interest

An earth mover prepares the foundation of new apartment block development in the waterfront suburb of Rushcutters Bay
An earth mover prepares the foundation of new apartment block development in the waterfront suburb of Rushcutters Bay, Australia, December 13, 2016. REUTERS/Jason Reed

May 26, 2019

By Swati Pandey

SYDNEY (Reuters) – Australia’s crumbling housing market looks set to stabilize over coming months as hopes of interest rate cuts and loosening of mortgage rules have boosted buyer inquiries, property and mortgage brokers say.

Home prices across Australia have fallen rapidly since late-2017, heightening worries among policymakers that a prolonged decline would deal a severe blow to the country’s already slowing economy.

While industry watchers say a return to boom times is unlikely anytime soon, they point to signs suggesting a bottoming-out for the sector is imminent.

Economists, including those at AMP and Citibank, last week re-jigged their forecasts to pencil in a less steeper decline in home prices than previously predicted. Several property and mortgage brokers who spoke to Reuters on Friday also said they have seen a noticeable jump in customer inquiries, including from those buying a home for investment.

“The sun is shining all over again now,” said mortgage broker Tony Bice at Sydney-based Finance Made Easy.

Bice cited the unexpected re-election of the country’s pro-business coalition government a little over a week ago and predictions of an Australia rate cut as soon as next month for the improvement in sentiment.

The Australian Prudential Regulation Authority’s (APRA) proposal to ease stress test on mortgages was the “most interesting” policy change, Bice said. Analysts expect the regulator’s move would boost customers’ borrowing capacity.

“My inquiries since the last week has risen dramatically. I have written 11 loans in the last 4 days. In the past, you’d be lucky to write 11 loans in two weeks.” Bice told Reuters.

“A lot of my clients are holding off until June to see what the Reserve Bank does. If they drop the cash rate, I expect banks to follow suit. That will finally revive the market.”

With growth sputtering and inflation at a low ebb, Philip Lowe, the governor of the Reserve Bank of Australia (RBA) last week gave the strongest signal yet that rates were about to move lower soon. And an overwhelming majority of economists are now predicting a cut in the cash rate to 1.25% from a record-low of 1.5% at the RBA’s June 4 policy meeting.

UNDER THE HAMMER

Auction activity – a closely-watched measure of demand in Australia – over the weekend provided the first major test for the market following the policy changes.

There were 1,933 capital city auctions on Saturday, double the amount from the previous week, and preliminary data showed a modest pick-up in demand. Clearance rates nudged above 60% for the two biggest cities of Sydney and Melbourne, compared to 50%-57% over the past year.

The promise of lower rates and easy credit led economists to predict a less steeper drop in home prices. Citi now sees a peak-to-trough fall of 7.5% by June 2019 from 10% previously. AMP’s Shane Oliver predicts a 12% top-to-bottom decline, from an earlier forecast of 15%.

Yet, few expect the boom days to return in a hurry.

“We see broadly flat house prices for 2020,” Oliver said.

“Given still high house prices and poor affordability, still very high debt levels, tighter lending standards and rising unemployment a quick return to boom time conditions is most unlikely.”

(Reporting by Swati Pandey; Editing by Shri Navaratnam)

Source: OANN

An earth mover prepares the foundation of new apartment block development in the waterfront suburb of Rushcutters Bay
An earth mover prepares the foundation of new apartment block development in the waterfront suburb of Rushcutters Bay, Australia, December 13, 2016. REUTERS/Jason Reed

May 26, 2019

By Swati Pandey

SYDNEY (Reuters) – Australia’s crumbling housing market looks set to stabilize over coming months as hopes of interest rate cuts and loosening of mortgage rules have boosted buyer inquiries, property and mortgage brokers say.

Home prices across Australia have fallen rapidly since late-2017, heightening worries among policymakers that a prolonged decline would deal a severe blow to the country’s already slowing economy.

While industry watchers say a return to boom times is unlikely anytime soon, they point to signs suggesting a bottoming-out for the sector is imminent.

Economists, including those at AMP and Citibank, last week re-jigged their forecasts to pencil in a less steeper decline in home prices than previously predicted. Several property and mortgage brokers who spoke to Reuters on Friday also said they have seen a noticeable jump in customer inquiries, including from those buying a home for investment.

“The sun is shining all over again now,” said mortgage broker Tony Bice at Sydney-based Finance Made Easy.

Bice cited the unexpected re-election of the country’s pro-business coalition government a little over a week ago and predictions of an Australia rate cut as soon as next month for the improvement in sentiment.

The Australian Prudential Regulation Authority’s (APRA) proposal to ease stress test on mortgages was the “most interesting” policy change, Bice said. Analysts expect the regulator’s move would boost customers’ borrowing capacity.

“My inquiries since the last week has risen dramatically. I have written 11 loans in the last 4 days. In the past, you’d be lucky to write 11 loans in two weeks.” Bice told Reuters.

“A lot of my clients are holding off until June to see what the Reserve Bank does. If they drop the cash rate, I expect banks to follow suit. That will finally revive the market.”

With growth sputtering and inflation at a low ebb, Philip Lowe, the governor of the Reserve Bank of Australia (RBA) last week gave the strongest signal yet that rates were about to move lower soon. And an overwhelming majority of economists are now predicting a cut in the cash rate to 1.25% from a record-low of 1.5% at the RBA’s June 4 policy meeting.

UNDER THE HAMMER

Auction activity – a closely-watched measure of demand in Australia – over the weekend provided the first major test for the market following the policy changes.

There were 1,933 capital city auctions on Saturday, double the amount from the previous week, and preliminary data showed a modest pick-up in demand. Clearance rates nudged above 60% for the two biggest cities of Sydney and Melbourne, compared to 50%-57% over the past year.

The promise of lower rates and easy credit led economists to predict a less steeper drop in home prices. Citi now sees a peak-to-trough fall of 7.5% by June 2019 from 10% previously. AMP’s Shane Oliver predicts a 12% top-to-bottom decline, from an earlier forecast of 15%.

Yet, few expect the boom days to return in a hurry.

“We see broadly flat house prices for 2020,” Oliver said.

“Given still high house prices and poor affordability, still very high debt levels, tighter lending standards and rising unemployment a quick return to boom time conditions is most unlikely.”

(Reporting by Swati Pandey; Editing by Shri Navaratnam)

Source: OANN

German Bundesbank President Jens Weidmann presents the annual 2018 report in Frankfurt
German Bundesbank President Jens Weidmann presents the annual 2018 report in Frankfurt, Germany, February 27, 2019. REUTERS/Kai Pfaffenbach

May 26, 2019

FRANKFURT (Reuters) – European Central Bank policymaker and presidential hopeful Jens Weidmann said on Sunday he saw no need for the ECB to change its policy at present, despite a weaker euro zone economy.

The ECB’s Governing Council is due to meet on June 5-6 and decide on the terms of its third round of cheap loans to banks – one of several measures it has deployed to stimulate lending in the bloc.

“This isn’t a situation where prices are falling and we have to react now,” the head of Germany’s central bank told members of the public at the Bundesbank’s open days.

Weidmann added decreasing spare capacity in the economy, namely the extent to which labor, capital and other resources are used below their maximum level, would eventually push up prices.

These have been growing at a slower pace than the ECB’s target of “close, but below 2%” for years despite the central bank’s unprecedented stimulus measures.

Weidmann, a guardian of German economic orthodoxy who has often opposed the ECB’s easy policy, is one of the hot names in the race to replace Mario Draghi as President in November.

But he may face opposition from indebted countries in the bloc’s south, which favor lower interest rates.

“Surely it would be bad to give the impression that certain nationalities are fundamentally excluded from the ECB Presidency,” Weidmann said.

“That would be the opposite of what we want to achieve, which is acceptance.”

(Reporting By Frank Siebelt; Writing by Francesco Canepa; Editing by Raissa Kasolowsky)

Source: OANN

German Bundesbank President Jens Weidmann presents the annual 2018 report in Frankfurt
German Bundesbank President Jens Weidmann presents the annual 2018 report in Frankfurt, Germany, February 27, 2019. REUTERS/Kai Pfaffenbach

May 26, 2019

FRANKFURT (Reuters) – European Central Bank policymaker and presidential hopeful Jens Weidmann said on Sunday he saw no need for the ECB to change its policy at present, despite a weaker euro zone economy.

The ECB’s Governing Council is due to meet on June 5-6 and decide on the terms of its third round of cheap loans to banks – one of several measures it has deployed to stimulate lending in the bloc.

“This isn’t a situation where prices are falling and we have to react now,” the head of Germany’s central bank told members of the public at the Bundesbank’s open days.

Weidmann added decreasing spare capacity in the economy, namely the extent to which labor, capital and other resources are used below their maximum level, would eventually push up prices.

These have been growing at a slower pace than the ECB’s target of “close, but below 2%” for years despite the central bank’s unprecedented stimulus measures.

Weidmann, a guardian of German economic orthodoxy who has often opposed the ECB’s easy policy, is one of the hot names in the race to replace Mario Draghi as President in November.

But he may face opposition from indebted countries in the bloc’s south, which favor lower interest rates.

“Surely it would be bad to give the impression that certain nationalities are fundamentally excluded from the ECB Presidency,” Weidmann said.

“That would be the opposite of what we want to achieve, which is acceptance.”

(Reporting By Frank Siebelt; Writing by Francesco Canepa; Editing by Raissa Kasolowsky)

Source: OANN

FILE PHOTO: Lebanon's Prime Minister Saad al-Hariri reacts after the announcement of the new government at the presidential palace in Baabda
FILE PHOTO: Lebanon’s Prime Minister Saad al-Hariri reacts, after the announcement of the new government at the presidential palace in Baabda, Lebanon January 31, 2019. REUTERS/Mohamed Azakir/File Photo

May 26, 2019

BEIRUT (Reuters) – The Lebanese draft state budget for 2019 is the start of a “long road” and shows Lebanon is determined to tackle public sector waste, Prime Minister Saad al-Hariri said, after his unity cabinet wrapped up marathon talks on the plan.

The budget finalised by the government on Friday cuts the deficit to 7.5% of GDP from 11.5% in 2018. It is seen as a critical test of Lebanon’s will to launch reforms that have been put off for years by a state riddled with corruption and waste.

“The 2019 budget is not the end. This budget is the beginning of a long road that we decided to take in order to lead the Lebanese economy to safety,” Hariri said in a speech at a Ramadan iftar meal on Saturday.

Lebanon’s bloated public sector is its biggest expense, followed by the cost of servicing a public debt equal to some 150% of GDP, one of the world’s heaviest debt burdens.

The government, which groups nearly all of Lebanon’s main political parties, met 19 times to agree on the budget. Hariri said the budget for 2020 would not take that much time “because now we know what we want to do”.

“The 2019 budget is the beginning of the process of what we want to do in 2020, 2021, 2022 and 2023,” he said, according to a transcript of his remarks sent by his office. 

The cabinet is due to meet on Monday at the presidential palace to formally seal the process before the budget is referred to parliament.

The budget could help unlock some $11 billion in financing pledged at a Paris donors’ conference last year for infrastructure investment, if it wins the approval of donor countries and institutions.

Hariri said the budget was a message to the Lebanese, financial markets and friendly foreign states that Lebanon was determined to “address the weakness, imbalance and squander in the public sector”.

Measures to rein in the public sector wage bill include a three-year freeze in all types of state hiring and a cap on extra-salary bonuses. State pensions will also be taxed.

A big chunk of the deficit cut stems from tax increases including a 2% import tax and a hike in tax on interest payments.

The government also plans to cut some $660 million from the debt servicing bill by issuing treasury bonds at a 1% interest rate to the Lebanese banking sector.

Fears the budget would lead to cuts to state salaries, pensions or benefits triggered weeks of strikes and protests by public sector workers and military veterans.

(Writing by Tom Perry; Editing by Kirsten Donovan)

Source: OANN

FILE PHOTO: U.S. President Trump speaks at the Wounded Warrior Project Soldier Ride event in the East Room of the White House in Washington
FILE PHOTO: U.S. President Donald Trump reacts as he speaks at the Wounded Warrior Project Soldier Ride event after the release of Special Counsel Robert Mueller’s report, in the East Room of the White House in Washington, U.S., April 18, 2019. REUTERS/Carlos Barria/File Photo

May 25, 2019

By Katanga Johnson

WASHINGTON (Reuters) – Deutsche Bank AG and Capital One Financial Corp will not have to immediately hand over the financial records of U.S. President Donald Trump, three of his children and the Trump Organization, according to a court filing on Saturday.

The filing in U.S. District Court for the Southern District of New York followed an appeal submitted on Friday by Trump and his affiliates against an existing order from a federal judge allowing the banks to hand over financial records to Democratic lawmakers.

Amid an ongoing legal battle between the Republican president and Democrats in Congress, the agreement to hold off for now on enforcing the subpoenas for Trump’s financial records was a rare accord between Trump’s attorneys, the banks and the House Intelligence and the Financial Services Committees.

“The parties have reached an agreement regarding compliance with and enforcement of the subpoenas” while the appeal to the 2nd U.S. Circuit Court of Appeals is pending, the filing said.

Parts of the subpoenas have been included in court filings. The subpoena on Deutsche Bank seeks records of accounts, transactions and investments linked to Trump, his three oldest children, their immediate family members and several Trump Organization entities, as well as records of ties they might have to foreign entities.

Deutsche Bank has long been a principal lender for Trump’s real estate business and a 2017 disclosure form showed that Trump had at least $130 million of liabilities to the bank.

The subpoena on Capital One seeks records related to multiple entities tied to the Trump Organization’s hotel business. It followed an informal request to the bank by Democratic lawmakers in March seeking records related to potential conflicts of interest tied to Trump’s Washington hotel and other businesses.

A lawyer for the Trumps argued earlier this week that the subpoenas exceeded the authority of Congress and were “the epitome of an inquiry into private or personal matters.”

U.S. District Judge Edgardo Ramos, however, found that they were allowed under the broad authority of Congress to conduct investigations to further legislation.

(Reporting by Katanga Johnson; Editing by Daniel Wallis)

Source: OANN

Deutsche Bank AG and Capital One Financial Corp will not have to immediately hand over the financial records of U.S. President Donald Trump, three of his children and the Trump Organization, according to a court filing on Saturday.

The filing in U.S. District Court for the Southern District of New York followed an appeal submitted on Friday by Trump and his affiliates against an existing order from a federal judge allowing the banks to hand over financial records to Democratic lawmakers.

Amid an ongoing legal battle between the Republican president and Democrats in Congress, the agreement to hold off for now on enforcing the subpoenas for Trump’s financial records was a rare accord between Trump’s attorneys, the banks and the House Intelligence and the Financial Services Committees.

“The parties have reached an agreement regarding compliance with and enforcement of the subpoenas” while the appeal to the 2nd U.S. Circuit Court of Appeals is pending, the filing said.

Parts of the subpoenas have been included in court filings. The subpoena on Deutsche Bank seeks records of accounts, transactions and investments linked to Trump, his three oldest children, their immediate family members and several Trump Organization entities, as well as records of ties they might have to foreign entities.

Deutsche Bank has long been a principal lender for Trump’s real estate business and a 2017 disclosure form showed that Trump had at least $130 million of liabilities to the bank.

The subpoena on Capital One seeks records related to multiple entities tied to the Trump Organization’s hotel business. It followed an informal request to the bank by Democratic lawmakers in March seeking records related to potential conflicts of interest tied to Trump’s Washington hotel and other businesses.

A lawyer for the Trumps argued earlier this week that the subpoenas exceeded the authority of Congress and were “the epitome of an inquiry into private or personal matters.”

U.S. District Judge Edgardo Ramos, however, found that they were allowed under the broad authority of Congress to conduct investigations to further legislation.

Source: NewsMax Politics

Illustration picture showing U.S. dollar and China's yuan banknotes
A U.S. dollar banknote featuring American founding father Benjamin Franklin and a China’s yuan banknote featuring late Chinese chairman Mao Zedong are seen among U.S. and Chinese flags in this illustration picture taken May 20, 2019. REUTERS/Jason Lee/Illustration

May 25, 2019

BEIJING (Reuters) – The United States has called on China to curb the development of its state-owned enterprises (SOEs), a demand that China sees as an “invasion” on its economic sovereignty, Chinese state news agency Xinhua said on Saturday.

Trade tensions between Washington and Beijing escalated sharply earlier this month after the Trump administration accused China of having “reneged” on its previous promises to make structural changes to its economic practices.

Washington later slapped additional tariffs of up to 25% on $200 billion of Chinese goods, prompting Beijing to retaliate.

As trade talks stalled, both sides have appeared to be digging in. China has denied it had walked back on its promises but reiterated it would not make concessions to “matters of principles” to defend its core interests, although no full details were given.

“At the negotiating table, the U.S. government presented a number of arrogant demands to China, including restricting the development of state-owned enterprises,” Xinhua said in a commentary.

SOEs in China enjoy not only explicit subsidies but also hidden benefits such as implicit government guarantees for debts and lower interest for bank loans, analysts and trade groups say.

“Obviously, this is beyond the scope of trade negotiations and touches on China’s fundamental economic system,” Xinhua said.

“This shows that behind the United States’ trade war against China, it is trying to invade China’s economic sovereignty and force China to damage its core interests.”

The commentary added the United States has made unfounded accusations including that Beijing had forced technology transfers from foreign firms operating in China, saying this is all evidence that the U.S side is “forcing China to change its development path.”

(Reporting by Yawen Chen and Ryan Woo; Editing by Frances Kerry)

Source: OANN

FILE PHOTO: Pakistani Prime Minister Imran Khan delivers a speech at the opening ceremony for the second Belt and Road Forum in Beijing
FILE PHOTO: Pakistani Prime Minister Imran Khan delivers a speech at the opening ceremony for the second Belt and Road Forum in Beijing, China, April 26, 2019. REUTERS/Florence Lo/File Photo

May 25, 2019

By Drazen Jorgic

ISLAMABAD (Reuters) – Pakistani Prime Minister Imran Khan warned against the risk of conflict in the region, following a visit to Islamabad by Iranian Foreign Minister Javad Zarif as tensions between Washington and Tehran escalated.

Strains have increased between Iran and the United States, which is a firm backer of Tehran’s regional rival Saudi Arabia, in the wake of this month’s attack on oil tankers in the Gulf region that Washington has blamed on Iran.

Tehran has distanced itself from the bombings, but the United States has sent a aircraft carrier and an extra 1,500 troops to the Gulf, sparking concerns about the risks of conflict in a volatile region.

Khan, who has been seeking to improve Pakistan’s strained relations with neighbor Iran, said he was concerned about the “rising tensions in the Gulf”, but did not specifically name the United States or Saudi Arabia.

“He underscored that war was not a solution to any problem,” Khan’s office said in a statement late on Friday, citing the premier.

“Further escalation in tensions in the already volatile region was not in anyone’s interest. All sides needed to exercise maximum restraint in the current situation.”

Washington has been seeking to increasingly tighten sanctions against Iran, as relations continue to worsen under President Donald Trump.

At the end of the two-day visit to Pakistan, Zarif told Iranian state-run newswire IRNA that U.S. allegations against Tehran were increasing tensions.

“These actions are also a threat to global peace and stability,” he said.

Earlier this month, four tankers, including two belonging to Saudi Arabia, were bombed near the United Arab Emirates’ Fujairah emirate, one of the world’s largest bunkering hubs, located just outside the Strait of Hormuz.

Washington has accused Iran’s Revolutionary Guards of carrying out the attacks, and the Trump administration has declared a national security-related emergency that would clear the sale of billions of dollars’ worth of weapons to Saudi Arabia, the United Arab Emirates and other countries, bypassing congressional approval.

Pakistan’s relations with Iran have also been strained in recent months, with both sides accusing each other of not doing enough to stamp out militants allegedly sheltering across the border.

(Reporting by Drazen Jorgic; Editing by Sam Holmes)

Source: OANN

FILE PHOTO: Pakistani Prime Minister Imran Khan delivers a speech at the opening ceremony for the second Belt and Road Forum in Beijing
FILE PHOTO: Pakistani Prime Minister Imran Khan delivers a speech at the opening ceremony for the second Belt and Road Forum in Beijing, China, April 26, 2019. REUTERS/Florence Lo/File Photo

May 25, 2019

By Drazen Jorgic

ISLAMABAD (Reuters) – Pakistani Prime Minister Imran Khan warned against the risk of conflict in the region, following a visit to Islamabad by Iranian Foreign Minister Javad Zarif as tensions between Washington and Tehran escalated.

Strains have increased between Iran and the United States, which is a firm backer of Tehran’s regional rival Saudi Arabia, in the wake of this month’s attack on oil tankers in the Gulf region that Washington has blamed on Iran.

Tehran has distanced itself from the bombings, but the United States has sent a aircraft carrier and an extra 1,500 troops to the Gulf, sparking concerns about the risks of conflict in a volatile region.

Khan, who has been seeking to improve Pakistan’s strained relations with neighbor Iran, said he was concerned about the “rising tensions in the Gulf”, but did not specifically name the United States or Saudi Arabia.

“He underscored that war was not a solution to any problem,” Khan’s office said in a statement late on Friday, citing the premier.

“Further escalation in tensions in the already volatile region was not in anyone’s interest. All sides needed to exercise maximum restraint in the current situation.”

Washington has been seeking to increasingly tighten sanctions against Iran, as relations continue to worsen under President Donald Trump.

At the end of the two-day visit to Pakistan, Zarif told Iranian state-run newswire IRNA that U.S. allegations against Tehran were increasing tensions.

“These actions are also a threat to global peace and stability,” he said.

Earlier this month, four tankers, including two belonging to Saudi Arabia, were bombed near the United Arab Emirates’ Fujairah emirate, one of the world’s largest bunkering hubs, located just outside the Strait of Hormuz.

Washington has accused Iran’s Revolutionary Guards of carrying out the attacks, and the Trump administration has declared a national security-related emergency that would clear the sale of billions of dollars’ worth of weapons to Saudi Arabia, the United Arab Emirates and other countries, bypassing congressional approval.

Pakistan’s relations with Iran have also been strained in recent months, with both sides accusing each other of not doing enough to stamp out militants allegedly sheltering across the border.

(Reporting by Drazen Jorgic; Editing by Sam Holmes)

Source: OANN


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