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Latvia violated EU law in removing ECB policymaker, court rules

FILE PHOTO: Latvia's central bank governor Rimsevics arrives at the news conference in Riga
FILE PHOTO: Latvia's central bank governor Ilmars Rimsevics arrives at the news conference in Riga, Latvia February 20, 2018. REUTERS/Ints Kalnins

February 26, 2019

LUXEMBOURG (Reuters) – Latvia violated European Union law by barring from office its central bank governor, who is also a European Central Bank policymaker, the European Court of Justice ruled on Tuesday in a widely expected decision.

Ilmars Rimsevics was suspended early last year on charges of corruption, leaving Latvia without a vote at ECB policy meetings and challenging a key plank of central bank independence.

“The Court annuls the decision suspending the Governor of the Central Bank of Latvia from office,” the Court said in a statement. “Latvia has not adduced evidence of the serious misconduct imputed to the governor of its central bank.”

The court’s decision comes after Advocate General Juliane Kokott argued in December that Latvia had failed to provide evidence of corruption — which Rimsevics denies — and that suspending him from office during the investigation amounted to his removal.

In a case without precedent for the ECB, Rimsevics was detained last February on accusations of soliciting a bribe and was even prevented for months from appointing a deputy to represent Latvia in ECB policy meetings.

Rimsevics and the ECB both took Latvia to court, arguing that removing a central bank chief without proving guilt in the case of serious misconduct violates central bank independence.

While the ruling is a win for Rimsevics, he is unlikely to be reinstated and Deputy Governor Zoja Razmusa will represent Latvia at ECB meetings until the Governor’s term ends later this year.

(Reporting by Michele Sinner; Writing by Balazs Koranyi; Editing by Catherine Evans)

Source: OANN

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Exclusive: France, Germany agree on joint proposal for euro zone budget

FILE PHOTO: EU flags outside the EU Commission headquarters in Brussels
FILE PHOTO: European Union flags are seen outside the EU Commission headquarters in Brussels, Belgium November 14, 2018. REUTERS/Francois Lenoir/File Photo

February 22, 2019

By Michael Nienaber

BERLIN (Reuters) – France and Germany have agreed a detailed proposal for a euro zone budget to boost growth, strengthen competitiveness and lower the development gap between individual member states, a German government document showed on Friday.

The Franco-German accord is likely to pave the way for an agreement in the wider group of euro zone finance ministers who will discuss the set-up of the new but disputed tool next month.

“The purpose of the euro zone budgetary instrument would be to foster competitiveness and convergence in the euro zone…,” the joint Franco-German proposal read, according to the government document seen by Reuters.

The new tool should also be open for countries that are locked into the Exchange Rate Mechanism II – the two-year waiting room for joining the euro, the proposal said.

“As agreed by the summit, the instrument should be part of the EU budget. It would not be credit-based,” it read.

This means the new instrument would not be available before 2021 when the next EU budget will come into force. It also means that the size of the budget would be determined in negotiations for the next EU budget which are to kick off later this year.

In their joint proposal, France and Germany suggest that the euro zone budget should support national reforms which have been identified in the European Semester – meaning the European Commission’s policy proposals for each member state.

“By also financing investment projects or public investment programs in policy areas identified in the European Semester and preferably related to these reforms, potential growth, competitiveness and convergence could be raised especially in diverging countries,” they said.

Legally, the new tool would be based on an act under EU law that regulates its functioning and generally sets out the priorities and on an additional intergovernmental agreement.

Member states would submit policy plans to the European Commission that contain both their planned reforms and proposals for projects to be supported under the budgetary instrument.

Those projects could either represent costs of the reform measures themselves or investment projects, especially in areas related to the reforms undertaken, it said.

The European Commission would then approve these plans in consultation with the governments and the money would flow depending on progress in implementation, the proposal said.

“The timeframe would be shorter than for structural and cohesion funds, allowing for more flexibility,” it added.

Governments would also be obliged to co-finance substantial shares of the investment projects from national budgets, the proposal said.

In addition to the current contributions of member states to the EU budget, Germany and France suggest that countries could also pay into the new tool on the basis of an intergovernmental agreement, according to their position paper.

Such externally assigned revenues could come for example from the planned financial transaction tax, it said, adding governments would have the final say on what taxes should be dedicated to the new budget.

France, representing the most ambitious view, has been pushing hard for a large, separate pool of money for the euro zone, financed from dedicated taxes and national contributions.

The Netherlands and some other northern EU countries doubt there is financial need for a euro zone budget at all. Germany has tried to be a bridge builder with its preference for a tight budget with payments hinging on structural reforms.

In a nod to France, the joint position paper said that member states would continue technical discussions on a stabilization function of the euro zone budget.

(Reporting by Michael Nienaber; Editing by Toby Chopra)

Source: OANN

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System Fail: The Russia Probe Was a Disinformation Operation

System Fail: The Russia Probe Was a Disinformation Operation

AP Photo/Jacquelyn Martin

It will take weeks for the elite pundit class to unravel all the possible implications and subtexts embedded in Robert Mueller's final report on the charge that Donald Trump and his team colluded with Russia to fix the 2016 election. The right claims that the report exonerates Trump fully, while the left contends there are ...

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Grassley Urges: No More Changes to Top Immigration Officials

Sen. Chuck Grassley, R-Iowa is urging the White House not to get rid of another top immigration official, particularly Lee Cissna, director of U.S. Citizenship and Immigration Services.

Grassley made his remarks in an interview with The Washington Post on Monday. They came after Kirstjen Nielsen resigned as Homeland Security secretary on Sunday and the White House announced that Randolph Alles. director of the Secret Service would soon be leaving his post.

And last week, the White House pulled the nomination of Ronald Vitiello, who had been nominated for the post of director of Immigration and Customs Enforcement. The Post said sources claim Cissna could be the next to go.

Grassley told the newspaper he was “very, very concerned.”

“One, those are good public servants,” Grassley said. “Secondly, besides the personal connection I have with them and the qualifications they have, they are the intellectual basis for what the president wants to accomplish in immigration.

 “The president has to have some stability and particularly with the number one issue that he’s made for his campaign, throughout his two and a half years of presidency. He’s pulling the rug out from the very people that are trying to help him accomplish his goal.”

Grassley made his concerns known to Mick Mulvaney, acting White House chief of staff. Mulvaney said he would look into the issue, Grassley told the Post.

Grassley also criticized White House senior adviser Stephen Miller, who has been pushing for changes at DHS.

Source: NewsMax Politics

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Vela’s second goal gives LAFC 2-2 draw at NYCFC

MLS: Los Angeles FC at New York City FC
Mar 17, 2019; New York, NY, USA; Los Angeles FC forward Carlos Vela (10) celebrates his goal against New York City FC during the first half at Yankee Stadium. Mandatory Credit: Vincent Carchietta-USA TODAY Sports

March 17, 2019

Carlos Vela scored his second goal of the game on a penalty kick in the 76th minute as visiting Los Angeles FC remained unbeaten by rallying for a 2-2 draw over winless New York City FC on Sunday afternoon at Yankee Stadium.

Vela helped LAFC improve to 2-0-1 by recording his fourth career two-goal game and scored on the penalty kick after NYCFC defender Ben Sweat took down Latif Blessing in the center of the box.

He scored his second goal of the season in the 42nd minute and then became the sixth player in the league to reach three goals.

Vela improved to 5-for-5 all-time on penalty kicks when he got NYCFC goalkeeper Sean Johnson to move to his left. As Johnson moved, Vela hammered the shot into the wide-open right side of the net.

LAFC nearly won the game right before stoppage time expired but Adama Diomande’s left footed shot from the center of the box sailed just wide.

Alexandru Mitrita scored his first goal with NYCFC in the 39th minute and Alexander Ring scored his second goal of the season in the 62nd minute.

Despite controlling possession for 61 percent of the match, NYCFC settled for its third straight tie in a physical game that featured 31 fouls and eight yellow cards.

LAFC goalkeeper Tyler Miller made four saves while Johnson stopped two shots.

NYCFC took a 1-0 lead when Mitrita avoided a tackle, sped past defender Jordan Harvey, made an inside move on Walker Zimmerman and lifted a right-footed shot from the right side of the box past Miller.

Two minutes later, Mitrita had a shot go off the crossbar.

Moments after Mitrita missed his second goal, LAFC tied the game by capitalizing on a turnover by NYCFC defender Maxime Chanot near midfield. Blessing gained possession and found a streaking Vela, who eluded Mitrita and lifted a left-footed shot from the right side of the box into the net.

Ring made it 2-1 when he hammered a right-footed shot inside the near post.

–Field Level Media

Source: OANN

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FedEx misses earnings estimates, cuts full-year EPS forecast again

FILE PHOTO: Traders work at the post that trades FedEx on the floor of the New York Stock Exchange
FILE PHOTO: Traders work at the post that trades FedEx on the floor of the New York Stock Exchange April 7, 2015. REUTERS/Brendan McDermid

March 19, 2019

(Reuters) – Package delivery company FedEx Corp missed analysts’ estimates for quarterly profit and cut its full-year earnings per share forecast for the second time, citing weaker global trade growth, sending its shares down 5 percent on Tuesday.

The Memphis, Tennessee-based company cut its fiscal 2019 adjusted earnings per share forecast to a range of $15.10 to $15.90, from $15.50 to $16.60 previously.

FedEx, which is seen as a bellwether for the global economy, in December slashed its full-year profit forecast, blaming weak growth in Europe and a cooling Chinese economy due to an ongoing trade war with the United States.

“Slowing international macroeconomic conditions and weaker global trade growth trends continue…,” Chief Financial Officer Alan Graf said in a statement.

The company’s adjusted net income fell to $797 million, or $3.03 per diluted share, in the third quarter ended Feb. 28, from $1.02 billion, or $3.72 per share, a year earlier.

Total revenue rose nearly 3 percent to about $17 billion.

Analysts on average had expected earnings of $3.11 per share and revenue of $17.67 billion, according to IBES data from Refinitiv.

(Reporting by Lisa Baertlein in Los Angeles and Ankit Ajmera in Bengaluru; Editing by Sriraj Kalluvila)

Source: OANN

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Saudis to seek $20 billion investments for planned tourism landmark

Visitors walk outside the tombs at the Madain Saleh antiquities site, al-Ula
FILE PHOTO: Visitors walk outside the tombs at the Madain Saleh antiquities site, al-Ula, Saudi Arabia February 10, 2019. Picture taken February 10, 2019. REUTERS/Stephen Kalin

March 20, 2019

By Stephen Kalin

RIYADH (Reuters) – Saudi Arabia is targeting up to $20 billion of investments through 2035 for a planned landmark tourism destination and will hold a global investor roadshow before the end of the year, the head of the project told Reuters.

Al-Ula, the site of an ancient civilization in a remote northwestern corner of the country, is part of plans by the world’s top crude exporter to diversify its economy away from oil and open up after decades of reclusion.

Amr Madani, chief executive of the Royal Commission for al-Ula, said in an interview this week he expects targeted investments to eventually generate 35,000 jobs and contribute a combined 120 billion riyals ($32 billion) to gross domestic product over the next 17 years.

“The bulk of that in the beginning will be construction-led but at steady state it will be tourism-led,” he said. This would be alongside secondary industries like sustainable agriculture, heritage preservation and film production.

The government, along with a French cultural partnership, has already begun financing infrastructure at al-Ula, which features majestic rock-hewn tombs and 2,000-year-old stone carvings by the Nabateans, the pre-Islamic Arab people that also built Petra in neighboring Jordan.

“We’d rather inject zero from public money, but the reality is we need to kickstart the investment. So we don’t know what that number is but we’re committed to keep investing until we get to the right conditions where funds jump in,” Madani said.

Various investment vehicles will be considered, including joint ventures and long leases, he added.

OVERWHELMED

Al-Ula’s development is part of a push to preserve pre-Islamic heritage sites in order to attract non-Muslim tourists, strengthen national identity and temper the austere strain of Sunni Islam that has dominated Saudi Arabia for decades.

It is also part of Crown Prince Mohammed bin Sultan’s efforts to make the country an entertainment destination, with the kingdom looking to attract dozens of Western acts, including a planned Michael Jackson-inspired “Thriller” theatrical show.

The authorities eventually want to attract up to 2 million visitors annually to al-Ula, but they are starting with about 1,000 hotel rooms plus desert camps and a three month visitor season called Winter at Tantoura that just concluded its first iteration.

“We were overwhelmed, not only by those who came, but by people who saw the pictures and wanted to come,” said Madani. “There is a lot of excitement around the world.”

Plans to admit tourists to Saudi Arabia have been discussed for years but have not come to fruition due to sluggish bureaucracy and concern over conservative sentiment.

International outcry over the murder of journalist Jamal Khashoggi by Saudi agents last October may give some potential visitors pause, but calls for Western performers to boycott the kingdom have not caught on.

Alongside “seasonal” visas issued for Tantoura, the government has approved plans to issue electronic visas for foreign visitors to attend sporting events and concerts, but it is unclear when those will be available.

(Reporting By Stephen Kalin; editing by Emelia Sithole-Matarise)

Source: OANN

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FILE PHOTO: Supporters of the Spain's far-right party VOX wave Spanish flags as they attend an electoral rally ahead of general elections in the Andalusian capital of Seville
FILE PHOTO: Supporters of the Spain’s far-right party VOX wave Spanish flags as they attend an electoral rally ahead of general elections in the Andalusian capital of Seville, Spain April 24, 2019. REUTERS/Marcelo del Pozo/File Photo

April 26, 2019

By John Stonestreet and Belén Carreño

MADRID (Reuters) – Spain’s Vox party, aligned to a broader far-right movement emerging across Europe, has become the focus of speculation about last minute shifts in voting intentions since official polling for Sunday’s national election ended four days ago.

No single party is anywhere near securing a majority, and chances of a deadlocked parliament and a second election are high.

Leaders of the five parties vying for a role in government get final chances to pitch for power at rallies on Friday evening, before a campaign characterized by appeals to voters’ hearts rather than wallets ends at midnight.

By tradition, the final day before a Spanish election is politics-free.

Two main prizes are still up for grabs in the home straight. One concerns which of the two rival left and right multi-party blocs gets more votes.

The other is whether Vox could challenge the mainstream conservative PP for leadership of the latter bloc, which media outlets with access to unofficial soundings taken since Monday suggest could be starting to happen.

The right’s loose three-party alliance is led by the PP, the traditional conservative party that has alternated in office with outgoing Prime Minister Pedro Sanchez’s Socialists since Spain’s return to democracy in the 1970s.

The PP stands at around 20 percent, with center-right Ciudadanos near 14 percent and Vox around 11 percent, according to a final poll of polls in daily El Pais published on Monday.

Since then, however, interest in Vox – which will become the first far-right party to sit in parliament since 1982 – has snowballed.

It was founded in 2013, part of a broader anti-establishment, far-right movement that has also spread across – among others – Italy, France and Germany.

While it is careful to distance itself from the ideology of late dictator Francisco Franco, Vox’s signature policies include repealing laws banning Franco-era symbols and on gender-based violence, and shifting power away from Spain’s regional governments.

TRENDING

According to a Google trends graphic, Vox has generated more than three times more search inquiries than any other Spanish political party in the past week.

Reasons could include a groundswell of vocal activist support at Vox rallies in Madrid and Valencia, and its exclusion from two televised debates between the main party leaders, on the grounds of it having no deputies yet in parliament.

Conservative daily La Vanguardia called its enforced absence from Monday’s and Tuesday’s debates “a gift from heaven”, while left-wing Eldiario.es suggested the PP was haemorrhaging votes to Vox in rural areas.

Ignacio Jurado, politics lecturer at the University of York, agreed the main source of additional Vox votes would be disaffected PP supporters, and called the debate ban – whose impact he said was unclear – wrong.

“This is a party polling over 10 percent and there are people interested in what it says. So we lose more than we win in not having them (in the debates),” he said

For Jose Fernandez-Albertos, political scientist at Spanish National Research Council CSIC, Vox is enjoying the novelty effect that propelled then new, left-wing arrival Podemos to 20 percent of the vote in 2015.

“While it’s unclear how to interpret the (Google) data, what we do know is that it’s better to be popular and to be a newcomer, and that Vox will benefit in some form,” he said.

For now, the chances of Vox taking a major role in government remain slim, however.

The El Pais survey put the Socialists on around 30 percent, making them the frontrunners and likely to form a leftist bloc with Podemos, back down at around 14 percent.

The unofficial soundings suggest little change in the two parties’ combined vote, or the total vote of the rightist bloc.

That makes it unlikely that either bloc will win a majority on Sunday, triggering horse-trading with smaller parties favoring Catalan independence – the single most polarizing issues during campaigning – that could easily collapse into fresh elections.

(Election graphic: https://tmsnrt.rs/2ENugtw)

(Reporting by John Stonestreet and Belen Carreno, Editing by William Maclean)

Source: OANN

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FILE PHOTO: The logo of the OPEC is seen at OPEC's headquarters in Vienna
FILE PHOTO: The logo of the Organisation of the Petroleum Exporting Countries at OPEC’s headquarters in Vienna, Austria December 5, 2018. REUTERS/Leonhard Foeger/File Photo

April 26, 2019

JOINT BASE ANDREWS, Md. (Reuters) – U.S. President Donald Trump said on Friday he called the Organization of the Petroleum Exporting Countries and told the cartel to lower oil prices.

“Gasoline prices are coming down. I called up OPEC, I said you’ve got to bring them down. You’ve got to bring them down,” Trump told reporters.

(Reporting by Roberta Rampton; Writing by Makini Brice; Editing by Chizu Nomiyama)

Source: OANN

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Sonia Bompastor, director of the Olympique Lyonnais womenÕs Youth Academy, leads a training at the OL Academy near Lyon
Sonia Bompastor, director of the Olympique Lyonnais womenÕs Youth Academy, leads a training at the OL Academy in Meyzieu near Lyon, France, April 16, 2019. REUTERS/Emmanuel Foudrot

April 26, 2019

By Julien Pretot

MEYZIEU, France (Reuters) – Olympique Lyonnais president Jean-Michel Aulas was wringing out his women’s team shirts in the locker room on a rainy London day eight years ago when he decided it was time to take gender equality more seriously.

It was halftime in their Champions League semi-final second leg against Arsenal at Meadow Park with 507 fans watching and Aulas realized that his players did not have a another kit for the second half.

“Next time, there will be a second set just like for the men, that’s how it’s going to work from now on,” he said.

Lyon have since won five Champions League titles to become the most successful women’s team in Europe and recently claimed a 13th consecutive domestic crown.

They visit Chelsea on Sunday in the second leg of their Champions League semi-final, with a fourth straight title in their sights.

At the heart of their achievements is a pervasive ethos that promotes gender equality throughout the club, starting in the youth academy.

In 2013, Aulas appointed former Lyon and France player Sonia Bompastor as head of the Women’s Academy — the female equivalent of one of France’s top youth set-ups that has produced players such as Karim Benzema, Alexandre Lacazette and Hatem Ben Arfa.

At the Youth Academy, girls and boys share the same facilities.

“Pitches, physiotherapy rooms are the same for all,” the 38-year-old Bompastor told Reuters.

As the girls train under the watch of former Lyon and France international Camille Abily, the screams of the boys practicing can be heard nearby.

The boys and girls also benefit from the same psychological support that includes hypnosis sessions and yoga.

“We have a ‘mental ability’ cell and the hypnotist acts on the girls’ subconscious, on their deeply held beliefs after observing them on and off the pitch,” Bompastor added.

SAME TREATMENT

One message the Academy staff are trying to convey is that girls are as good as boys.

“Women’s nature is such that we have low self-esteem. So self-esteem is a big topic for our girls,” said Bompastor.

This is not the case with the boys, she added.

“Some 14, 15-year-old boys still think they would beat our professional players, we tell them this would not be happening. We still need to work on those beliefs,” she said.

Female players also have to face questions that their male counterparts do not, Bompastor explained.

“In France there is a problem with the way women are considered, there are high aesthetic expectations. So we get heavy questions on femininity, intimate questions that men don’t get,” she said.

OL’s Academy has been held up as a shining example for others to follow, even in the U.S., where women’s soccer has a wider audience than in Europe.

“About one third of the (senior women’s) squad comes from the Academy, we have a good balance,” said Bompastor.

“I’m getting tons of requests from American universities and foreign clubs, who want to come and visit our facilities.”

‘ONE CLUB’

The salaries of the senior players is one area where there remains a large discrepancy between Lyon’s men’s and women’s teams.

While the three best-paid women players in the world are at Lyon with Ballon d’Or winner Ada Hegerberg earning 400,000 euros ($445,520) a year, this figure is dwarfed by the around 4 million euros earned annually by men’s player Memphis Depay.

There is, however, a level of interaction between the men’s and women’s players that is not present at many other clubs.

“When you talk about OL you talk about women and men, you talk about one club and you feel it when you are here or outside in the city,” Germany defender Carolin Simon told Reuters.

“We see it when we play in the big stadium. It’s not ‘normal’ for women’s football,” the 26-year-old, who joined the club last year, added.

Lyon’s female players also enjoy respect from their male counterparts, Simon said.

“It’s very cool, it’s a big honor to feel that it doesn’t matter if you are a professional man or woman. We talk with the men, there are handshakes, it’s a good atmosphere and it’s also why we are successful,” said Simon.

“The men respect us and it’s not just for the cameras.”

Her team mate, England’s Lucy Bronze, sees the men’s respect as key to improving women’s football.

“We might not be paid the same but they are just normal with us, they see us as footballers the same as they are,” Bronze told Reuters.

“Being at Lyon has really opened my eyes. To improve women’s football, it starts with having the respect of your male counterparts. It’s the biggest thing because they can influence so many people.”

(Reporting by Julien Pretot; Editing by Toby Davis)

Source: OANN

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FILE PHOTO: Ethiopian migrants, stranded in war-torn Yemen, sit on the ground of a detention site pending repatriation to their home country, in Aden, Yemen
FILE PHOTO: Ethiopian migrants, stranded in war-torn Yemen, sit on the ground of a detention site pending repatriation to their home country, in Aden, Yemen April 24, 2019. REUTERS/Fawaz Salman/File Photo

April 26, 2019

GENEVA (Reuters) – Yemeni authorities have rounded up about 3,000 irregular migrants, predominantly Ethiopians, in the south of the country, “creating an acute humanitarian situation,” the U.N. migration agency said on Friday.

“IOM is deeply concerned about the conditions in which the migrants are being held and is engaging with the authorities to ensure access to the detained migrants,” the International Organization for Migration said.

The migrants are held in open-air football stadiums and in a military camp, it said in a statement.

The detentions began on Sunday in the city of Aden and the neighboring province of Lahj, which are under the control of the internationally recognized government backed by Saudi Arabia and the United Arab Emirates. Iran-aligned Houthi rebels control Sanaa, the capital, and other major urban centers.

Both sides are under international diplomatic pressure to implement a United Nations-sponsored ceasefire deal agreed last year in Sweden and to prepare for a wider political dialogue that would end the four-year-old war.

Thousands of migrants arrive in Yemen every year, mostly from the Horn of Africa, driven by drought and unemployment at home and lured by the wages available in the Gulf.

(Writing by Maher Chmaytelli, Editing by William Maclean)

Source: OANN

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U.S. dollar notes are seen in this picture illustration
U.S. dollar notes are seen in this November 7, 2016 picture illustration. Picture taken November 7. REUTERS/Dado Ruvic/Illustration

April 26, 2019

(Reuters) – Following are five big themes likely to dominate thinking of investors and traders in the coming week and the Reuters stories related to them.

1/DOLLAR JUGGERNAUT

The dollar has zipped to near two-year highs, leaving many scratching their heads. To many, it’s down to signs the U.S. economy is chugging ahead while the rest of the world loses steam. After all, Wall Street is busily scaling new peaks day after day.

Never mind the cause, the effect is stark. The euro has tumbled to 22-month lows against the dollar and investors are preparing for more, buying options to shield against further downside. Emerging-market currencies are also in pain, with Turkish lira and Argentine peso both sharply weaker.

Now U.S. data need to keep surprising on the upside or even just meet expectations. The International Monetary Fund sees U.S. growth at 2.3 percent this year. For Germany, the forecast is 0.8 percent. The U.S. economy’s rude health has given rise to speculation the Fed might resume raising interest rates. Unlikely. But as other countries — Canada, Sweden and Australia are the latest — hint at more policy easing, there seems to be one way the dollar can go. Up.

(GRAPHIC: Dollar outperforms G10 FX – https://tmsnrt.rs/2Dz17S5)

2/FED: UP OR DOWN?

Wall Street is near record highs and recession worries are receding, so as we mentioned above, investors might wonder if the Federal Reserve will start raising rates again.

Such a pivot is unlikely after the Fed killed off rate-rise expectations at its March meeting. And the latest Reuters poll all but puts to bed any risk of rates will go up this economic cycle, given inflation remains below the Fed’s alarm threshold and unemployment is the lowest in generations.

Before the March rate-pause announcement, a preponderance of economists penciled in one or more increases this year. But that has flipped. A majority of those surveyed April 22-24 see no further tightening through December and more are leaning toward a cut by the end of next year.

Indeed, interest rate futures imply Fed Funds will be below the current 2.25-2.50 percent target range by this December.

Recent positive consumer spending and exports data have eased market concerns of a sharp economic slowdown. But inflation probably needs to run hot for a long period to panic policymakers off their wait-and-see course.     

(GRAPHIC: Federal funds and the economy – https://tmsnrt.rs/2DzjTZz)

3/HEISEI TO REIWA

Next week ends three decades of Japan’s Heisei era. Heisei, or Achieving Peace, began in 1989 near the peak of a massive stock market bubble and closes with the country trapped in low growth, no inflation, and negative interest rates.

The new era that dawns on May 1 is called Reiwa, meaning Beautiful Harmony. It begins when Crown Prince Naruhito ascends the Chrysanthemum Throne. But do investors really want harmony? What they want to see is a bit of economic growth and inflation to shake up the status quo.

The Bank of Japan’s stimulus toolkit to revive a long-suffering economy is anything but harmonious and yet it’s set to stay. The central bank confirmed recently rates will stay near zero for a long time. But the coming days may not be harmonious or peaceful for currency markets. A 10-day Golden Week holiday kicks off on April 29 and investors are fretting over the risk of a “flash crash” – a violent currency spasm that can occur in times of thin trading turnover.

The year has already seen two yen spikes and many, including Japan’s housewife-trader brigade – so-called Mrs Watanabes – appear to have bought yen as the holiday approaches. Their short dollar/long yen positions recently reached record highs, stock exchange data showed.

(GRAPHIC: Japan stocks: from Hensei to Reiwa – https://tmsnrt.rs/2W6a7Fe)

4/EARNING TURNING

Quarterly earnings were supposed to be the worst in Europe in almost three years, but with a third of results in, things are looking a little rosier.

Two-thirds of companies’ results have beat expectations, and they point to earnings growth of 4.5 percent year-on-year. Financials have delivered the biggest surprises, according to analysis by Barclays.

That might just show how low expectations were. In fact, analysts are still taking a red pen to their estimates.

The latest I/B/E/S data from Refinitiv shows analysts on average expect first-quarter earnings-per-share for STOXX 600-listed companies to fall 4.2 percent. That would be their worst quarter since 2016 and down sharply from an estimated 3.4 percent just a week earlier.

Those estimates may end up being a little too bearish as earnings season goes on, quelling worries that Europe is heading toward a corporate recession.

GSK and Reckitt Benckiser will give the market a glimpse of the health of the consumer products market and spending on everything from toothpaste, washing powder and paracetamol.

(GRAPHIC: Earnings forecasts – https://tmsnrt.rs/2DuO2ZF)

5/WAITING FOR THE OLD LADY

Sterling has gone into the doldrums amid the Brexit delay and unproductive talks between the UK government and the opposition Labour party on a EU withdrawal deal. The resurgent dollar, meanwhile, has taken 2 percent off the pound in April. It is unlikely the Bank of England will be able to rouse it at its May 2 meeting.

Despite robust retail and jobs data of late, the economic picture is gloomy – 2019 growth is likely to be around 1.2 percent, the weakest since 2009, investment is down and Governor Mark Carney says business uncertainty is “through the roof”.

Indeed, expectations for an interest rate increase have been whittled down; Reuters polls forecast rates will not move until early 2020, a calendar quarter later than was forecast a month ago. The hunt for a new governor to replace Carney in October adds more uncertainty to the mix.

The recent run of UK data has fueled hopes of economic rebound. That’s put net hedge fund positions in the pound into positive territory for the first time in nearly a year. The Old Lady of Threadneedle Street might temper some of that optimism.

(GRAPHIC: Sterling positions – https://tmsnrt.rs/2XJwUXX)

(Reporting by Alden Bentley in New York, Vidya Ranganathan in Singapore; Karin Strohecker, Josephine Mason and Saikat Chatterjee in London; compiled by Sujata Rao; edited by Larry King)

Source: OANN

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