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2020 Democratic presidential candidate Pete Buttigieg speaks at a campaign event in Des Moines, Iowa, U.S., April 16, 2019. REUTERS/Elijah Nouvelage
April 26, 2019
By James Oliphant
MARSHALLTOWN, Iowa (Reuters) – Four years ago, Donald Trump campaigned in small towns like Marshalltown, Iowa, vowing to restore economic prosperity to the U.S. heartland.
In his bid to replace Trump in the White House, Pete Buttigieg is taking a similar tack. The difference, he says, is that he can point to a model of success: South Bend, Indiana, the revitalized city where he has been mayor since 2012.
The Democratic presidential contender has vaulted to the congested field’s top tier in recent weeks, drawing media and donor attention for his youth, history-making status as the first openly gay major presidential candidate and a resume that includes military service in Afghanistan.
But Buttigieg’s main argument for his candidacy is that he is a turnaround artist in the mold of Trump, although the Democrat does not expressly invoke the comparison with the Republican president.
“I’m not going around saying we’ve fixed every problem we’ve got,” Buttigieg, 37, said after a house party with voters in Marshalltown. “But I’m proud of what we have done together, and I think it’s a very powerful story.”
Critics argue improving the fortunes of a Midwestern city of 100,000 people does not qualify Buttigieg, who has never held national office, for the presidency of a country of 330 million. Others say South Bend still has pockets of despair and that minorities, in particular, have failed to benefit from its growth.
Buttigieg has told crowds in Iowa and elsewhere that his experience in reviving a struggling Rust Belt community allows him to make a case to voters that other Democratic candidates cannot. That may give him the means to win back some of the disaffected Democratic voters who turned their backs on Hillary Clinton in 2016 to vote for Trump.
Watching Buttigieg at a union hall in Des Moines last week, Rick Ryan, 45, a member of the United Steelworkers, lamented how many of his fellow union workers voted for Trump. The president turned in the best performance by a Republican among union households since Ronald Reagan in 1984.
Ryan said he hoped someone like Buttigieg could return them to the Democratic fold.
“He’s aware of the decline in the labor force in America, not just in Indiana or Des Moines or anywhere else,” Ryan said. “Jobs are going overseas. We need a find to way to bring that back.”
Randy Tucker, 56, of Pleasant Hill, Iowa, a member of the International Brotherhood of Electrical Workers, said Trump appealed to union members “desperate for somebody to reach out to them, to help them, to listen to their voice.”
Buttigieg could do the same, he said. “In my heart right now, he’s No. 1.”
PAST VS. FUTURE
Buttigieg stresses a key difference in his and Trump’s approaches.
Trump, he tells crowds, is mired in the past, promising to rebuild the 20th century industrial economy. Buttigieg argues the pledge is misleading and unrealistic.
Buttigieg says his focus is on the future, and he often talks about what the country might look like decades from now.
“The only way that we can cultivate what makes America great is to look to the future and not be afraid of it,” Buttigieg said in Marshalltown.
Buttigieg knows his sexual preference may be a barrier to winning some blue-collar voters. But he notes that after he came out as gay in 2015, he won a second term as mayor with 80 percent of the vote in conservative Indiana.
Earlier this month, he announced his presidential bid at the hulking plant in South Bend that stopped making Studebaker autos more than 50 years ago. After lying dormant for decades, the building is being transformed into a high-tech hub after Buttigieg and other city leaders realized it would never again attract a large-scale industrial company.
“That building sat as a powerful reminder. We hoped we would get back that major employer that would fix our economy,” said Jeff Rea, president of the regional Chamber of Commerce.
Buttigieg is praised locally for spurring more than $100 million in downtown investment. During his two terms, unemployment has fallen to 4.1 percent from 11.8 percent.
But a study released in 2017 by the nonprofit group Prosperity Now said not all of the city’s residents had shared in its rebound. The median income for African-Americans remained half that of whites, while the unemployment rate for blacks was double.
Regina Williams-Preston, a city councilor running to replace Buttigieg as mayor, credits him for the revitalized downtown. But she said he had a “blind spot” when it came to focusing on troubled neighborhoods like the one she represents and only grew more engaged after community pressure.
“He understands it now,” she said. “The next step is figuring out how to open the doors of opportunity for everyone.”
‘ONE OF US’
Trump touts the fact that the United States added almost 300,000 manufacturing jobs last year as evidence he made good on his promise to restore the industrial sector. But that growth still left the country with fewer manufacturing jobs than in 2008.
The robust U.S. economy is likely the president’s greatest asset in his re-election bid, particularly in states he carried in 2016 such as Iowa, Wisconsin, Michigan and Pennsylvania. He won Buttigieg’s home state by 19 points over Clinton in 2016.
Sean Bagniewski, chairman of the Democratic Party in Polk County, Iowa, said Buttigieg would be well positioned to compete with Trump in the Midwest.
“People love the fact that he’s a mayor,” said Bagniewski, who has not endorsed a candidate in the nominating contest. “If you can talk about a positive future, and if you actually have experience that can do it, that’s a compelling vision in Iowa.”
Nan Whaley, the mayor of Dayton, Ohio, which faces many of the same challenges as South Bend, agreed.
“He’s one of us,” Whaley said. “That helps.”
(Reporting by James Oliphant; Editing by Colleen Jenkins and Peter Cooney)
Source: OANN
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., April 24, 2019. REUTERS/Brendan McDermid
April 26, 2019
By Sruthi Shankar and Amy Caren Daniel
(Reuters) – U.S. stock index futures were flat on Friday, as investors paused ahead of GDP data, which is expected to show the world’s largest economy maintained a moderate pace of growth in the first quarter.
Gross domestic product probably increased at a 2% annualized rate in the quarter as a burst in exports, strong inventory stockpiling and government investment in public construction projects offset a slowdown in consumer and business spending, according to a Reuters survey of economists.
The Commerce Department report will be published at 8:30 a.m. ET.
The GDP data comes as investors look for fresh catalysts to push the markets higher. The S&P 500 index is about 0.5% below its record high hit in late September, after surging nearly 17% this year.
First-quarter earnings have been largely upbeat, with nearly 78% of the 178 companies that have reported so far surpassing earnings estimates, according to Refinitiv data.
Wall Street now expects S&P 500 earnings to be in line with the year-ago quarter, a sharp improvement from the 2.3% fall expected at the start of April.
Amazon.com Inc rose 0.9% in premarket trading after the e-commerce giant reported quarterly profit that doubled and beat estimates on soaring demand for its cloud and ad services.
Ford Motor Co shares surged 8.5% after the automaker posted better-than-expected first-quarter earnings largely due to strong pickup truck sales in its core U.S. market.
Mattel Inc jumped 8% after the toymaker beat analysts’ estimates for quarterly revenue, as a more diverse range of Barbie dolls powered sales in the United States.
At 6:52 a.m. ET, Dow e-minis were down 35 points, or 0.13%. S&P 500 e-minis were down 1.5 points, or 0.05% and Nasdaq 100 e-minis were up 10.75 points, or 0.14%.
Among decliners, Intel Corp slumped 7.7% after it cut its full-year revenue forecast and missed quarterly sales estimate for its key data center business.
Rival Advanced Micro Devices declined 0.8%.
Oil majors Exxon Mobil Corp and Chevron Corp are expected to report results later in the day.
(Reporting by Sruthi Shankar and Amy Caren Daniel in Bengaluru; Editing by Anil D’Silva)
Source: OANN
FILE PHOTO: A worker holds a nozzle to pump petrol into a vehicle at a fuel station in Mumbai, India, May 21, 2018. REUTERS/Francis Mascarenhas
April 26, 2019
By Manoj Kumar and Nidhi Verma
NEW DELHI (Reuters) – Surging global oil prices will pose a first big challenge to India’s new government, whoever wins an election now under way, especially as domestic prices have been allowed to lag, meaning consumers are in for a painful surge as they catch up.
For oil-import dependent India, higher global prices could lead to a weaker rupee, higher inflation, the ruling out of interest rate cuts and could further weigh on twin current account and budget deficits, economists warned.
But compounding the future pain, state-run fuel suppliers and retailers have held off passing on to consumers the higher prices during a staggered general election, which began on April 11 and ends on May 23, according to sources familiar with the situation.
That delay is expected to be unwound once the election is over. And there could be additional price increases to make up for losses or profits missed during the period of delayed increases, the sources said.
In some major Asian countries, such as Japan and South Korea, pump prices are adjusted periodically so they move largely in tandem with international crude prices.
That was what was supposed to happen in India but the election means there have been many days when pump prices have been unchanged.
In New Delhi, for example, while crude oil prices have gone up by nearly $9 a barrel, or about 12 percent, in the past six weeks, gasoline prices have only risen by 0.47 rupees a liter, or 0.6 percent.
State-controlled fuel suppliers and retailers declined to say why they had delayed price increases, or discuss whether there has been any pressure from the government of Prime Minister Narendra Modi.
A government spokesman declined to comment.
The opposition Congress party said Modi’s government was violating its own policy of daily price revision by advising the state oil companies to hold prices steady.
“The government should cut fuel taxes otherwise consumers will have to pay much higher oil prices once the elections are over,” said Akhilesh Pratap Singh, a senior leader of the Congress party.
(GRAPHIC: India Polls: Fuel price hike lags crude surge – https://tmsnrt.rs/2XLlxik)
Nitin Goyal, treasurer at the All India Petroleum Dealers Association, representing fuel stations in 25 states, said prices were similarly held down for 19 days in the southern state of Karnataka last year, when it held state assembly elections.
Only for them to surge after the vote.
“Consumers should be ready for a rude shock of a massive jump in retail prices, similar to the level we have seen in the Karnataka state election,” Goyal said.
‘CREDIT NEGATIVE’
Sri Paravaikkarasu, director for Asia oil at Singapore-based consultancy FGE, said retail prices of gasoline and gasoil prices would have been up to 6 percent, or about 4 rupee, higher if they had been allowed to rise in line with global prices.
“Indian pump prices have failed to keep up with the recent uptrend in crude prices,” Paravaikkarasu said.
“With the country’s general elections underway, the incumbent government has been keeping pump prices relatively unchanged.”
India had switched to a daily price revision in June 2017 from a revision every two weeks, as the government allowed retailers to set prices.
But the government faced protests last October when retailers raised prices by up to 10 rupees a liter after the crude oil price went above $80 a barrel, forcing it to cut fuel taxes.
Global prices rose to their highest level in 2019 on Thursday, days after the United States announced all Iran sanction waivers would end by May, pressuring importers including India to stop buying Tehran’s oil. [O/R]
Higher oil prices will mean Asia’s third largest economy is likely to see growth of less than 7 percent rate this fiscal year, economists said. Growth slowed to 6.6 percent in the October-December quarter, the slowest in five quarters.
Rating agency CARE has warned that a 10 percent rise in global oil prices could increase demand for dollars, putting pressure on the rupee and widening the current account deficit.
India’s oil import bill rose by nearly one-third in the fiscal year ending March 31 to $140.5 billion, against $108 billion the previous year.
“The increase in international oil prices is a credit negative for the Indian economy,” ICRA, the Indian arm of the Fitch rating agency, said in a note.
“Every $10/ bbl increase in crude oil prices increases the fiscal deficit by about 0.1 percent of GDP.”
Any big price rise would also build a case for the central bank to keep rates steady, or even raise them.
The Reserve Bank of India’s Monetary Policy Committee, which cut the benchmark policy repo rate by 25 basis points this month, warned that rising oil and food prices could push up inflation.
Policymakers are worried that a sustained increase in the oil price in the range of $70-75/barrel or higher can move the rupee down by 3-4 percent on an annual basis.
The rupee has depreciated by 1.24 percent against the dollar since a year high in mid-March.
($1 = 70.1800 Indian rupees)
(Reporting by Manoj Kumar and Nidhi Verma; Editing by Martin Howell and Rob Birsel)
Source: OANN
The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, April 25, 2019. REUTERS/Staff
April 26, 2019
By Medha Singh and Agamoni Ghosh
(Reuters) – European shares slipped on Friday after losses in heavyweight banks and Glencore outweighed gains in healthcare and auto stocks, while investors remained on the sidelines ahead of U.S. economic data for the first quarter.
The pan-European STOXX 600 index was down 0.1 percent by 0935 GMT, eyeing a modest loss at the end of a holiday-shortened week. Banks-heavy Italian and Spanish indices were laggards.
The banking index fell for a fourth day, at the end of a heavy earnings week for lenders.
Britain’s Royal Bank of Scotland tumbled after posting lower first quarter profit, hurt by intensifying competition and Brexit uncertainty, while its investment bank also registered poor returns.
Weakness in investment banking also dented Deutsche Bank’s quarterly trading revenue and sent its shares lower a day after the German bank abandoned merger talks with smaller rival Commerzbank.
“The current interest rate environment makes it challenging for banks to make proper earnings because of their intermediary function,” said Teeuwe Mevissen, senior market economist eurozone, at Rabobank.
Since the start of April, all country indexes were on pace to rise between 1.8 percent and 3.4 percent, their fourth month of gains, while Germany was strongly outperforming with 6 percent growth.
“For now the current sentiment is very cautious as markets wait for the first estimates of the U.S. GDP growth which could see a surprise,” Mevissen said.
U.S. economic data for the first-quarter is due at 1230 GMT. Growth worries outside the United States resurfaced this week after South Korea’s economy unexpectedly contracted at the start of the year and weak German business sentiment data for April also disappointed.
Among the biggest drags on the benchmark index in Europe were the basic resources sector and the oil and gas sector, weighed down by Britain’s Glencore and France’s Total, respectively.
Glencore dropped after reports that U.S authorities were investigating whether the company and its subsidiaries violated certain provisions of the commodity exchange act.
Energy major Total said its net profit for the first three months of the year fell compared with a year ago due to volatile oil prices and debt costs.
Chip stocks in the region including Siltronic, Ams and STMicroelectronics lost more than 1 percent after Intel Corp reduced its full-year revenue forecast, adding to concerns that an industry-wide slowdown could persist until the end of 2019.
Meanwhile, healthcare, which is also seen as a defensive sector, was a bright spot. It was helped by French drugmaker Sanofi after it returned to growth with higher profits and revenues for the first-quarter.
Luxembourg-based satellite operator SES led media stocks higher after it maintained its full-year outlook on the back of the company’s Networks division.
Automakers in the region rose 0.4 percent, led by Valeo’s 6 percent jump as the French parts maker said its performance would improve in the second half of the year.
Continental AG advanced after it backed its outlook for the year despite reporting a fall in first-quarter earnings.
Renault rose more than 3 percent as it clung to full-year targets and pursues merger talks with its Japanese partner Nissan.
(Reporting by Medha Singh and Agamoni Ghosh in Bengaluru; Editing by Gareth Jones and Elaine Hardcastle)
Source: OANN
FILE PHOTO: A shopper looks at food at a supermarket in Tokyo February 26, 2015. REUTERS/Yuya Shino
April 26, 2019
TOKYO (Reuters) – Japan’s household spending likely rose for a fourth straight month in March, a Reuters poll found on Friday, but weak factory output and exports could still push the economy into a mild contraction in the first quarter.
Household spending is expected to have risen 1.7 percent in March from a year earlier, the poll of 14 economists showed, the same rate of growth posted in February.
“The employment situation is favorable but wage recovery remains moderate, which is why private consumption lacks momentum,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
“Still, domestic demand will likely be relatively solid till a planned sales tax hike in October. But after that, the economy is seen weakening unless external demand becomes strong enough to boost Japan’s economy.”
Japan is scheduled to raise its sales tax hike to 10 percent from 8 percent in October, after Prime Minister Shinzo Abe twice postponed it.
The last sales tax increases from 5 percent in 2014 dealt a blow to private consumption, which accounts for about 60 percent of the economy.
The government will announce household spending data at 8:30 a.m. Japan time on Friday, May 10 (2330 GMT, May 9).
Recent data showed Japan’s industrial output fell in January-March at the fastest pace in almost five years, while exports fell for a fourth straight month.[nL3N2272AR][nL3N21T1SQ]
(Reporting by Kaori Kaneko; Editing by Kim Coghill)
Source: OANN
FILE PHOTO: An aerial photo looking north shows shipping containers at the Port of Seattle and the Elliott Bay waterfront in Seattle, Washington, U.S. March 21, 2019. REUTERS/Lindsey Wasson
April 26, 2019
By Lucia Mutikani
WASHINGTON (Reuters) – The U.S. economy likely maintained a moderate pace of growth in the first quarter, which could further dispel earlier fears of a recession even though activity was driven by temporary factors.
The Commerce Department’s gross domestic product (GDP) report to be published on Friday at 8:30 a.m. EDT (1230 GMT) is expected to sketch a picture of an economy growing close to potential, mostly reflecting the impact of an ebbing boost from a giant fiscal stimulus and past interest rate increases.
Gross domestic product probably increased at a 2.0 percent annualized rate in the first quarter as a burst in exports, strong inventory stockpiling and government investment in public construction projects offset slowdowns in consumer and business spending, according to a Reuters survey of economists.
With global growth still sluggish, the surge in exports is likely to reverse and the inventory build will probably need to be worked off, which could curtail production at factories. That could restrain growth in the second quarter.
The economy grew at a 2.2 percent pace in the October-December period. Growth has stepped down from a peak 4.2 percent pace in the second quarter of 2018, when the White House’s $1.5 trillion tax cut package jolted consumer spending.
Economists estimate the speed at which the economy can grow over a long period without igniting inflation at between 1.7 and 2.0 percent. The economy will mark 10 years of expansion in July, the longest on record.
“The economy remains solid, but we anticipate a slowing in the pace of growth in the medium term as the tailwinds from fiscal stimulus fade and the headwinds of tighter monetary policy take hold,” said Sam Bullard, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.
The economy stumbled at the turn of the year, with a batch of weak economic reports suggesting first-quarter GDP growth as low as a 0.2 percent rate. The soft data stream stoked fears of a recession that were also exacerbated by a brief inversion of the U.S. Treasury yield curve.
Some of the weak data, especially retail sales, were blamed on a 35-day partial shutdown of the federal government, which hurt confidence and delayed processing of tax refunds. Since the shutdown ended on Jan. 25, economic data have mostly perked up, leading to a sharp upgrading of first-quarter GDP estimates.
“Slower, but moderate economic growth is continuing and we might see some slight acceleration as we head into second quarter,” said Sung Won Sohn, an economics professor at Loyola Marymount University in Los Angeles.
WEAK DOMESTIC DEMAND
The improvement in the economy’s fortunes has been mirrored by strong corporate profits for the quarter.
Some economists caution that growth could surprise on the downside because of a seasonal quirk. The so-called residual seasonality has tended to understate economic growth in the first quarter. Though the government said last year it had addressed the methodology problem, economists believe residual seasonality has not been entirely eliminated from the data.
A surge in exports and weak imports are expected to have sharply narrowed the trade deficit in the first quarter. Trade is believed to have added more than one percentage point to GDP after being neutral in the fourth quarter.
Trade tensions between the United States and China have caused wild swings in the trade deficit, with exporters and importers trying to stay ahead of the tariff fight between the two economic giants.
The trade standoff has also had an impact on inventories, which are expected to have increased in the first quarter at their strongest pace since 2015. Part of the inventory build is related to weak demand, especially in the automotive sector.
Inventories are expected to have contributed a full percentage point to first-quarter GDP after adding one-tenth of a percentage point in the October-December period.
Excluding trade and inventories, the economy is expected to have expanded at a roughly 1.6 percent rate in the first quarter. Economists said Federal Reserve officials were likely to focus on this growth measure.
The Fed recently suspended its three-year monetary policy tightening campaign, dropping forecasts for any interest rate hikes this year. The U.S. central bank increased borrowing costs four times in 2018.
“The composition of the data will not look favorably on domestic economic activity, nor provide a positive forward look at current quarter activity,” said Joe Brusuelas, chief economist at RSM in New York. “Policymakers will likely look past this growth report when formulating rate policy.”
Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, is expected to have slowed significantly from the fourth quarter’s 2.5 percent rate. Economists said the government shutdown was the main factor behind the anticipated deceleration in spending.
A moderation is also expected in businesses spending on equipment because of the delayed impact of sharp drops in oil prices toward the end of 2018 and fading depreciation provisions in the 2018 tax bill. Supply chain disruptions caused by Washington’s trade war with Beijing were also seen crimping business investment.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
Source: OANN
FILE PHOTO: Bank of Canada Governor Stephen Poloz speaks during a news conference in Ottawa, Ontario, Canada, January 9, 2019. REUTERS/Chris Wattie
April 26, 2019
OTTAWA (Reuters) – The Bank of Canada could start hiking rates again “sometime down the road,” although such a move will depend on whether upcoming economic data backs up its assessment that a current slowdown is only a temporary detour, the central bank’s head said on Thursday.
The Bank of Canada has raised interest rates five times since July 2017, although it has stayed on the sidelines in recent decisions as global trade concerns, the slumping oil sector and a weaker housing sector have weighed on the Canadian economy.
The bank again held rates steady on Wednesday but took a more dovish stance than in recent releases, removing wording around the need for “future hikes,” while lowering its growth forecasts for 2019.
But in a televised interview with Maclean’s magazine on Thursday, Governor Stephen Poloz said the central bank believed the slowdown would be temporary, lasting “a couple of quarters,” and implied the worst was already over.
“What we have to do then is wait and see if the data proves to us that we were right about that,” he said. “Assuming we are, then sometime down the road we’ll be able to say: ‘OK, now it’s time to start normalizing again,’ but that remains to be seen.”
He repeated that any move would be data-dependent.
The Bank of Canada estimates its neutral range is between 2.25 and 3.25 percent. The overnight interest rate is currently at 1.75 percent.
Poloz also said there was nothing to signal that Canada was on the verge of recession, but when asked if U.S. President Donald Trump’s protectionist trade policies could provoke a new global recession, he said: “Certainly.”
“When you think about the gains in income and living standards that have been created by trade liberalization in a postwar period, to erase even a portion of those would be to risk causing a recession globally,” Poloz said.
(Reporting by Julie Gordon and David Ljunggren in Ottawa; Editing by Peter Cooney)
Source: OANN
FILE PHOTO: Employees of Toyota Motor Corp. work on the assembly line of Mirai fuel cell vehicle (FCV) at the company’s Motomachi plant in Toyota, Aichi prefecture, Japan May 17, 2018. REUTERS/Issei Kato
April 26, 2019
By Stanley White
TOKYO (Reuters) – Japan’s factory output fell in March for the first time in two months and inventories rose at the fastest pace in a year as the U.S.-Sino trade war dents the country’s manufacturing sector.
Separate data showed retail sales picked up in March and labor demand remains the strongest in decades, but these positive figures are unlikely to ease policymakers’ concerns about a slowdown in global trade flows.
Factory output fell 0.9 percent in March, data by the Ministry of Economy, Trade and Industry (METI) showed, more than a median estimate for a 0.1 percent decline in a Reuters poll of economists. That followed a 0.7 percent increase in February.
The mounting pressure on Japan’s economy from weak external demand has hurt exports and threatens corporate profits, which could weigh on capital expenditure and make it more difficult to keep growth on track, analysts say.
Industrial output fell in March due to a 3.4 percent decline in car output and a 6.7 percent decline in the production of machines used to make semiconductors and flat-panel displays, the data showed.
In another source of concern, inventories rose 1.6 percent in March, the fastest increase in a year, due to higher inventories of metals, plastics, and heavy equipment.
The rise in inventories suggests makers of these goods could curb output in the future.
Manufacturers surveyed by the ministry expect production to rise 2.7 percent in April and 3.6 percent in May, but METI changed its assessment of output to say it is weakening recently.
Retail sales – a key gauge of private consumption that makes up about 60 percent of the economy – rose 1.0 percent in March from a year earlier, more than a 0.8 percent annual gain expected by economists.
Friday’s batch of data comes a day after the Bank of Japan said it would keep interest rates low for at least another year, in a move to dispel uncertainty over its commitment to support the economy and drive inflation.
Japan’s policymakers are nervously monitoring developments overseas but have few policy options if weakness in the global economy continues to damage the country’s outlook, some economists say.
The Sino-U.S. trade war has also had a negative effect on domestic growth, as a slowing Chinese economy curbed demand for mobile phone parts and chip-making equipment from Japan.
Uncertainty over Britain’s exit from the European Union and jittery global financial markets have added to a growing list of worries for policymakers.
Additional data released on Friday showed Japan’s jobless rate edged up to 2.5 percent in March from 2.3 percent previously, and job availability held steady at 1.63 per applicant, hovering at a 44-year high.
Tokyo’s core consumer price index (CPI), which includes oil products but excludes fresh food prices, rose an annual 1.3 percent in April from a year earlier, more than the median estimate for a 1.1 percent annual increase.
(Editing by Jacqueline Wong)
Source: OANN
FILE PHOTO: One hundred dollar notes are seen in this photo illustration at a bank in Seoul January 9, 2013. REUTERS/Lee Jae-Won
April 26, 2019
By Shinichi Saoshiro
TOKYO (Reuters) – The dollar hovered near a two-year high against its peers on Friday, supported by strong U.S. capital goods orders and awaiting first-quarter GDP data which could further reinforce the greenback’s bullish standing.
The dollar index versus a basket of six major currencies stood at 98.128 after advancing to 98.322 on Thursday, its highest since May 2017.
Data on Thursday showed new orders for U.S.-made capital goods increased by the most in eight months in March. That follows other recent U.S. data that show strength in retail sales and exports which have eased concerns of the world’s biggest economy sharply slowing.
The markets are watching first-quarter U.S. gross domestic product data due later on Friday (1230 GMT) for signs of whether the United States remains stronger than other leading economies.
According to a Reuters survey of economists, GDP probably increased at a 2.0 percent annualized rate in the quarter. The economy grew at a 2.2 percent pace in the October-December period.
“We expect the GDP data to underline steady economic recovery. Differences in economic fundamentals is a key driver for currencies now that the Fed – and more recently the Swedish and Japanese central banks – have adopted a dovish stance,” said Shin Kadota, senior strategist at Barclays in Tokyo.
Sweden’s central bank said on Thursday that recent weak inflationary pressures meant an interest rate hike would come slightly later than it had planned, sending the Swedish crown to a 17-year low.
In a move to dispel any doubt over its commitment to ultra-loose policies, the Bank of Japan on Thursday put a time frame on its forward guidance for the first time by telling investors that it would keep interest rates at super-low levels for at least one more year.
The euro was a touch higher at $1.1139 but within reach of $1.1117, its lowest level since June 2017 plumbed on Thursday.
The single currency has shed nearly 1 percent against the dollar this week, weighed by worries about the health of the euro zone economy.
The dollar was down 0.1 percent at 111.52 yen after shedding 0.5 percent overnight.
The Australian dollar was steady at $0.7018 after ending Thursday little changed.
The Aussie has lost roughly 2 percent this week, during which it sank to a near four-month trough as soft domestic inflation data boosted the prospect of a rate cut by the Reserve Bank of Australia.
(Reporting by Shinichi Saoshiro; Editing by Kim Coghill)
Source: OANN
FILE PHOTO: Shipping containers are seen at a port in Shanghai, China July 10, 2018. REUTERS/Aly Song
April 26, 2019
By Shrutee Sarkar
BENGALURU (Reuters) – Major central banks are done tightening policy, according to a majority of economists polled by Reuters, with the growth outlook wilting across developed and emerging economies along with scant prospects for a surge in inflation.
While that is largely reflected in bond markets, with major sovereign bond yields falling this year, global equities have rallied, and the S&P 500 index is near record highs after its best start this year in more than three decades.
One striking conclusion from the latest surveys of over 500 economists from around the world, covering more than 40 economies, was not just a toning down of the economic outlook, but a clear shift away from long-held optimistic views.
Although economists who answered an additional question were split on whether a deeper global economic downturn was more likely than a synchronized rebound, this year’s growth outlook was downgraded or left unchanged for 38 of the countries polled.
“The recent weakness of global growth will persist for much longer than is commonly assumed. A dovish turn by central banks and stimulus in China will not be enough to boost world GDP growth from its current slow pace,” noted Jennifer McKeown, head of global economics at Capital Economics.
“Disappointing economic performance will leave inflation very low and cause monetary policy to be loosened almost across the board. But we do not see this prompting any meaningful recovery until 2021.”
Global growth was forecast to average 3.4 percent this year, the lowest since polling began for 2019 almost two years ago. The most optimistic prediction was also more modest than at the start of the year.
The 2020 forecast held at 3.4 percent, the joint lowest since Reuters began polling on it.
However, the 2019 consensus was a touch higher than the International Monetary Fund’s latest view of 3.3 percent.
The risk of an escalation of the U.S.-China trade war and prospects of Britain exiting the European Union without a deal – two of the more prominent threats that initially drove the current slowdown – have eased.
Yet most major central banks have been hinting at a move away from hiking rates, and nearly 60 percent of more than 200 economists who answered a separate question said they were confident the global tightening cycle was over.
On Thursday, the Bank of Japan dispelled any doubt about its commitment to ultra-loose policies and Sweden’s central bank said a forecast interest rate hike would come slightly later than it had planned.
The U.S. Federal Reserve is done raising rates until at least the end of next year, with about a third of economists polled predicting at least one rate cut by then.
With euro zone economic growth and inflation prospects dimming, the European Central Bank may have missed its opportunity to raise rates before the next downturn.
“The ECB blames the euro zone weakness on a slowdown in China and concerns about the trade war. The Fed, meanwhile, pointed the finger to Europe and China as the main drags on U.S. growth. But with everyone looking across the border for a scapegoat, someone must inevitably be watching the wrong space,” noted Elwin de Groot, head of macro strategy at Rabobank.
“One could speculate that the central banks are pointing the finger just because they have little confidence that their actions are effective.”
Growth forecasts for developed economies – including Germany, France, Italy, Spain, Britain, Japan, Australia, the United States and Canada – for this year and next weakened.
It was not very different for emerging market economies, despite efforts from policymakers to boost sluggish growth.
Economic growth in major economies from Asia to Africa to Latin America was predicted to lose more momentum.
Although India is still expected to be the fastest-growing major economy, growth predictions were lowered compared with the previous poll.
“Looser fiscal and monetary policy should help to cushion the impact of weaker export demand on growth in emerging Asia. Nevertheless, regional growth this year is still likely to slow to its weakest rate in a decade,” added Capital Economics’ McKeown.
(Analysis and additional reporting by Indradip Ghosh in Bengaluru; Polling and reporting by the Reuters Polls team in Bengaluru and bureaus in Shanghai, Tokyo, London, Milan, Paris, Oslo, Istanbul, Johannesburg, Toronto, Brasilia, Mexico City, Lima, Buenos Aires, Bogota, Caracas and Santiago; Editing by Ross Finley and Hugh Lawson)
Source: OANN
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