Economy

U.S. and EU flags are pictured during the visit of Vice President Pence to the European Commission headquarters in Brussels
FILE PHOTO: U.S. and European Union flags are pictured during the visit of Vice President Mike Pence to the European Commission headquarters in Brussels, Belgium February 20, 2017. REUTERS/Francois Lenoir

March 19, 2019

BRUSSELS (Reuters) – European Commission Vice President Jyrki Katainen said on Tuesday that Washington’s “selfish” approach to trade was not sustainable, but it was too early to say that EU-U.S. trade talks were doomed to fail.

The Trump administration has imposed stiff tariffs on U.S. imports of steel and aluminum and set off a trade war with China in a bid to redress what it sees as unfavorable terms that contribute to a U.S. trade deficit of over half a trillion dollars a year.

The Commission, which negotiates trade agreements on behalf of the 28-nation European Union, has been in talks with U.S. authorities since last July, seeking to clinch a deal on industrial goods trade.

EU governments are now discussing the details of a negotiating mandate for the Commission, while Washington has until mid-May to decide whether to make good on President Donald Trump’s threat to impose tariffs on imports of European cars.

“It is too early to say that our trade discussions are doomed to fail,” Katainen told a regular news briefing.

“There are discussions going on on several levels and … we can end up having some sort of an agreement with the U.S. on trade, but let’s not go deeper than this,” he said, adding that the scope of negotiations had to be clear and that a deal would require a lot of good will and political capital on both sides.

Asked about a reform of the World Trade Organization (WTO), Katainen said it was problematic and that attempts to get it done were like pushing a rope.

“Japan, China and the EU are willing to reform the WTO, the U.S. has not been that interested, but they are willing to cooperate,” he said.

“Even though the U.S. authorities may think that selfishness is better than cooperation, it is not a sustainable way of thinking. We need better, rules-based trade in the future where the international community sets the rules,” he said.

U.S. Trade Representative Robert Lighthizer told Congress last week that the WTO was using an “out of date” playbook despite dramatic changes including the rise of China and the evolution of the internet.

He said Washington was nonetheless working “diligently” to negotiate new WTO rules to address these problems.

(Reporting By Jan Strupczewski; Editing by Kevin Liffey)

Source: OANN

An aircraft engine being built at Honeywell Aerospace in Phoenix
FILE PHOTO: A worker is seen building an aircraft engine at Honeywell Aerospace in Phoenix, Arizona, U.S. on September 6, 2016. REUTERS/Alwyn Scott

March 19, 2019

WASHINGTON, (Reuters) – New orders for U.S.-made goods rose less than expected in January, held back by decreases in orders for computers and electronic products, in another indication of slowing manufacturing activity.

Factory goods orders edged up 0.1 percent, the Commerce Department said on Tuesday, as demand for primary metals and fabricated metal products fell. That followed an unrevised 0.1 percent gain in December.

Economists polled by Reuters had forecast factory orders rising 0.3 percent in January. Factory orders increased 3.8 percent compared to January 2018.

The release of the report was delayed by a 35-day partial shutdown of the federal government that ended on Jan. 25.

Reports last Friday showed manufacturing output fell for a second straight month in February and factory activity in New York state hit nearly a two-year low this month.

Manufacturing, which accounts for about 12 percent of the economy, is losing momentum as the stimulus from last year’s $1.5 trillion tax cut package fades. Activity is also being crimped by a trade war between the United States and China as well as by last year’s surge in the dollar and softening global economic growth, which are hurting exports.

In January, orders for machinery rose 1.5 percent after falling 0.4 percent in December. Orders for mining, oil field and gas field machinery fell 2.7 percent after tumbling 8.2 percent in December.

Orders for electrical equipment, appliances and components rebounded 1.4 percent after dropping 0.3 percent in December. Computers and electronic products orders fell 0.9 percent after decreasing 0.4 percent in December.

Orders for primary metals declined 2.0 percent and fabricated metal products orders fell 0.6 percent. Transportation equipment orders increased 1.2 percent in January, slowing from the prior month’s 3.2 percent rise.

Orders for civilian aircraft and parts increased 15.6 percent in January. Motor vehicles and parts orders gained 0.4 percent.

The Commerce Department also said January orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, rose 0.8 percent as reported last week. Orders for these so-called core capital goods dropped 0.8 percent in December.

Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, also increased 0.8 percent in January as previously reported. Core capital goods shipments edged up 0.1 percent in December.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

Source: OANN

A Wall St. street sign is seen near the New York Stock Exchange (NYSE) in New York
FILE PHOTO: A Wall St. street sign is seen near the New York Stock Exchange (NYSE) in New York City, U.S., March 7, 2019. REUTERS/Brendan McDermid

March 19, 2019

NEW YORK (Reuters) – Investors remained bullish on longer-dated U.S. Treasuries for a sixth consecutive week on worries about a slowing economy and expectations inflation will stay muted despite a tight domestic labor market, a J.P. Morgan survey showed on Tuesday.

The margin of investors who said they were “long,” or holding more Treasuries than their portfolio benchmarks, over those who said they were “short,” or holding fewer Treasuries than their benchmarks, increased to nine percentage points from 7 points the prior week, according to the survey.

Three weeks ago, the gap between longs and shorts rose to 11 percentage points, the highest since September 2016.

The survey results come the same day Fed policymakers begin a two-day meeting at which they are expected to leave interest rates unchanged.Twenty-eight percent of the investors surveyed said on Monday for a third straight week they were long on U.S. government bonds, the J.P. Morgan survey showed.

The share of investors who said they were short Treasuries fell to 19 percent from 21 percent a week ago.

The percentage of investors who said they were “neutral,” or holding Treasuries equal to their portfolio benchmarks, edged up to 53 percent from 51 percent the week before, J.P. Morgan said.

Positions among active clients, which include market makers and hedge funds, showed no bearish bets on longer-dated Treasuries. Active net longs rose to 30 percent, the highest since May 2018, while the share of these clients who said they were neutral increased to 70 percent from 60 percent.

In early Tuesday trading, the yield on the benchmark 10-year Treasury was 2.6267 percent, up from 2.6050 percent a week ago.

(GRAPHIC: Investors positions in longer-dated U.S. Treasuries – https://tmsnrt.rs/2V9OjHR)

(Reporting by Richard Leong; Editing by Steve Orlofsky)

Source: OANN

Molten copper is poured at the KGHM copper and precious metals smelter processing plant in Glogow
FILE PHOTO: Molten copper is poured at the KGHM copper and precious metals smelter processing plant in Glogow May 10, 2013. REUTERS/Peter Andrews

March 19, 2019

WARSAW (Reuters) – Lawmakers from Poland’s ruling Law and Justice (PiS) party proposed on Tuesday to cut mining tax payments so that major copper producer KGHM could spend more money on investment.

The mining levy, introduced in 2012 and calculated using a formula based on local production volumes and prices, primarily affects KGHM, a major employer in southeast Poland and one of the world’s biggest copper and silver producers.

Poland holds general election this year. The tax has been a subject of debate during previous campaigns. In 2015, some politicians had promised to scrap it.

KGHM paid 1.67 billion zlotys ($442 million) in mining tax in 2018, while the group’s profit were 1.66 billion zlotys.

“Lowering the mining levy by 15 percent … will make additional funds available to KGHM, which will significantly translate into long-term stability and development of the company,” lawmakers said in draft law published on parliament’s website.

Reducing the mining levy would lower budget revenues by an estimated 180 million zlotys in 2019 and 240 million zlotys in subsequent years, the draft said.

By 1310 GMT shares in KGHM had risen by 4.2 percent.

(Reporting by Pawel Florkiewicz; Editing by Agnieszka Barteczko and Edmund Blair)

Source: OANN

Turkish President Erdogan addresses his supporters during a rally for the upcoming local elections, in Istanbul,
FILE PHOTO: Turkish President Tayyip Erdogan addresses his supporters during a rally for the upcoming local elections, in Istanbul, Turkey March 12, 2019. REUTERS/Murad Sezer

March 19, 2019

ANKARA (Reuters) – President Tayyip Erdogan on Tuesday called on New Zealand to restore the death penalty for the gunman who killed 50 people at two Christchurch mosques, warning that Turkey would make the attacker pay for his act if New Zealand did not.

Australian Brenton Tarrant, 28, a suspected white supremacist, was charged with murder on Saturday after a lone gunman opened fire at the two mosques during Muslim Friday prayers.

“You heinously killed 50 of our siblings. You will pay for this. If New Zealand doesn’t make you, we know how to make you pay one way or another,” Erdogan told an election rally of thousands in northern Turkey. He did not elaborate.

He said Turkey was wrong to have abolished the death penalty 15 years ago, and added that New Zealand should make legal arrangements so that the Christchurch gunman could face capital punishment.

“If the New Zealand parliament doesn’t make this decision I will continue to argue this with them constantly. The necessary action needs to be taken,” he said.

Erdogan is seeking to drum up support for his Islamist-rooted AK Party in March 31 local elections. At weekend election rallies he showed video footage of the shootings which the gunman had broadcast on Facebook, as well as extracts from a “manifesto” posted by the attacker and later taken down.

That earned a rebuke from New Zealand Foreign Minister Winston Peters, who said he told Turkey’s foreign minister and vice president that showing the video could endanger New Zealanders abroad.

Despite Peters’ intervention, an extract from the manifesto was flashed up on a screen at Erdogan’s rally again on Tuesday, as well as brief footage of the gunman entering one of the mosques and shooting as he approached the door.

Erdogan has said the gunman issued threats against Turkey and the president himself, and wanted to drive Turks from Turkey’s northwestern, European region. Majority Muslim Turkey’s largest city, Istanbul, is split between an Asian part east of the Bosphorus, and a European half to the west.

Erdogan’s AK Party, which has dominated Turkish politics for more than 16 years, is battling for votes as the economy tips into recession after years of strong growth. Erdogan has cast the local elections as a “matter of survival” in the face of threats including Kurdish militants, Islamophobia and incidents such as the New Zealand shootings.

A senior Turkish security source said Tarrant entered Turkey twice in 2016 – for a week in March and for more than a month in September. Turkish authorities have begun investigating everything from hotel records to camera footage to try to ascertain the reason for his visits, the source said.

(Reporting by Ece Toksabay and Tuvan Gumrukcu; Editing by Dominic Evans and Nick Tattersall)

Source: OANN

FILE PHOTO: British and EU flags flutter outside the Houses of Parliament in London
FILE PHOTO: British and EU flags flutter outside the Houses of Parliament in London, Britain January 17, 2019. REUTERS/Clodagh Kilcoyne

March 19, 2019

By Thomas Escritt and Gabriela Baczynska

BRUSSELS (Reuters) – European Union governments are exasperated by British dithering over quitting the bloc but have little appetite for pushing it out on schedule next week without a divorce deal, senior figures said on Tuesday.

EU ministers in Brussels to prepare a summit with British Prime Minister Theresa May on Thursday voiced frustration after the speaker of parliament threw up a new obstacle for her plan to get her Brexit deal ratified before the March 29 deadline.

“Our patience as the European Union is being sorely tested at the moment,” German Europe minister Michael Roth told reporters. “Dear friends in London, please deliver. The clock is ticking.”

But Roth also echoed comments in Berlin by Chancellor Angela Merkel, the EU’s pre-eminent leader, who said she would “fight to the last minute” until midnight (2300 GMT) on March 29 to ensure an orderly exit for the EU’s second-ranked economy.

He said Germany’s main aim was to avoid a no-deal Brexit, which would disrupt business across the continent.

However, after two defeats for the Withdrawal Agreement that May negotiated with the EU, and her difficulty in trying to get it through parliament on a third vote even before the speaker ruled that it must be substantially changed, it is not clear how May can avert this without asking fellow leaders for more time.

ALL DEPENDS ON MAY

Leaders expect to discuss such an extension at the two-day summit starting on Thursday afternoon. But if May has yet to make a concrete proposal on her next move then, then the summit can do little more than outline possible steps — such as a readiness to give her a couple of months, or maybe longer.

“If there is no move from London, the leaders can also decide to wait,” said Belgian Foreign Minister Didier Reynders. “It really depends on what May will say at the summit.”

Diplomats said member states were still discussing options for extension — possibly only for two to three months, if May persuades them she can clinch a deal at home, or for much longer if May accepts that radical reworking is needed. But these would come with conditions and might not be agreed until next week.

Merkel said there was “far too much in flux” to forecast the outcome of the summit, but her foreign minister, Heiko Maas, told reporters in Finland: “If more time is needed, it’s always better to do another round than a no-deal Brexit.”

EU diplomats say it is highly probable that leaders will unanimously support some sort of extension rather than see Britain lurch out of the bloc in 10 days’ time — even though some governments are starting to argue for ending the uncertainty and trusting to arrangements already put in place to mitigate the effects of a sudden, immediate exit.

Aides to French President Emmanuel Macron, a powerful voice on the Council alongside Merkel, say the onus is on Britain to say what it would do with more time.

“This uncertainty is unacceptable,” his EU affairs minister Nathalie Loiseau said in Brussels on Tuesday.

“Grant an extension? What for? Time is not a solution, it’s a method — if there’s an objective and a strategy. And it has to come from London.”

(Writing by Alastair Macdonald; @macdonaldrtr; Editing by Kevin Liffey)

Source: OANN

The Reserve Bank of India Governor Urjit Patel pauses during a news conference after a monetary policy review in Mumbai
FILE PHOTO: The Reserve Bank of India (RBI) Governor Urjit Patel pauses during a news conference after a monetary policy review in Mumbai, India, December 5, 2018. REUTERS/Francis Mascarenhas

March 19, 2019

By Suvashree Choudhury

MUMBAI (Reuters) – Economists raised concerns over a sharp slowdown in Indian economy and pitched for a monetary policy boost to support growth at a meeting with the nation’s central bank chief on Tuesday, according to three participants.

Reserve Bank of India Governor Shaktikanta Das met more than a dozen economists to get their views on the economy ahead of the Monetary Policy Committee (MPC) decision due on April 4.

Most economists expect the six-member MPC to cut the repo rate by 25 basis points for the second time in a row next month to 6.00 percent, a level last seen in August 2017.

While the economists did not specify the extent of rate cut that the RBI could consider, one of them called for a 50-basis- point reduction, one of the participants said.

“Most of the participants said that monetary policy needs to do the heavy lifting to boost growth as there was no space for fiscal expansion,” another participant said.

The meeting under Das, who took charge in December, was in sharp contrast to the previous ones under former governor Urjit Patel, who was slightly reclusive and preferred to meet a small group of 5-6 economists. Das’ style has, however, been more open and communicative.

India’s economy expanded by 6.6 percent during October-December, its slowest pace in five quarters, on weak consumer demand and investments, dealing a major blow to Prime Minister Narendra Modi as he seeks a second term in office at a general election that kicks off next month.

Slowing growth has hit the federal government’s tax collections, constraining its ability to substantially boost spending ahead of elections.

However, neither Das nor any RBI official from the monetary policy department gave any indication of their thoughts or views, as is typical in such big-group meetings.

Economists and strategists spoke of several issues including drought, liquidity management, exchange rate, inflation, growth, bank credit growth, real interest rates and monetary policy transmission.

“The meeting went on for two-and-a-half hours as there were many participants,” said another economist who attended the meeting.

“But they didn’t say a single word on these topics.”

The RBI did not respond to an email seeking comment on the meeting with economists.

Some economists pointed out that food inflation could begin inching up after September if monsoon rains were not sufficient, but was unlikely to push retail inflation past the RBI’s 4 percent target.

Consumer inflation was at 2.57 percent on-year in February as food prices continued to fall for a fifth straight month.

The economists also raised concerns over a slowdown in global growth that has hurt India’s exports. India’s outbound shipments grew 2.4 percent annually in February, slower than 3.7 percent in January.

“Overall, the view was that the downside risks to growth have increased since the last policy while inflation risks have remained muted,” said a third participant.

“Not many of us clearly specified how much rate cut we wanted, but we presented the facts to make it clear to RBI that there was a need for a big boost to the economy.”

(Reporting by Suvashree Choudhury; Editing by Shreejay Sinha)

Source: OANN

Saudi Arabia's King Salman attends Arab league and EU summit, in Sharm el-Sheikh
FILE PHOTO: Saudi Arabia’s King Salman attends a summit between Arab league and European Union member states, in the Red Sea resort of Sharm el-Sheikh, Egypt, February 24, 2019. REUTERS/Mohamed Abd El Ghany

March 19, 2019

RIYADH (Reuters) – Saudi Arabia’s King Salman has launched four entertainment projects in the capital Riyadh, together worth 86 billion riyals ($23 billion), state television reported on Tuesday.

The projects include a park, sports track and an art center.

The King also ordered that one of the capital’s main roads should be named after crown prince Mohammed bin Salman.

(Reporting by Marwa Rashad; Editing by Catherine Evans)

Source: OANN

FILE PHOTO: Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang
FILE PHOTO: Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang province, China December 7, 2018. REUTERS/Stringe

March 19, 2019

By Dmitry Zhdannikov

LONDON (Reuters) – Oil prices rose to new 2019 highs on Tuesday, supported by supply cuts from OPEC and falling output from Iran and Venezuela due to U.S. sanctions.

Brent crude oil futures were up 55 cents at $68.09 per barrel at 1145 GMT, having earlier risen to a new 2019 high of $68.16 a barrel, their highest since November 2018.

U.S. West Texas Intermediate (WTI) futures were at $59.47 per barrel, up 38 cents from their last settlement. They have also risen on Tuesday to their highest since November 2019 of $59.57 a barrel.

The Organization of the Petroleum Exporting Countries on Monday scrapped its planned meeting in April, effectively extending supply cuts that have been in place since January until its next regular meeting in June.

OPEC and a group of non-affiliated producers including Russia, known as OPEC+, cut supply in 2019 to halt a sharp price drop which began in the second-half of 2018 due to booming U.S. production and fears of a global economic slowdown.

Saudi Arabia has signaled that OPEC and its allies may continue to restrain oil output until the end of 2019.

“The OPEC+ deal has brought stability to crude prices and signs of an extension have taken crude higher,” said Alfonso Esparza, senior market analyst at futures brokerage OANDA.

Prices have been further supported by U.S. sanctions against oil exports from Iran and Venezuela, traders said.

Venezuela has suspended its oil exports to India, one of its key export destinations, the Azeri energy ministry said on Tuesday, citing Venezuela’s oil minister.

Because of the tighter supply outlook for the coming months, the Brent forward curve has gone into backwardation since the start of the year, meaning that prices for immediate delivery are more expensive than those for dispatch in the future, with May Brent prices around $1.20 per barrel more expensive than December delivery Brent.

(GRAPHIC: Brent crude oil forward curves – https://tmsnrt.rs/2FlM7YZ)

Outside OPEC, analysts are watching U.S. crude oil production, which has risen by more than 2 million barrels per day (bpd) since early 2018, to around 12 million bpd, making the United States the world’s biggest producer ahead of Russia and Saudi Arabia.

Weekly output and storage data will be published by the Energy Information Administration (EIA) on Wednesday.

Bank of America Merrill Lynch said in a note that economic “risks are skewed to the downside” and that “we forecast global demand growth of 1.2 million bpd year-on-year in 2019 and 1.15 million bpd during 2020”.

The bank said it expected “Brent and WTI to average $70 per barrel and $59 per barrel respectively in 2019, and $65 per barrel and $60 per barrel in 2020.”

(Reporting by Henning Gloystein; Editing Joseph Radford and Louise Heavens)

Source: OANN

Contrary to the views of most economists, the Trump administration expects the U.S. economy to keep booming over the next decade on the strength of further tax cuts, reduced regulation, and improvements to the nation's infrastructure.

The annual report from President Donald Trump's Council of Economic Advisers forecasts that the economy will expand a brisk 3.2 percent this year and a still-healthy 2.8 percent a decade from now. That is much faster than the Federal Reserve's long-run forecast of 1.9 percent annual economic growth.

The administration's forecast hinges on an expectation that it will manage to implement further tax cuts, incentives for infrastructure improvements, new labor policies and scaled-back regulations — programs that are unlikely to gain favor with the Democratic-led House that would need to approve most of them.

Kevin Hassett, chairman of the White House council, insisted that the president's economic agenda would provide enough fuel to drive robust growth at a time when the majority of economists foresee a slowdown due in part to the aging U.S. population.

He said the biggest risk to growth would be if financial markets anticipate that Trump's existing policies would be reversed. Without getting into specifics, Hassett said the risk would be if markets expect that the winner of the 2020 presidential election would shift away from policies such as the tax overhaul that Trump signed into law in 2017.

"Uncertainty over the policies themselves could slow their positive impact," Hassett said.

The tax cuts added roughly $1.5 trillion to the federal debt over the next decade, not accounting for economic growth. The report suggests that the lower tax rates have increased business investment in ways that will make the economy more productive, while also creating a surge in people coming off the sidelines to search for work.

The administration's optimism comes amid signs of slowing global economic growth, as well as a recent slowdown in manufacturing production and weakness in retail sales in January and December.

Source: NewsMax Politics


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