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Hot Brendan Keenan's "Bleak Omens" for Europe!

Discussion in 'Europe' started by Dublin 4, Jan 17, 2018 at 8:01 AM.

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    [​IMG]

    MONDAY, JANUARY 8, 2018



    TOP NEWS

    Fed's Bostic says three rate hikes in 2018 may be too much
    The Federal Reserve may only need to raise interest rates two times in 2018 given weak price pressures and possible loss of public confidence in the central bank's ability to hit a 2 percent inflation target, Atlanta Fed President Raphael Bostic said. Bostic also added his voice to a group of Fed officials concerned that central bank action may "invert" the yield curve and make long-term rates lower than short-term ones, historically a signal of future recession. Separately, San Francisco Fed President John Williams said the U.S. Federal Reserve could better fight a recession by committing to keep interest rates lower for longer to keep average inflation on a steady upward path over the years.

    Euro zone confidence at multi-year high, but inflation expectations fall
    Economic sentiment in the euro zone rose more than expected in December and the business climate indicator hit new highs, European Commission data showed, underlining robust economic growth in the single currency area. The Commission's economic sentiment indicator rose to 116.0 points in December from 114.6 in November. Meanwhile, investors in the euro zone felt more upbeat in January as they shrugged off the lack of a new government in Germany and the global economy picked up, a survey showed, but research group Sentix warned there was a risk of overheating. Sentix's index for the euro zone rose to 32.9 in January from 31.1 in December.

    German industrial orders dip, but trend still strong
    German industrial orders fell in November for the first time since July, data showed, easing slightly after a strong run as Europe's largest economy enjoys robust form. Factories registered a 0.4 percent drop in orders. November's reading from the Federal Statistics Office confounded expectations in a Reuters poll for a 0.5 percent rise. The data also showed that contracts for 'Made in Germany' goods climbed by a revised 0.7 percent in October, an upward revision from a previously reported rise of 0.5 percent. The Economy Ministry, detailing the figures, said the fall in November was due to fluctuations in large orders but added that the trend remained firmly upwards.
    Despite Brexit, EU eyes bigger budget
    The EU executive called for an expanded budget to cover more spending on defense, security and controlling migration despite the upcoming departure of Britain, one of the bloc's main paymasters. European Commission President Jean-Claude Juncker led calls during a forum debating forthcoming negotiations on a new seven-year budget for the share of the bloc's economic output devoted to EU spending be increased by around 10 percent from 2021, the year after Britain will stop paying its substantial share. His budget chief, Guenther Oettinger, said Brussels' funding should be increased from its current 1 percent of gross national income across the bloc to something a little over 1.1 percent.

    Bank of Canada sees capacity pressure, setting up another rate hike
    Canadian companies remain optimistic about future sales despite some moderation from highs, and signs of capacity pressures and labor shortages have picked up, the Bank of Canada said, reinforcing expectations for an interest rate hike. Little economic slack remains, with companies expected to expand operations to accommodate demand as the job market tightens and expectations for U.S. demand remain firm, the central bank said in its quarterly Business Outlook Survey. The chance of a rate hike on Jan. 17 jumped to 86 percent after the report while the two-year yield pushed to its highest since June 2011 at 1.795 percent.

    [​IMG]



    DEEP DIVE

    INSIGHT-In possible boon for White House, Fed ready to lay low as tax plan kicks in
    U.S. Federal Reserve policymakers have come to view Donald Trump's tax overhaul as a short-term economic boost that will neither permanently supercharge the economy, as the president says, or cause an immediate disruption that would require a central bank response, as some analysts have warned.

    ANALYSIS-Bond markets look beyond easy ECB money to first rate rise
    The timing of a European Central Bank rate rise is fast taking over as the main driver of borrowing costs in the euro area as investors begin to sense that the bank's massive stimulus scheme may end sooner rather than later.


    CHART OF THE DAY
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    MARKETS TODAY

    TREASURIES: Treasury yields were little changed after a boost from stronger German government debt and a Federal Reserve official's remarks that the U.S. central bank may only raise rates two times this year. Benchmark10-year notes were down 2/32 to yield 2.48 pct. 2-year notes were unchanged with a yield of 1.97 pct. 30-year bonds were flat, yielding 2.81 pct. The Treasury Department will sell new three-year notes on Tuesday, 10-year notes on Wednesday and 30-year bonds on Thursday. Demand for three-year notes may be mixed given that the U.S. central bank is expected to continue hiking interest rates. But sales of long-term securities are expected to go well.

    FOREX: The dollar rose to a more than one-week high against a basket of other major currencies, helped by a pullback in the euro as investors took profits after the common currency's recent rally. The dollar index was up 0.42 pct at 92.331. The euro slipped 0.52 pct to $1.1966. Sterling lost 0.01 pct to $1.3567. Against the yen, the dollar edged down 0.01 pct to 113.05 yen.

    CORPORATES: Corporate bond spreads were unchanged as attention turned to the quarterly earnings season, with investors expected to focus on what U.S. companies will say about the recently approved tax overhaul and corporate tax cuts. The CDX-IG.29 index was unchanged at 45 bps.

    STOCKS: The S&P 500 barely rose while the healthcare and financial sectors weighed and investors took a breather ahead of earnings season and after the strong rally that marked the start of 2018.Biogen dropped 3.75 pct and Regeneron lost 3.27 pct. Wells Fargo fell 1.13 pct and Citigroup was down 1.17 pct. The Dow fell 12.94 points, or 0.05 pct, to 25,282.93, the S&P 500 gained 4.55 points, or 0.17 pct, to 2,747.7 and the Nasdaq added 20.83 points, or 0.29 pct, to 7,157.39.

    C&E: Oil was little changed, trading near their highest since May 2015, as political concerns in some OPEC nations offset projections for higher U.S. oil production. U.S. crude rose 0.76 pct to $61.91 a barrel. Brent gained 0.41 pct to $67.90 a barrel. Gold edged up 0.04 pct to $1320.29 an ounce. Reuters-Jefferies index was down 0.26 pct at 196.07.


    [​IMG]


    LATAM NEWS

    Mexican inflation seen rising to 16-1/2 year high in Dec
    Mexican inflation likely ticked up in December to its highest rate in 16 1/2 years due to the rising energy and food prices, a Reuters survey of analysts showed. The median forecast of 16 financial market analysts polled by Reuters was that inflation in the economy accelerated to 6.75 percent from 6.63 percent in November, which would be the highest level since May 2001. The analysts' poll also showed the annual core inflation rate was forecast to post a reading of 4.91 percent in December. Mexican consumer prices likely rose in December by 0.57 percent compared with the previous month, with the core figure up by 0.47 percent on the month, the survey showed.

    Chile inflation hit low end of 2017 target –government
    Chile's inflation for the full year of 2017 was 2.3 percent, within the central bank's target range of 2 percent to 4 percent and the lowest in five years, the government said. The CPI rose 0.1 percent in December, below market expectations of 0.18 percent. Core inflation was also 0.1 percent in December. Traders polled in late December said they expected the central bank to hold its benchmark interest rate at 2.50 percent over the next six months. A poll of analysts in mid-December, however, said the bank would likely raise the rate to 2.75 percent in 2018.
     
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    The Italian crisis is developing nicely.
     
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    Berlusconi says Italy can't leave euro, coalition ally disagrees

    “One second after the League is in government it will begin all possible preparations to arrive at our monetary sovereignty. It’s a question of national security,” he said.

    Berlusconi has called for Italy to operate with two currencies, keeping the euro for international trade and tourism while printing its old lira currency for domestic use.

    [​IMG]

    Berlusconi says Italy can't leave euro, coalition ally disagrees
     
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    EU in TURMOIL as study reveals these FOUR countries will pay HUGE price for Brexit

    But Austria, Sweden, Germany and The Netherlands made special deals to pay only 25 per cent of their share of the rebate.

    So when the UK exits, the “rebates on the rebate” will no longer apply, meaning €1.7bn (£1.5bn) will instead have to be paid - and redistributed from the four countries to other member states.

    [​IMG]

    EU in TURMOIL as study reveals these FOUR countries will pay HUGE price for Brexit

    [​IMG] Nitey nitey 4 Phobeez [​IMG]

    [​IMG]
     
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