Bloomberg: Uber Is Blamed for the Mistakes of New York’s Leaders

Uber Is Blamed for the Mistakes of New York’s Leaders Failing to understand market forces will make matters worse. Bloomberg, August 6, 2018     Can’t I leave the city for a long weekend without you people screwing everything up? I thought I explained all of this back in May of this year (How Taxi…

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EU acts to protect firms from Donald Trump’s sanctions against Iran

Companies told to ignore White House demands to drop all business with Iran

The EU has launched an attempt to protect European businesses from Donald Trump’s sanctions against Iran as the US administration voiced its intent to apply maximum pressure on Tehran by vigorously applying its punitive measures.

The sanctions are to enter into force at midnight (US east coast time). At the same time, a blocking statute – last used to protect EU firms from US sanctions against Cuba – will be brought into force in an attempt to insulate firms and keep alive a deal designed to limit the Iranian government’s nuclear aspirations.

Related: North Korea frustrates US as ‘maximum pressure’ eases on sanctions

Related: Trump plays dangerous game with anti-Iran Twitter rant

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Nationwide will not pass on full 0.25% interest rate rise to most savers

Many of the building society’s savers will see only a 0.1% increase

Nationwide is not passing on last week’s Bank of England’s 0.25% rate rise in full to savers in the first sign that big financial institutions will use the base rate to increase profit margins.

The building society, one of the biggest mortgage and savings institutions in the UK, said that while its tracker mortgage customers will see a 0.25% rise in their payments, many of its savers will see only a 0.1% increase in rates.

Related: Bank of England raises interest rates to 0.75%

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German factory orders slump; Brexit fears push pound to 11-month low – as it happened

All the day’s economic and financial news, as Germany’s manufacturers suffer a big drop in new orders, and the pound falls towards $1.29

Earlier:

Time for a recap:

Brexit fears have dragged the pound down to its lowest level in almost a year.

If the theological obsession of the unelected takes priority over the economic wellbeing of the people then it’s a bureaucrats’ Brexit.

“We are working constructively, day and night, to reach a deal with the United Kingdom and I think this is also reflected in the fact that the next negotiation round is scheduled for 16 and 17 of August.”

Boom! Capital Economics have predicted that the pound could slide back to $1.20 if Britain can’t agree a deal with the EU.

Even though sterling has already fallen a long way against the dollar, it would probably drop a lot more if fears of a “no deal” materialised, says analyst John Higgins.

After all, investors still seem to be assigning a fairly low probability to this outcome. Unlike in the run-up to the vote for Brexit in June 2016, there has been no surge in the demand for options to protect against a slump in sterling. And in the past few months, it has only fallen a few cents more against the dollar than might have been expected given the shift in UK/US rate expectations. …

The upshot is that we wouldn’t be surprised if, in the event of no deal, the exchange rate plunged towards, or even below, the level of circa $1.20/£ that it reached in early 2017.

Over in the eurozone, Greece has received the final tranche of its bailout – as it prepares to exit the programme in a fortnight.

Final disbursement of €15bn made to #Greece today: last important step towards the completion of the @ESM_Press programme on 20 August and to the new chapter that is about to open. now has a strong buffer to smooth its path back to market financing. @EU_Commission @EEAthina

As the death toll rose to 94 – prime minister Alexis Tsipras, whiplashed by public discontent over its handling of the fires, accepted the resignation of the head of the country’s civil protection agency this morning.

The resignation, which follows the government’s replacement of the heads of the fire and police services last night, has spurred speculation Tsipras will move ahead with a far-reaching reshuffle to boost his two-party coalition’s flagging popularity imminently.

Steven Barrow, strategist at South Africa’s Standard Bank, thinks the pound is falling because time is running out to agree a Brexit deal.

He warns (via the FT) that the selloff could intensify this autumn.

“We think the timescale is unrealistic and, as this starts to dawn on the market, it could just prove another factor tipping risk assets over the edge in the autumn.

Sterling caught a dose of the “Brexit blues” today, says Connor Campbell of financial spread-betting group SpreadEx.

He blames Dr Fox’s warning that a no-deal Brexit was a 60:40 shout, on top of Bank of England governor Mark Carney’s concerns.

Though the Western markets were almost uniformly in the red, the day’s real loser was the pound.

Plunging half a percent against the dollar – cable is at a fresh 11 month low – and 0.3% against the euro, sterling was spooked by the apparent increase in likelihood of a ‘no-deal’ Brexit, with international trade secretary Liam Fox echoing Mark Carney’s claims last week that the chances of the UK leaving the EU without an agreement in place is becoming more and more of a reality.

Brexit worries have also pulled the pound down against the euro today.

Sterling has dropped below €1.12 today, a decline of 0.35%. Back in April it was worth almost €1.16, meaning UK holidaymakers got a little bit more for their money overseas.

Polling company ORB has bad news for the government: public support for Theresa May’s handling of the Brexit negotiations has hit a record low.

Just 24% of the public approve of the way things are going, they say, things are going well, down from 40% back in April.

NEW Public confidence in the #Brexit negotiations continues to fall, hitting another record low.

76% say they disapprove of the way in which the Government is handling the negotiations.

Full tables/charts here: https://t.co/Gn3C3ZU51N#UK #TheresaMay #politics pic.twitter.com/wcB75eEjat

European stock markets have slipped into the red today.

Investors are worrying about the decline in German factory orders in June and the lack of Brexit progress, meaning the FTSE 100 didn’t get its typical boost from the weakening pound.

“European stock markets opened mixed today as the trade dispute between the US and China continues to hang over investors and stocks…

There has been an marked escalation in the trade war, with President Trump’s claiming the US was winning the trade dispute.”

The drop in the pound has been the main event on a quiet session, says Boris Schlossberg, managing director of FX Strategy BK Asset Management.

He writes:

“The biggest story of the day was the continued slide in cable which hit fresh 11 month highs as it dipped below towards $1.2950 support on renewed fears of a hard Brexit.”

The British pound slipped to an 11-month low on Monday, on renewed fears of a hard Brexit in May 2019 https://t.co/RVwcBVOZa8

The latest attacks on Europe from eurosceptic voices such as Liam Fox are pushing the pound down, argues Commerzbank currency strategist Ulrich Leuchtmann.

Leuchtmann says:

“The voices forecasting a hard Brexit are becoming increasingly shrill. The FX [foreign exchange] market is slowly beginning to work out that these people might successfully torpedo a constructive solution.”

The pound sank to its lowest level in 11 months as traders worry the risks of a no-deal Brexit are rising https://t.co/XgyFBlG4y8 pic.twitter.com/PPBBpEq88r

Over in Downing Street, the prime minister’s spokesman has denied that Britain is likely to leave the EU without a deal.

He told reporters at the regular lobby briefing that:

“We continue to believe that a deal is the most likely outcome because reaching a good deal is not only in the interests of the UK, it is in the interests of the EU and its 27 members.”

Why a no-deal Brexit worries the City:

Carney right to be concerned about consequences of no-deal #Brexit. This week’s Economist makes good point about likely acrimoniousness of no deal, which wld aggravate negative impact – UK, Ireland wld be hit worst, by a large margin. pic.twitter.com/bWrUvtT436

The pound is hitting new 11-month lows, due to Brexit worries and a general move into the US dollar this morning.

Sterling sinks to 11-month low vs dollar after UK trade minister says no-deal Brexit likely https://t.co/UaruCvMnRX @tomfinn2 pic.twitter.com/I1tKFbBtYI

UBS Wealth Management has cut its recommendation for clients to go ‘overweight’ on shares, due to the threat of a trade war.

It fears that the dispute will get worse in the months ahead, with “several painful rounds of talks and new tariff measures” on the horizon.

“While we expect the trade disputes to ultimately be resolved before the world is tipped into another recession, our base case now assumes things will get worse before they get better.

“The benign macroeconomic environment, and strong fundamentals, have emboldened a recent sense of market optimism. But there is a very real danger of overlooking the possibility of the trade situation getting worse, which could have significant impacts, such as supply-chain disruptions, reduced hiring, and lower investment.

The drop in German factory orders may indicate that the country’s growth rate is slowing fast, warns Mikael Sarwe of Nordea Markets:

Back from 4 weeks vacation. First data that hits the wires – German factory orders. Sincerely hope that there is something fishy with the number. Otherwise we are in for a much more severe slowdown than expected. Cold shower… pic.twitter.com/qGEJ9qfTXi

Newsflash: The pound has hit its lowest level since last September, amid heightened worries over Brexit.

Sterling fell half a cent this morning to $1.2954. That takes it below its mid-July low to the weakest point in 11 months.

STERLING FALLS TO 11-MONTH LOW OF $1.2957; TRADERS CITE DOLLAR STRENGTH, UK TRADE MINISTER COMMENTS ON NO-DEAL BREXIT – Reuters News #Sterling #GBP #Eur #Brexit

Pound hits 11 month low against the U.S. dollar after Liam Fox’s warning of a no-deal Brexit.
Wonder if the Telegraph will do a front page like they did on Mark Carney, when sterling was pretty much unchanged? pic.twitter.com/IFSsxyv5uw

Back in the UK, car sales have crept up in July, despite a drop in demand for diesel cars again.

“Manufacturers have been racing to clear stock before new regulations on fuel economy and emissions take effect in September, resulting in some great opportunities for consumers.”

Reuters reports that the Chinese media turned up the heat on Donald Trump over his trade policies:

The overseas edition of the ruling Communist Party’s People’s Daily newspaper singled out U.S. President Donald Trump in an editorial on Monday, saying he was starring in his own “street fighter-style deceitful drama of extortion and intimidation”.

Fears of a trade war with America hit China’s stock market today.

The Shanghai composite index fell by 1.25%, as traders fretted about the threat of tariffs hurting global trade.

Tariffs are working big time. Every country on earth wants to take wealth out of the U.S., always to our detriment. I say, as they come,Tax them. If they don’t want to be taxed, let them make or build the product in the U.S. In either event, it means jobs and great wealth…..

..Because of Tariffs we will be able to start paying down large amounts of the $21 Trillion in debt that has been accumulated, much by the Obama Administration, while at the same time reducing taxes for our people. At minimum, we will make much better Trade Deals for our country!

The drop in German factory orders was much steeper than expected, says Bloomberg:

Orders fell 4 percent from the previous month — eight times as much as forecast in a Bloomberg survey of economists — and the 0.8 percent drop from a year ago was the first annual decline since July 2016.

German manufacturers took a hit in June as a slide in overseas demand knocked factory orders amid escalating trade tensions – Bloomberg – https://t.co/axQUmDMNpE pic.twitter.com/hqtKK76NTl

The size and scale of the drop in German factory orders in June is almost too bad to be true, suggests Marc Ostwald of ADM Investor Services.

He writes:

The fact that every single category fell – be that domestic, Eurozone & Non-Eurozone or Capital Goods, Consumer Durables or Intermediate Goods – looks to be highly anomalous, in so far as there is rarely ever a month where there is a “parallel shift” down, barring events such as the global financial crisis of 2008.

Economist Fred Ducrozet of Pictet Bank points out that ‘core’ German factory orders also fell in June:

Huge drop in German new orders (-4.0% MoM, third largest in ten years). Almost too big to be true, but the setback looks broad-based at first sight. https://t.co/FM3CKAVf8P

Here’s the chart with German ‘core’ factory orders (excluding major orders). Not great, but slightly less terrible than the headline numbers. pic.twitter.com/VimwVQYbFG

The broader picture is that German factory orders have fallen in five of the first six months of 2018, as this chart from the Financial Times show:

The data covers a month when the transatlantic trade relations between the US and the European Union were worsening, ahead of a meeting between US President Donald Trump and European Commission President Jean-Claude Juncker in July.

Carsten Brzeski of Dutch bank ING also believes Germany is being buffeted by rising trade tensions.

Here’s his take on today’s data:

German industrial orders took a severe hit in June, dropping by 4% month-on-month, from [up] 2.6% month-on-month in May. On the year, new orders were down by 0.8%.

Even though new orders data are highly volatile, the June report could be a tentative sign of how trade tensions are hitting the German economy. Foreign orders from outside the eurozone dropped by almost 6% MoM.

German industrial orders took a severe hit in June, which could be a sign that trade tensions are starting to bite, says @CarstenBrzeskihttps://t.co/vqvdajiafI

Oliver Rakau of Oxford Economics says today’s German factory data is “horrendous”, and a sign that economic uncertainty is dampening demand.

Today’s horrendous factory orders all but confirm that German industry has a tough H2 ahead as uncertainty starts to bite and the automotive sector has to deal with new emission test standards.

Decline of German June factory orders was broad based across sector & regions. This was a bad report even accounting for the usual monthly volatility. In my view, an important reason is that uncertainty has begun to bite weighing esp. on investment goods orders. pic.twitter.com/oV07vKZIPM

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Donald Trump’s trade wars appear to be biting.

“Regarding the latest development, uncertainty caused by trade policy probably played a role.”

European Opening Calls:#FTSE 7678 +0.25%#DAX 12651 +0.28%#CAC 5499 +0.37%#MIB 21655 +0.31%#IBEX 9765 +0.25%

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Are Donald Trump’s policies hurting long-term US growth? | Kenneth Rogoff

The country’s presidents have more influence over long-term trends than short-term fluctuations

President Donald Trump regularly thumps his chest and claims credit for each new uptick of the fast-growing US economy. But when it comes to economic performance, the country’s presidents have considerably more influence over long-term trends than over short-term fluctuations.

Trump’s tax cuts and spending hikes have indeed provided extra short-term stimulus. So, too, apparently, have foreign buyers of American products such as soybeans, who are rushing to stock up before the tariff war fully heats up.

Related: Is this the end of the road for the euro? | Hans-Werner Sinn

Many of the regulations that Trump is targeting ought to be strengthened, not eliminated

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