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U.S., Mexico reach NAFTA deal, turn up pressure on Canada

“The United States and Mexico agreed on Monday to overhaul the North American Free Trade Agreement (NAFTA), putting pressure on Canada to agree to new terms on auto trade and dispute settlement rules to remain part of the three-nation pact.

Auto stocks soared and the S&P 500 and the Nasdaq rallied to record highs on the expectation that Canada would sign onto the deal and ease the economic uncertainty caused by U.S. President Donald Trump’s repeated threats to ditch the 1994 accord.

Details of gains and concessions in the deal were only starting to emerge on Monday. Trump threatened he still could put tariffs on Canadian-made cars if Canada did not join its neighbors and warned he expected concessions on Canada’s dairy protections.”


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Turnbull Loses Support of Key Ministers in Leadership Blow

” Prime Minister Malcolm Turnbull suffered a likely fatal blow to his leadership on Thursday as three key Cabinet ministers resigned and demanded he allow another ballot of party lawmakers to decide his fate.

Finance Minister Mathias Cormann, Communications Minister Mitch Fifield and Jobs Minister Michaelia Cash held a news conference to announce their resignations and demand Turnbull convene an immediate meeting. His chief rival Peter Dutton, a lightning rod for disaffection with the government’s slumping poll ratings, narrowly failed to unseat the prime minister in a vote on Tuesday and intends to challenge again.

The resignations “mean it’s game over for him and Australia will have a new leader by the end of day,” said Haydon Manning, an associate professor of politics and public policy at Flinders University. “My money would be on Dutton but you can’t rule out another candidate giving it a go.” ”


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America’s Booming Economy Comes With a Cost for Global Growth

” Making America great again isn’t proving so great for other parts of the world.

With the rise in the dollar and interest rates already squeezing emerging economies just as President Donald Trump’s trade war threatens China, the U.S. is set to be the only Group of Seven nation to see economic growth accelerate this year as Trump’s tax cuts kick in.

The end of the short-lived euphoria of a synchronized global upswing is already evident in financial markets. NatWest Markets notes its basket of so-called growth assets such as the Australian dollar and copper is down about 4.5 percent this year compared with the almost 7 percent gain of the Standard & Poor’s 500 Index.

The gap in performance “certainly captures the imbalanced nature of growth this year,” said Jim McCormick (NYSE:MKC), head of cross-asset strategy at NatWest.

The global backdrop will frame discussions when the Federal Reserve holds its annual policy symposium this week in Jackson Hole, Wyoming, at which Chairman Jerome Powell will speak. The Fed’s two interest-rate hikes of 2018 have helped lift the dollar almost 6 percent on a trade-weighted basis this year, making it costlier for international borrowers to repay loans. ”


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Dollar Edges Higher with Trade, Political Risk in Focus

” The dollar edged higher against a basket of the other major currencies on Wednesday as investors awaited the outcome of trade talks between China and the U.S. this week and monitored growing political risks in the U.S.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, edged up 0.13% to 95.26 by 04:03 AM ET (08:03 AM GMT) after falling 0.69% the previous day.

Market sentiment has been boosted by the revival of trade talks between Washington and Beijing. ”


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Fed’s Kaplan sees three or four more rate hikes, then a pause

” With the U.S. economy at full employment and inflation at the Federal Reserve’s 2 percent goal, the U.S. central bank should press on with its plan for gradual interest rate hikes at least for the next nine to 12 months, a policymaker said on Tuesday.

Only once short-term rates reach a “neutral” level where they are neither stimulating nor braking the economy should the central bank potentially stop raising rates and figure out what to do next, Dallas Fed President Robert Kaplan said in an essay.

Neutral, he said, is somewhere between 2.5 percent and 2.75 percent.

“It would take approximately three or four more federal funds rate increases of a quarter of a percent to get into the range of this estimated neutral level,” Kaplan wrote in the essay, which was published by the Dallas Fed. ”


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Atlanta Fed Chief Pledges to Oppose Hike Inverting Yield Curve

” Federal Reserve Bank of Atlanta President said prospects for an inversion in the Treasury yield curve, which is widely viewed as a signal of a possible recession, would prompt him to dissent against further interest-rate hikes.

“I pledge to you I will not vote for anything that will knowingly invert the curve and I am hopeful that as we move forward I won’t be faced with that,’’ Bostic said Monday in Kingsport, Tennessee, in response to an audience question. “The market is going to do what the market does, and we have to pay attention and react.’’ ”


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Turkey says central bank swap deal with Qatar to have $3 billion limit

“A currency swap agreement between the Turkish and Qatari central banks will have an overall limit of $3 billion, the Turkish central bank said in a statement on Monday.

The two central banks signed the deal on Friday to provide liquidity and support for financial stability, days after Turkey’s Gulf ally pledged $15 billion in support.”


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Dollar Pushes Higher Amid Hopes for U.S. – China Trade Talks

” The U.S. dollar pushed higher against a currency basket on Monday, buoyed by expectations for trade talks that investors hope will ease tensions between the U.S. and China.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, edged up 0.1% to 96.11 by 03:41 AM ET (07:41 AM GMT) after falling 0.5% on Friday, the largest one day decline in almost a month.

Mounting tensions between the U.S. and its trading partners, along with a currency crisis in Turkey propelled the dollar to 14-month highs late last week. ”


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Turkish lira crisis poses additional risk to German economy – Investing

” Turkey’s currency crisis poses an additional risk to Germany’s economy on top of trade frictions with the United States and the possibility of Britain leaving the European Union without a deal, the German finance ministry said on Monday.

The Turkish lira has lost nearly 40 percent of its value against the dollar this year, hit by a worsening diplomatic rift with the United States and by investor alarm about President Tayyip Erdogan’s influence over monetary policy. ”


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