Economy

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: EU summit following the EU elections in Brussels
FILE PHOTO: European Council President Donald Tusk holds a news conference after a European Union leaders summit following the EU elections, in Brussels, Belgium May 28, 2019. REUTERS/Yves Herman/File Photo

June 19, 2019

By Philip Blenkinsop and Belén Carreño

BRUSSELS/MADRID (Reuters) – European Council President Donald Tusk said on Wednesday that he was “cautiously optimistic” that EU leaders would agree names to hold the bloc’s top jobs when they meet in Brussels on Thursday.

Multiple diplomats and officials have told Reuters it may be too soon for a deal at the summit, which will be chaired by Tusk, citing disagreement between Berlin and Paris over a German candidate Manfred Weber’s bid to take over at the helm of the bloc’s executive Commission later this year.

“There are different views, different interests, but also a common will to finalize this process before the first session of the European Parliament,” Tusk said in an invitation letter to the 28 national leaders.

“I remain cautiously optimistic, as those I have spoken to have expressed determination to decide swiftly. I hope we can make it on Thursday.”

The new leaders will help set the EU’s course for the next five years as the bloc struggles with weak economies and a wave of euroskeptic sentiment at home, as well as facing external challenges from the United States to Russia to China.

Following an EU-wide election last month, the new European assembly is due to gather for the first time on July 2 and should then elect its new president for 2019-24.

That job is part of a package of the EU’s most senior leadership positions that come vacant soon.

They include replacements for European Commission President Jean-Claude Juncker, the bloc’s chief diplomat Federica Mogherini, the head of the European Central Bank (ECB) in Frankfurt Mario Draghi, and Tusk himself.

“I think that there is a chance of reaching an agreement at the summit,” said a senior EU diplomatic source. “At least, we are going to know which candidacies can fly and which couldn’t.”

Others have pointed out, however, that German Chancellor Angela Merkel could not drop Weber – who is a deputy head of her Bavarian sister party CSU – just yet.

Weber’s bid to lead the European Commission is firmly opposed by French President Emmanuel Macron, as well as the socialist Spanish Prime Minister Pedro Sanchez who is seeking to raise Madrid’s sway in the bloc.

WEBER’S LAST DANCE?

Should a deal prove elusive this week, Brussels sources said another leaders’ summit could take place on June 30 or July 1, or even in late August.

“There’s a strong desire to get things done quickly. I don’t see things going on beyond the summer,” another senior EU diplomat said on Wednesday.

The EU needs to balance out political affiliations, regional distribution and the candidate’s own profiles. The bloc is also seeking to let more women into its male-dominated leadership, with expectation that senior Commission roles would go to candidates such as Spain’s Economy Minister Nadia Calvino.

Beyond a firm majority – or, preferably, unanimity – among the 28 national leaders, any candidate to run the next European Commission must also be approved by the new European Parliament.

Despite voting to quit the bloc in 2016, Britain remains one of the 28 members and has members of the European Parliament until it finally leaves.

Political factions in the parliament are still discussing a coalition agreement and a pro-EU majority is in the works between the center-right European People’s Party (EPP), the socialists, the liberals and the greens.

The EPP, the parliament’s largest multi-country grouping, has so far stuck firmly with Weber. The socialists promote Dutchman Frans Timmermans, who currently is a deputy head at the Commission responsible for the rule of law.

The bloc’s current top competition official in Brussels, Denmark’s Margrethe Vestager, runs for the liberals. The group, which includes Macron’s allies, on Wednesday elected a former Romanian prime minister, Dacian Ciolos, as their new leader.

Brussels sources said Merkel’s condition for eventually dropping Weber could be demanding that no other candidate proposed by the European Parliament – Timmermans or Vestager – get to lead the Commission either. Other names in the running include the bloc’s Brexit negotiator and center-right Frenchman Michel Barnier, Belgium’s liberal caretaker Prime Minister Charles Michel, Bulgaria’s World Bank head, Kristalina Georgieva, or Lithuania’s outgoing President Dalia Grybauskaite.

GRAPHIC – EU top jobs race – https://tmsnrt.rs/2WSEMJU

(Additional reporting by Robin Emmott, Peter Maushagen and Sabine Siebold in Brussels, Giselda Vagnoni in Rome, Gederts Gelzis in Riga, Writing by Gabriela Baczynska; Editing by Alison Williams)

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: U.S. investor and founder of the Baring Vostok private equity group Michael Calvey leaves a court after a hearing in Moscow, Russia
FILE PHOTO: U.S. investor and founder of the Baring Vostok private equity group Michael Calvey leaves court after a hearing in Moscow, Russia. April 11, 2019. REUTERS/Maxim Shemetov/File Photo

June 19, 2019

MOSCOW (Reuters) – Russian private equity fund Baring Vostok said on Wednesday it has ceded a 9.99% stake in Vostochny Bank to the lender’s other big shareholder following a legal battle, meaning it is no longer the majority shareholder.

Baring Vostok, whose U.S. founder is under house arrest in Russia on embezzlement charges, has been locked in a legal battle with businessman Artem Avetisyan’s Finvision over control of the bank. The case is being closely watched by Russian President Vladimir Putin.

A court in Russia’s Far East ruled last week that Baring Vostok must relinquish a 9.99% stake to Finvision after Avetisyan went to court, claiming Finvision had an agreement with Baring Vostok that it could exercise an option to increase its stake by 10%.

The fund’s share in Vostochny Bank has now fallen to 41.6%, while Finvision’s share has risen to 42%, according to Reuters calculations.

A spokesman for Baring Vostok said on Wednesday that the fund did not plan to appeal the ruling and that it had already handed over the stake to Finvision.

Baring Vostok was founded by prominent U.S. businessman Michael Calvey, who with other fund executives, has been detained in Russia since February pending a trial on embezzlement charges. They all deny the charges and say the case is a way of pressuring them in a dispute over control of a Russian bank.

The case against Calvey rattled Russia’s business community and in April he was freed from jail and placed under house arrest.

Putin said earlier this month that he was closely following the embezzlement case against Calvey and that Russian law enforcement agencies should work to establish whether he was guilty or not.

(Reporting by Tatiana Voronova; writing by Tom Balmforth; editing by Susan Fenton)

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: Sweden's prime minister speaks at campaign rally in Stockholm
FILE PHOTO: Sweden’s Prime Minister Goran Persson speaks at a campaign rally one day before Sunday’s general election in Stockholm September 16, 2006. REUTERS/Bob Strong/File Photo

June 19, 2019

By Johan Ahlander and Esha Vaish

STOCKHOLM (Reuters) – Swedbank shareholders elected Goran Persson as chairman on Wednesday, with the former Swedish Prime Minister pledging to “clean the house” after a money-laundering scandal.

Sweden’s oldest retail bank has lost its chief executive, chairman and a third of its stock market value this year as its Estonian business was embroiled in a money laundering inquiry.

Swedbank, which is under investigation in the United States, the Baltics and Sweden, now faces the potential threat of sanctions and fines as it seeks to regain public confidence.

The most recent allegations against Swedbank, reported by Swedish state TV in March, say it processed gross transactions of up to 20 billion euros a year from high-risk, mostly Russian non-resident clients, through Estonia from 2010 to 2016.

Swedbank suspended its two top Estonian executives on Tuesday as part of an internal inquiry into its compliance with anti-money laundering rules which it launched in April under shareholder pressure for greater transparency.

Swedbank bulked up its board with three appointments at its annual shareholder meeting, including the addition of Persson, as it seeks to regain investor confidence following the scandal, which has also engulfed neighboring Danske Bank.

The 70-year-old former Swedish politician has emerged as a troubleshooter since playing an instrumental role in reviving Sweden’s economy after a financial crisis in the 1990s.

Persson, a Social Democrat who served as prime minister for a decade until 2006 and has since sat on several boards including smaller regional lender Alandsbanken, vowed to restore confidence in Swedbank and work for a better corporate culture.

“We’re going to clean our house. That work starts now,” Persson said after his election as chairman of Swedbank, whose shares were up 1% to 140.50 Swedish crowns at 1031 GMT.

Shareholders also voted in Bo Magnusson and Josefin Lindstrand as new members of the board, which also faces the task of finding a new chief executive for the bank.

Persson expects a new CEO to be in place by “end of autumn.”

(Reporting by Johan Ahlander and Esha Vaish in Stockholm; editing by Johannes Hellstrom and Alexander Smith)

Source: OANN

FILE PHOTO: New Toyota cars are transported from their manufacturing facility in Burnaston
FILE PHOTO: New Toyota cars are transported from their manufacturing facility in Burnaston, Britain March 16, 2017. REUTERS/Darren Staples/File Photo

June 19, 2019

LONDON (Reuters) – British factory orders slid in June against a backdrop of stoppages in car production following uncertainty about when Britain will leave the European Union, the CBI’s monthly industrial trends survey showed on Wednesday.

The Confederation of British Industry survey’s total order book balance sank to -15 this month from -10 in May, the weakest reading since October 2016 and a steeper fall than expectations of a reading of -12 in a Reuters poll.

June’s production index sank to +2 from +14 in May, which the CBI said reflected the sharpest contraction in car manufacturing since March 2009, as producers brought forward seasonal plant closures.

“There’s clear evidence that Brexit uncertainty is really biting, with our surveys showing volatility in both stocks and output in recent months,” CBI economist Alpesh Paleja said.

“Firms are desperate to see an end to the current impasse. That means securing a Brexit deal that can not only command the support of parliament and the EU, but prioritizes the protection of jobs and the economy,” he added.

(Reporting by David Milliken, editing by Andy Bruce; London newsroom +44 20 7542 7947, uk.online@reuters.com)

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

Trump Sees The Future Is Keeping America Great Because He Has 2020 Vision! Trump Is Making America Great Again! Will You Vote For Trump?

Trump officially launches re-election campaign, makes case for second term: ‘Keep America Great’
President Trump formally launched his 2020 re-election campaign Tuesday night before a jam-packed crowd in Orlando’s Amway Center, and quickly unloaded on the media organizations and government actors he said tried their hardest to bring down both See More his candidacy and then presidency with the Russian collusion scandal. “Our patriotic movement has been under assault from the very first day,” Trump said. He specifically called out the “phony” dossier used by the FBI to secure a secret surveillance warrant to surveil one of his former aides, Carter Page. To supporters’ delight, Trump even debuted a new impersonation of Hillary Clinton.

For the most part, Tuesday’s rally focused on Trump’s policy successes, from criminal justice reform to the economy. He also touted the planned Space Force, celebrated the “obliteration” of ISIS, and Republicans’ role in a newly energized national pro-lifemovement. And after polling the boisterous crowd, Trump appeared to settle on a new campaign slogan: “Keep America Great.” Still, not everyone loves the new Trump rallying cry. In an op-ed in the Opinion section of FoxNews.com, Fox News contributor Deroy Murdock explains why he believes the president needs a better re-election campaign slogan and what it should be.

Republicans demand Democratic leadership condemn AOC for ‘concentration camp’ remarks
Top Republicans are urging Democratic leadership to condemn Rep. Alexandria Ocasio-Cortez’s remarks comparing detention facilities on the southern border to concentration camps. Ocasio-Cortez, D-N.Y., on Monday told her Instagram followers on a live-stream that the U.S. government is “running concentration camps on our southern border.”

Rep. Liz Cheney, R-Wyo., said AOC’s remarks disrespect history and disregard what happened during the Holocaust. “It’s a total disregard to the facts, in particular about the Holocaust, but also you see the extent to which her colleagues and the people whoare supposed to be leading the Democrats in the House – Speaker Pelosi, Steny Hoyer – won’t stand up and criticize what she’s saying and condemn those comments,” the House Republican Caucus chairwoman said in an interview on “The Story with Martha MacCallum.”

The debate over slavery reparations comes to the Hill
Slavery reparations will be the center of debate during a scheduled hearing Wednesday before a House Judiciary subcommittee. After being treated as a fringe issue, reparations increasingly have been discussed by the mainstream of the Democratic Party. Several 2020 Democratic presidential candidates have endorsed looking at the idea, though they have stopped short of endorsing directpayouts for African-Americans. Still, the nation remains divided on the issue, as illustrated by remarks ahead of Wednesday’s hearing by Sen. Cory Booker, a 2020 Democratic presidential candidate, and Senate Majority Leader Mitch McConnell. In addition to Booker, actor and activist Danny Glover and writer Ta-Nehisi Coates are also among the witnesses expected to testify at the hearing.

Will a US-China trade talk breakthrough come at the G-20?
President Trump and Chinese President Xi Jinping have agreed to meet in Japan and discuss trade at the G-20 Summit, amid a weeks-long stalemate on negotiations and tension over looming new tariffs on China. On Tuesday, Trump tweeted that he and Xi had had “very good” telephone conversations. “We will be having an extended meeting next week at the G-20 in Japan,” the president tweeted. “Our respective teams will begin talks prior to our meeting.”

Pentagon in transition as acting Defense Secretary Shanahan plans to depart
President Trump abruptly announced Tuesday that acting Defense Secretary Patrick Shanahan is withdrawing from consideration to lead the Pentagon and he’s naming Secretary of the Army Mark Esper as Shanahan’s replacement. While speculation had brewed for days about Shanahan’s status, the announcement came shortly after the publication of an explosive USA Today report that the FBI has been probing a violent domestic dispute from 2010 between Shanahan and his then-wife as part of his background investigation. Speaking to reporters outside the White House,the president said, “it’s a difficult time for Pat,” adding Shanahan would take “some time off for family matters.” In a resignation letter Tuesday, Shanahan said “it is unfortunate that a painful and deeply personal family situation from long ago is being dredged up and painted in an incomplete and therefore misleading way in the course of this process.”

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FILE PHOTO: U.S. President Donald Trump and China's President Xi Jinping meet business leaders at the Great Hall of the People in Beijing
FILE PHOTO: U.S. President Donald Trump and China’s President Xi Jinping meet business leaders at the Great Hall of the People in Beijing, China, November 9, 2017. REUTERS/Damir Sagolj

June 19, 2019

BEIJING (Reuters) – China said on Wednesday positive outcomes were possible in trade negotiations with the United States, after the presidents of the world’s two largest economies agreed to revive their troubled talks at a G20 meeting this month.

U.S. President Donald Trump said on Tuesday he would meet Chinese President Xi Jinping at the G20 summit in Osaka, Japan. China, which previously declined to say whether the two leaders would get together, confirmed the meeting.

The two countries are in the middle of a costly trade dispute that has put pressure on financial markets and damaged the global economy.

Talks to reach a broad deal broke down last month after U.S. officials accused China of backing away from agreed commitments. Interaction since then has been limited, and Trump has threatened to put more tariffs on Chinese products in an escalation that businesses in both countries want to avoid.

News that the negotiations were back on the agenda cheered China’s stock markets with the blue-chip CSI300 index ending 1.3% higher while the Shanghai Composite Index rose 1.0%.

Speaking at a daily news briefing, foreign ministry spokesman Lu Kang said it was important to find a solution that was acceptable to both sides.

“I’m not getting ahead of myself, but communication over four decades shows it is possible to achieve positive outcomes,” he said.

Lu said he could not give an exact agenda for the meeting.

“The two leaders will talk about whatever they want,” he said. “A deal is not only in the interests of the two peoples but meets the aspirations of the whole world.”

In another possible sign of a pre-G20 thaw, China’s state television’s movie channel, which has in recent weeks broadcast old patriotic films about China’s heroics against the United States in the 1950-53 Korean War, on Wednesday showed a movie that put the United States in a far more positive light.

The channel showed 1999’s “Lover’s Grief over the Yellow River”, about a U.S. pilot in World War Two who was rescued by Communist guerrilla forces in China and falls in love with one of the young women fighters.

The overseas edition of the ruling Communist Party’s official People’s Daily said on its Weibo account the movie was “deeply moving”, and showed a picture of the lead Chinese actress and lead U.S. actor locked in an embrace.

“It’s better to fall in love than to fight,” the Beijing office of the Communist Youth League wrote approvingly of the movie on its Weibo account.

(Reporting by Cate Cadell; Additional reporting by Beijing newsroom and Ben Blanchard; Editing by Darren Schuettler)

Source: OANN

FILE PHOTO: Southern EU Countries Summit in Valletta
FILE PHOTO: Italian Prime Minister Giuseppe Conte gestures at a news conference during the Southern EU Countries Summit in front of the Auberge de Castille in Valletta, Malta, June 14, 2019. REUTERS/Darrin Zammit Lupi

June 19, 2019

ROME (Reuters) – Prime Minister Giuseppe Conte said on Wednesday that Italy’s commissioner in the European Union’s next executive should have an important economic job.

Addressing the Chamber of Deputies ahead of an EU summit later this week, Conte said his government would push to obtain “a top-drawer economic portfolio.”

The term of the current European Commission expires on Oct. 31, and EU governments have begun negotiations over the next team of commissioners.

(Reporting by Giuseppe Fonte and Angelo Amante, writing by Gavin Jones, editing by Giselda Vagnoni)

Source: OANN

FILE PHOTO: The German share price index DAX graph at the stock exchange in Frankfurt
FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June7, 2019. REUTERS/Staff

June 19, 2019

(Reuters) – European stock markets were flat on Wednesday after posting their best results in five months a day earlier thanks to a strong policy speech from European Central Bank chief Mario Draghi that flagged a potential return to bond-buying and lower interest rates.

Draghi’s speech sank the euro and drove major euro zone bond yields back below zero, slashing effective market borrowing costs, giving a boost to companies worried by sagging growth and driving the pan-European STOXX 600 index almost 2% higher.

It was flat compared to Tuesday’s close by 0709 GMT, although interest rate sensitive banking stocks outperformed with a 0.7% rise.

Clydesdale and Yorkshire Banking Group bucked that trend to gain 2.8% after the British lender pledged to make an additional 50 million pounds ($62.75 million) in savings from its takeover of rival Virgin Money.

Also keeping markets afloat was news that China and the United States are rekindling trade talks ahead of a meeting next week between Presidents Donald Trump and Xi Jinping at the G-20 summit in Japan, sparking hopes that the tensions between the two sides would abate.

Draghi’s speech has also further upped the stakes for a Federal Reserve policy meeting that will be Wednesday’s main market event, already expected to point the way to interest rate cuts for the second half of this year.

(Reporting by Amy Caren Daniel and Medha Singh in Bengaluru; editing by Patrick Graham)

Source: OANN

FILE PHOTO: Headquarters of the European Central Bank (ECB) are illuminated with a giant euro sign in Frankfurt
FILE PHOTO: The headquarters of the European Central Bank (ECB) are illuminated with a giant euro sign in Frankfurt, Germany, March 12, 2016. EUTERS/Kai Pfaffenbach//File Photo

June 19, 2019

LONDON (Reuters) – Commerzbank said on Wednesday that it has now bought forward its expectations for an interest rate cut from the European Central Bank to July from the fourth quarter of this year.

The change in forecast follows comments by ECB chief Mario Draghi on Tuesday that the central bank will ease policy again if inflation fails to accelerate.

“Yesterday’s speech in Sintra may well be remembered as opening the door for the next round of large-scale stimulus, similar to his Jackson Hole speech in 2014,” analysts at Commerzbank said in a note.

“In essence, the ECB could no longer tolerate the adverse mix of collapsing inflation break-evens and rising real yields since the meeting two weeks ago.”

(Reporting by Dhara Ranasinghe, editing by Karin Strohecker)

Source: OANN

FILE PHOTO: G20 Finance Ministers and Central Bank Governors Meeting in Fukuoka
FILE PHOTO: Italy’s Economy and Finance Minister Giovanni Tria speaks to reporters during the G20 Finance Ministers and Central Bank Governors Meeting in Fukuoka, Japan June 9, 2019. Franck Robichon/Pool via REUTERS

June 19, 2019

ROME (Reuters) – Italy’s public account could benefit from 3 to 4 billion euro ($3.4-$4.5 billion) of lower than expected uptake of welfare measures next year, finance minister Giovanni Tria was reported as saying in a interview with the Financial Times.

The European Union looks increasingly likely to impose disciplinary procedures on Italy over the management of its huge public debt.

Tria is expected to discuss later in the day how to avoid the EU infringement with Prime Minister Giuseppe Conte and the leaders of the ruling coalition.

(Reporting by Giselda Vagnoni; Editing by Jacqueline Wong)

Source: OANN

FILE PHOTO: Japanese Vice Minster of Finance Asakawa, Finance Minister Aso, and Bank of Japan Governor Kuroda hold a news conference at the IMF and World Bank's 2019 Annual Spring Meetings, in Washington
FILE PHOTO: Japanese Vice Minster of Finance Masatsugu Asakawa, Finance Minister Taro Aso, and Bank of Japan Governor Haruhiko Kuroda hold a news conference after the G-20 Finance Ministers and Central Bank Governors’ meeting at the IMF and World Bank’s 2019 Annual Spring Meetings, in Washington, April 12, 2019. REUTERS/James Lawler Duggan

June 19, 2019

By Leika Kihara

TOKYO (Reuters) – Substantial discussions on trade, including reform of the World Trade Organization, will likely take place at a summit of Group of 20 major economies next week in Osaka, a senior Japanese finance ministry official said on Wednesday.

Japan, which chairs this year’s G20 gatherings, will take a neutral stance in the U.S.-China trade row and urge countries to resolve tensions with a multilateral framework, said Masatsugu Asakawa, vice finance minister for international affairs.

“With regard to differences (on trade) between the United States and China, Japan of course won’t take sides. We will also not take any steps that go against WTO rules,” said Asakawa, who oversaw the G20 finance leaders’ gathering earlier this month.

“Japan will continue to take a multilateral approach in promoting free trade,” he told a news conference.

China and the United States, the world’s two largest economies, are in the middle of a costly trade dispute that has pressured financial markets and damaged the world economy.

Markets are focused on whether U.S. President Donald Trump and his Chinese counterpart Xi Jinping can narrow their differences when they sit down at the G20 summit.

The bitter trade war has forced the International Monetary Fund to cut its global growth forecast and overshadowed the G20 meetings that conclude with the Osaka summit on June 28-29.

At the finance leaders’ gathering, the G20 issued a communique warning that trade and geopolitical tensions have “intensified” and that policymakers stood ready to take further action against such risks.

“The macro-economic impact (of the trade tensions) is an issue of concern,” Asakawa said, conceding it took considerable time for G20 finance ministers and central bank heads to agree on their communique’s language on trade.

More “concrete” discussions on trade policy will take place at the G20 Osaka summit, he added.

The row over trade appeared to spread to currency policy when Trump criticized European Central Bank President Mario Draghi’s dovish comments as aimed at weakening the euro to give the region’s exports an unfair trade advantage.

Asakawa rebuffed the view the Bank of Japan’s massive stimulus program could also provoke the ire of Trump.

He also said the G20 shared an understanding that members would accept any exchange-rate moves driven by ultra-easy monetary policies as long as the measures are not directly aimed at manipulating currencies.

“The BOJ’s ultra-easy policy is aimed at beating deflation, not at manipulating exchange rates. That’s understood widely among the G20 economies,” he said.

Fears of the widening fallout from the trade war have heightened market expectations the U.S. Federal Reserve will start cutting interest rates this year. Draghi said on Tuesday the ECB will ease again if inflation fails to accelerate.

The dovish tone of other central banks have piled pressure on the BOJ, though many analysts expect it to keep policy steady at least at this week’s rate review.

(Additional reporting by Tetsushi Kajimoto; Editing by Chris Gallagher & Shri Navaratnam)

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

A car passes in front of Toyota dealer in Dhahran, Saudi Arabia
A car passes in front of Toyota dealer in Dhahran, Saudi Arabia June 15, 2019. Picture taken June 15, 2019. REUTERS/ Hamad I Mohammed

June 19, 2019

By Marwa Rashad and Stephen Kalin

RIYADH (Reuters) – Saudi Arabia began courting Toyota two years ago to build a large car plant as part of Crown Prince Mohammed bin Salman’s grand plan to wean the kingdom off oil revenues and create jobs for young Saudis.

But the Japanese carmaker has rebuffed Riyadh’s overtures following talks that dragged on without tangible results because high labor costs, a small domestic market and a lack of local supplies gave Toyota pause for thought, four sources said.

Securing a deal with a major automaker by 2020 for a car plant is a key target in the Gulf state’s national industrial strategy, part of a broader agenda to diversify the economy of the world’s largest oil exporter.

Failure to do so would be a setback for Prince Mohammed, coming after the listing of oil giant Saudi Aramco was shelved and the killing of journalist Jamal Khashoggi tarnished the kingdom’s image.

“Nobody would say ‘No, full stop’ … but they politely conveyed they’re not interested,” said an industry source familiar with the Toyota talks.

Toyota said it could not comment on the current internal discussions and communication with the Saudi government.

Saudi Arabia’s ministry of energy, industry and mineral resources and the government media office did not respond to requests for comment.

As part of measures designed to create 1.6 million manufacturing and logistics jobs by 2030, Prince Mohammed wants to localize half the production of imported vehicles and weapons – which are expected to account for up to $100 billion in spending by Saudi government entities and consumers by 2030.

Under the deal Toyota signed in March 2017, the Japanese company agreed to conduct a feasibility study for an industrial project to make vehicles and car parts in the kingdom.

Two sources familiar with the matter said Toyota concluded after the study and negotiations that Saudi Arabia would need to provide huge subsidies for the project to be viable.

“They found that production costs will be similar to other countries only if there is a 50% government incentive. But even then, they aren’t sure it will be profitable,” said one source with knowledge of the negotiations.

(GRAPHIC: Saudi Arabia GDP breakdown – https://tmsnrt.rs/2WDjAZb )

TOUGH SELL

When it comes to establishing manufacturing, Riyadh hopes to replicate its 1980s push into petrochemicals – the cornerstone of an industrial drive that turned Saudi Basic Industries (SABIC) into the world’s fourth biggest petrochemicals firm.

Hundreds of thousands of Saudis work in petrochemicals, one of the biggest contributors to the economy outside oil. But it took decades to build up the industry, even with huge government funding and cheap raw materials.

Saudi Arabian Military Industries, owned by the kingdom’s sovereign wealth fund, is spearheading the drive to localize military spending. It aims to generate $10 billion in revenue over the next five years and hopes to generate 30% of revenues from export markets by 2030.

For cars, the National Industrial Development and Logistics Program (NIDLP) wants half the roughly 400,000 vehicles bought each year in Saudi Arabia to be made there by 2030, one source said.

But Toyota, which has a 30 percent market share, only proposed a small plant producing up to 10,000 vehicles using imported goods and the Saudis wanted a bigger factory, the industry source and the source familiar with the talks said.

A strategy document posted on NIDLP’s website acknowledged that Saudi Arabia had a major competitive disadvantage and state incentives would be needed to create “substantial commercial justifications” to attract carmakers.

It did not provide specifics about the disadvantages, nor the size and kind of state incentives required.

At NIDLP’s launch in January, the state approved 45 billion riyals ($12 billion) of incentives to develop an auto sector, including duty rebates, human resources subsidies and tax holidays, but it wasn’t enough, the industry source said.

NIDLP did not respond to requests for comment.

Asked if it would consider the project if the economic conditions changed, Toyota said: “We do not comment on assumptions about the current and future situations.”

(GRAPHIC: Economy by sector in 2018 – https://tmsnrt.rs/2IUeZbs)

JOBS PUSH

The NIDLP is aiming to create 27,000 jobs in the automotive sector by 2030 by attracting so-called original equipment manufacturers (OEMs).

One obstacle, though, is the absence of a local supply chain for car parts, three automotive industry executives said.

Riyadh would need to build integrated economic districts producing components such as windows, batteries and wheels to lower costs, a senior executive at a Western auto firm said.

“If I have to open a manufacturing process in Saudi and then import every single component from abroad, I do not have any economical plus,” he said. “The problem is not really setting up a plant, but having the entire value chain.”

The local market is also relatively small. Demand for cars in Saudi Arabia has fallen by some 50% over three years to about 450,000 cars in 2018, as a drop in oil prices and departure of expatriates hit consumption, said Subhash Joshi, director of mobility practice at research firm Frost & Sullivan.

“Saudi Arabia and (Gulf) countries have been persistently disappointing in terms of sales in recent years, so it’s not as if OEMs would be entering a booming market,” said Justin Cox, director of global production at LMC Automotive.

Cox said countries such as Egypt and Turkey had more advantages for carmakers.

Toyota has a 1.2 billion euro plant with an annual capacity of 150,000 vehicles in Turkey, which is in a customs union with Europe. A plant Nissan set up in Egypt in 2005 with a $200 million investment will produce 28,000 cars this year.

Cars imported into the GCC customs union which includes Saudi Arabia only attract a 5% tariff, offering little protection against cheap imports for countries trying to get domestic car production off the ground.

CARMAKERS WARY

Turkey and Egypt also provide experienced, cheap manpower while Riyadh has been reducing the number of foreign laborers to create jobs for Saudis, who prefer higher-paying public jobs. Some 10 million foreigners have been doing the strenuous, lower-paid jobs largely shunned by the 20 million nationals.

Khalid al-Salem, who oversees the development of industrial cities, said the authorities were working on incentives to lure Saudis to industrial jobs instead of retail, where entry requirements are easier and pay is higher. He did not elaborate.

It’s not the first time Saudi Arabia has attempted to lure automakers.

In 2012, Jaguar Land Rover signed a deal to explore producing 50,000 Land Rovers a year in the kingdom at a cost of 4.5 billion riyals ($1.2 billion), but it never moved forward.

The industry source said the British luxury brand, owned by India’s Tata Motors, got a better offer from a European country.

“We continually review our global manufacturing footprint. At this time, our focus remains on our manufacturing presence in the UK, China, Brazil and mainland Europe,” Jaguar Land Rover said in an emailed response when asked about the Saudi project.

Two of the sources said Riyadh has also approached Nissan Motor Co in recent years.

They said the Japanese firm considered contract manufacturing through a 75% Saudi-owned venture – without the Nissan brand – but the arrest of former chairman Carlos Ghosn last year meant it was off the table for now.

Nissan declined to comment.

MINING AND PHARMACEUTICALS

While Saudi Arabia is struggling to lure carmakers, it does have a truck assembly industry. But analysts say assembling vehicles imported in kit form requires less investment and doesn’t create as many jobs as building cars from scratch.

Economists say, however, that Saudi Arabia does have the potential to build competitive industries and create jobs in the mining and pharmaceutical sectors.

The state is looking to triple mining’s contribution to gross domestic product by 2030 by focusing on untapped reserves of bauxite, phosphate, gold, copper and uranium.

Saudi authorities estimate the country holds 500 million tonnes of phosphate ore, about 7% of global proven reserves and a new mining law to boost foreign investment is being drafted.

Monica Malik, chief economist at Abu Dhabi Commercial Bank, said investment in mining infrastructure would likely have the most direct impact on developing new manufacturing industries.

Pharmaceuticals is another strategic sector for NIDLP. About 25 local manufacturing plants produce 30% of prescription drugs consumed now and the government wants to double the sector’s contribution to non-oil gross domestic product to 1.97% by 2020.

Suhasini Molkuvan, program manager at Frost & Sullivan, said the target was almost close to reality though a lack of investment in research and development and intellectual property left local firms dependent on multinationals.

“Diversity is easier said than done,” said a senior Riyadh banker. “It might be achievable in 15 to 20 years if they continue to make the push.”

(Additional reporting by Sylvia Westall, Tuqa Khalid and Saeed Azhar in Dubai, Costas Pitas in London, Naomi Tajitsu in Tokyo and Norihiko Shirouzu in Beijing; editing by Ghaida Ghantous and David Clarke)

Source: OANN

FILE PHOTO: Japan's SoftBank Group Corp Chief Executive Masayoshi Son bows his head after his presentation at a news conference in Tokyo
FILE PHOTO: Japan’s SoftBank Group Corp Chief Executive Masayoshi Son bows his head after his presentation at a news conference in Tokyo, Japan, November 5, 2018. REUTERS/Kim Kyung-Hoon

June 19, 2019

By Sam Nussey

TOKYO (Reuters) – Most investors in SoftBank Group Corp’s $100 billion Vision Fund want to join the group’s forthcoming second fund, founder and Chief Executive Masayoshi Son said on Wednesday, adding discussions would begin soon.

The entrepreneur said in May a second fund would launch “soon”, with SoftBank likely to be the only investor initially.

Raising further funds is essential if Son is to extend his spending spree on late-stage startups around the world.

Investors in the first fund include the sovereign wealth funds of Saudi Arabia and Abu Dhabi, Apple Inc and Foxconn, formally known as Hon Hai Precision Industry Co Ltd.

The Vision Fund will ramp up its employee numbers to 1,000 from 400 currently, Son said at the group’s annual general meeting.

The fund’s head, Rajeev Misra, said he sees investment rising to 100-150 companies, from around 80 at present.

Internet firms now dominate rankings of the world’s largest companies but have transformed just two industries, advertising and retail, which make up only a small part of the economy, Son told investors.

While SoftBank has invested in those industries in less mature markets – in, for instance, South Korea’s Coupang and Indonesia’s Tokopedia – its tech bets have been focused on startups looking to disrupt other industries like transport, insurance and healthcare.

Son also said he wants to be the conductor in an AI-driven technological revolution.

“The conductor doesn’t play anything but actually he plays everything,” Son said.

Shareholder responses at the meeting included a plea for Son to take care of his health, concern over the number of injuries at the Fukuoka SoftBank Hawks baseball team, and from one father who said he had taken his son to SoftBank’s headquarters in the hopes of glimpsing the founder.

Outside the venue in Tokyo, Japan’s taxi lobby protested Son’s support for the ride-hailing industry, which remains strictly regulated domestically.

SoftBank portfolio companies including recently listed Uber Technologies Inc and China’s Didi Chuxing control 90% of the industry globally.

(Reporting by Sam Nussey; Editing by Christopher Cushing)

Source: OANN

FILE PHOTO: Australia's Prime Minister Scott Morrison speaks at the Istana in Singapore
FILE PHOTO: Australia’s Prime Minister Scott Morrison speaks at the Istana in Singapore, June 7, 2019. REUTERS/Feline Lim

June 19, 2019

By Colin Packham

SYDNEY (Reuters) – Australian Prime Minister Scott Morrison will need to secure just three votes in the country’s upper house to pass legislation after election results on Wednesday showed his government picked up four additional Senate seats.

Morrison’s position will be tested when he seeks to pass his major re-election policy of A$158 billion in tax cuts when lawmakers return to parliament for the first time since the election — expected to be in the first week of July.

Morrison secured re-election in May when his coalition won a majority of seats in Australia’s lower house – a result he declared as a political miracle.

Confirming the final results for the Senate, the Australian Electoral Commission said Morrison’s Liberal-National coalition won 19 of the 40 seats contested.

These lawmakers will now sit alongside 16 government Senators who were not up for re-election this year, giving Morrison 35 of the 76-seats in Australia’s Senate.

The government previously held 31 seats, leaving them dependent on the support of independents to pass legislation.

While Morrison remains shy of an outright majority, several right-wing independents are expected to support the bulk of his legislation.

“The government has struggled for years to pass legislation. This Senate will be much friendlier, and the bulk of Morrison’s agenda will become law,” said Haydon Manning, a professor of political science at Flinders University, told Reuters.

The conservative government in April proposed A$158 billion in tax cuts over the next decade, primarily aimed at middle-income earners.

While Australia’s opposition Labor party has promised to support the tax cuts for the lower income earners, it has said it will oppose the third stage of the fiscal plan that delivers tax cuts that favor higher earners.

Morrison has said the tax cuts will not be split, setting the stage for a political fight amid calls for urgent fiscal stimulus to boost a flagging economy.

Australia’s central bank earlier this month cut interest rates for the first time in nearly three years, though it warned the economy needed additional support.

Should Morrison win enough support for his tax plan, about 10 million middle- and low-income earners – will receive up to A$1,080 ($742.72) per person.

Economists have estimated the tax breaks would inject about A$7.5 billion into the economy over 2019/20.

(Reporting by Colin Packham; Editing by Michael Perry)

Source: OANN

FILE PHOTO: Labourers work at Maxport garment factory in Thai Binh province
FILE PHOTO: Labourers work at Maxport garment factory in Thai Binh province, Vietnam June 13, 2019. REUTERS/Kham

June 19, 2019

By Sachin Ravikumar

MUMBAI (Reuters) – Confidence among Asian companies in the June quarter fell to its lowest since the 2008-09 financial crisis, as a U.S.-China trade war disrupts global supply chains and shows little sign of easing soon, a Thomson Reuters/INSEAD survey found.

The Thomson Reuters/INSEAD Asian Business Sentiment Index tracking companies’ six-month outlook worsened in the three months ended June to 53, versus 63 in the previous two quarters.

A reading above 50 means optimistic respondents outnumbered pessimists, but worries about the threat of a prolonged trade war drove the index to its lowest since the June quarter of 2009, when the first edition of the survey was released.

“There was a big dip (in the index) three quarters ago, and we felt it was the uncertainty about the trade war and people were worried about the future,” said Antonio Fatas, a Singapore-based economics professor at global business school INSEAD.

“We get a sense after four quarters of low numbers that now, it’s not just uncertainty. This is a true slowdown in growth. We see activity declining — it’s not just the expectation that activity will decline,” Fatas added.

For a fourth straight quarter, survey participants cited the global trade war as the chief risk to business, followed by Brexit and a slowdown in the Chinese economy.

The survey interviewed 95 companies in 11 Asia-Pacific countries that together contribute about a third of global gross domestic product and are home to 45% of the world’s population.

It was conducted from May 31 to June 14.

RISING CAUTION

The index staying above the neutral point of 50 suggests companies in the region are not expecting an imminent global recession, but the decade low indicates caution was rising as trade tensions mount.

The United States and China have been embroiled in a trade standoff since last year, marked by tit-for-tat import tariffs, as Washington looks to force Beijing to make changes to its business policies. Talks between the two to reach a detente ended last month without a deal.

Washington’s move to put Huawei, the world’s No.2 maker of smartphones, on an export blacklist that bars U.S. companies from doing business with the Chinese firm without special approval further ratcheted up tensions.

Still, U.S. President Donald Trump has said that a deal would “eventually” be struck.

BNP Paribas, however, does not expect a resolution to the trade war this year, said Hong Kong-based Manishi Raychaudhuri, Asia-Pacific equity strategist at the banking group.

The trade tensions are hurting supply lines, especially that for higher-end smartphones, with many manufacturers looking to move production out of China and into countries such as Vietnam, Taiwan and Bangladesh, Raychaudhuri noted.

These changes, however, “can’t be made overnight”, he added.

U.S.-based Broadcom Inc, which makes radio-frequency chips used in Apple’s iPhones and iPads, last week forecast a $2 billion hit to annual sales from the trade tensions and the U.S. ban on Huawei.

Huawei has acknowledged a harder-than-expected hit from the ban and slashed its revenue forecast for the year.

China’s economy is also feeling the heat, with industrial output growth sliding to a 17-year low in May.

Respondents to the survey included Japan’s Nikon Corp, South Korea’s Samsung Electronics, India’s Tata Consultancy Services and Reliance Industries Ltd, as well as Thailand’s PTT PCL.

Note: Companies surveyed can change from quarter to quarter.

(Reporting by Sachin Ravikumar; Editing by Himani Sarkar)

Source: OANN

U.S. President Donald Trump reacts on stage formally kicking off his re-election bid with a campaign rally in Orlando
U.S. President Donald Trump reacts on stage formally kicking off his re-election bid with a campaign rally in Orlando, Florida, U.S., June 18, 2019. REUTERS/Carlos Barria

June 19, 2019

By Steve Holland

ORLANDO, Fla. (Reuters) – President Donald Trump on Tuesday formally launches what may be an uphill battle to persuade voters to give him four more years in office, as he bets a strong U.S. economy will outweigh voter concerns about his unorthodox style and polarizing policies.

At an evening rally in Orlando, Florida, Trump, who has long made it known he is running for re-election, will begin making his case with gusto for a second term. He and his wife, Melania, and a large contingent of senior White House staff arrived in Orlando aboard Air Force One for the occasion.

The Trump of 2020 most certainly will bear a strong resemblance to the Trump of 2016 – brash and eager to bash opponents and promote tough policies on trade and immigration.

Two-and-a-half years into his tenure, Trump sees plenty of positive factors, led by a growing economy with low unemployment.

“If the economy stays strong, he is very likely to get re-elected,” said Trump confidant Newt Gingrich, a former Republican speaker of the U.S. House of Representatives.

But an investigation of Russian interference in the 2016 election, coupled with a presidential style marked by name-calling and eye-popping tweets, has undermined some Americans’ confidence in Trump before the November 2020 election.

He also has stirred division with his hard-line policies on immigration and unsettled business and farm groups with his use of tariffs in trade disputes with China and some allies.

Democrats cite a string of broken promises in Trump’s first term, from lowering drug prices to closing corporate tax loopholes and stopping plant closures. In a media call on Tuesday, Democratic Party officials focused on his moves to weaken the signature healthcare law of his Democratic predecessor, Barack Obama, without providing an alternative.

“Donald Trump is launching his campaign for re-election tonight and the American people face a choice – we can make Trump an aberration or let him fundamentally and forever alter the character of this nation,” said Kate Bedingfield, deputy campaign manager for Democratic front-runner Joe Biden.

POLLING CONCERNS

A Reuters/Ipsos poll on June 11 gave Trump a 40% job approval rating, compared with 57% who disapproved. Other opinion polls have shown him running consistently behind his main Democratic challengers, such as Biden, in key battleground states.

Republican strategists say the fundamentals favor Trump as he heads into his election but that he faces challenges given his bare-knuckled approach, which he refuses to temper.

“His support with his base is as strong as it’s ever been for any Republican incumbent president. The challenge is adding to that and building the coalition he needs for re-election,” said Republican strategist Ryan Williams, a former adviser to 2012 Republican nominee Mitt Romney.

In a Twitter post before his trip, Trump said: “Republican enthusiasm is at an all time high. Look what is going on in Orlando, Florida, right now!”

The Orlando Sentinel, however, welcomed the president’s visit with an editorial titled: “Our endorsement for president in 2020: Not Donald Trump.”

Trump supporters with tents and sleeping bags started camping out at the rally venue on Monday and thousands had gathered by Tuesday afternoon in a torrential downpour. “It was like a big Trump party,” said Maureen Bailey, who slept in a tent with her twin sister, Laureen Vartanian.

Local Democratic Party officials planned a “Win With Love” rally a few blocks from the Trump rally.

Starting his 2020 push in Florida, which the former New York businessman considers his second home, shows how important the state is to Trump’s re-election hopes. He would like to recreate the state-by-state electoral victory map he assembled to defeat Democrat Hillary Clinton in 2016.

That election included Trump victories in Florida, Pennsylvania, Michigan and Wisconsin, and he thus far faces challenges in all those states, along with North Carolina.

FLORIDA IS A KEY

Democrats vow to win back industrial states like Pennsylvania and Michigan that flipped to Trump in 2016 after decades of voting Democratic in presidential elections, and they believe his behavior and policies will generate strong turnout among Americans eager to turn him out of office.

Trump campaign advisers wave off the polls at this stage, saying Trump had trailed in most polls in 2016 and still won.

The advisers believe Trump’s chances will improve once Democrats go through their hard-fought nominating process and produce a nominee for him to face off against.

Nobody is expecting Trump to change his behavior. Aides who had urged him early in his White House tenure to tone down his style are long gone.

Some Trump advisers had urged the president to begin his campaign launch in New York with a nostalgic recreation of the scene from June 2015 when Trump and his wife rode down an escalator at Trump Tower for his announcement speech.

On his flight to Tokyo on May 24, Trump turned down the idea, based on input from the first lady, who thought he should do something new and was adamantly against the escalator ride, said a person with direct knowledge of the conversation.

(Reporting by Steve Holland; Additional reporting by Doina Chiacu in Washington and Carlo Allegri in Orlando; Editing by Bill Trott and Peter Cooney)

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

FILE PHOTO: Containers are pictured at an industrial port in Tokyo
FILE PHOTO: Containers are pictured at an industrial port in Tokyo, Japan, February 22, 2019. Picture taken on February 22, 2019. REUTERS/Kim Kyung-hoon

June 18, 2019

By Tetsushi Kajimoto

TOKYO (Reuters) – Japan’s economy is likely to stop expanding this year and into next with the Sino-U.S. trade war and a planned sales tax hike expected to crimp activity, a Reuters poll of Japanese companies found, with most calling for fresh stimulus to prop up growth.

The gloomy outlook suggests that Prime Minister Shinzo Abe’s reflationary policy mix, known as “Abenomics”, is sputtering.

“A combination of the U.S.-China trade friction and the tax hike in October will almost certainly tip Japan into recession,” an electric machinery maker wrote in the monthly survey.

The Corporate Survey found 42% of respondents see the economy contracting into next year, while 52% believe growth will remain stagnant. Just 5% foresee it expanding, the June 4-13 poll showed.

China and United States, the world’s two largest economies, have been locked in a tit-for-tat tariff war for nearly a year, which has curbed global trade and upended supply chains, pressuring Japan’s exports and factory output.

Some 55% of Japanese firms said harsher U.S. punitive tariffs against China were affecting their business profits, with much higher proportions of transport machinery firms and chemicals makers taking a hit, the Reuters Corporate Survey showed.

But only 7% of Japanese firms were considering moving their operational base or supply chains outside of China, suggesting they see the trade spat calming down or are waiting to see how long it lasts. Some 57% said this wasn’t something they are considering while 36% said they had no businesses in China.

TAX HIKE

Japanese businesses are also worried that raising the sales tax to 10% from 8% — to cover rising social welfare costs as the nation rapidly ages — will undermine consumer spending.

Previously, when the tax rate was raised from 5% in April 2014, it triggered a slump.

To keep the economy from faltering, nearly two-thirds of companies called for fresh stimulus, with a quarter of respondents wanting an individual income tax cut and nearly as many demanding the government postpone the sales tax hike.

The next two most popular choices were investment tax breaks, picked by 22%, and more fiscal spending, picked by 20%.

Only 5% picked further monetary easing as a stimulus option, underscoring a widespread market view that the Bank of Japan’s stimulus has done about all it can.

“Additional stimulus is necessary if the sales tax hike goes ahead even as the global economy is in a downtrend,” a machinery maker manager wrote in the survey, which collects anonymous comments.

“We must stop a sales tax hike for good, or even cut it to 5% or below,” a retailer said.

ALREADY PEAKED

The survey’s outlook reinforces the growing view that Japan’s economy may already be in recession after having likely peaked out last autumn, said Yasunari Ueno, chief market economist at Mizuho Securities.

Both Ueno and business respondents expressed concerns about a slump in the economy after Japan hosts the summer Olympics next summer.

“As Tokyo Olympics-related capex runs its course, a stronger yen lifted by expectations of Fed rate cuts will add downward pressure on growth,” Ueno said. “Moreover, if the sales tax rises to 10% as planned in October, that will hurt consumer sentiment.”

The economy has shown signs of slowing since late last year. In the most recent quarter ended in March, it grew at an annual pace of 2.2% but key GDP components – consumption, capex, exports and imports – all slowed sharply from the prior quarter.

Meanwhile, as President Donald Trump demands that the U.S.-Japan trade gap be fixed, nearly two-thirds of Japanese firms saw no need to reduce Japan’s trade surplus with the United States, the survey showed.

The survey, conducted for Reuters by Nikkei Research, canvassed 505 big and midsize companies, of which 240-260 companies responded on condition of anonymity.

(Reporting by Tetsushi Kajimoto; editing by Malcolm Foster and Sam Holmes)

Source: OANN

FILE PHOTO: The U.S. Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington
FILE PHOTO: The U.S. Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst/File Photo

June 18, 2019

By Katanga Johnson

WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission said on Tuesday it is considering boosting the number of options in private stock sales by broadening access to more potential investors and revamping the capital-raising process of private companies.

The agency invited the public to comment on whether it should expand its private-offering framework.

SEC Chairman Jay Clayton said he considers public consultation a step toward addressing concerns over the large amount of capital raised in the private versus public markets, and the way it bars some investors from participating.

“We are taking a critical look at our exemptions from registration to ensure that our multifaceted private offering framework works for investors and entrepreneurs alike, no matter where they are located in the United States,” Clayton said.

He added that the goal is to expand investment opportunities while maintaining appropriate protections.

Tuesday’s request for comment seeks public feedback on whether the SEC should take steps to facilitate a company’s transition from one form of offering to another, and whether retail investors should be allowed greater exposure to companies through pooled investment, the agency said.

It will also consider the limitations on who, and in what amount, a person can invest in a private company stock sale.

The agency said it welcomes responses from startups, entrepreneurs and investors.

Some industry advocates welcome the SEC’s public consultation, arguing that both companies and investors stand to win if the agency moved to adopt a proposal that expanded investor access to private offerings.

“There is huge interest from retail investors in getting in on the ground floor of the next large successful company,” said Dina Ellis Rochkind, an attorney with the Paul Hastings law firm. There would be equally strong interest from startups to raise capital from retail investors, she added.

Democrat-appointed Commissioner Rob Jackson said he voted in favor of letting the public in to more private deals but was hesitant because of the potential for fraud to less-savvy investors.

“The questions in this release involve a fundamental tradeoff: the costs families suffer when investors are victims of fraud versus the benefits of broader access to capital,” Jackson said.

(Reporting by Katanga Johnson; Editing by Susan Thomas and Bill Berkrot)

Source: OANN

FILE PHOTO: The Federal Communications Commission (FCC) logo is seen before the FCC Net Neutrality hearing in Washington
FILE PHOTO: The Federal Communications Commission (FCC) logo is seen before the FCC Net Neutrality hearing in Washington February 26, 2015. REUTERS/Yuri Gripas

June 18, 2019

By David Shepardson

WASHINGTON (Reuters) – The U.S. Federal Communications Commission will vote in July on whether to auction a key band of largely unused 2.5 GHz spectrum to help advance next-generation 5G wireless networks and scrap requirements that it be used for education, the agency said on Tuesday.

The FCC in May 2018 voted to consider releasing additional key 2.5 GHz mid-band spectrum reserved in the 1960s for what is now known as the Educational Broadband Service.

FCC Chairman Ajit Pai said in a statement the proposal would give existing users more flexibility in how they use the spectrum. “Valuable mid-band spectrum available for new mobile services will allow for more efficient and effective use of these airwaves and will advance U.S. leadership in 5G,” he added.

Pai said last year the FCC was seeking to ensure that existing users would retain spectrum, give some entities a chance to obtain new licenses “and then auctioning off the remaining white spaces.” Reuters reported the auction plans earlier on Tuesday.

Sprint Corp uses leased spectrum in the 2.5 GHz band in its existing 4G network and 5G network that it is being rolled out. That spectrum is a key part of Sprint and T-Mobile US Inc’s proposed $26 billion tie-up and 5G plan, and is not directly affected by the auction, FCC officials said.

The U.S. Education Department in a June 7 letter told the FCC it should maintain an “educational use requirement” for that spectrum and suggested setting aside revenue from license sales to help students who lack the internet access required to do their homework.

The FCC proposal would remove that educational requirement, officials told reporters on a conference call. It did not provide an auction timetable but said the proposal would establish a “competitive bidding window.” Several FCC auctions are planned this year, the agency added.

FCC Commissioner Brendan Carr last year noted that the 2.5 GHz band is unused in about half the country, and more than 90% of the licenses held by educational institutions are leased to other entities.

Carr said those arrangements show “many educational institutions have contracted with those providers so that each can focus on what it does best: the former can educate

students, and the latter can build wireless networks.”

The FCC also plans to vote next month on revising its children’s television programming rules, it said in a statement.

(Reporting by David Shepardson; Editing by Richard Chang)

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

President Donald Trump has a tough re-election battle ahead of him, but he’ll be fighting on the strength of having a “remarkable economy” and for keeping his promises, former House Speaker Newt Gingrich said Tuesday.

“It’s tough, but I think we are at 92% negative press coverage,” Gingrich told Fox News’ “America’s Newsroom.” “The fact that he is still standing is kind of amazing.”

Trump’s record on the economy, job creation and rising wages are bringing him credit, Gingrich added, and “he has been very good on judges, very good on deregulation, very good on tax cuts.”

But the president thinks he’ll win, said Gingrich, and “he believes it’s going to be a fight to the finish, but he also believes that the Democrats are pretty weak, and I am inclined to agree with him. I think they could stumble into a disaster if they are not careful.”

Gingrich’s comments came as hundreds of people camped out in Orlando waiting for the president’s official campaign announcement Tuesday night, and he said that’s because Trump has a “very intense relationship with his base.”

He noted that about 100,000 people registered to attend the kickoff event, but the building where it’s being held has capacity for 25,000.

“Trump is unique in that he was elected in the end by all the people who were mad at Washington, who wanted somebody with goals, who didn’t mind that he had weaknesses, as long as he was a fighter,” said Gingrich. “He has convinced them he is a fighter.”

Source: NewsMax Politics

FILE PHOTO: Vice governor of the People's Bank of China Chen Yulu attends a thematic forum of the second Belt and Road Forum for international cooperation in Beijing
FILE PHOTO: Vice governor of the People’s Bank of China Chen Yulu attends a thematic forum of the second Belt and Road Forum for international cooperation in Beijing, China, April 25, 2019. REUTERS/Jason Lee/File Photo

June 18, 2019

LONDON (Reuters) – China will let markets play a more prominent role in deciding the exchange rate for its yuan currency, the central bank’s vice governor Chen Yulu said on Tuesday.

“We will improve the market based exchange rate formation and transmission mechanism, we aim to let the market play a more decisive role in determining exchange rate,” Chen said during an event at Bloomberg in London.

China has taken big strides in trying to promote the international usage of its currency since 2009 but the yuan’s take up in global trade and markets remains meagre thanks to its relatively closed markets and largely policy determined exchange rate.

Chen also added that policy makers in the world’s second largest economy would push ahead with efforts to make yuan-denominated assets more attractive to investors outside China and focus on opening its financial sector.

“Going forward, China will pursue high standards in improving the financial sector: We will improve the business standard and improve the policy climate to further improve the attractiveness of RMB assets.”

(Reporting by Karin Strohecker and Saikat Chatterjee)

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: FILE PHOTO: FILE PHOTO: U.S. President Donald Trump and China's President Xi Jinping meet business leaders at the Great Hall of the People in Beijing
FILE PHOTO: FILE PHOTO: U.S. President Donald Trump and China’s President Xi Jinping meet business leaders at the Great Hall of the People in Beijing, China, November 9, 2017. REUTERS/Damir Sagolj/File Photo

June 18, 2019

WASHINGTON (Reuters) – U.S. President Donald Trump on Tuesday said he would meet with Chinese President Xi Jinping at the G20 summit later this month, and that trade talks between the two countries were set to restart ahead of time.

“Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting,” Trump tweeted.

(Reporting by Susan Heavey; Editing by Tim Ahmann)

Source: OANN

FILE PHOTO: JP Morgan Chase & Co. corporate headquarters in New York
FILE PHOTO: A view of the exterior of the JP Morgan Chase & Co. corporate headquarters in New York City May 20, 2015. REUTERS/Mike Segar/Files

June 18, 2019

BOSTON (Reuters) – JPMorgan Chase & Co will convert its $2 billion Highbridge multi-strategy fund into a credit focused fund to better meet client appetite, a company spokesman said on Tuesday.

One of the fund’s four lead portfolio managers, Arjun Menon, who had focused on Asian stocks, will be leaving the fund, the spokesman said.

(Reporting by Svea Herbst-Bayliss; Editing by Steve Orlofsky)

Source: OANN

A worker adjusts EU and U.S. flags at the start of the 2nd round of EU-US trade negociations at the EU Commission headquarters in Brussels
A worker adjusts European Union and U.S. flags at the start of the 2nd round of EU-US trade negotiations for Transatlantic Trade and Investment Partnership at the EU Commission headquarters in Brussels November 11, 2013. REUTERS/Francois Lenoir

June 18, 2019

BRUSSELS (Reuters) – The European Union’s trade surplus in goods with the United States increased in the first four months of 2019 while its deficit with China widened, figures that could further strain global tensions.

The European Union’s surplus with the United States grew to 48.2 billion euros ($54.0 billion) in Jan-Apr 2019 from 46.0 billion euros in the same period of 2018, EU statistics office Eurostat reported on Tuesday.

With China, the EU’s trade deficit expanded to 62.0 billion from 57.2 billion euros.

The United States has hit the European Union with tariffs and threatened more in complaint over the trade balance. Both Washington and Brussels have also complained that China wants free trade without playing fair.

Overall, the goods trade deficit of the 28-nation bloc increased to 21.7 billion euros in Jan-Apr 2019 from 10.3 billion a year earlier.

Energy imports were the chief cause of the deficit, especially from Russia and Norway.

For the narrower 19-country euro zone, exports grew by 5.2% year-on-year in April and imports by 6.6%, leading to a narrowing of its trade surplus to 15.7 billion euros in April from 17.1 billion a year earlier.

On a seasonally adjusted basis, the euro zone’s trade surplus also declined to 15.3 billion euros in April from 18.6 billion in March as exports fell by 2.5% month-on-month and imports declined by 0.9%.

(Reporting by Philip Blenkinsop; editing by Francesco Guarascio)

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. REUTERS/Pascal Rossignol

June 18, 2019

(Reuters) – Following is a summary of commercial aircraft deals announced by Airbus and Boeing at the Paris Airshow.

AIRBUS

* Air Lease Corp signs letter of intent for 50 A220-300s, 27 A321XLRs and 23 A321neos worth an estimated $11 billion at list prices.

* Virgin Atlantic orders 14 A330neos worth $4.1 billion at list prices, and takes out an option for six more.

* Lebanon’s Middle East Airlines orders four A321XLRs, estimated to be worth more than $500 million at list prices.

* Philippines budget airline Cebu Air orders 16 A330neos, 10 A321XLRs and five A320neos, worth about $6 billion in total at list prices.

* Saudi Arabian Airlines orders a further A320neo family aircraft worth an estimated $3.3 billion at list prices, and takes out options for as many as 35 more.

* Malaysia’s AirAsia Group converts 253 A320neo orders to the larger A321neo. Financial terms not disclosed

BOEING

* Korean Air commits to buying 20 787 Dreamliners worth $6.3 billion at list prices.

* GECAS exercises purchase rights for 10 737-800 Boeing Converted Freighters worth about $1.1 billion at list prices, and adds 15 more purchase rights.

(Compiled by Mark Potter)

Source: OANN

FILE PHOTO: The logo of the Organization of the Petroleum Exporting Countries (OPEC) is seen outside their headquarters in Vienna
FILE PHOTO: The logo of the Organization of the Petroleum Exporting Countries (OPEC) is seen outside their headquarters in Vienna, Austria December 7, 2018. REUTERS/Leonhard Foeger/File Photo

June 18, 2019

LONDON (Reuters) – OPEC and non-OPEC states are discussing holding their ministerial meetings on oil output policy on July 10-12 in Vienna, a date range proposed by Iran, OPEC sources said on Tuesday.

The Organization of the Petroleum Exporting Countries, Russia and other producers have since Jan. 1 implemented a deal to cut oil output by 1.2 million barrels per day. The meeting is to decide whether to extend the pact and whether to adjust it.

The new suggestion is that the Joint Ministerial Monitoring Committee, an advisory panel, meets on July 10, followed by OPEC ministers on July 11 and the combined gathering of OPEC and non-OPEC producers on July 12, the sources said.

(Reporting by Reuters OPEC team; Editing by Edmund Blair)

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: 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

LONDON (Reuters) – The recent suspension of a high-profile British equity 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.

Neil Woodford’s asset management firm suspended dealing the 3.7 billion pound ($4.63 billion) LF Woodford Equity Income Fund this month, drawing criticism from politicians and regulators.

“I don’t think Woodford per se creates financial stability risks, but if it undermines confidence in the system it could be a very big problem,” Kashyap, a member of the BoE’s Financial Policy Committee, told a committee of lawmakers in parliament.

(Reporting by David Milliken, writing by Andy Bruce; Editing by William Schomberg)

Source: OANN

FILE PHOTO: Italian Economy Minister Giovanni Tria looks on before a joint news conference with Eurogroup President Mario Centeno at the Treasury ministry in Rome
FILE PHOTO: Italian Economy Minister Giovanni Tria looks on before a joint news conference with Eurogroup President Mario Centeno at the Treasury ministry in Rome, Italy, November 9, 2018. REUTERS/Alessandro Bianchi -/File Photo

June 18, 2019

By Tommy Wilkes and Dhara Ranasinghe

LONDON (Reuters) – Italy can avoid disciplinary action from the European Commission over its spending plans by sticking to its current budget deficit target but Rome will need to cut spending rather than hike taxes, Economy Minister Giovanni Tria said on Tuesday.

The European Union looks increasingly likely to impose disciplinary procedures on Italy over the management of its huge public debt, after inconclusive meetings on Friday between the Italian finance minister and his EU partners.

Speaking to bond investors and bankers at a conference in London, Tria sought to reassure the international financial community that Italy would not breach European rules.

An unexpected slowdown in growth last year had meant Italy could not comply with European Union fiscal rules, but a rise in tax receipts and lower-than-expected spending on social welfare programs in 2019 showed that Italy was on the right track.

“We are going to have the commitments approved by parliament,” he told Reuters on the sidelines of the conference when asked if Rome would need to introduce new commitments to avoid disciplinary action by Brussels.

“For the next year, we have to indicate which of the instruments (to use),” Tria said, adding he preferred cutting spending rather than raising taxes to meet a budget deficit target of around 2.1% of GDP.

Tria also asked investors to avoid the “noise” coming out of the ruling coalition in Rome, in which populist parties from the far-right and left govern in an uneasy alliance, and instead focus on the actual spending commitments from the government.

Deputy Prime Minister Matteo Salvini was reported by media as saying on Tuesday that Rome would press ahead with plans for “mini-bots” unless a better solution was put forward.

But in London Tria, seen as a moderate, said the notion of “mini-bots” was not on the government’s agenda. “We don’t need this kind of instrument,” he said.

The mini-BOTs, named after short-term bills or BOTs, are a proposal by Salvini’s far-right League party. They have raised concerns among investors that they could become a parallel currency.

“We don’t want to create problems in Europe. We have to reinforce the trust in investors in Italy’s financial situation,” Tria said.

(Reporting by Tommy Wilkes and Dhara Ranasinghe, editing by Ed Osmond)

Source: OANN

FILE PHOTO: John Glen, local Member of Parliament for Salisbury and South Wiltshire, talks to the media in Salisbury
FILE PHOTO: John Glen, local Member of Parliament for Salisbury and South Wiltshire, talks to the media in Salisbury, Britain, April 3, 2018. REUTERS/Hannah McKay

June 18, 2019

LONDON (Reuters) – Britain’s government is committed to doing whatever it can to keep its financial sector globally competitive after Brexit, financial services minister John Glen said on Tuesday.

Britain is due to leave the European Union on Oct. 31 but it has yet to secure a divorce settlement with the bloc, the UK financial sector’s single biggest customer.

Uncertainty for finance has increased as a new British prime minister is being selected.

Glen said there must be a “clear plan” to maintain the UK financial sector’s global success as it cannot be taken for granted.

“It would be a tragedy if we lost our competitive advantage by accident,” Glen told a TheCityUK conference.

He knew the financial sector, known in Britain as the City, wanted an end to the ‘Brexit impasse’.

Frankfurt, Paris, Amsterdam, Luxembourg and Dublin have been vying to attract new hubs being opened by UK-based financial companies needing an EU base after Brexit.

Bankers see the shift of some jobs and activities from the City to the EU as inevitable and one-way, whatever the future UK trading deal with Brussels.

But Glen said none of those rival financial centers in the EU can match all that London has to offer.

TheCityUK’s new chair, Mark Tucker, said the financial sector was Britain’s most successful economic sector bar none and has a comparative advantage over other countries in that it is difficult, if not impossible, to replicate.

“It’s the envy of other nations,” said Tucker, who also chairs HSBC bank.

Finance needed to recover the public’s trust and have a “coherent and united front” so that it becomes more than the sum of its parts to demonstrate the benefits that finance brings to the economy and communities, Tucker said.

(Reporting by Huw Jones; Editing by Catherine Evans and Louise Heavens)

Source: OANN

FILE PHOTO: Governing Council of the ECB monetary policy meeting in Vilnius
FILE PHOTO: Mario Draghi, President of the European Central Bank (ECB), attends a news conference in Vilnius, Lithuania June 6, 2019. REUTERS/Ints Kalnins/File Photo

June 18, 2019

SINTRA, Portugal (Reuters) – The European Central Bank will need to ease policy again, possibly through new rate cuts or asset purchases, if inflation doesn’t head back to its target, ECB President Mario Draghi said on Tuesday.

“In the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required,” Draghi told the ECB’s annual conference in Sintra, Portugal.

“That aim is symmetric, which means that, if we are to deliver that value of inflation in the medium term, inflation has to be above that level at some time in the future.”

He added there was still “considerable headroom” for more asset purchases and “further cuts in policy interest rates and mitigating measures to contain any side effects remain part of our tools”.

“Will use all the flexibility within our mandate to fulfill our mandate – and we will do so again to answer any challenges to price stability in the future,” Draghi said.

(Reporting By Francesco Canepa and Balazs Koranyi)

Source: OANN

FILE PHOTO: Swedbank sign is seen on the local headquarters building in Tallinn
FILE PHOTO: Swedbank sign is seen on the local headquarters building in Tallinn, Estonia March 25, 2019. REUTERS/Ints Kalnins

June 18, 2019

STOCKHOLM (Reuters) – Swedbank has suspended the two top executives at its Estonian business with immediate effect, acting on an internal investigation into compliance with money-laundering rules at the bank.

Sweden’s oldest retail bank has faced a turbulent year after being linked to a money laundering scandal originating at Danske Bank, which has said its Estonia branch was used to move 200 billion euros ($225 billion)of suspicious funds from 2007 to 2015.

Swedbank – whose group CEO and chairman departed amid the turmoil – admitted in late April to failings in combating money laundering and announced an internal inquiry to review its current and historic customer relationships through its Baltic units.

Swedbank said late on Monday the probe was continuing as it announced findings from the investigation so far had prompted it to suspend Robert Kitt, who has been Estonia CEO from 2015, and Vaiko Tammevali, Estonia CFO since 2014.

“Today’s decision is a consequence of the ongoing internal investigation,” Swedbank’s head of Baltic Banking, Charlotte Elsnitz, said in a statement.

“We are fully committed to the Estonian market and to all our employees, customers and other stakeholders. Estonia is one of four home markets of Swedbank.”

Kitt and Tammevali could not immediately be reached for comment.

The bank’s shares, which have lost about a third in value since the scandal broke, were down 1.5 percent at 138.55 Swedish crowns at 0735 GMT.

The most recent allegations against Swedbank, reported by Swedish state TV, stated that the lender had processed gross transactions of up to 20 billion euros a year from high-risk, non-resident clients, mostly Russian, through its Estonian branch from 2010 to 2016. Previous allegations had related to a period between 2007 and 2015.

Credit Suisse analysts said that the removals meant that essentially all top management in Estonia had been changed, which could help bank in any discussions with authorities.

The Estonian financial regulator declined to comment and said that their ongoing forward investigation with Sweden and other Baltic authorities was ongoing.

Swedbank said it was cooperating fully with authorities in Sweden, the United States and the Baltic countries in their investigations.

The lender said Olavi Lepp, currently chief risk officer, had been named acting CEO of Swedbank Estonia, while Anna Kouts, currently head of treasury, would become acting CFO.

(Reporting by Johannes Hellstrom and Esha Vaish, editing by Deepa Babington/Keith Weir)

Source: OANN

FILE PHOTO: The German share price index DAX graph at the stock exchange in Frankfurt
FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June7, 2019. REUTERS/Staff

June 18, 2019

(Reuters) – Worries over the Middle East and another chip sector warning on trade pressured European shares on Tuesday, ahead of a key two-day Federal Reserve meeting which traders expect to clear the way for a cut in interest rates.

The United States on Monday announced the deployment of about 1,000 more troops, citing concerns about a threat from Iran and stirring nerves on financial markets already concerned by the ramping up of trade tensions with China.

German chipmaker Siltronic tumbled 8% after it was the latest to warn U.S. restrictions on exports to China would hurt business, saying Q2 sales would be “significantly below” the first quarter and were likely to decline further.

The pan-European STOXX 600 index fell 0.17% by 0708 GMT, with Britain’s FTSE 100 outperforming with a 0.2% rise.

The profit warning comes hot on the heels of U.S. chipmaker Broadcom’s shock statement last Thursday that trade issues would knock $2 billion off 2019 sales.

Another German chipmaker Infineon Technologies and STMicroelectronics, dropped 5.8% and 2.2% respectively, pulling the technology sector 0.8% lower.

Infineon’s move, however, came after it launched a 1.5 billion euro capital increase to help fund its acquisition of Cypress Semiconductor.

(Reporting by Amy Caren Daniel and Medha Singh in Bengaluru; editing by Patrick Graham)

Source: OANN

FILE PHOTO: French Economy and Finance Minister Bruno Le Maire delivers a speech during a high-level forum on debt at the Finance ministry in Paris
FILE PHOTO: French Economy and Finance Minister Bruno Le Maire delivers a speech during a high-level forum on debt at the Finance ministry in Paris, France, May 7, 2019. REUTERS/Benoit Tessier/File Photo

June 18, 2019

PARIS (Reuters) – Renault’s alliance with Japanese partner Nissan remains French Finance Minister Bruno Le Maire’s priority ahead of any further consolidation with the likes of Fiat-Chrysler, he said on Tuesday.

“It is not in our interest at all to weaken this alliance,” Le Maire told Europe 1 radio. The French government is Renault’s biggest shareholder with a 15% stake.

Asked to comment on media reports that Fiat’s top executive had been in Paris over the weekend, Le Maire replied: “It poses me no problems at all if the head of Fiat were to spend his time in Paris.”

(Reporting by Sudip Kar-Gupta; Editing by David Goodman)

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: Bank Indonesia's logo is seen at Bank Indonesia headquarters in Jakarta
FILE PHOTO: Bank Indonesia’s logo is seen at Bank Indonesia headquarters in Jakarta, Indonesia, January 17, 2019. REUTERS/Willy Kurniawan

June 18, 2019

JAKARTA (Reuters) – Bank Indonesia is expected to keep its benchmark interest rate steady at a policy review on Thursday, but it may begin to follow other Asian central banks by cutting later this year, a Reuters poll showed.

All but three of 22 analysts surveyed predicted Bank Indonesia (BI) will hold the 7-day reverse repurchase rate at 6.0%, where it has been since November.

The other three forecast a trim by 25 basis points (bps), which would be the first rate cut since September, 2017.

A reduction would put BI on the same path as central banks in India, Malaysia and the Philippines who have loosened monetary conditions following the Federal Reserve’s dovish turn.

Hours before BI’s meeting, the Fed, facing fresh demands by U.S. President Donald Trump to cut interest rates, is expected to leave borrowing costs unchanged, but possibly lay the groundwork for a rate cut later this year.

“Now, we believe the stars in the global economic atmosphere are aligned for a BI rate cut,” said Satria Sambijantoro, an economist with Bahana Sekuritas, who is among the minority predicting a cut this week.

He cited even stronger dovish signals from the Fed, prospects of lower oil prices, and a credit rating upgrade from Standard & Poor’s last month as reasons why BI would feel comfortable cutting now.

Most other economists, however, think BI will take time to monitor global markets before cutting.

Trimegah Securities said in a note this week a premature rate cut would hurt the rupiah currency. Anchoring the rupiah was among BI’s main goals behind rate increases last year that increased the policy rate by a total 175 basis points.

“We’ll turn bearish on rupiah and bonds if BI delivers a rate cut too early,” its economist Fakhrul Fulvian said.

Governor Perry Warjiyo in an interview with Reuters last month said that BI will take into consideration global market conditions and Indonesia’s external balance when “considering the room for monetary policy to be more accommodative”.

Warjiyo told Reuters 2019 GDP expansion is seen at 5.1%, a fraction below last year’s 5.17% and near the bottom end of BI’s 5.0%-5.4% outlook.

On Monday, the governor told a hearing with parliament he expects global uncertainties to subside in the second half of the year.

Indonesian exports have plunged in recent months as global trade slowed and trade tensions between the United States and China escalated.

At its May 16 policy meeting, BI widened its forecast for the current account gap to 2.5%-3% of gross domestic products (GDP) this year, from an initial estimate of 2.5%.

All eight respondents who gave a view on the year-end benchmark expect at least one rate cut in 2019. Four predicted the rate would end the year 25 bps below its current level, three saw it 50 bps lower, and one saw the rate 75 bps lower.

(Polling by Tabita Diela and Nilufar Rizki in JAKARTA, Khusboo Mittal in BENGALURU; Editing by Simon Cameron-Moore)

Source: OANN


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