Top Things to Know Today - page 17
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Or maybe they will reindustrialize again and star wxporting and being an amazing country again. Idiots. Its too soon to know
EUR/GBP: Cross at October 2013 Highs on Sterling Sell-Off
The EUR/GBP cross was soaring on Tuesday and pushed to 32-month highs during the US session, supported mainly be the collapsing sterling. It was seen trading at £0.8530, 1.7% stronger on the day.
The GBP/USD pair fell to fresh three decade lows and was nearing the magical $1.30 mark, with a test of this level possible later in the week.
Earlier in the day, the UK services PMI for June slowed to 52.3 points from 53.5 booked in May. Analysts had expected a decline to 52.8 points.
In the previous session, the construction PMI for June unexpectedly crashed to a seven-year-low of 46.0 points, but sterling did not decline after the number. Friday's manufacturing PMI for June improved to 52.1 points from 50.1 previously.5 Things to Watch on the Economic Calendar This Week
1. China second quarter GDP
China is scheduled to release data on second quarter gross domestic product at 2:00GMT on Friday, or 10:00PM ET, Thursday. The report is expected to show the world's second largest economy grew 6.6% in the three months ended in June, slowing from growth of 6.7% in the preceding quarter, which was the slowest pace in a quarter of a century.
The Asian nation will also publish data on June industrial production, fixed asset investment and retail sales along with the GDP report.
Additionally, China is to publish trade figures on Wednesday. The Asian nation published weaker than expected inflation data over the weekend, reinforcing views that more government stimulus steps will be needed to support the economy.
2. Bank of England rate decision
The Bank of England will release its rate decision as well as minutes of its Monetary Policy Committee meeting at 11:00GMT, or 07:00AM ET, on Thursday.
Expectations for more easing mounted after BoE Governor Mark Carney recently suggested interest rate cuts and additional stimulus will likely be needed over the summer to offset the hit to the economy from Britain's decision to leave the European Union.
A Reuters survey published last week showed that 17 out of 52 economists polled predicted a cut to 0.25% from the current 0.5%, while another two said rates will be chopped to zero. The remaining two-thirds said the rate would be held steady at 0.5%, with policymakers more likely to wait until August to make any move.
Asked more broadly how the BoE was likely to respond to Brexit, a majority of economists who answered the question thought a combination of lower rates and more asset purchases was likely.
3. U.S. June retail sales report
The Commerce Department will publish data on June retail sales at 12:30GMT, or 08:30AM ET, Friday. The consensus forecast is that the report will show retail sales inched up 0.1% last month, after rising 0.5% in May. Core sales are forecast to increase 0.4%, after gaining 0.4% a month earlier.
Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy. Consumer spending accounts for as much as 70% of U.S. economic growth.
4. U.S. inflation data for June
The Commerce Department will publish June inflation figures at 12:30GMT, or 8:30AM ET, Friday. Market analysts expect consumer prices to ease up 0.3%, while core inflation is forecast to increase 0.2%.
On a yearly base, core CPI is projected to climb 2.3%. Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories. The central bank usually tries to aim for 2% core inflation or less.
Rising inflation would be a catalyst to push the Fed toward raising interest rates.
5. U.S. second quarter earnings season kicks off
The focus on Wall Street will shift to corporate earnings next week after a strong June jobs report on Friday gave investors confidence that the U.S. economy was on stable footing and left the S&P 500 within a whisper of a new closing record high.
source
Top 5 things to watch today
Theresa May set to take over as U.K. prime minister.
Global stocks mixed as most rallies take a breather.
FOMC members Kaplan and Harker to speak later Wednesday.
Japan cuts inflation/GDP forecasts as China exports/imports decline.
Oil trades lower on bearish bets for U.S. crude stockpiles.
More from China NDRC, comments on overcapacity, solid economy
The National Development and Reform Commission of the People's Republic of China (NDRC)
Yen set for biggest weekly drop since February '99 as China data boosts risk
The yen hit a three-week low against the dollar on Friday and was set for its biggest weekly fall in 17 years after data pointed to stabilization in the Chinese economy, bolstering global risk sentiment.
The dollar rose to 106.32 yen , its strongest level since June 24 in Asian trade, before giving up some of its gains in Europe to trade at 105.80. European shares fell in early deals hurt by an attack in the French city of Nice that killed more than 80 people. (EU)
For the week though, the dollar has rallied 5.2 percent against the yen, putting it on track for its best weekly performance against the yen since February 1999, as expectations of a huge stimulus from Japan weighed on the yen.
Such speculation has come to the fore after former Federal Reserve Chairman Ben Bernanke visited the Bank of Japan earlier this week, fuelling talk BOJ Governor Haruhiko Kuroda might provide "helicopter money", which would involve the central bank directly financing government spending.
Government and central bank officials directly involved in policymaking, however, have said there is no chance Japan will resort to "helicopter money".
The euro gained 0.6 percent to 117.80 yen (EURJPY=R), while even the battered British pound rose 0.6 percent to 141.42 yen (GBPJPY=R).
"The Chinese data is helping risk sentiment. Overall, we have had some good headlines this week, like more political stability in the UK, expectations of more Japanese stimulus and all these are contributing to investors selling the yen," said Yujiro Goto, currency strategist at Normura.
Latest data from China showed growth, industrial output and retail sales all beat forecasts, indicating there was some resilience in the economy. That is expected to underpin the recent buoyancy of world markets while investors await a better reading from the post-Brexit referendum period in the coming weeks.
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Coup Attempt in Turkey Has Presented the US and Europe With a Huge Dilemma
Turkey's president Recep Erdogan called Friday night's attempted government takeover by a faction within the Turkish military "an act of treason," and vowed that the coup-plotters would "pay a heavy price" for their actions.
"This insurgency is a blessing from Allah, because it will allow us to purge the military" from mutineers, Erdogan said in a statement from Istanbul, shortly after arriving there early Saturday morning.
Earlier Friday night, a faction within the Turkish armed forces calling itself the "Peace at Home Council" said they had seized power, taken over the government, and declared martial law. They deployed forces onto the streets of Istanbul and Ankara, Turkey’s largest city and capital, respectively, and closed two major bridges leading into Istanbul.
A Turkish national intelligence spokesman told AP and CNN that the coup attempt had been "repelled" and "defeated" by early Saturday morning. Forty-two people were reportedly killed in the clashes, according to Turkish officials. More than 120 soldiers have reportedly been arrested.
As many analysts have noted on Twitter, Erdogan's statements from Istanbul seem like a clear sign of what's to come as the leader — whose rule has become increasingly authoritarian over the past year — prepares to crack down on the military he has long perceived as a threat to his rule.
"Presuming they fail, Erdogan authoritarianism gets a lot stronger," geopolitical expert Ian Bremmer, president of Eurasia Group, tweeted earlier on Friday.
Nadav Pollak , a senior fellow at the Washington Institute, echoed Bremmer's prediction.
"If Erdogan was looking for excuses to strengthen his authoritarian rule, he just found a lot of them in Turkey."
The White House released a statement on Friday condemning the uprising and calling on all parties in Turkey to "support the democratically elected Turkish government."
But the coup attempt “presents a dilemma to the United States and European governments," Richard N. Haass, the president of the Council on Foreign Relations, told the New York Times on Friday.
"Do you support a nondemocratic coup,” or an “increasingly nondemocratic leader?”
Drifting toward 'one-man rule'
Erdogan was elected prime minister in 2003. After his reign came to an end in 2014, he ran for president, which, until then, was more of a ceremonial role. Over the past year, however, Erdogan has attempted to significantly expand his presidential powers in the wake of roughly 14 terrorist attacks on Turkish soil.
"Never before in this system has one person amassed so much power in his hands as Erdogan has," Soner Cagaptay, director of the Turkish Research Program at the Washington Institute for Near East Policy, told The Washington Post in May.
"Turkey has visibly turned into a one-man rule," Aykan Erdemir, a former member of Turkish parliament and senior fellow at the Foundation for Defense of Democracies, told Business Insider shortly after then-Turkish prime minister Ahmet Davutoglu resigned under pressure in May.
"Erdogan dominates the whole playing field, and he is refusing the share power with anyone."
Davutoglu's "ambivalence" about a proposed change to Turkey's constitution that would "formalize the powerful role of the president that Erdogan has forged" contributed significantly to the tension that ultimately forced Davutoglu's hand, Steven Cook, a senior fellow for Middle East and Africa studies at the Council on Foreign Relations, told Business Insider at the time.
He added: "I don't recall an episode like this before, though of course there were four coups in Turkey. This is significantly different, however."
Erdogan's crackdown on Turkey's press and government critics, meanwhile, has prompted repeated condemnation from the US and the broader international community.
"His efforts to veer toward Islamism and crack down on the news media and opposition groups have left American officials caught between their instincts to support democracy and their reliance on an increasingly authoritarian leader," David Sanger, the New York Times' national security correspondent, wrote on Friday.
That is the political context in which the attempted coup erupted on Friday night — an attempt on Erdogan's power that at least one foreign policy analyst contends is the direct result of the president's "broken promises and deepening paranoia."
'Was a coup inevitable? No," Michael Rubin, a resident scholar at the American Enterprise Institute, wrote in Foreign Policy. " But those plotting it presumably justify their action in the belief that they are saving Turkey from a leadership increasingly out-of-touch and ideological."
He continued:
Aaron Stein, a Turkey analyst at the Atlantic Council, told the Wall Street Journal on Friday that the coup "underscores Turkish political instability at a time when the country is mired in a conflict… and the host and active member of the anti-ISIS coalition."
He added: “The coup may fail, but the result will lead to purges, regardless of who eventually ends up in power.”
'The military is not his friend'
Intriguingly, the government's relationship with the military — long plagued by mutual suspicion and mistrust — seemed to be improving over the past year, if not longer.
Istanbul-based journalist Noah Blaser laid it out well in Foreign Policy:
Blaser noted that Ankara has given the military virtually "free reign" to battle insurgents linked to the Kurdistan Workers' Party (PKK) in the southeast when a peace treaty broke down in mid-2015, granting them "greater immunity from legal prosecution amid accusations of security force rights violations."
As Cengiz Candar, a Turkey expert writing for Al-Monitor, pointed out, however, the warming ties stemmed primarily from a relationship of convenience.
“It was an alliance,” Candar wrote. “But the military is not his friend — not emotionally, not institutionally, not ideologically.”
Erdogan has shown he is "willing to spurn even his closest of AKP allies" in the name of amending the constitution and strengthening his executive authority, Dr. Jonathan Schanzer, vice president of research at the Washington, D.C.-based think tank Foundation for Defense of Democracies told Business Insider in May.
"It is clear that Erdogan is tightening his grip on absolute power," Schanzer said.
Even so, Erdogan was democratically elected, and mass protests against the military coup on the streets of Istanbul and Ankara late Friday night and early Saturday morning showed that Turkish citizens still prefer his government's rule to a military takeover.
"The AKP and Erdogan might be very polarizing and might have alienated an important segment of society, but they still have the backing of almost 50% of the population," Dr. Gonul Tol, the Director of Middle East Institute's Center for Turkish Studies, told Business Insider on Friday.
Even if they viewed Erdogan as a lesser evil than the military, however, Turkish citizens are evidently aware of how their country got to this point.
“Turkey has been polarized and brought to the brink of war by one man, Erdogan,” Halil Aktas, a protester who had taken to Istanbul's Taksim Square, told Foreign Policy . “This will not continue a single day more.”
source
Coup Attempt in Turkey Has Presented the US and Europe With a Huge Dilemma
Turkey's president Recep Erdogan called Friday night's attempted government takeover by a faction within the Turkish military "an act of treason," and vowed that the coup-plotters would "pay a heavy price" for their actions.
"This insurgency is a blessing from Allah, because it will allow us to purge the military" from mutineers, Erdogan said in a statement from Istanbul, shortly after arriving there early Saturday morning.
Earlier Friday night, a faction within the Turkish armed forces calling itself the "Peace at Home Council" said they had seized power, taken over the government, and declared martial law. They deployed forces onto the streets of Istanbul and Ankara, Turkey’s largest city and capital, respectively, and closed two major bridges leading into Istanbul.
A Turkish national intelligence spokesman told AP and CNN that the coup attempt had been "repelled" and "defeated" by early Saturday morning. Forty-two people were reportedly killed in the clashes, according to Turkish officials. More than 120 soldiers have reportedly been arrested.
As many analysts have noted on Twitter, Erdogan's statements from Istanbul seem like a clear sign of what's to come as the leader — whose rule has become increasingly authoritarian over the past year — prepares to crack down on the military he has long perceived as a threat to his rule.
"Presuming they fail, Erdogan authoritarianism gets a lot stronger," geopolitical expert Ian Bremmer, president of Eurasia Group, tweeted earlier on Friday.
Nadav Pollak , a senior fellow at the Washington Institute, echoed Bremmer's prediction.
"If Erdogan was looking for excuses to strengthen his authoritarian rule, he just found a lot of them in Turkey."
The White House released a statement on Friday condemning the uprising and calling on all parties in Turkey to "support the democratically elected Turkish government."
But the coup attempt “presents a dilemma to the United States and European governments," Richard N. Haass, the president of the Council on Foreign Relations, told the New York Times on Friday.
"Do you support a nondemocratic coup,” or an “increasingly nondemocratic leader?”
Drifting toward 'one-man rule'
Erdogan was elected prime minister in 2003. After his reign came to an end in 2014, he ran for president, which, until then, was more of a ceremonial role. Over the past year, however, Erdogan has attempted to significantly expand his presidential powers in the wake of roughly 14 terrorist attacks on Turkish soil.
"Never before in this system has one person amassed so much power in his hands as Erdogan has," Soner Cagaptay, director of the Turkish Research Program at the Washington Institute for Near East Policy, told The Washington Post in May.
"Turkey has visibly turned into a one-man rule," Aykan Erdemir, a former member of Turkish parliament and senior fellow at the Foundation for Defense of Democracies, told Business Insider shortly after then-Turkish prime minister Ahmet Davutoglu resigned under pressure in May.
"Erdogan dominates the whole playing field, and he is refusing the share power with anyone."
Davutoglu's "ambivalence" about a proposed change to Turkey's constitution that would "formalize the powerful role of the president that Erdogan has forged" contributed significantly to the tension that ultimately forced Davutoglu's hand, Steven Cook, a senior fellow for Middle East and Africa studies at the Council on Foreign Relations, told Business Insider at the time.
He added: "I don't recall an episode like this before, though of course there were four coups in Turkey. This is significantly different, however."
Erdogan's crackdown on Turkey's press and government critics, meanwhile, has prompted repeated condemnation from the US and the broader international community.
"His efforts to veer toward Islamism and crack down on the news media and opposition groups have left American officials caught between their instincts to support democracy and their reliance on an increasingly authoritarian leader," David Sanger, the New York Times' national security correspondent, wrote on Friday.
That is the political context in which the attempted coup erupted on Friday night — an attempt on Erdogan's power that at least one foreign policy analyst contends is the direct result of the president's "broken promises and deepening paranoia."
'Was a coup inevitable? No," Michael Rubin, a resident scholar at the American Enterprise Institute, wrote in Foreign Policy. " But those plotting it presumably justify their action in the belief that they are saving Turkey from a leadership increasingly out-of-touch and ideological."
He continued:
Aaron Stein, a Turkey analyst at the Atlantic Council, told the Wall Street Journal on Friday that the coup "underscores Turkish political instability at a time when the country is mired in a conflict… and the host and active member of the anti-ISIS coalition."
He added: “The coup may fail, but the result will lead to purges, regardless of who eventually ends up in power.”
'The military is not his friend'
Intriguingly, the government's relationship with the military — long plagued by mutual suspicion and mistrust — seemed to be improving over the past year, if not longer.
Istanbul-based journalist Noah Blaser laid it out well in Foreign Policy:
Blaser noted that Ankara has given the military virtually "free reign" to battle insurgents linked to the Kurdistan Workers' Party (PKK) in the southeast when a peace treaty broke down in mid-2015, granting them "greater immunity from legal prosecution amid accusations of security force rights violations."
As Cengiz Candar, a Turkey expert writing for Al-Monitor, pointed out, however, the warming ties stemmed primarily from a relationship of convenience.
“It was an alliance,” Candar wrote. “But the military is not his friend — not emotionally, not institutionally, not ideologically.”
Erdogan has shown he is "willing to spurn even his closest of AKP allies" in the name of amending the constitution and strengthening his executive authority, Dr. Jonathan Schanzer, vice president of research at the Washington, D.C.-based think tank Foundation for Defense of Democracies told Business Insider in May.
"It is clear that Erdogan is tightening his grip on absolute power," Schanzer said.
Even so, Erdogan was democratically elected, and mass protests against the military coup on the streets of Istanbul and Ankara late Friday night and early Saturday morning showed that Turkish citizens still prefer his government's rule to a military takeover.
"The AKP and Erdogan might be very polarizing and might have alienated an important segment of society, but they still have the backing of almost 50% of the population," Dr. Gonul Tol, the Director of Middle East Institute's Center for Turkish Studies, told Business Insider on Friday.
Even if they viewed Erdogan as a lesser evil than the military, however, Turkish citizens are evidently aware of how their country got to this point.
“Turkey has been polarized and brought to the brink of war by one man, Erdogan,” Halil Aktas, a protester who had taken to Istanbul's Taksim Square, told Foreign Policy . “This will not continue a single day more.”
source
GBP: Relief Rally Following BoE Meeting Proves Short Lived
The pound has fully reversed its initial gains recorded against the US dollar following last week’s surprise decision by the BoE to leave monetary policy unchanged.
It mainly reflected the MPC’s view that it needed a little more time to better assess the outlook for the UK economy following the Brexit vote and to set the optimal policy response.
The two most dovish MPC members Vlieghe and Haldane have both clearly signalled that they favour an aggressive easing of policy.
More specifically BoE Chief Economist Haldane stated that “a package of monetary easing measures is likely necessary” which he thinks needs to be delivered “promptly as well as muscularly”. It supports our view that the pound will weaken further over the summer.
The BoE’s updated Quarterly Inflation Report is likely to reveal a materially weaker outlook for the UK economy providing justification for aggressive monetary easing.
Germany ZEW July survey current situation 49.8 vs 51.8 exp
Germany ZEW July survey now released 19 July 2016
Ouch.. Negative territory for expectations . That'll be the Brexit factor I guess. Some are still scared it seems.
EURUSD a tad lower as is EURGBP
Update: ZEW say weakness is indeed due to Brexit. Special concerns about exports and European banking/financial system.