not all spirits performed poorly. Sales of rum showed a 5.7% rise in value and 3.3% rise in volume, while sales of gin increased by 7.6% in value and 2.4% in volume, boosted by innovation and higher qualities.

Spirits exports hit a record high of 4.3 billion euros in 2018, up 1.8% on 2017, mainly boosted by Cognac, liqueurs and rum sales. The volume exported stood at 445 millions liters, or 53 million 12-bottle boxes, up 1.9% on the year.

This confirmed data from wine and spirits exporters group FEVS in February.

Looking ahead, FFS warned that a food law implemented in February raising the minimum price at which retailers can sell goods had added between 5% and 8% to spirit prices, but that only benefited retailers and not producers.

(Reporting by Sybille de La Hamaide, editing by Inti Landauro and Deepa Babington)

Source: OANN

FILE PHOTO: Outside view of a restaurant's wall decorated with hundred of bottles in Paris
FILE PHOTO: Outside view of a restaurant’s wall decorated with hundred of bottles in Paris, France, July 5, 2017. REUTERS/Charles Platiau/File Photo

June 19, 2019

PARIS (Reuters) – Sales of spirits in France fell last year, hurt by “yellow vest” anti-government protests that were at their peak during the end of the year period that accounts for a bulk of sales, French spirits association FFS said on Wednesday.

Protests late last year, which saw some of the worst street violence in Paris in decades and blocked access to shopping malls around the country, cost 0.1 percentage point of French growth in the fourth quarter last year, the INSEE statistics agency said in March.

The weekly protests gradually waned this year.

In 2018, spirits sales in French supermarkets fell 2.1% in volume to 275 million liters, and fell 1.34% in value to 4.72 billion euros compared to the year earlier, FFS said.

Not all spirits performed poorly. Sales of rum showed a 5.7% rise in value and 3.3% rise in volume, while sales of gin increased by 7.6% in value and 2.4% in volume, boosted by innovation and higher qualities.

Spirits exports hit a record high of 4.3 billion euros in 2018, up 1.8% on 2017, mainly boosted by Cognac, liqueurs and rum sales. The volume exported stood at 445 millions liters, or 53 million 12-bottle boxes, up 1.9% on the year.

This confirmed data from wine and spirits exporters group FEVS in February.

Looking ahead, FFS warned that a food law implemented in February raising the minimum price at which retailers can sell goods had added between 5% and 8% to spirit prices, but that only benefited retailers and not producers.

(Reporting by Sybille de La Hamaide, editing by Inti Landauro and Deepa Babington)

Source: OANN

FILE PHOTO: A general view shows the upper house of the Italian parliament, in Rome
FILE PHOTO: A general view shows the upper house of the Italian parliament, in Rome, Italy March 20, 2019. REUTERS/Yara Nardi/File Photo

June 19, 2019

BRUSSELS (Reuters) – The European Commission has asked Italy to adopt new measures to cut its growing public debt and avoid an EU disciplinary action that could lead to financial sanctions and stricter oversight of the country’s fiscal policies.

Italy narrowly averted such sanction procedure late last year, when it reached an agreement with the Commission, the European Union’s executive, over its 2019 budget. The Commission had initially rejected the budget, saying it would not cut Italy’s large debt.

Official data released in April showed Italy’s debt grew to 132.2% of gross domestic product in 2018, the largest ratio in the EU after bailed-out Greece. It is set to expand further this year and next, according to Commission forecasts, in spite of EU rules that say the debt should fall.

Italy’s euroskeptic government has so far shown little inclination to reduce its debt. Deputy Prime Minister Matteo Salvini has instead urged a relaxation of EU fiscal rules and wants broad tax cuts — without explaining how they would be funded.

The possible next steps are:

June 20-21: EU leaders meet in Brussels for a quarterly summit. The meeting offers Italian Prime Minister Giuseppe Conte a chance to discuss ways to avoid the debt procedure with the outgoing Commission president, Jean-Claude Juncker.

June 26: The European Commission could recommend the opening of a disciplinary procedure against Italy if Rome makes no concessions. Exceptionally, this decision could be postponed to July 2, but EU officials have repeatedly said a delay is unlikely.

July 1-2: EU governments’ officials meet and could decide to endorse the Commission’s proposal to start a disciplinary action over Italy’s debt.

July 8-9: EU finance ministers gather in Brussels for a regular monthly meeting, where they are expected to decide on the possible formal opening of disciplinary proceedings against Italy, if recommended by the Commission.

Once the procedure is started, Italy will be required to adopt measures, such as higher taxes and spending cuts, to correct its deviation from fiscal targets within three or six months from the beginning of the procedure.

July 29: If EU finance ministers open a disciplinary procedure, July 29 would be the deadline for the Commission to propose what would be unprecedented financial sanctions against Rome. If deemed in “serious” breach of EU rules, the Italian government could be required to lodge with the Commission a non-interest bearing deposit worth 0.2% of GDP — around 3.5 billion euros ($3.9 billion).

Aug. 7: Euro zone governments would have 10 days, until Aug. 7, to block by qualified majority a Commission proposal to impose sanctions.

Sept. 20: Italy presents updated growth and public finance targets, which will be the framework of its 2020 budget.

Mid-October: First possible deadline for Italy to meet, in its 2020 draft budget, the fiscal requirements imposed by the EU in the disciplinary procedure.

Failure to act could trigger further sanctions, including a fine of up to 0.2% of GDP, the suspension of billions of euros in EU funds and closer fiscal monitoring by the European Commission and the European Central Bank.

Further failure to cooperate could incur even stricter penalties. Those might include a fine of up to 0.5% of GDP, the potential loss of multi-billion-euro loans from the European Investment Bank, and precautionary monitoring by the EU of Italy’s plans to issue new debt.

Nov. 1: The new Commission is expected to take office, unless the mandate of the existing executive is extended.

(Reporting by Francesco Guarascio @fraguarascio in Brussels; additional reporting by Giuseppe Fonte and Gavin Jones in Rome; Editing by Catherine Evans)

Source: OANN

FILE PHOTO: Japanese Prime Minister Shinzo Abe holds a joint news conference with visiting U.S. President Donald Trump (not pictured) in Tokyo
FILE PHOTO: Japanese Prime Minister Shinzo Abe holds a joint news conference with visiting U.S. President Donald Trump (not pictured) in Tokyo, Japan May 27, 2019. REUTERS/Jonathan Ernst

June 19, 2019

By Linda Sieg and Kiyoshi Takenaka

TOKYO (Reuters) – Japanese Prime Minister Shinzo Abe faced stiff opposition criticism on Wednesday after a report warned that many retirees won’t be able to live on pensions alone, a topic likely to become an issue in an election for parliament’s upper house.

Abe has made reform of the social security system a top priority to cope with Japan’s fast-ageing, shrinking population.

But the furor over the report and Finance Minister Taro Aso’s refusal to accept its findings have created a headache for Abe’s coalition ahead of the upper house poll and amid speculation that the premier may also call a snap election for the more powerful lower chamber.

A report this month by advisers to the Financial Services Agency (FSA) said a model case couple would need $185,000 in addition to their pensions if they lived for 30 years after retiring.

The report was meant to highlight the need to plan ahead for retirement but instead gave opposition parties ammunition to blast Abe’s government.

“What is making lots of people angry is that you are simply stressing stability (of the system) and not addressing their anxiety head-on,” Yukio Edano, leader of the largest opposition Constitutional Democratic Party of Japan, told Abe during debate before a parliamentary panel.

Abe said the report had caused “misunderstandings” and reiterated the government’s position that reforms to the pension system implemented in 2004 had ensured its sustainability.

Pensions are a particularly sensitive topic for Abe.

His Liberal Democratic Party suffered a massive defeat in a 2007 upper house election during his first stint as premier partly because of voter outrage over misplaced pension records. Two months later, Abe resigned.

Abe’s ruling bloc is unlikely to lose its upper house majority but the fuss has trimmed his support and a weak performance would hamper efforts to cement his legacy.

Aso, 78, the wealthy scion of an elite political family, also said he’d never worried about supporting himself as he aged and didn’t know if he was receiving a pension.

“INCONVENIENT TRUTH”

That many retirees cannot subsist on pensions alone and will outlive their savings is one of Japan’s worst-kept secrets and one reason Abe is considering raising the retirement age.

“The FSA has done exactly what it is supposed to do — not be afraid to uncover inconvenient truths,” said Jesper Koll, CEO of asset manager WisdomTree Japan.

Yuichiro Tamaki, leader of the opposition Democratic Party for the People, said Aso’s rejection of the report had deepened public unease.

“Holding back, hiding or even falsifying information just because an election is near does not help you win trust for the government nor for the pension system,” he told Abe.

Japan’s life expectancy is the highest among Organization for Economic Cooperation and Development countries at 87.1 years for women and 81 years for men. The World Economic Forum last week forecast Japanese men could be expected to outlive their savings by 15 years and women by almost two decades.

About 54% of Japanese who get public pensions rely on them for their entire income, according to 2015 government data.

Opposition parties have also used the FSA report to renew questions about the sustainability of the public pension system.

The government in 2004 adopted reforms it said had made the system sustainable for the next 100 years, a pledge many private economists, opposition lawmakers and ordinary Japanese question.

“People knew, even before the release of report, that there will be many economic problems after their retirement,” said Yu Nakahigashi, 40, a self-employed businessman. “I don’t want them to hide the truth from the public.”.

(Additional reporting by Yuri Harada; editing by Darren Schuettler and Nick Macfie)

Source: OANN

FILE PHOTO: Federal Reserve Board Chairman Jerome Powell holds a news conference in Washington
FILE PHOTO: Federal Reserve Board Chairman Jerome Powell arrives at his news conference following the closed two-day Federal Open Market Committee meeting in Washington, U.S., May 1, 2019. REUTERS/Yuri Gripas

June 19, 2019

By Jeff Mason

WASHINGTON (Reuters) – President Donald Trump on Tuesday kept up pressure on the head of the Federal Reserve to lower interest rates, following a report that White House lawyers earlier this year explored whether they could legally strip Jerome Powell of the Fed chairmanship.

Asked by reporters outside the White House if he wanted to demote Powell, Trump said: “Let’s see what he does.”

Trump has repeatedly attacked Powell for raising interest rates, claiming that the Fed’s four rate hikes last year were undercutting his economic and trade policies, particularly as he battled over trade issues with China. Last October Trump said the Fed had “gone crazy” under Powell.

The Fed wraps up a two-day policy meeting in Washington on Wednesday. Powell and fellow U.S. central bankers are expected to leave interest rates steady but potentially lay the groundwork for a rate cut later this year.

“They are going to be making an announcement pretty soon, so we’ll see what happens,” Trump told reporters.

Earlier Tuesday, European Central Bank chief Mario Draghi signaled he would ease policy to deal with low inflation across the Atlantic, a move that Trump said benefited Europe and was unfair to the United States.

“I want to be given a level playing field, and so far I haven’t been,” Trump told reporters.

The comments add to pressure on Powell, who is facing financial market expectations for three rate cuts by year’s end as economic data has weakened, though the data still points to continued, though slower, growth.

Trump, who picked Powell to replace Janet Yellen as the Fed chair, told ABC News last week: “I’m not happy with what he’s done.”

Bloomberg News, citing people familiar with the matter, reported Tuesday that the White House’s counsel’s office had looked into the legality of demoting Powell to a Fed governor in February, soon after Trump discussed firing the Fed chairman. Such a move would be unprecedented in the Fed’s 100-year history.

White House economic adviser Larry Kudlow declined to confirm or deny the report, but told reporters that Trump is not considering any changes to Powell’s status. Powell’s four-year term as Fed chair expires in 2022.

“The Fed is independent. They’ll act on their own time, in their own way,” Kudlow said.

Powell has said he does not believe the president has the power to fire him, and that he would not resign if asked.

A spokeswoman for the Fed Board of Governors on Tuesday said, “Under the law, a Federal Reserve Board chair can only be removed for cause.”

Robert C. Hockett, a law professor at Cornell Law School, whose research includes monetary law and economics, said demoting Powell might not be considered removal. But any move by Trump to do so would probably be contested by members of the Senate, which must confirm nominees for Fed chair and to the Fed’s Board of Governors, and could lead to a legal challenge over the limits of the president’s power, Hockett said.

He also said the Fed’s policy-setting Federal Open Market Committee, known as the FOMC, could act to preserve Powell’s authority.

“Even if Trump could ‘demote’ Powell, the FOMC could nevertheless vote to keep him on as FOMC chair, thereby neutralizing Trump’s move,” Hockett said.

(Reporting by Jeff Mason; Additional reporting by Susan Heavey, Trevor Hunnicutt, Dan Burns; writing by Ann Saphir; Editing by Leslie Adler)

Source: OANN

Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang
Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang province, China December 7, 2018. Picture taken December 7, 2018. REUTERS/Stringer

June 19, 2019

By Aaron Sheldrick

TOKYO (Reuters) – Oil prices extended gains on Wednesday after rising in the previous session on rekindled hopes for a U.S.-China trade deal and on the potential for conflict between the U.S. and Iran in the Middle East after tanker attacks there last week.

Brent crude futures were up 3 cents at $62.17 a barrel by 0330 GMT. They rose 2% on Tuesday.

U.S. West Texas Intermediate crude gained 12 cents to $54.02 a barrel. The U.S. benchmark surged 3.8% in the last session.

In a post on Twitter, U.S. President Donald Trump said preparations were starting for him to meet Chinese President Xi Jinping at the G20 summit in Osaka, Japan, next week.

That comes after talks to reach a broad deal on trade between the United States and China broke down last month after Washington accused the Chinese of backing away from previously agreed commitments.

Interaction between the two sides since then has been limited, and Trump has threatened, repeatedly, to slap more tariffs on Chinese products in an escalation that businesses in both countries want to avoid.

“Global demand for crude got a boost on expectations that trade talks are showing some positive signs following President Trump’s tweets,” said Edward Moya, senior market analyst at OANDA in New York.

Both oil benchmarks gave up earlier gains in the Asian session after data showed that Japan’s exports fell for a sixth straight month in May as China-bound shipments weakened, underlining the impact of the trade war.

Tensions in the Middle East after last week’s tanker attacks remain high, with Trump saying he was prepared to take military action to stop Iran having a nuclear bomb but leaving open whether he would sanction the use of force to protect Gulf oil supplies.

Fears of a confrontation between Iran and the United States have mounted since last Thursday’s attacks, which Washington has blamed on Tehran. Iran has denied involvement.

Iran said this week it would breach internationally agreed curbs on its stock of low-enriched uranium within 10 days, possibly paving the way for the country to develop a nuclear weapon, adding that European nations still had time to save a landmark nuclear deal.

The U.S. is deploying about 1,000 more troops to the Middle East for what Washington said were defensive purposes, citing concerns about a threat from Iran.

Market participants are also waiting for a meeting between the Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia, a group known as OPEC+, to decide whether to extend a supply reduction pact that ends this month.

OPEC and non-OPEC states are discussing holding meetings on July 10-12 in Vienna, a date range proposed by Iran, OPEC sources said on Tuesday. OPEC itself, however, is considering meeting on July 1-2 though it is still saying meeting will be held on June 25-26 on its website.

U.S. crude stocks also fell by 812,000 barrels last week to 482 million, industry group the American Petroleum Institute said on Tuesday.

The report from the government’s Energy Information Administration are due later on Wednesday. [EIA/S]

(Reporting by Aaron Sheldrick; Editing by Joseph Radford and Christian Schmollinger)

Source: OANN

General view of a landscape of partially thawed Arctic permafrost near Mould Bay
General view of a landscape of partially thawed Arctic permafrost near Mould Bay, Canada, in this handout photo released June 18, 2019. The image was captured in 2016 by researchers from the University of Alaska Fairbanks who were amazed to find the permafrost thawing 70 years faster than models predicted. Louise Farquharson/Handout via REUTERS

June 19, 2019

By Matthew Green

LONDON (Reuters) – Permafrost at outposts in the Canadian Arctic is thawing 70 years earlier than predicted, an expedition has discovered, in the latest sign that the global climate crisis is accelerating even faster than scientists had feared.

A team from the University of Alaska Fairbanks said they were astounded by how quickly a succession of unusually hot summers had destabilized the upper layers of giant subterranean ice blocks that had been frozen solid for millennia.

“What we saw was amazing,” Vladimir E. Romanovsky, a professor of geophysics at the university, told Reuters by telephone. “It’s an indication that the climate is now warmer than at any time in the last 5,000 or more years.”

With governments meeting in Bonn this week to try to ratchet up ambitions in United Nations climate negotiations, the team’s findings, published on June 10 in Geophysical Research Letters, offered a further sign of a growing climate emergency.

The paper was based on data Romanovsky and his colleagues had been analyzing since their last expedition to the area in 2016. The team used a modified propeller plane to visit exceptionally remote sites, including an abandoned Cold War-era radar base more than 300 km from the nearest human settlement.

Diving through a lucky break in the clouds, Romanovsky and his colleagues said they were confronted with a landscape that was unrecognizable from the pristine Arctic terrain they had encountered during initial visits a decade or so earlier.

The vista had dissolved into an undulating sea of hummocks – waist-high depressions and ponds known as thermokarst. Vegetation, once sparse, had begun to flourish in the shelter provided from the constant wind.

Torn between professional excitement and foreboding, Romanovsky said the scene had reminded him of the aftermath of a bombardment.

“It’s a canary in the coalmine,” said Louise Farquharson, a post-doctoral researcher and co-author of the study. “It’s very likely that this phenomenon is affecting a much more extensive region and that’s what we’re going to look at next.”

Scientists are concerned about the stability of permafrost because of the risk that rapid thawing could release vast quantities of heat-trapping gases, unleashing a feedback loop that would in turn fuel even faster temperature rises.

Even if current commitments to cut emissions under the 2015 Paris Agreement are implemented, the world is still far from averting the risk that these kinds of feedback loops will trigger runaway warming, according to models used by the U.N.-backed Intergovernmental Panel on Climate Change.

With scientists warning that sharply higher temperatures would devastate the global south and threaten the viability of industrial civilization in the northern hemisphere, campaigners said the new paper reinforced the imperative to cut emissions.

“Thawing permafrost is one of the tipping points for climate breakdown and it’s happening before our very eyes,” said Jennifer Morgan, Executive Director of Greenpeace International. “This premature thawing is another clear signal that we must decarbonize our economies, and immediately.”

(Reporting by Matthew Green; Editing by Mark Heinrich)

Source: OANN

FILE PHOTO: Worker walks in a container area at a port in Tokyo
FILE PHOTO: A worker walks in a container area at a port in Tokyo, Japan January 25, 2016. REUTERS/Toru Hanai/File photo/File Photo

June 19, 2019

TOKYO (Reuters) – Japan’s exports fell 7.8% in May from a year earlier, down for a sixth straight month, Ministry of Finance (MOF) data showed on Wednesday, underscoring persistent weakness in overseas demand.

That compared with a 7.7% drop expected by economists in a Reuters poll, and followed a 2.4% fall in April.

Imports fell 1.5% in the year to May, versus the median estimate for a 0.2% increase.

The trade balance came to a deficit 967.1 billion yen ($8.91 billion), versus the median estimate for a 979.2 billion yen shortfall.

For full tables, go to the MOF website: http://www.customs.go.jp/toukei/info/index_e.htm

(Reporting by Tetsushi Kajimoto and Daniel Leussink; Editing by Chang-Ran Kim)

Source: OANN

Employee works on assembling an electric vehicle (EV) at a factory of Suda Electric Vehicle Technology Co, in Sanmenxia, Henan
An employee works on assembling an electric vehicle (EV) at a factory of Suda Electric Vehicle Technology Co, in Sanmenxia, Henan province, China March 19, 2019. Picture taken March 19, 2019. REUTERS/Stringer

June 19, 2019

By Kane Wu, Yilei Sun and Julie Zhu

HONG KONG/BEIJING (Reuters) – Last year, Wei Qing and his private equity investment team visited more than 20 Chinese electric vehicle manufacturing startups.

The end result? They decided not to invest in any.

“There are too many uncertainties from when a company tells a story in the early stage, to when it produces a sample car and raises funds, to the eventual mass production,” said Wei, managing director at Shanghai-based Sailing Capital.

Wei, who declined to name the EV makers his team visited, said he thinks only a few of them will survive. Sailing instead decided to invest in an EV parts supplier, he added.

His concerns reflect what bankers describe as increasingly tough funding times for Chinese EV makers which must jostle for attention in a crowded sector and produce convincing arguments about future profitability despite government cuts to EV subsidies and plans to phase them out.

Numerous setbacks plaguing Tesla Inc in its quest for sustained profitability as well as a dramatic slide in sales and problems with some cars at Chinese startup Nio Inc have also put investors on their guard.

This year, Chinese EV makers have raised just $783.1 million as of mid-June compared with $6 billion for the same period a year earlier and $7.7 billion for all of 2018, according to data provider PitchBook.

One Hong Kong-based banker said he had been approached by at least a dozen EV makers seeking new funds but had to pass on most of them as they were not able to set themselves apart from the crowd.

Even fundraising efforts that have gotten off the ground are not moving as fast as EV makers would like.

“It is challenging,” said the banker who began working on one fundraising this year. “If you can get a meeting with investors, you can always tell a story, but some don’t even reply to your requests for a meeting.”

He declined to be identified as the negotiations were not public.

(For a graphic on ‘Fundraising by Chinese EV Companies’ click https://tmsnrt.rs/2IjAjYt)

SUBSIDY WOES

Eager to curb smog and jump-start its own auto industry, China has said it wants so-called new energy vehicles (NEVs) – which also include hybrids, plug-in hybrids and fuel cell cars – to account for a fifth of auto sales by 2025 compared with 5% now.

Those ambitions have spawned a plethora of EV startups competing not just with each other, but also global automakers and Tesla, which plans to start production in China this year.

About 330 EV firms are registered for some sort of subsidy, government data shows, although the number of more well established startups is much smaller, at around 50.

But amid criticism that some firms have become overly reliant on government funds, Beijing has reduced subsidies, raised the standards needed for vehicles to qualify and flagged they will end altogether after 2020.

That has led to sharp slowdown as vehicle prices rise. Sales of NEVs in May rose just 1.8% from a year earlier compared with 18.1% in April, and 62% growth for 2018.

Surviving in the current funding environment, requires much cost discipline, Daniel Kirchert, CEO at Nanjing-based EV maker Byton, told Reuters.

“Given the current situation, it is not enough for any startup to come up with good products and be fast to market. At least it’s equally important to manage cost. Not only fixed costs but variable cost,” he said.

Byton, which is backed by state-owned automaker FAW Group and battery supplier Contemporary Amperex Technology Co (CATL) is one of a few EV makers with a fundraising round in train, seeking $500 million.

Others include Leap Motor, backed by state-owned Shanghai Electric Group Corp and Sequoia Capital China, which is seeking $372 million as well as CHJ Automotive, founded by serial entrepreneur Li Xiang, which wants to raise as much as $500 million.

Those with successful funding under their belts this year include Baidu Inc-backed WM Motor Technology Co Ltd which closed a $446 million round in March, according to PitchBook.

Some have obtained money outside private equity. E-Town Capital, a Beijing government investment firm, will invest 10 billion yuan ($1.4 billion) in a joint venture with Nio, which could help Nio build its own plant.

TESLA, NIO WEIGH

But overall, industry funding prospects are much bleaker, particularly as Tesla and Nio struggle.

Founder Elon Musk told Tesla employees last month the $2.7 billion the company recently raised would give it just 10 months to break even at the rate it burned cash in the first quarter. Shares in the industry pioneer have slid 32% in the year to date.

Nio’s shares have been hit harder, down 60% this year on a cut to its delivery outlook, a halving in first-quarter sales from the previous quarter, increased competition and reduced subsidies. Its reputation has also been hurt after three vehicles caught on fire and by the inadvertent shutting down of a car on Beijing’s prestigious Changan Avenue after the driver initiated a software update.

Nio declined to comment.

“Some of the listed EV industry leaders are currently underperforming in the secondary trading market and that has created pressures for the sector’s short-term outlook,” said Brian Gu, president of EV startup Xpeng Motors and a former senior JP Morgan banker.

“We are seeing investors become more cautious, selective and keenly focused on the frontrunners. I think this trend is likely to persist,” he said.

An investor in WM Motor was more downbeat about the willingness of private equity investors to fund the industry.

“Nio is probably the best among Chinese EV start-ups. Look where it stands now – how can that make us comfortable about writing cheques for other EV start-ups?” said the investor who also held Nio shares but sold them this year.

(Reporting by Kane Wu and Julie Zhu in Hong Kong and Yilei Sun in Beijing; Additional reporting by Norihiko Shirouzu in Beijing; Editing by Jennifer Hughes and Edwina Gibbs)

Source: OANN

FILE PHOTO: An Adobe Systems Inc software box is seen in Los Angeles
FILE PHOTO: An Adobe Systems Inc software box is seen in Los Angeles, California, U.S., March 13, 2017. REUTERS/Lucy Nicholson/File Photo

June 18, 2019

(Reuters) – Adobe Inc beat analysts’ estimates for quarterly profit and revenue on Tuesday, driven by growth in its digital media business that houses its flagship product Creative Cloud, sending its shares up 4.6% after market.

Adobe is sharpening its focus on the fast-growing cloud business, a fiercely competitive market dominated by Microsoft Corp, Oracle Corp and Salesforce.com Inc.

In doing so, Adobe, known for its image-editing software Photoshop, partnered with Microsoft in March to bolster its sales and marketing software capabilities.

Salesforce and Microsoft also posted better-than-expected quarterly results on the back of growth in their cloud businesses.

Adobe’s shift to a cloud-based subscription has brought a more predictable revenue stream for the company, by selling its software through web-based subscriptions and not through the sale of packaged-licensed software.

On Tuesday, Adobe’s executives expressed confidence in the company’s ability to raise prices annually for its subscription-based services, while driving volume growth by attracting new users.

“We’re able to do that through the various new products that are attracting folks to our platform… And then as they get comfortable with those, they end up to upsell them into full suite products for multiple applications,” Chief Financial Officer John Murphy on post-earnings call.

Subscription revenue during the second quarter jumped 27.7% to $2.46 billion and product revenue rose 1.2% to $152.8 million.

Revenue from Adobe’s digital media segment jumped 22% to $1.89 billion, above estimates of $1.86 billion, according to IBES data from Refinitiv.

Revenue from its Experience Cloud business, which provides services including analytics, advertising and marketing, rose 34% to $784 million, above analysts’ estimate of $774.9 million. The growth was helped by the acquisitions of Magento and Marketo, Chief Executive Officer Shantanu Narayen said on the call.

However, the company expects to report revenue of about $2.80 billion in the third quarter, below analysts’ estimates of $2.83 billion. It estimates a 20% revenue rise in its digital media unit in the current quarter.

The San Jose, California-based company’s revenue jumped 25% to $2.74 billion in the quarter ended May 31, beating estimates of $2.70 billion.

Excluding items, Adobe earned $1.83 per share, above the average analyst estimate of $1.78.

(Reporting by Sayanti Chakraborty in Bengaluru; Editing by Maju Samuel)

Source: OANN

Facebook logo is seen on representations of virtual currency in this illustration picture
A 3-D printed Facebook logo is seen on representations of virtual currency in this illustration picture, June 18, 2019. REUTERS/Dado Ruvic/Illustration

June 18, 2019

By Pete Schroeder

WASHINGTON (Reuters) – A leading U.S. House lawmaker on Tuesday called on Facebook Inc to halt development on its new cryptocurrency and for company executives to testify before Congress, adding to global concerns about what the digital currency could mean for data privacy and security.

Maxine Waters, who chairs the House Financial Services Committee, said Facebook should halt development of the product, dubbed Libra, until Congress and regulators can review the issue, and called on company executives to testify before Congress.

“Facebook has data on billions of people and has repeatedly shown a disregard for the protection and careful use of this data,” she said in a statement. “With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users.”

Her comments came after Representative Patrick McHenry, the senior Republican on her panel, also sought a hearing on Facebook’s new initiative. A Facebook representative said the company looked forward to answering lawmakers’ questions.

Facebook’s announcement was met with immediate backlash from U.S. lawmakers and regulators across the globe, who are concerned that Facebook is already too massive and careless with users’ privacy.

“Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy. We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight,” said Senator Sherrod Brown, the top Democrat on the Senate Banking Committee, in a statement.

U.S. Senator Mark Warner, a Virginia Democrat who also sits on Senate Banking Committee, expressed concern that through Libra, Facebook was using its scale in social networking to achieve dominance in adjacent markets like mobile payments.

French Finance Minister Bruno Le Maire called for more regulation of tech companies.

“This instrument for transactions will allow Facebook to collect millions and millions of data, which strengthens my conviction that there is a need to regulate the digital giants,” he said in an interview on Europe 1 radio.

But Bank of England Governor Mark Carney said he had an “open mind” on the potential utility of the product, while warning it could face strict regulation.

Facebook has engaged with regulators in the United States and abroad about the planned cryptocurrency, company executives said. They would not specify which regulators.

A U.S. regulatory source briefed on the matter said Facebook had been in communication with U.S. regulators but added it was still unclear how the currency would be structured and whether it would directly fall under any existing U.S. regulatory regimes.

Switzerland’s financial watchdog said it was in contact with the initiators of the Libra project but declined to comment on whether it was obtaining specific regulatory permission or status.

Markus Ferber, a senior German lawmaker in the European parliament, said in a statement that Facebook’s new coin should put “regulators on high alert” and called on the European Commission to start work on regulatory framework for virtual currencies.

(Reporting by Pete Schroeder and Katie Paul; Editing by Lisa Shumaker)

Source: OANN

A woman shops in a supermarket in Buenos Aires
A woman shops in a supermarket in Buenos Aires, Argentina April 17, 2019. REUTERS/Agustin Marcarian

June 18, 2019

BUENOS AIRES (Reuters) – Argentina’s gross domestic product (GDP) likely contracted 5.9% in the first quarter from the same quarter a year ago, hit by a decline in domestic consumption and production due to stubbornly high inflation and a sharp recession, according to analysts polled by Reuters.

South America’s second largest economy is expected to report official GDP data for the first quarter on Wednesday, according to the statistics agency INDEC’s formal publication schedule.

A Reuters poll of eight local and international analysts indicated a range of economic contractions between 5.6% and 7.2%, with the average drop around 5.9%. Analysts said a gradual recovery process would follow.

“Slowly economic activity will recover,” as it benefited from low levels of consumption and idle capacity in the quarterly comparisons, said Pablo Besmedrisnik, director of consultancy Invenómica.

Argentina’s economy had grown 3.9% year-on-year in the same quarter in 2018, according to data from the National Institute of Statistics and Censuses (INDEC). The country’s GDP has been falling since the second quarter of 2018.

(Reporting by Hernan Nessi; Writing by Adam Jourdan; Editing by Rosalba O’Brien)

Source: OANN

FILE PHOTO: A member of the security personnel sits behind a logo of the Belt and Road Forum at the China National Convention Center
FILE PHOTO: A member of the security personnel sits behind a logo of the Belt and Road Forum (BRF) at the China National Convention Center, in Beijing, China, April 25, 2019. REUTERS/Jason Lee

June 18, 2019

WASHINGTON (Reuters) – China’s massive Belt and Road infrastructure drive could speed up economic development and reduce poverty for dozens of developing countries, the World Bank said on Tuesday in a new report that called for deep policy reforms and more transparency for the initiative.

The long-delayed report said that the Belt and Road, a string of ports, railways, roads and bridges and other investments connecting China to Europe via central and southern Asia could lift 32 million people out of moderate poverty conditions if implemented fully.

“Achieving the ambitions of the Belt and Road Initiative will require equally ambitious reforms from participating countries,” Ceyla Pazarbasioglu, World Bank vice president for equitable growth, said in a statement.

“Improvements in data reporting and transparency – especially around debt – open government procurement, and adherence to the highest social and environmental standards will help significantly,” she added.

(Reporting by David Lawder; Editing by Steve Orlofsky)

Source: OANN

FILE PHOTO: Single family homes being built by KB Homes are shown under construction in San Diego
FILE PHOTO: Single family homes being built by KB Homes are shown under construction in San Diego, California, U.S., April 17, 2017. REUTERS/Mike Blake/File Photo

June 18, 2019

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. homebuilding fell in May, but groundbreaking activity in the prior two months was stronger than previously thought, pointing to some tentative signs of improvement in the struggling housing market.

Land and labor shortages are, however, making it difficult for builders, especially in the single-family housing segment, to fully take advantage of a sharp decline in mortgage rates. That has left the housing market continuing to grapple with tight inventory and sluggish sales growth.

The report from the Commerce Department on Tuesday came as Federal Reserve officials started a two-day policy meeting.

Low inflation, a slowing economy and an escalation in the trade war between Washington and Beijing have led financial markets to fully price in an interest rate cut this year, pulling down mortgage rates. The U.S. central bank is, however, not expected to cut rates on Wednesday.

“Housing continues to wander along, not doing much better but not weakening a whole lot,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

Housing starts dropped 0.9% to a seasonally adjusted annual rate of 1.269 million units last month amid a drop in the construction of single-family housing units, the government said. Data for April was revised up to show homebuilding rising to a pace of 1.281 million units, instead of increasing to a rate of 1.235 million units as previously reported. Housing starts in March were also stronger than initially estimated.

Economists polled by Reuters had forecast housing starts edging up to a pace of 1.239 million units in May.

Single-family homebuilding, which accounts for the largest share of the housing market, dropped 6.4% to a rate of 820,000 units in May. Single-family housing starts fell in the Northeast, the Midwest and West, but rose in the South, where the bulk of homebuilding occurs.

Some on the weakness in groundbreaking activity likely reflects heavy rain and flooding in some parts of the country.

The housing market hit a soft patch last year and has been a drag on economic growth for five straight quarters.

The PHLX housing index was trading higher, in line with a broadly firmer U.S. stock market. The dollar rose slightly against a basket of currencies, while U.S. Treasury yields fell.

GRADUAL IMPROVEMENT

Despite the recent signs of improvement in housing starts, there are concerns that renewed trade tensions between the United States and China could hurt future home building.

A survey on Monday showed confidence among homebuilders ebbed in June, with builders continuing “to report rising development and construction costs, with some additional concerns over trade issues.”

Builders said that despite lower mortgage rates, “home prices remain somewhat high relative to incomes, which is particularly challenging for entry-level buyers.”

The 30-year fixed mortgage rate has decreased to 3.82% from a peak of about 4.94% in November, according to data from mortgage finance agency Freddie Mac. According to the latest data, house prices rose 3.7% in March from a year ago, outpacing wages, which increased 3.1% in May.

Building permits rose 0.3% to a rate of 1.294 million units in May. It was the second straight monthly increase in permits. Building permits have been weak this year, with much of the decline concentrated in the single-family housing segment.

Permits to build single-family homes increased 3.7% to a rate of 815,000 units in May, after five straight monthly declines. Permits were boosted by a 7.7% jump in the South, the largest gain since December 2016. But single-family housing permits fell in the Northeast, West and Midwest.

“The gain in permits along with more favorable buying conditions points to gradually improving activity over the summer,” said Mark Vitner, a senior economist at Wells Fargo Securities in Charlotte, North Carolina. “That said, lower mortgages rates will not likely be rocket fuel for residential construction, and a surge in activity is unlikely.”

Starts for the volatile multi-family housing segment surged 10.9% to a rate of 449,000 units last month. Permits for the construction of multi-family homes dropped 5.0% to a pace of 479,000 units.

Housing completions fell 9.5% to 1.213 million last month. Realtors estimate that housing starts and completion rates need to be in a range of 1.5 million to 1.6 million units per month to plug the inventory gap. The stock of housing under construction was little changed at 1.131 million units.

“If you were waiting for more construction to deal with the nation’s growing housing shortage, you are going to have a longer wait,” said Chris Rupkey, chief economist at MUFG in New York.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

Source: OANN

FILE PHOTO: Neil Woodford is seen in this undated handout picture
FILE PHOTO: Neil Woodford, founder and fund manager at Woodford Investment Management, is seen in this undated handout picture released on June 10, 2019. Jonathan Atkins/Handout via REUTERS/File Photo

June 18, 2019

By Carolyn Cohn and Muvija M

(Reuters) – British money manager Neil Woodford faced further pressure on Tuesday after retail platform Fidelity International stopped its customers from making new investments in one of his smaller funds.

Woodford, one of Britain’s best-known fund managers, suspended the 3.7 billion pound ($4.6 billion) LF Woodford Equity Income fund on June 3 due to a rise in redemption requests, leaving investors unsure about when they will get their money back.

This has put Woodford’s business under scrutiny by regulators and politicians, and led to outflows from the Income Focus fund, his other open-ended investment fund.

Fidelity’s decision to curb new investments in the Income Focus fund is the latest setback for Woodford, after British wealth manager St James’s Place ended a 3.5 billion pound investment mandate with Woodford Investment Management.

Meanwhile, investment platform Hargreaves Lansdown removed the Equity Fund, which has come under fire for investing in unlisted and illiquid stocks, from its ‘Wealth 50’ list and cut its exposure to the Income Focus fund.

Fidelity said in an emailed statement that its move was “in the best interest of our platform clients unless and until uncertainties are resolved,” adding it was not restricting withdrawals from the fund.

It said that the restrictions were temporary and a “precautionary measure”.

The Income Focus fund “doesn’t have any exposure to illiquid or unquoted securities”, a Woodford spokesman said in an email, adding that it contains “a combination of large, mid and small-sized companies”.

The Income Focus fund’s assets under management (AUM) have dropped 32% since the Equity Income fund suspension, to 325 million pounds, Morningstar data shows. Redemptions and market movements can contribute to a drop in AUM.

The suspension of Woodford’s fund could become a “very big problem” if it caused investors to doubt the integrity of the financial system, Bank of England policymaker Anil Kashyap said on Tuesday.

And PIMFA, the trade association for investment managers and financial advisers, said it represented “an erosion of trust”, while retail investor lobbyist Gina Miller called for an independent review into the regulator.

Woodford’s only listed fund, the Woodford Patient Capital Trust, hit record lows on Tuesday, down more than 30% since the Equity Income fund suspension. It recovered ground to 55 pence by 1220 GMT, down 0.2%.

(Reporting by Carolyn Cohn in London and Muvija M in Bengaluru; Editing by Bernard Orr and Alexander Smith)

Source: OANN

FILE PHOTO: People walk in the Popolo's Square in Rome
FILE PHOTO: People walk in the Popolo’s Square in Rome, Italy July 12, 2018. REUTERS/Tony Gentile/File Photo

June 18, 2019

ROME (Reuters) – The number of Italians living in absolute poverty held steady in 2018 after three straight years of growth, though the problem remains at a record high, data showed on Tuesday.

About 5 million people or 8.4% of the population live in absolute poverty, defined as those unable to buy goods and services “essential to avoid grave forms of social exclusion”, according to data from national statistics bureau ISTAT.

In terms of families, the number was 1.8 million, the highest since ISTAT records began in 2005.

Fighting poverty is a key goal of the year-old populist government, which has embarked on a big expansion of state welfare, including a “citizens’ income” for the poor, and plans tax cuts to reinvigorate the chronically stagnant economy.

Luigi Di Maio, who heads the coalition 5-Star Movement and championed the welfare reform, said in September that the government would “abolish poverty” in the euro zone’s third largest economy.

The economy grew 0.9% percent in 2018 and ISTAT expects it to eke out 0.3% growth this year.

In Italy’s underdeveloped south, the bedrock of support for 5-Star, more than 11% of people were living in absolute poverty last year, ISTAT said.

That compared with 6.6% in central regions including the capital, Rome, and around 7% in the north including the financial capital, Milan.

Italians living in “relative poverty” — those whose disposable income is less than around half the national average — fell to around 15% of the population from 15.6% in 2017.

(Reporting by Angelo Amante; Editing by Mark Bendeich and Crispian Balmer)

Source: OANN

An aerial view shows the 53rd International Paris Air Show at Le Bourget Airport near Paris
An aerial view shows the 53rd International Paris Air Show at Le Bourget Airport near Paris, France, June 17, 2019. Picture taken June 17, 2019. REUTERS/Pascal Rossignol

June 18, 2019

By Tim Hepher and Eric M. Johnson

LE BOURGET, France (Reuters) – Airbus and Boeing bagged a combined $15 billion of plane deals on day two of the Paris Airshow, as their sales teams scrapped for orders after a downturn in business at many airlines and the grounding of Boeing’s top-selling jet.

Airbus extended its early lead in orders at the event with a $6 billion deal on Tuesday to sell 36 planes to Philippines airline Cebu Air, including 10 of the new long-range A321XLR model launched on Monday.

The European planemaker also struck a deal to sell a further 30 A320neo aircraft to Saudi Arabian Airlines, worth $3.3 billion at list prices, while Malaysia’s AirAsia converted 253 A320neo orders to the larger A321neo model. Financial terms of the AirAsia deal were not disclosed.

Airbus shares were up 0.6% at 1100 GMT, having touched a record high of 126.50 euros in early trade.

Boeing, meanwhile, gained a much needed lift after a slow start to the show on Monday as Korean Air committed to buying 20 of the U.S. planemaker’s 787 Dreamliners, worth $6.3 billion at list prices.

Despite the flurry of activity, dealmaking at the aerospace industry’s biggest annual event has been quieter than normal, fuelling speculation that a decade-long boom might be coming to an end.

With airlines struggling to contend with overcapacity, slowing economies and geopolitical tensions, some analysts warn that Airbus and Boeing could face a growing number of cancellations from their bulging order books.

Boeing in particular is suffering after the grounding of its MAX 737 aircraft in March following two deadly crashes.

A321XLR TAKES OFF

However, the planemakers are confident of continued strong demand for more fuel-efficient jets as emissions regulations tighten and air travel continues to rise, driven by Asia’s growing middle classes. Boeing on Monday increased its 20-year industry demand forecast.

“Although investors have started to ask questions about the state of the upcycle, the aerospace industry remains very confident in the current state of the market,” analysts at Vertical Research Partners said in a note.

Sources familiar with the matter say that American Airlines and leasing giant GECAS are also in talks to buy Airbus’s new A321XLR, which is aimed at new routes for airlines with smaller planes, stealing a march on Boeing’s plans for a potential planned NMA mid-market jet.

As well as 10 Airbus A321XLR jets, Cebu Air said it was buying 16 larger A330neo planes and five of A320neo model. Finance chief Andrew Huang told a news conference the A330neo jets would have up to 460 seats, allowing the budget airline to add new international routes.

Cebu, which operates the Cebu Pacific brand, had a 51% share of the Philippine domestic market in 2018, according to company data. In the international market, its 19% share was second only to the 28% held by full-service rival Philippine Airlines.

Saudi Arabian Airlines, which already has 35 planes on order from the Airbus A320neo family, said its additional purchases included 15 of the A321XLR jet and that it also has an option to buy as many as 35 more A320neo aircraft.

Korean Air said in October 2018 that it was likely to order more Boeing 787 jets, mainly to replace its existing aircraft, as it looks to streamline its fleet and reduce costs.

(Additional reporting by Laurence Frost, Andrea Shala, Alistair Smout, Cyril Altmeyerhenzien, Sudip Kar-Gupta, Neil Jerome and Jamie Freed; Editing by Mark Potter, Keith Weir and David Goodman)

Source: OANN

FILE PHOTO: Federal Reserve Board Chairman Jerome Powell delivers the Federal Reserve’s Semiannual Monetary Policy Report to the House Financial Services Committee on Capitol Hill in Washington
FILE PHOTO: Federal Reserve Board Chairman Jerome Powell delivers the Federal Reserve’s Semiannual Monetary Policy Report to the House Financial Services Committee on Capitol Hill in Washington, U.S., February 27, 2019. REUTERS/Joshua Roberts/File Photo

June 18, 2019

By Howard Schneider and Ann Saphir

WASHINGTON/SAN FRANCISCO – (Reuters) – Bond investors expect an aggressive set of U.S. interest rate cuts this year, and a voluble president pines for the “old days” when his predecessors bullied central bankers to get their way.

If Federal Reserve Chairman Jerome Powell had a complicated task last year in calling an early halt to further Fed rate hikes, his mission in a Wednesday press conference may be even trickier: Thread the needle between growing expectations that lower rates are coming soon and economic data that looks reasonably healthy with rates just where they are.

Failing to pull it off could trigger the same sort of volatility and tightening of financial conditions witnessed in December, when Powell’s press conference remarks were interpreted as overly hawkish and in part responsible for an 8% drop in the S&P 500 over the next few days.

At the extreme, that sort of volatility could feed into the real economy and make the Fed’s job in coming weeks even more complicated.

“Powell will have to do a lot of tap dancing,” Bank of America Merrill Lynch economists wrote Friday in outlining how the Fed will need to account for expected slower U.S. growth, weak inflation and trade risks, without making it seem as if a serious downturn is in the offing.

“This is a Fed that wants to insure that the recovery will continue,” they said. “The goal will be to talk about the need to ease policy but underscore that a recession is not around the corner.”

The Fed begins its two-day policy meeting on Tuesday, and will issue a new statement and economic projections at 2 p.m. (1800 GMT) on Wednesday. Powell’s press conference is scheduled to begin Wednesday at 2:30 p.m. (1830 GMT)

The central bank is expected to leave its benchmark overnight policy rate unchanged at its current range of between 2.25% and 2.5%. The federal funds rate has been at that level since December after a three-year cycle of monetary policy tightening that began slowly but ended with roughly quarterly rate hikes over 2017 and 2018.

A ‘DARKENED’ OUTLOOK?

The mood has clearly shifted since the Fed last met in early May, in part because of trade policy choices made by President Donald Trump and which the president has demanded be offset with looser monetary policy.

But it is unclear by how much. One Federal Reserve regional bank president has referred to the outlook as “darkened,” and another has called for lower rates “soon.” Powell in his most recent public comments dropped the use of the word “patient” in referring to the Fed’s posture when it comes to deciding on the next rate move.

That suggested to many analysts that the word will disappear from the policy statement as well. In May that 279-word missive said the Fed “will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate.”

But an absence of patience doesn’t mean the central bank is on a hair trigger. The focus on Powell will center around how he describes the Fed’s sensitivity to upcoming data, how seriously it views the risks of a widening trade war, and whether it still sees weak inflation as likely “transitory,” as he described it in May.

A LITTLE ‘FEDSPLAINING’?

Despite his December misstep, Powell has been given generally good marks by Wall Street investors for his ability to communicate policy.

His immediate predecessors had their own miscues.

Former chairman Ben Bernanke triggered weeks of global bond market volatility with his 2013 comments about the Fed’s plan to reduce its bond purchases. And former chair Janet Yellen in 2015 had to navigate the difficulties of the first interest rate increase since the 2007 to 2009 financial crisis.

But Powell this week may have a pronounced information gap to fill. As of March, 11 of 17 policymakers felt that rates at year-end would be unchanged from today, and the other six saw them as likely a bit higher.

The expected performance of the economy has not changed that much since then. Even if Trump’s trade policies have been hard to predict, Fed officials say the economic consequences could just as easily cavort to the upside if, for example, an upcoming meeting of the Group of 20 nations ends with any hint of progress in U.S.-China trade negotiations.

At this point, as economists at Goldman Sachs wrote over the weekend, the “hurdle” for the Fed to cut rates “is likely to be higher than widely believed,” with the economy and markets either healthier or more aligned with Fed policy than was the case in the 1990s when the Fed used preemptive “insurance” rate cuts to encourage continued economic growth.

If Fed officials don’t collectively push their rate view down, as markets expect and the White House demands, it will be up to Powell to explain why.

(Graphic: Fed communications ratings – https://tmsnrt.rs/31DehYx)

(Reporting by Howard Schneider; Editing by Dan Burns and Andrea Ricci)

Source: OANN

FILE PHOTO: A Volvo logo is pictured on the stand during the 87th International Motor Show at Palexpo in Geneva
FILE PHOTO: A Volvo logo is pictured on the stand during the 87th International Motor Show at Palexpo in Geneva, Switzerland, March 7, 2017. REUTERS/Denis Balibouse

June 18, 2019

STOCKHOLM (Reuters) – Sweden’s AB Volvo is joining forces with U.S. chipmaker Nvidia to develop artificial intelligence used in self-driving trucks, the companies said on Tuesday.

The agreement between Volvo and Nvidia is a long-term partnership spanning several years, and work will begin immediately with personnel from the two companies being co-located in Gothenburg, Sweden and Santa Clara, California.

Volvo said the partnership will focus on the development of a flexible, scalable autonomous driving system, which is planned to be used first in commercial pilot schemes before it is deployed in commercial vehicles from the Volvo Group, Volvo said.

“Utilizing Nvidia’s end-to-end artificial intelligence platform for training, simulation and in-vehicle computing, the resulting system is designed to safely handle fully autonomous driving on public roads and highways,” Volvo said in a statement.

Nvidia, which has previously announced technology partnerships with automakers including Volkswagen, Mercedez-Benz and Toyota, said it was thrilled to team up with Volvo.

“The latest breakthroughs in AI and robotics bring a new level of intelligence and automation to address the transportation challenges we face,” Nvidia CEO Jensen Huang said.

Nvidia’s so-called Drive Constellation chips often power the machine learning used to refine self-driving car software algorithms inside data centers, and the company has also been working to build its Drive chips into cars.

But automotive chips accounted for only $641 million of Nvidia’s $11.7 billion in revenue in its most recent fiscal year.

Tesla Inc was a major customer for Nvidia’s automotive chips, but last year, Chief Executive Elon Musk said the company was developing its own chip.

AB Volvo’s and Nvidia’s collaboration will be built on Nvidia’s full software package for sensor processing, perception, map localization and path planning.

(Reporting by Johannes Hellstrom; Editing by Keith Weir)

Source: OANN

FILE PHOTO: A Facebook panel is seen during the Cannes Lions International Festival of Creativity, in Cannes
FILE PHOTO: A Facebook panel is seen during the Cannes Lions International Festival of Creativity, in Cannes, France, June 20, 2018. REUTERS/Eric Gaillard/File Photo

June 18, 2019

By Katie Paul and Anna Irrera

SAN FRANCISCO/NEW YORK (Reuters) – Facebook Inc revealed plans on Tuesday to launch a cryptocurrency called Libra, the latest development in its effort to expand beyond social networking and move into e-commerce and global payments.

Facebook has linked with 28 partners in a Geneva-based entity called the Libra Association, which will govern its new digital coin set to launch in the first half of 2020, according to marketing materials and interviews with executives.

Facebook has also created a subsidiary called Calibra, which will offer digital wallets to save, send and spend Libras. Calibra will be connected to Facebook’s messaging platforms Messenger and WhatsApp, which already boast more than a billion users.

The Menlo Park, California-based company has big aspirations for Libra, but consumer privacy concerns or regulatory barriers may present significant hurdles.

Facebook hopes it will not only power transactions between established consumers and businesses around the globe, but offer unbanked consumers access to financial services for the first time.

The name “Libra” was inspired by Roman weight measurements, the astrological sign for justice and the French word for freedom, said David Marcus, a former PayPal executive who heads the project for Facebook.

“Freedom, justice and money, which is exactly what we’re trying to do here,” he said.

Facebook also appears to be betting it can squeeze revenue out of its messaging services through transactions and payments, something that is already happening on Chinese social apps like WeChat.

The Libra announcement comes as Facebook is grappling with public backlash due to a series of scandals, and may face opposition from privacy advocates, consumer groups, regulators and lawmakers.

Some Facebook adversaries have called for the company to incur penalties, or be forcibly broken up, for mishandling user data, allowing troubling material to appear on its site and not preventing Russian interference in the 2016 presidential election through a social media disinformation campaign.

It is not clear how lawmakers or regulators will react to Facebook making a push into financial services through the largely unregulated world of cryptocurrency.

In recent years, cryptocurrency investors have lost hundreds of millions of dollars through hacks, and the market has been plagued by accusations of money-laundering, illegal drug sales and terrorist financing.

Facebook has engaged with regulators in the United States and abroad about the planned cryptocurrency, company executives said. They would not specify which regulators or whether the company has applied for financial licenses anywhere.

Facebook hopes it can bring global regulators to the table by publicizing Libra, said Kevin Weil, who runs product for the initiative.

“It gives us a basis to go and have productive conversations with regulators around the world,” said Weil. “We’re eager to do that.”

MAJOR PARTNERS

Bitcoin, the most well-known cryptocurrency, was created in 2008 as a way for pseudonymous users to transfer value online through encrypted digital ledgers. Early developers believed that the world needed an alternative to traditional currencies, which are controlled by governments and by central banks.

Since then, thousands of bitcoin alternatives have launched, and Facebook is just one of dozens of blue-chip companies dabbling with the underlying technology. But its status as a Silicon Valley behemoth that touches billions of people around the world has created significant buzz around Libra’s potential.

Partners in the project include household names like Mastercard Inc, Visa Inc, Spotify Technology SA, PayPal Holdings Inc, eBay Inc, Uber Technologies Inc and Vodafone Group Plc, as well as venture capital firms like Andreessen Horowitz.

They hope to have 100 members by Libra’s launch during the first half of 2020. Each member gets one vote on substantial decisions regarding the cryptocurrency network and firms must invest at least $10 million to join. Facebook does not plan to maintain a leadership role after 2019.

Though there are no banks among the inaugural members, there have been discussions with a number of lenders about joining, said Jorn Lambert, executive vice president for digital solutions at Mastercard. They are waiting to see how regulators and consumers respond to the project before deciding whether to join, he said.

The Libra Association plans to raise money through a private placement in the coming months, according to a statement from the association.

PRIVACY, REGULATORY CONCERNS

Although Libra-backers who spoke to Reuters or provided materials are hopeful about its prospects, some expressed awareness that consumer privacy concerns or regulatory barriers may prevent the project from succeeding.

Calibra will conduct compliance checks on customers who want to use Libra, using verification and anti-fraud processes that are common among banks, Facebook said.

The subsidiary will only share customer data with Facebook or external parties if it has consent, or in “limited cases” where it is necessary, Facebook said. That could include for law enforcement, public safety or general system functionality.

Transactions will cost individuals less than merchants, Facebook said, though executives declined to provide specifics. Each Libra will be backed by a basket of government-backed assets.

The company plans to refund customers who lose money because of fraud, Facebook said.

Sri Shivananda, Paypal’s chief technology officer said in an interview that the project is still in its “very, very early days,” and there were conversations in progress with regulators.

Mastercard’s Lambert characterized Libra similarly, noting much needed to happen before the launch.

If the project receives too much regulatory pushback, he said, “we might not launch.”

(Reporting by Katie Paul and Anna Irrera; Editing by Lauren Tara LaCapra and Lisa Shumaker)

Source: OANN

Illustration photo of Australian dollars
Australian dollars are seen in an illustration photo February 8, 2018. REUTERS/Daniel Munoz

June 18, 2019

By Hideyuki Sano and Stanley White

TOKYO (Reuters) – The Australian dollar on Tuesday eased to its lowest levels since early January after the nation’s central bank flagged a further rate cut, while the British pound was hobbled by rising worries of a no-deal Brexit

With markets focused on U.S. Federal Reserve and Bank of Japan meetings later this week, traders latched on to minutes of the Reserve Bank of Australia’s (RBA) June meeting which showed policymakers were prepared to cut rates once more to revive wages growth and inflation.

“The market is already pricing in two rate cuts (in Australia), and there are some speculative moves to push the Aussie lower,” said Yukio Ishizuki, foreign exchange strategist at Daiwa Securities.

The RBA minutes sent the Aussie slumping to $0.6833, its lowest since the flash crash of early January. It was last fetching $0.6837.

Markets are pricing in about 50% chance of another rate cut next month by the RBA, which delivered its first easing in almost three years just two weeks ago..

The pound was under pressure after former foreign minister Boris Johnson got a boost on Monday in his campaign to become prime minister as one of his former rivals and EU supporter Matt Hancock backed him.

That rattled markets as Johnson, the face of the official campaign to leave the European Union in the 2016 referendum, has promised to lead Britain out of the EU with or without a deal.

The pound, which tumbled to a 5-1/2-month low of $1.2532 on Monday, last traded at $1.2530. It also fell to its weakest level since January against the euro, which climbed to 89.74 pence, compared to a two-year low of 84.56 touched just over a month ago.

The pound could be in for a rough ride in coming days, with a raft of potentially market-moving events ahead, including consumer inflation and retail sales data, due on Wednesday and Thursday respectively, and the Bank of England’s policy announcement on Thursday.

The dollar eased slightly to 108.23 yen on Tuesday as a decline in Japanese stocks triggered about of risk aversion.

“The yen may have a little more room to rise if U.S. stocks take a hit and trigger a bout of risk aversion,” Daiwa Securities’ Ishizuki said.

The dollar index measuring its value against six major currencies also declined slightly to 97.446, undermined by the New York Fed’s business index fell this month by a record to reach its weakest level in more than 2-1/2 years.

The Fed’s two-day policy meeting starting later on Tuesday is the next major focus after markets have priced in more than two 25 basis-point rate cuts by year-end.

That marks a sharp contrast to the Fed’s official forecast in March, which showed policymakers deemed the next move would be a hike.

“As markets are now pricing in rate cuts in the second half of this year, the question is how the Fed will respond to such an outlook,” said Shinichiro Kadota, senior strategist at Barclays.

The euro was little changed in Asia, trading at $1.1231.

(Editing by Shri Navaratnam)

Source: OANN

Illustration photo of Australian dollars
Australian dollars are seen in an illustration photo February 8, 2018. REUTERS/Daniel Munoz

June 18, 2019

By Hideyuki Sano and Stanley White

TOKYO (Reuters) – The Australian dollar on Tuesday eased to its lowest levels since early January after the nation’s central bank flagged a further rate cut, while the British pound was hobbled by rising worries of a no-deal Brexit

With markets focused on U.S. Federal Reserve and Bank of Japan meetings later this week, traders latched on to minutes of the Reserve Bank of Australia’s (RBA) June meeting which showed policymakers were prepared to cut rates once more to revive wages growth and inflation.

“The market is already pricing in two rate cuts (in Australia), and there are some speculative moves to push the Aussie lower,” said Yukio Ishizuki, foreign exchange strategist at Daiwa Securities.

The RBA minutes sent the Aussie slumping to $0.6833, its lowest since the flash crash of early January. It was last fetching $0.6837.

Markets are pricing in about 50% chance of another rate cut next month by the RBA, which delivered its first easing in almost three years just two weeks ago..

The pound was under pressure after former foreign minister Boris Johnson got a boost on Monday in his campaign to become prime minister as one of his former rivals and EU supporter Matt Hancock backed him.

That rattled markets as Johnson, the face of the official campaign to leave the European Union in the 2016 referendum, has promised to lead Britain out of the EU with or without a deal.

The pound, which tumbled to a 5-1/2-month low of $1.2532 on Monday, last traded at $1.2530. It also fell to its weakest level since January against the euro, which climbed to 89.74 pence, compared to a two-year low of 84.56 touched just over a month ago.

The pound could be in for a rough ride in coming days, with a raft of potentially market-moving events ahead, including consumer inflation and retail sales data, due on Wednesday and Thursday respectively, and the Bank of England’s policy announcement on Thursday.

The dollar eased slightly to 108.23 yen on Tuesday as a decline in Japanese stocks triggered about of risk aversion.

“The yen may have a little more room to rise if U.S. stocks take a hit and trigger a bout of risk aversion,” Daiwa Securities’ Ishizuki said.

The dollar index measuring its value against six major currencies also declined slightly to 97.446, undermined by the New York Fed’s business index fell this month by a record to reach its weakest level in more than 2-1/2 years.

The Fed’s two-day policy meeting starting later on Tuesday is the next major focus after markets have priced in more than two 25 basis-point rate cuts by year-end.

That marks a sharp contrast to the Fed’s official forecast in March, which showed policymakers deemed the next move would be a hike.

“As markets are now pricing in rate cuts in the second half of this year, the question is how the Fed will respond to such an outlook,” said Shinichiro Kadota, senior strategist at Barclays.

The euro was little changed in Asia, trading at $1.1231.

(Editing by Shri Navaratnam)

Source: OANN

FILE PHOTO: The logo of French oil giant Total is seen at La Defense business and financial district in Courbevoie
FILE PHOTO: The logo of French oil giant Total is seen on a flag at La Defense business and financial district in Courbevoie near Paris, France. May 16, 2018. REUTERS/Charles Platiau/File Photo

June 18, 2019

By Bate Felix

PARIS (Reuters) – Energy major Total said its new supercomputer – which has propelled it to a world ranking as the most powerful computer in the sector – will enable its geologists to find oil faster, cheaper and with a better success rate.

The Pangea III computer build by IBM will help process complex seismic data in the search for hydrocarbons 10 times faster that before, Total said on Tuesday.

The computing power of the Pangea III has been increased to 31.7 so-called ‘petaflops’ from 6.7 petaflops in 2016, and from 2.3 petaflops in 2013, Total said, adding that it was the equivalent of around 170,000 laptops combined.

The computer ranks as number 1 among supercomputers in the oil and gas sector, and number 11 globally, according to the TOP500 table (www.top500.org) which ranks supercomputers twice a year.

Total’s European peer Eni’s HPC4 supercomputer is ranked number 17 in the global top 500 list.

Oil and gas companies, along with other industrial groups, are increasingly relying on powerful computers to process complex data faster. This enables them to cut costs while boosting productivity and the success rate of projects.

Total did not say how much it had invested in the new supercomputer.

The company’s senior vice president for exploration, Kevin McLachlan, told Reuters that 80% of the Pangea III’s time would be dedicated to seismic imaging.

“We can do things much faster,” he said. “We are developing advanced imaging algorithms to give us much better images of the sub-surface in these complex domains and Pangea III will let us do it 10 times faster than we could before.”

Total said the new algorithms can process huge amounts of data more accurately, and at a higher resolution.

It would also help to locate more reliably hydrocarbons below ground, which is useful in complex environments where it is exploring for oil trapped under salt, such as Brazil, the Gulf of Mexico, Angola and the Eastern Mediterranean.

McLachlan expected the increased computer power to affect Total’s success rate in exploration, because of the better imaging, and in oil well appraisals, development and drilling. 

    “What used to take a week, now takes us a day to process,” he said, adding that tens of millions of dollars of savings would be made on the oil wells as a direct result of obtaining better images.

(Reporting by Bate Felix; Editing by Sudip Kar-Gupta)

Source: OANN

FILE PHOTO: A Sanofi sign at the Viva Tech start-up and technology summit in Paris
FILE PHOTO: The Sanofi logo at the Viva Tech start-up and technology summit in Paris, France, May 25, 2018. REUTERS/Charles Platiau/File Photo

June 18, 2019

PARIS (Reuters) – French healthcare company Sanofi has teamed up with Google to work on innovations, aimed at using emerging data technologies to change how medicines and health services will be delivered in future.

Sanofi and Google will use data sets to improve their understanding of key diseases and extract patients’ insights and feedback, the companies said in a joint statement.

“Combining Sanofi’s biologic innovations and scientific data with Google’s industry-leading capabilities, from cloud computing to state-of-the-art artificial intelligence, we aspire to give people more control over their health and accelerate the discovery of new therapies,” said Ameet Nathwani, chief medical officer and executive vice-president, Sanofi.

This would enable Sanofi to research and develop a more personalized approach to treatment and identify accompanying technologies to improve results, the statement said.

(Reporting by Sudip Kar-Gupta, Editing by Sherry Jacob-Phillips)

Source: OANN

FILE PHOTO: A Sanofi sign at the Viva Tech start-up and technology summit in Paris
FILE PHOTO: The Sanofi logo at the Viva Tech start-up and technology summit in Paris, France, May 25, 2018. REUTERS/Charles Platiau/File Photo

June 18, 2019

PARIS (Reuters) – French healthcare company Sanofi has teamed up with Google to work on innovations, aimed at using emerging data technologies to change how medicines and health services will be delivered in future.

Sanofi and Google will use data sets to improve their understanding of key diseases and extract patients’ insights and feedback, the companies said in a joint statement.

“Combining Sanofi’s biologic innovations and scientific data with Google’s industry-leading capabilities, from cloud computing to state-of-the-art artificial intelligence, we aspire to give people more control over their health and accelerate the discovery of new therapies,” said Ameet Nathwani, chief medical officer and executive vice-president, Sanofi.

This would enable Sanofi to research and develop a more personalized approach to treatment and identify accompanying technologies to improve results, the statement said.

(Reporting by Sudip Kar-Gupta, Editing by Sherry Jacob-Phillips)

Source: OANN

FILE PHOTO: A pumpjack is seen at sunset outside Scheibenhard, near Strasbourg
FILE PHOTO: A pumpjack is seen at sunset outside Scheibenhard, near Strasbourg, France, October 6, 2017. REUTERS/Christian Hartmann

June 18, 2019

By Aaron Sheldrick

TOKYO (Reuters) – Oil prices were falling for a second day on Tuesday, after more signs that global economic growth is being hit by U.S.-China trade tensions, although losses were limited amid tensions in the Middle East after tanker attacks last week.

Brent crude futures were down 16 cents, or 0.3%, at $60.78 a barrel by 0215 GMT. They fell 1.7% in the previous session on concerns about slowing global growth.

U.S. West Texas Intermediate (WTI) crude futures were down 12 cents, or 0.2%, at $51.92. They dropped 1.1% on Monday.

The New York Federal Reserve said on Monday that its gauge of business growth in New York state posted a record fall this month to its weakest level in more than 2-1/2 years, suggesting an abrupt contraction in regional activity.

U.S. business sentiment has sagged as tensions over trade have escalated between China and the United States and on signs of softness in the labor market.

“The (oil) market is in a rut and desperately in need of some robust economic data to get it out of this funk,” said Stephen Innes, managing partner at Vanguard Markets in Bangkok.

Oil prices have fallen around 20% since 2019 highs reached in April, in part due to concerns about the U.S.-China trade war and disappointing economic data.

U.S. President Donald Trump and China’s President Xi Jinping could meet at the G20 summit in Japan later this month. Trump has said he would meet Xi at the event, although China has not confirmed the meeting.

Putting further pressure on oil, the U.S. energy department said on Monday that shale oil output is expected to reach a record in July.

But tensions in the Middle East are likely to keep prices supported, analysts said.

Acting U.S. Defense Secretary Patrick Shanahan announced on Monday the deployment of about 1,000 more troops to the Middle East for what he said were defensive purposes, citing concerns about a threat from Iran.

Fears of a confrontation between Iran and the United States have mounted since last Thursday when two oil tankers were attacked, which Washington has blamed on Tehran. Iran has denied involvement.

(Reporting by Aaron Sheldrick; Editing by Richard Pullin and Joseph Radford)

Source: OANN

A man looks on in front of an electronic board showing stock information at a brokerage house in Nanjing
A man looks on in front of an electronic board showing stock information at a brokerage house in Nanjing, Jiangsu province, China February 13, 2019. REUTERS/Stringer

June 18, 2019

By Shinichi Saoshiro

TOKYO (Reuters) – Investor caution ahead of the Federal Reserve’s interest rate meeting capped Asian stocks on Tuesday, while crude oil prices retreated as global growth worries overshadowed supply concerns stemming from recent Middle East tensions.

The Shanghai Composite Index lost 0.25%, Hong Kong’s Hang Seng rose 0.15% and Japan’s Nikkei dipped 0.3%.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.2%.

Bucking the trend were Australian stocks, which rose 0.3% after minutes from the Reserve Bank of Australia’s (RBA) last policy meeting pointed to the possibility of another interest rate cut.

The Fed, facing fresh demands by U.S. President Donald Trump to cut interest rates, begins a two-day meeting later on Tuesday. The central bank is expected to leave borrowing costs unchanged this time but possibly lay the groundwork for a rate cut later this year.

Fresh hopes for looser U.S. monetary policy have been a tonic for risk assets markets, which were buffeted last month by an escalation in the trade conflict between Washington and Beijing. The S&P 500 has gained 5% this month after sliding in May on trade war fears.

“In just a few months, the market has turned from being guided by the Fed to actively guiding the Fed,” wrote interest rate strategists at Bank of America Merrill Lynch.

Focus is now on how close the Fed could be to cutting interest rates amid the raging U.S.-China trade war, signs of the economy losing steam and pressure by President Trump to ease policy.

“The FOMC (Federal Open Market Committee) meeting is the week’s biggest event so there will be a degree of caution prevailing in the markets,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

“Expectations for a rate cut in July have increased significantly, so the markets could experience disappointment if the Fed does not send strong signals of impending easing.”

U.S. Treasury yields dipped on Monday after the New York Fed’s “Empire” gauge of business growth in the state showed a fall this month to its weakest in more than 2-1/2-years, fanning rate cut expectations.

The dollar index against a basket of six major currencies stood little changed at 97.468 after pulling back from a two-week high on the decline in Treasury yields.

The Australian dollar fell to a fresh five-month low of $0.6851 after minutes from the RBA’s June meeting showed the central bank thinks it may have to ease policy again to push down unemployment and revive wages and inflation.

The central bank cut rates to a record low of 1.25% at its meeting earlier this month, to support the slowing economy.

The pound extended an overnight slump and brushed $1.2512, its lowest since Jan. 3. Concerns that arch-Brexiteer Boris Johnson will replace Theresa May as prime minister have dogged sterling. [GBP/]

The euro was a shade higher at $1.1231 after spending the previous day confined to a narrow range.

U.S. crude oil futures shed 0.13% to $51.86 per barrel after retreating 1.1% the previous day and Brent crude lost 0.2% to $60.81 per barrel following Monday’s loss of 1.7%.

Oil prices had fallen on Monday as weak Chinese economic data released at the end of last week led to fears of lower global demand for the commodity. [O/R]

Concerns over weakening demand overshadowed tensions in the Middle East, which remained high following last week’s attacks on two oil tankers in the Gulf of Oman.

(Editing by Sam Holmes)

Source: OANN

FILE PHOTO: A woman rides a tricycle carrying a child near a residential compound in Beijing's Tongzhou district
FILE PHOTO: A woman rides a tricycle carrying a child near a residential compound in Beijing’s Tongzhou district, China, February 25, 2016. REUTERS/Jason Lee/File Photo

June 18, 2019

BEIJING (Reuters) – China’s new home prices rose 0.7% month-on-month in May, picking up the pace slightly from a 0.6% gain the previous month, Reuters calculated from National Bureau of Statistics (NBS) data published on Tuesday.

On a yearly basis, average new home prices in China’s 70 major cities increased 10.7% in May, unchanged from the growth rate in April.

China’s real estate market has shown signs of resurgence in recent months as some smaller cities quietly loosened curbs, and confidence has been lifted by Beijing’s call on banks to beef up lending and lower interest rates.

But a broader economic slowdown means the rebound might not be sustainable, some analysts caution, while official purchase restrictions in most cities are also expected to remain in place.

China’s property investment growth cooled in May and sales saw their biggest decline since October 2017, suggesting the frothy housing market may not be able to cushion the effects of a slumping manufacturing sector and intensifying trade tensions.

(Reporting by Beijing Monitoring Desk; Editing by Shri Navaratnam)

Source: OANN

Traders work on the floor at the NYSE in New York
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., June 17, 2019. REUTERS/Brendan McDermid

June 18, 2019

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – China’s holdings of U.S. Treasury bonds and notes for the month of April fell to the lowest level since May 2017, data from the U.S. Treasury department showed on Monday, highlighting an uncertain outlook on a trade deal between Beijing and Washington.

Chinese holdings of U.S. government debt declined for a second straight month, to $1.113 trillion in April, from $1.120 trillion the previous month. Even so, the world’s second-largest economy remains the largest non-U.S. holder of Treasuries.

(For a graphic on ‘China, Japan Holdings of U.S. Treasuries’ click http://tmsnrt.rs/2DJ1ckW)

Belgium, which analysts surmised is where China would typically keep some of its holdings, also fell to $179.8 billion in April, from $186.6 billion in March.

“This is a head-scratcher given that Chinese reserves during the month only declined by just under $4 billion,” said Gennadiy Goldberg, senior rates strategist, at TD Securities in New York. “So there’s quite a bit more selling than would have been justified.”

He said it could have been profit-taking from the build-up of holdings in the first quarter of the year. “If you look at the flow of funds, for example, there was notable buying of Treasuries in Q1. So this certainly suggests that foreigners are taking more profits off the table,” Goldberg said, while saying he does not think the decline was related to the trade conflict.

“If this were trade-related, you would have seen either more pressure on the Chinese yuan and you would have seen a decline in foreign exchange reserves on a one-for-one basis,” Goldberg said.

If Belgium’s holdings were included, it was almost a $15 billion decline.

The data showed that Japan, the second-largest non-U.S. holder of Treasuries, also reduced its holdings of Treasuries in April, to $1.064 trillion, from $1.078 trillion the previous month.

Overall, foreign holdings of Treasuries dropped to $6.433 trillion in April, from $6.473 trillion in March.

Foreign flows of U.S. Treasuries, meanwhile, showed an inflow of $16.949 billion in April, from net selling of $12.526 billion in March. Offshore private investors purchased Treasuries, at $45.366 billion during the month, from only $91 million previously.

(For a graphic on ‘Foreign purchases of U.S. Treasuries’ click https://tmsnrt.rs/2TM2p21)

Foreigners continued to sell U.S. stocks in April to the tune of $964 million, after outflows of $23.638 billion in March. Foreign investors have sold stocks for 12 straight months.

The report showed foreigners bought $46.9 billion in net long-term securities in April, after selling $25.9 billion in March.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Susan Thomas and Leslie Adler)

Source: OANN

Preliminary figures show falling numbers of migrant families were crossing the southern border illegally in recent weeks, the Washington Post reported Monday.

Customs and Border Protection data shows more than 85,000 “family unit” members at the border in May, an average of nearly 2,800 per day. That number has declined about 13% since the beginning of June, the Post reported.

Overall, U.S. officials say they are expecting a decline of 15-20% decline in border arrests from May, when authorities detained more than 144,000 and migration levels reached their highest point since 2006, the Post reported.

The time frame of the decline corresponds with the period that President Donald Trump threatened to impose tariffs on Mexico and the government of President Andrés Manuel López Obrador agreed to a crackdown to avoid the penalty, the Post noted.

“We are seeing initial actions and we are seeing some signs they’re having an impact,” an unnamed U.S. official told the Post. “But I think it’s still too early to tell.”

Border arrests typically surge in the spring, when demand for U.S. farm labor grows, then subside during peak summer months, the Post reported.

For example, border arrested dropped 17% from May 2018 to June 2018, the Post reported.

If the June arrest numbers continue to decline, it would be the first month this year that CBP has notched a drop in enforcement actions.

Source: NewsMax Politics

FILE PHOTO: Ships and shipping containers are pictured at the port of Long Beach in Long Beach, California
FILE PHOTO: Ships and shipping containers are pictured at the port of Long Beach in Long Beach, California, U.S., January 30, 2019. REUTERS/Mike Blake

June 17, 2019

By Jonathan Saul

LONDON (Reuters) – A group of leading banks will for the first time include efforts to cut carbon dioxide emissions in their decision making when providing shipping company loans, executives said on Tuesday.

International shipping accounts for 2.2% of global carbon dioxide (CO2) emissions and the U.N.’s International Maritime Organization (IMO), has a long-term goal to cut greenhouse gas emissions by 50% from 2008 levels by 2050.

Working with non-profit organisations the Global Maritime Forum, the Rocky Mountain Institute and London University’s UCL Energy Institute, 11 banks have established a framework to measure the carbon intensity of shipping finance portfolios.

The banks involved in the “Poseidon Principles” initiative, which will set a common baseline to assess whether lending portfolios are in line or behind the adopted climate goals set by the IMO, represent around a fifth or $100 billion of the total global shipping finance portfolio.

The results will be published annually in individual sustainability reports and the data will be obtained by banks from borrowers under existing loan agreements.

Although the IMO agreed stricter energy efficiency targets last month for certain types of ships, environmental campaigners are calling for tougher goals.

“We are helping the shipping industry emerge into the 21st century in a responsible way,” Michael Parker, global head of shipping at Citigroup, told Reuters.

‘HUGE ROLE’

Those involved so far are Citigroup, Societe Generale, DNB, ABN Amro, Amsterdam Trade Bank, Credit Agricole CIB, Danish Ship Finance, Danske Bank, DVB, ING and Nordea.

“Banks have a huge role to play here because there is about $450 billion of senior debt that the world’s shipping banks and Chinese lessors grant to the sector and about 70,000 commercial vessels,” Paul Taylor, global head of shipping & offshore with Societe Generale CIB, said.

Banks will in the longer term be more selective about which ships they include in their lending portfolios, bankers said.

“Will there be companies that will find it difficult to get finance as they have less efficient ships, yes, it will be a consequence of it – but it’s not going to be used to look for those companies and somehow find a way of getting them out,” Citigroup’s Parker said.

Oivind Haraldsen, Danske Bank’s global head of shipping, said more institutions would join the efforts to cut the carbon footprint of the sector.

“All of us have to push – we as banks probably have more power than we are aware,” he said.

(Editing by Alexander Smith)

Source: OANN

Shoppers ride escalators at the Beverly Center mall in Los Angeles
FILE PHOTO: Shoppers ride escalators at the Beverly Center mall in Los Angeles, California November 8, 2013. Picture taken November 8. REUTERS/David McNew

June 17, 2019

By Jason Lange, Chris Prentice and David Lawder

WASHINGTON/NEW YORK (Reuters) – This year’s holiday season could be tighter for many Americans if the U.S. government imposes tariffs on another $300 billion worth of Chinese imports – because that will include tech products, game consoles, toys, cribs, ornaments and Santa hats.

The tariffs would add 25% to the import cost of these and many other consumer items just as retail outlets throughout the world’s largest economy begin to gear up for the peak end-of-year shopping season.

Consumers have been largely shielded until now from the direct impact of the trade war between China and the United States as the administration of President Donald Trump has focused previous rounds of tariffs on imports sold to manufacturers rather consumers.

But Trump is escalating the trade war and preparing to extend tariffs to nearly all Chinese imports after talks for a deal broke down in May. The U.S. government is pushing for wide-ranging economic and trade reforms from Beijing.

Trump said he would decide whether to trigger the next round of tariffs after talks with Chinese President Xi Jinping at the G20 summit in Japan later this month.

In preparation for the new round, the U.S. Trade Representative’s Office (USTR) on Monday began seven days of hearings for testimony from retailers, manufacturers and others impacted. Thousands of business filed comments to the USTR ahead of the hearings.

Toys, phones and televisions are all on the tariff list and represent some of the most valuable categories of products that Americans buy from China, according to a Reuters analysis of data from the U.S. Census Bureau.

The new tariffs would hit cellphones whose import bill from China totaled $43 billion in 2018 – more than 80% of total cellphone imports.

They would also cover a broad set of toys, including scooters and doll carriages, whose imports totaled $11.9 billion last year. China supplied about 85% of America’s total imports of those toys.

Further pain for parents could come in the form of proposed levies on more than $5 billion worth of video game consoles. Chinese imports amounted to 98% of total U.S. imports of those consoles last year.

And U.S. imports from China of targeted Christmas products – including ornaments, nativity scenes and Christmas tree lights – totaled at least $2.3 billion last year.

An executive from a family-owned, Christmas goods supplier in upstate New York said the company has looked “long and far” to find another supplier for many typical holiday products.

“However, trying to find other countries to manufacture everything else, from Santa hats, to stockings, to glass ornaments, has been a struggle and we have been unable to do so,” Nathan Gordon of Gordon Companies Inc in Cheektowaga said in public comments posted on June 12.

HE’S MAKING A LIST

Some products previously spared by the Trump administration to avoid hitting consumers’ pockets are now on the list. That includes an array of safety and play equipment for children – including high chairs, play pens, and swings.

The proposed tariffs would hit at least $800 million of these goods.

Smart watches, smart speakers and Bluetooth audio are also included. The Consumer Technology Association estimates that 2018 imports in this category from China were up to $17.9 billion.

Retailers Walmart Inc, Target Corp, and more than 600 other companies urged Trump in a letter last week to resolve the trade dispute with China, saying tariffs hurt American businesses and consumers.

Worry over potential cost increases for Americans from tariffs has raised concern about inflation, though across the economy, prices rises remain below the U.S. Federal Reserve target of 2%.

Trump has said that China pays the tariffs, but U.S. importers actually foot the bill and either pass them on to consumers or suppliers.

(Reporting by Jason Lange and David Lawder in Washington and Chris Prentice in New York; Editing by Simon Webb and Rosalba O’Brien)

Source: OANN

FILE PHOTO: The convoy of a team from the United Nations and the World Food Program crosses from Houthi-controlled areas to a government-controlled areas to reach grain mills in an eastern suburb of Hodeidah
FILE PHOTO: The convoy of a team from the United Nations and the World Food Program crosses from Houthi-controlled areas to a government-controlled areas to reach grain mills in an eastern suburb of Hodeidah, Yemen February 26, 2019. REUTERS/Abduljabbar Zeyad/File Photo

June 17, 2019

By Michelle Nichols

UNITED NATIONS (Reuters) – United Nations food chief David Beasley warned on Monday that a phased-suspension of food assistance in Yemen was likely to begin later this week over a diversion of aid and lack of independence in Houthi-controlled areas.

Beasley, executive director of the World Food Programme (WFP), called on the Houthis to “simply let us do our job.”

“If we do not receive these assurances then we will begin a phased suspension of food assistance, most likely toward the end of this week. If and when we do initiate suspension we will continue our nutrition program for malnourished children, pregnant women and new mothers,” he told the U.N. Security Council.

Beasley said WFP had been unable to implement agreements with the Houthis on the registration of people in need and the rollout of a biometric system – using iris scanning, fingerprints or facial recognition – to support aid delivery.

“We are now assisting feeding over 10 million people per month but as the head of the World Food Programme I cannot assure you that all the assistance is going to those who need it most,” Beasley said.

“Why? Because we are not allowed to operate independently and because aid is being diverted for profit and or other purposes,” he told the 15-member council.

The Houthis did not immediately respond to a request for comment on Beasley’s remarks. However, earlier this month Mohammed Ali al-Houthi, head of the Houthis’ Supreme Revolutionary Committee, told Reuters the WFP insisted on controlling the biometric data in violation of Yemeni law.

In a statement, the U.N. Security Council “condemned the misappropriation of humanitarian assistance and aid by the Houthis … and reiterated their call for the rapid, safe and unhindered flow of commercial and humanitarian supplies and personnel into and across the country.”

A Saudi-led coalition intervened in Yemen in 2015 to try to restore the internationally recognized government that was ousted from power in the capital, Sanaa, by the Houthis in 2014.

The conflict is widely seen in the region as a proxy war between Saudi Arabia and Iran. The Houthis deny being puppets of Iran and say their revolution is against corruption.

Beasley said that aid diversion was not limited to just Houthi-controlled areas, but “when we face challenges in areas controlled by the government, we have received cooperation to address the issues.”

(Reporting by Michelle Nichols; Editing by Susan Thomas and Bill Trott)

Source: OANN

FILE PHOTO: Workers pour cement at a construction site for an office town in downtown San Diego
FILE PHOTO: Workers pour cement at a construction site for an office town in downtown San Diego, California, U.S., April 23, 2019. REUTERS/Mike Blake/File Photo

June 17, 2019

(Reuters) – Citi Research’s barometer on U.S. economic data surprises decreased on Monday to its most negative level since late April after disappointing data on homebuilder sentiment and New York state business activity.

The Citi gauge, which measures whether U.S. economic data come in weaker or stronger than analysts forecast, is monitored by traders for the U.S. growth trajectory. It slipped to minus 63.2 from minus 55.4.

(Reporting by Richard Leong; Editing by Jeffrey Benkoe)

Source: OANN

Traders work on the floor at the NYSE in New York
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., June 5, 2019. REUTERS/Brendan McDermid

June 17, 2019

By Shreyashi Sanyal

(Reuters) – U.S. stock index futures treaded water on Monday, after the main indexes ended the previous week slightly higher, as focus shifted to a pivotal Federal Reserve meeting that could lay the groundwork for an interest rate cut later this year.

The S&P 500 index has risen nearly 5% so far in June on hopes of a rate cut in the face of weaker economic data and heightening global trade tensions, but that rally ran out of steam in the past week as traders trimmed their expectations.

The Fed is expected to leave borrowing costs unchanged at a policy meeting on Tuesday and Wednesday, but analysts expect data to show that a growing number of policymakers are open to cutting rates in the coming months.

“The Fed has a very delicate balancing act to contend with as they have a choice of endorsing current dovish market pricing and keeping things calm, or to suggest it’s gone too far too quickly and give risk assets a sharp jolt,” wrote Jim Reid, a strategist at Deutsche Bank.

The Fed’s policy-setting committee is due to release its statement at 2 p.m. EDT (1800 GMT) on Wednesday.

At 7:14 a.m. ET, Dow e-minis were up 5 points, or 0.02%. S&P 500 e-minis were up 1.25 points, or 0.04% and Nasdaq 100 e-minis were up 8 points, or 0.11%.

Investors also braced for the Group of 20 summit at the end of the month, which may yield progress on resolving the prolonged trade war between the United States and China.

Among stocks, Pfizer Inc edged down 0.1% in premarket trading after the drugmaker said it would buy Array Biopharma Inc for $10.64 billion. Shares of Array jumped 59%.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila)

Source: OANN

FILE PHOTO: NVIDIA logo shown at SIGGRAPH 2017
FILE PHOTO: A NVIDIA logo is shown at SIGGRAPH 2017 in Los Angeles, California, U.S. July 31, 2017. REUTERS/Mike Blake

June 17, 2019

By Stephen Nellis

(Reuters) – Nvidia Corp on Monday said it will make its chips work with processors from Arm Holdings Inc to build supercomputers, deepening Nvidia’s push into systems that are used for modeling both climate change predictions and nuclear weapons.

Nvidia was long known as a supplier of graphics chips for personal computers to make video games look more realistic, but researchers now also use its chips inside data centers to speed up artificial intelligence computing work such as training computers to recognize images.

To do so, Nvidia’s so-called accelerator chips work alongside central processors from companies such as Intel Corp and International Business Machines Corp.

At a supercomputing conference held in Germany on Monday, Nvidia said its accelerator chips will work with Arm processors by the end of the year.

Arm, owned by Japan’s SoftBank Group Corp, provides the underlying processor technology for the chips in most mobile phones. But companies such as Ampere Computing, headed by Intel’s former president, have been working to take those chips into data centers, where Intel’s chips are dominant.

But Arm processors are different from Intel or IBM chips in that Arm itself does not make chips. Instead it licenses out the underlying technology so others can make chips with it.

Ian Buck, vice president of Nvidia’s accelerated computing unit, said the project to build a supercomputer with Arm will be a “heavy lift” from a technical perspective.

But he said Nvidia undertook it because researchers in Europe and Japan want to develop super computing chips with Arm’s technology, essentially giving them a third option beyond IBM and Intel over which they can have more control.

“That openness … makes it very attractive,” Buck said of Arm’s technology during an interview with Reuters before the conference. “What makes Arm interesting, and why we’re announcing support is, is its ability to provide an open architecture for supercomputing.”

The move to work with Arm on supercomputers follows Nvidia’s $6.8 billion deal to buy Israeli firm Mellanox Technologies. Mellanox makes high-speed networking chips that help stitch together many smaller computers into a larger one and is found in some of the world’s most powerful supercomputers.

(Reporting by Stephen Nellis in San Francisco; Editing by Himani Sarkar)

Source: OANN

FILE PHOTO: The Federal Reserve building is pictured in Washington, DC
FILE PHOTO: The Federal Reserve building is pictured in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie/File Photo

June 17, 2019

By Ann Saphir and Howard Schneider

SAN FRANCISCO/WASHINGTON (Reuters) – The U.S. Federal Reserve, facing fresh demands by President Donald Trump to cut interest rates, is expected to leave borrowing costs unchanged at a policy meeting this week but possibly lay the groundwork for a rate cut later this year.

New economic projections that will accompany the U.S. central bank’s policy statement on Wednesday will provide the most direct insight yet into how deeply policymakers have been influenced by the U.S.-China trade war, Trump’s insistence on lower interest rates, and recent weaker economic data.

Analysts expect the “dot plot” of year-end forecasts for the Fed’s benchmark overnight lending rate – the federal funds rate – will show a growing number of policymakers are open to cutting rates in the coming months, though nowhere near as aggressively as investors expect or Trump wants.

The Fed is also widely, though not universally, expected to remove a pledge to be “patient” in taking future action on rates, opening the door to a possible cut at its coming policy meetings.

Risks may be rising, but “I don’t think they want to box themselves into a corner,” said Carl Tannenbaum, chief economist at Northern Trust. “The markets are set up for a cut in July, and if they don’t get it, financial conditions will tighten.”

The federal funds rate is currently set in a range of 2.25% to 2.50%.

The Fed’s policy-setting committee is due to release its latest statement and economic projections at 2 p.m. EDT (1800 GMT) on Wednesday after the end of a two-day meeting. Fed Chairman Jerome Powell will hold a press conference shortly after.

MIND THE DOTS

The Fed’s last set of economic and policy projections, released in March, showed most policymakers foresaw no need to change rates this year and only very gradual rate hikes thereafter. (For a graphic of the gap between market and Fed expectations, please see https://tmsnrt.rs/2WzJ6tu.)

But since that meeting the economic outlook has become cloudier.

Recent U.S. retail sales numbers were strong. But while unemployment has held near a 50-year low of 3.6%, U.S. employers created a paltry 75,000 jobs in May. Inflation, which Powell says is low in part because of temporary factors, continues to undershoot the Fed’s 2% target.

The Atlanta Fed forecast on Friday that gross domestic product will increase at a 2.1 percent annualized rate in the April-June quarter, a drop from the 3.1 percent pace of the first three months of the year.

Trade uncertainty has increased as well, with Trump using the threat of tariffs on goods from Mexico to force the country to curb the number of mostly Central American immigrants crossing the U.S.-Mexico border.

He has also vowed to slap more tariffs on Chinese imports if no trade deal is reached when he meets Chinese President Xi Jinping at a Group of 20 summit at the end of this month in Japan.

Concern that mounting tariffs could further slow U.S. and global economic growth is one of the chief reasons traders in interest rate futures loaded up on contracts anticipating three U.S. rate cuts by the end of the year.

Fed officials may have reason to trim their rate outlook a bit, but meeting market expectations would involve a dramatic shift. Nine of the Fed’s current 17 policymakers would have to move their rate projections downward for the median to reflect a single cut, let alone three.

“Powell will do what he can to try to downplay the dots especially if they don’t show what the markets want them to show,” said Roberto Perli, economist at Cornerstone Macro. “He will have a tough time.”

Adding to the pressure for a rate cut is a yield curve inversion in parts of the market for U.S. government debt, historically a precursor of recessions. The three-month Treasury bill, for instance, has paid out a higher rate than a 5-year Treasury note for the last several months running.

And Trump, who has said that rates should be lowered by perhaps a full percentage point or more, continues to publicly berate the Fed and Powell, his handpicked chairman, for refusing to act.

“I’ve waited long enough,” Trump said in an interview with ABC News last week, talking favorably of the “old days” when Presidents Lyndon Johnson and Richard Nixon intervened forcefully in Fed policy – and set the stage, many economists argue, for the high inflation, economic volatility and recessions that followed in the 1970s.

DOWNWARD SHIFT

Most of the more than 100 economists polled June 7-12 by Reuters say they are not penciling in a rate cut until the third quarter of next year. But views are shifting rapidly. Forty respondents expected at least one rate cut sometime in 2019, up from just eight who did in the previous poll.

Within the U.S. central bank, St. Louis Fed President James Bullard is the only policymaker who has said a rate cut may be needed “soon.”

Several others have signaled a readiness to move off their wait-and-see stance, with Powell saying earlier this month in a speech in Chicago that the Fed will act “as appropriate” in the face of risks posed by the global trade war and other developments.

The word “patient,” which had been repeatedly used by the Fed since early this year to signal its willingness to hold off further rate hikes, was notably absent from Powell’s remarks, though the Fed chief stopped well short of suggesting a rate cut was coming soon.

The Fed raised rates four times in 2018 but has since abandoned plans to continue lifting borrowing costs this year.

It is likely to avoid signaling any move to cut rates until it is ready to deliver, predicted Bruce Monrad, a high-yield bond portfolio manager at Boston-based Northeast Investors Trust.

Nevertheless, Monrad added, Fed policymakers may have tied their own hands by letting bets in financial markets stray so far. “They have had six months to control the rhetoric. They really haven’t walked back the market.”

(Reporting by Ann Saphir and Howard Schneider; Editing by Paul Simao)

Source: OANN

FILE PHOTO: A security guard walks past in front of the Bank of Japan headquarters in Tokyo
FILE PHOTO: A security guard walks past in front of the Bank of Japan headquarters in Tokyo, Japan January 23, 2019. REUTERS/Issei Kato/File Photo

June 17, 2019

By Leika Kihara

TOKYO (Reuters) – The Bank of Japan is expected to maintain its massive stimulus program on Thursday and signal its readiness to ramp up monetary support if growing risks such as the escalating U.S.-China trade war threaten the economy’s modest expansion.

Many BOJ policymakers are wary of using their dwindling policy ammunition any time soon as years of ultra-low interest rates strain financial institutions’ profits, say sources with knowledge of the central bank’s thinking.

But the darkening outlook is also forcing them to brace for the likelihood of another economic downturn and brainstorm ideas on how to respond, they say.

Adding to the uncertainty are heightening market expectations the U.S. Federal Reserve will start to cut interest rates to fend off the damage from the trade war with China.

While such rate cut expectations have kept a floor on stock prices so far, an actual cut by the Fed could push down the dollar and trigger an unwelcome yen spike that hurts Japan’s export-reliant economy, some analysts say.

“There may be no immediate need for action,” one of the sources said. “But with uncertainty over the outlook so high, the BOJ would need to think about how to respond if a shock hits the economy.”

At the two-day rate review ending on Thursday, the BOJ is widely expected to keep its short-term rate target at -0.1% and a pledge to guide the 10-year government bond yield around zero percent. The Fed meets this Tuesday and Wednesday.

The BOJ board is likely to maintain its view Japan’s economy continues to expand moderately as a trend, but debate whether its projection of a rebound in overseas growth later this year remains valid, the sources say.

At a post-meeting news conference, BOJ Governor Haruhiko Kuroda is likely reinforce his view the central bank is ready to deploy additional stimulus if the economy loses momentum to hit its 2% inflation target.

Japan’s economy expanded an annualized 2.1% in January-March but many analysts predict growth to slow in coming quarters as the U.S.-China trade row hurts global trade. A scheduled domestic sales tax hike in October may also cool consumption, they warn.

Many in the BOJ prefer to wait for more data, such as the central bank’s “tankan” quarterly business sentiment survey due July 1, to see how deeply the trade tensions could hurt domestic demand, the sources say.

“Domestic demand, including capital expenditure, is still firm. The key is to see whether this will remain the case,” a second source said.

Japan’s annual core consumer inflation hit 0.9% in April, remaining distant from the BOJ’s target, despite years of heavy money printing by the central bank.

Many analysts say the BOJ has very little tools left to fight the next recession, with its negative rate policy hurting financial institutions’ margins and long-term yields already hovering below zero.

(Reporting by Leika Kihara; Editing by Kim Coghill)

Source: OANN

FILE PHOTO: A security guard walks past in front of the Bank of Japan headquarters in Tokyo
FILE PHOTO: A security guard walks past in front of the Bank of Japan headquarters in Tokyo, Japan January 23, 2019. REUTERS/Issei Kato/File Photo

June 17, 2019

By Leika Kihara

TOKYO (Reuters) – The Bank of Japan is expected to maintain its massive stimulus program on Thursday and signal its readiness to ramp up monetary support if growing risks such as the escalating U.S.-China trade war threaten the economy’s modest expansion.

Many BOJ policymakers are wary of using their dwindling policy ammunition any time soon as years of ultra-low interest rates strain financial institutions’ profits, say sources with knowledge of the central bank’s thinking.

But the darkening outlook is also forcing them to brace for the likelihood of another economic downturn and brainstorm ideas on how to respond, they say.

Adding to the uncertainty are heightening market expectations the U.S. Federal Reserve will start to cut interest rates to fend off the damage from the trade war with China.

While such rate cut expectations have kept a floor on stock prices so far, an actual cut by the Fed could push down the dollar and trigger an unwelcome yen spike that hurts Japan’s export-reliant economy, some analysts say.

“There may be no immediate need for action,” one of the sources said. “But with uncertainty over the outlook so high, the BOJ would need to think about how to respond if a shock hits the economy.”

At the two-day rate review ending on Thursday, the BOJ is widely expected to keep its short-term rate target at -0.1% and a pledge to guide the 10-year government bond yield around zero percent. The Fed meets this Tuesday and Wednesday.

The BOJ board is likely to maintain its view Japan’s economy continues to expand moderately as a trend, but debate whether its projection of a rebound in overseas growth later this year remains valid, the sources say.

At a post-meeting news conference, BOJ Governor Haruhiko Kuroda is likely reinforce his view the central bank is ready to deploy additional stimulus if the economy loses momentum to hit its 2% inflation target.

Japan’s economy expanded an annualized 2.1% in January-March but many analysts predict growth to slow in coming quarters as the U.S.-China trade row hurts global trade. A scheduled domestic sales tax hike in October may also cool consumption, they warn.

Many in the BOJ prefer to wait for more data, such as the central bank’s “tankan” quarterly business sentiment survey due July 1, to see how deeply the trade tensions could hurt domestic demand, the sources say.

“Domestic demand, including capital expenditure, is still firm. The key is to see whether this will remain the case,” a second source said.

Japan’s annual core consumer inflation hit 0.9% in April, remaining distant from the BOJ’s target, despite years of heavy money printing by the central bank.

Many analysts say the BOJ has very little tools left to fight the next recession, with its negative rate policy hurting financial institutions’ margins and long-term yields already hovering below zero.

(Reporting by Leika Kihara; Editing by Kim Coghill)

Source: OANN

FILE PHOTO: File photo of employees working at a Target store at St. Albert
FILE PHOTO: Employees work at a Target store at St. Albert, Alberta, January 15, 2015. REUTERS/Dan Riedlhuber/Files

June 17, 2019

(Reuters) – Target Corp on Sunday said it was unable to process select card payments at some stores for nearly 90 minutes due to a vendor-related issue – the second consecutive outage faced by the retailer in a week.

Target said its payments vendor NCR experienced an issue at one of its data centers on Sunday afternoon, which affected the retailer’s stores.

The incident was not related to Saturday’s glitch, the company said in an emailed statement, adding that the issue has now been resolved and payments are going through.

The company had faced an outage on Saturday due to an “internal technology issue” which stopped customers in the United States from paying for in-store purchases.

The issue was not a security-related issue and no payment information was compromised at any time, the retailer added.

A defect in a network device in June 2014 also caused problems with Target’s payment processing systems, according to media reports.

(Reporting by Ishita Chigilli Palli in Bengaluru, Editing by Sherry Jacob-Phillips)

Source: OANN

FILE PHOTO: A man looks at an electronic board showing the Nikkei stock index outside a brokerage in Tokyo
FILE PHOTO: A man looks at an electronic board showing the Nikkei stock index outside a brokerage in Tokyo, Japan, January 7, 2019. REUTERS/Kim Kyung-Hoon

June 17, 2019

By Tomo Uetake

TOKYO (Reuters) – Asian shares got off to a shaky start on Monday as investors were cautious ahead of a closely-watched Federal Reserve meeting, while political tensions in the Middle East and Hong Kong kept risk-appetite in check.

MSCI’s broadest index of Asia-Pacific shares outside Japan opened slightly lower and was last little changed, while Japan’s Nikkei average stood flat.

Wall Street stocks ended lower on Friday as investors turned cautious before this week’s Fed meeting, while a warning from Broadcom on slowing demand weighed on chipmakers and added to U.S.-China trade worries.[.N]

“The week ahead is likely to provide some clarification for investors on three fronts that have been a source of uncertainty. The FOMC meeting, with updated forecasts, is center stage,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.

A private gauge on eurozone’s manufacturing sector as well as U.S.-China trade frictions will also be watched closely, Chandler said.

Financial markets have been sideswiped since a sudden escalation in Sino-U.S. trade tensions in early May, with growing anxiety among investors that a protracted standoff could tip the global economy into recession.

Adding to the tensions between the world’s two biggest economies, U.S. Secretary of State Mike Pompeo told Fox News on Sunday that U.S. President Donald Trump would raise the issue of Hong Kong’s human rights with China’s President Xi Jinping at a potential meeting of the two leaders at the G20 summit in Japan later this month.

On Sunday, hundreds of thousands of black-clad protesters in Hong Kong demanded that Beijing-backed city leader Carrie Lam step down over her handling of a bill that would have allowed extradition to China, resulted her to issue a rare apology.

Geopolitical tensions in the Middle East added another layer of uncertainty for investors after the United States blamed Iran for attacks on two oil tankers in the Gulf of Oman last week.

Hopes that global central banks will keep the money spigot open have helped to temper some of the fears, and all eyes are on the Fed’s two-day meeting starting on Tuesday.

Strong U.S. retail sales data on Friday rolled back expectations of a Fed rate cut at this week’s meeting to 21.7%, from 28.3% on Thursday, according to CME Group’s FedWatch tool. But bets of an easing at the July meeting remain high at 85%.

The Bank of Japan also meets this week and is widely expected to reinforce its commitment to retain a massive stimulus program for some time to come.

The retail report also sent short-dated U.S. Treasury yields higher, flattening the yield curve.[L2N23L10H]

Benchmark 10-year notes was last at 2.091%, while two-year bond yield edged up, shrinking the spread between two- and 10-year yields to 23.6 basis points compared to more than 30 earlier this month.

A Reuters poll showed a growing number of economists expect the Fed policymakers to cut interest rates this year, although the majority still see it holding steady.

In currency markets, the dollar index against a basket of six major currencies climbed to 97.583 on Friday, its highest level in almost two weeks, after the U.S. retail sales data eased fears that the world’s largest economy is slowing sharply.

The index last stood at 97.511, while the euro fetched $1.1220, near the lower end of its weekly trading range.

Oil extended gains on Monday after the attacks on two oil tankers last week raised concerns about potential supply disruptions, but prices remained on track for a weekly loss on fears that trade disputes will dent global oil demand. [O/R]

Brent futures rose 0.2% to $62.13 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose 0.2% to $52.60.

Spot gold eased 0.1% to $1,340.25 an ounce after hitting a 14-month peak on Friday.

Bitcoin jumped overnight to $9,391.85, its highest level in 13 months. It was last quoted at $9150.15.

(Reporting by Tomo Uetake; Editing by Shri Navaratnam)

Source: OANN

FILE PHOTO: U.S. dollar notes are seen on a desk at a currency exchange booth in Karachi
FILE PHOTO: U.S. dollar notes are seen on a desk at a currency exchange booth in Karachi, Pakistan December 3, 2018. REUTERS/Akhtar Soomro/File Photo

June 17, 2019

By Shinichi Saoshiro

TOKYO (Reuters) – The dollar hovered near a two-week high early on Monday, as strong U.S. retail sales data tempered some of the fears about a sharp downturn in the world’s largest economy.

That provided some relief to the dollar ahead of the Federal Reserve’s policy meeting this week. While few expect the Fed to cut rates at Wednesday’s policy review, traders are wagering that policy makers will do just that in coming months.

The dollar index versus a basket of six major currencies was little changed at 97.509 after rising to 97.583 on Friday, its highest since June 3.

The index had declined to a 2-1/2-month low of 96.459 a little more than a week ago after a weak U.S. jobs report heightened Fed rate cut prospects.

Expectations of an interest rate cut at the Fed’s June 18-19 meeting fell from 28.3% on Thursday to 21.7% according to CME Group’s FedWatch tool. But bets of an easing at the July meeting remain high at 85%.

“In addition to the upbeat U.S. data, the dollar is supported by weakness in other currencies, notably the euro and antipodeans,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

“The Fed might cut rates sooner or later but so might its antipodean counterparts as well as the European Central Bank, and such views put the dollar at an advantage.”

With growth slowing and inflation staying well below the its target, the ECB recently raised the prospect of even more stimulus, arguing that a rate cut or even more asset purchases may become necessary.

The central banks of Australia and New Zealand face a similar predicament as the global economy braces for fallout from the U.S.-China trade conflict.

Australian bond yields slipped to a record low last week as investors priced in further easing by the Reserve Bank of Australia, which already cut rates to a record low 1.25% earlier this month.

The euro was little changed at $1.1216 after shedding about 0.6% on Friday, when it fell to an eight-day trough of $1.1203.

The Australian dollar crawled up 0.1% to $0.6878 but remained within reach of a five-month low of $0.6862 set on Friday, when the currency retreated nearly 0.7%.

The New Zealand dollar, which slumped more than 1% during the previous session, traded near a three-week low of $0.6488 brushed toward the end of last week.

The dollar was flat at 108.570 yen after edging up 0.15% on Friday.

(Graphic: World FX rates in 2019 – http://tmsnrt.rs/2egbfVh)

(Reporting by Shinichi Saoshiro; Editing by Shri Navaratnam)

Source: OANN

FILE PHOTO: The Federal Reserve building is pictured in Washington, DC
FILE PHOTO: The Federal Reserve building is pictured in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie/File Photo

June 16, 2019

(Reuters) – Goldman Sachs economists said on Sunday they are skeptical of “insurance” U.S. interest rate decreases from the Federal Reserve to forestall possible slowing in U.S. economic growth due to global trade tensions.

A surprise escalation in trade tensions between Washington and Beijing since May, together with stubbornly low inflation, have spurred bets among traders the U.S. central bank may lower key lending rates by 0.75 percentage points by year-end.

“However, we think the hurdle for such cuts is likely to be higher than widely believed,” Goldman economists wrote in a research note published on Sunday.

A number of primary dealers, or the 24 top Wall Street firms that do business directly with the Fed, anticipate the Fed would lower key borrowing costs beginning this summer.

Goldman Sachs Group Inc and a few other primary dealers have stuck with calls that the Fed would refrain from decreasing rates until there is evidence of significant deterioration in business and consumer activities.

Goldman economists said the three-quarter point in rate cuts in 1995-1996 and 1998, which some analysts point to as recent examples of pre-emptive policy easing from the Fed, were responses to data “rested at least as much on observable deterioration as on an insurance motive.”

They said another assumption for insurance rate-cuts is that Fed officials could reserve the moves once the risk abates.

“However, the greater political scrutiny of Fed hikes now—especially with a presidential election approaching—could make this harder to do in 2020, so that overly hasty insurance cuts now might increase the risk that the funds rate gets stuck at too low a level if the economy remains resilient,” they wrote.

On Friday, U.S. short-term interest rates futures implied traders see about a 58% chance the Fed would lower short-term rates by 0.75 point by year-end, up from 54% a week earlier and 7% a month ago, according to CME Group’s FedWatch too.

Fed policy-makers will meet next Tuesday and Wednesday where analysts widely expect they would pave the way for possible rate cuts later this year.

Interest rates futures suggested traders priced in a 23% probability the Fed would lower rates next week, compared with 25% a week ago and 13% a month earlier, the CME FedWatch program showed.

(Reporting by Richard Leong; Editing by Lisa Shumaker)

Source: OANN

An oil tanker is seen after it was attacked at the Gulf of Oman
FILE PHOTO: An oil tanker is seen after it was attacked at the Gulf of Oman, in waters between Gulf Arab states and Iran, June 13, 2019. ISNA/Handout via REUTERS

June 16, 2019

DUBAI (Reuters) – The two oil tankers crippled in attacks in the Gulf of Oman last week that Washington and Riyadh have blamed on Iran are being assessed off the coast off the United Arab Emirates before their cargos are unloaded, the ships’ operators said on Sunday.

Damage assessment on Japan’s Kokuka Courageous and preparation for ship-to-ship transfer of its methanol cargo would start after authorities in Sharjah, one of the UAE’s seven emirates, complete security checks, Bernhard Schulte Shipmanagement said.

Thursday’s attacks, which also hit Norwegian tanker Front Altair, have heightened tensions between Iran and the United States and its Gulf allies after similar blasts in May struck four ships, including two Saudi oil tankers, off the UAE.

Foreign minister Jeremy Hunt said on Sunday Britain was “almost certain” Iran was behind attacks, adding that London did not believe anyone else could have done it.

Tehran has denied any involvement in the attacks near the Strait of Hormuz, a major transit route for global oil supplies.

The Front Altair is sitting off the coast of Sharjah’s Khorfakkan port while the Kokuka Courageous is anchored closer to shore off the emirate’s Kalba port, according to Refinitiv Eikon ship tracking data.

“Our crew remain on board the Kokuka Courageous. They are safe and well,” Bernhard Schulte said in a statement.

The Kokuka Courageous’s 21 crew members were returned to the vessel by the U.S. Navy’s Bahrain-based Fifth Fleet after being rescued.

The crew of the Front Altair, who had been picked up by Iranian boats, departed Iran from Bandar Abbas airport to Dubai International Airport on Saturday, the ship’s operator Frontline said.

A specialist team will inspect the Front Altair before deciding on how to unload its naphtha cargo. Frontline said on Sunday there had been no reported marine pollution.

The ship is now being towed toward the offshore part of Fujairah emirate, the company said.

FINGER POINTED AT IRAN

It was not clear who would take part in assessing damage to the tankers. After the May 12 attacks, in which a Norwegian-registered tanker was also hit, the UAE launched an investigation in cooperation with the United States, Saudi Arabia, Norway and France, which has a naval base in Abu Dhabi.

The UAE has said the probe shows that a state actor was behind last month’s operation, without naming a country, and that naval mines were most likely used.

The United States and Saudi Arabia have directly blamed Iran for both last week’s and last month’s ship attacks. The kingdom’s de facto ruler, Crown Prince Mohammed bin Salman, on Saturday called on the international community to take a “decisive stand” but said Riyadh does not want a war.

The attacks have raised fears of broader confrontation in the region where the United States has boosted its military presence over perceived Iranian threats.

Tensions between Washington and Tehran heightened after the United States last year quit a 2015 international nuclear pact with Iran and re-imposed sanctions on the Islamic Republic.

Saudi Arabia and Iran are locked in several proxy wars in the Middle East, including in Yemen where the Iran-aligned Houthi movement has claimed drone strikes on oil pumping stations in Saudi Arabia last month and a missile attack which hit a civilian airport in the south of the kingdom last week.

(Reporting by Lisa Barrington; Editing by Ghaida Ghantous/Keith Weir)

Source: OANN

FILE PHOTO: International Labour Organization's annual labour conference
FILE PHOTO: South African President Cyril Ramaphosa attends the opening day of the International Labour Organization’s annual labour conference in Geneva, Switzerland June 10, 2019. REUTERS/Denis Balibouse/File Photo

June 16, 2019

CAPE TOWN (Reuters) – Youth unemployment in South Africa has become a “national crisis”, President Cyril Ramaphosa said on Sunday at an event commemorating youth activism during the apartheid era.

Unemployment in Africa’s most advanced economy has remained stubbornly high since white minority rule ended 25 years ago, and creating jobs is a major challenge for Ramaphosa as he aims to reignite an underperforming economy.

Unemployment inched up to 27.6% in the first quarter, official data showed in May, underscoring the task faced by Ramaphosa after his ANC party won re-election last month.

An expanded category of unemployment, including people who have stopped looking for work, rose to 38% in the first quarter from 37.0% in the previous three-month period.

“We are very much alive to the fact that youth unemployment is indeed a national crisis,” Ramaphosa told an audience of mainly young people and students on National Youth Day.

The day honors scores of students killed during the 1976 Soweto uprising that helped focus global attention on the brutality of apartheid.

According to government agency Stats SA, the burden of unemployment is concentrated among the 15-34 age group who account for almost two-thirds of the jobless. Around four out of 10 young people do not have a job.

(Reporting by Wendell Roelf; Editing by Andrew Cawthorne)

Source: OANN


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