FILE PHOTO: A man looks at an electronic board showing the Nikkei stock index outside a brokerage in Tokyo, Japan, January 7, 2019. REUTERS/Kim Kyung-Hoon
June 17, 2019
By Tomo Uetake
TOKYO (Reuters) – Asian shares wobbled near one-week lows on Monday as investors turned cautious ahead of a closely-watched Federal Reserve meeting, while political tensions in the Middle East and Hong Kong kept risk appetite in check.
European stock were expected to open higher, with futures for Britain’s FTSE climbing 0.4% and Germany’s DAX up about 0.2%.
MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed by early afternoon, after opening slightly weaker. Japan’s Nikkei average also closed flat.
Asian markets got a quick boost after Hong Kong’s Hang Seng Index jumped as much as 1.4%. At the weekend, the territory’s leader Carrie Lam climbed down on a bill that would have allowed extradition to China.
The Hang Seng fell for three sessions in a row through Friday, after the extradition bill triggered mass protests and some of the worst unrest seen in the territory since Britain handed it back to Chinese rule in 1997.
“Last week the issue looked as if it would become another thorny point between the United States and China. As the bill is now being postponed indefinitely, things will likely calm down, which is good for markets,” said Hiroyuki Ueno, senior strategist at Sumitomo Mitsui Trust Asset Management.
Mainland Chinese shares traded within a tight range, with benchmark Shanghai Composite up 0.2% and the blue-chip CSI 300 rising 0.1%.
U.S. Secretary of State Mike Pompeo told Fox News on Sunday that President Donald Trump would raise the issue of Hong Kong’s human rights with China’s President Xi Jinping at a potential meeting of the two leaders at the G20 summit in Japan later this month.
Wall Street stocks ended lower on Friday as investors turned cautious before this week’s Fed meeting, while a warning from Broadcom on slowing demand weighed on chipmakers and added to U.S.-China trade worries.[.N]
Investors were waiting for more clues from the Fed after policymakers raised expectations for a rate cut in recent weeks amid worries about mounting fallout from the U.S.-Sino trade war.
Strong U.S. retail sales data on Friday rolled back expectations of a Fed rate cut at this week’s meeting to 17.5%, from 31% shortly before the release of the data on Friday, according to CME Group’s FedWatch tool. But bets of an easing by the July meeting remain high at 84%.
“The week ahead is likely to provide some clarification for investors on three fronts that have been a source of uncertainty. The FOMC meeting, with updated forecasts, is center stage,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.
A private gauge on eurozone’s manufacturing sector as well as U.S.-China trade frictions will also be watched closely, Chandler said.
Financial markets were sideswiped by a sudden escalation in Sino-U.S. trade tensions in early May, with growing anxiety among investors that a protracted standoff could tip the global economy into recession.
Geopolitical tensions in the Middle East added another layer of uncertainty after the United States blamed Iran for attacks on two oil tankers in the Gulf of Oman last week.
Hopes that global central banks will keep the money spigots open have helped to temper some of the fears, and all eyes are on the Fed’s two-day meeting starting on Tuesday.
The Bank of Japan also meets this week and is widely expected to reinforce its commitment to retain a massive stimulus program for some time to come.
The retail sales report also sent short-dated U.S. Treasury yields higher, flattening the yield curve.[L2N23L10H]
Benchmark 10-year notes was last at 2.106%, while two-year bond yield edged up, shrinking the spread between two- and 10-year yields to 23.7 basis points compared to more than 30 earlier this month.
A Reuters poll showed a growing number of economists expect the Fed policymakers to cut interest rates this year, although the majority still see it holding steady.
In currency markets, the dollar index against a basket of six major currencies climbed to 97.583 on Friday, its highest level in almost two weeks, after the U.S. retail sales data eased fears that the world’s largest economy is slowing sharply.
The index last stood at 97.510, while the euro fetched $1.1216, near the lower end of its weekly trading range.
Oil prices rose on Monday after U.S. Secretary of State Pompeo said Washington will take all actions necessary to guarantee safe navigation in the Middle East, as tensions mounted following attacks on tankers last week.[O/R]
Brent futures added 0.4% to $62.27 a barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 0.3% to $52.67.
Spot gold eased 0.2% to $1,338.17 an ounce after hitting a 14-month peak on Friday.
Bitcoin jumped overnight to $9,391.85, its highest level in 13 months. It was last quoted at $9,193.21.
(Additional reporting by Hideyuki Sano; Editing by Shri Navaratnam & Kim Coghill)
FILE PHOTO: The Federal Reserve building is pictured in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie/File Photo
June 17, 2019
By Ann Saphir and Howard Schneider
SAN FRANCISCO/WASHINGTON (Reuters) – The U.S. Federal Reserve, facing fresh demands by President Donald Trump to cut interest rates, is expected to leave borrowing costs unchanged at a policy meeting this week but possibly lay the groundwork for a rate cut later this year.
New economic projections that will accompany the U.S. central bank’s policy statement on Wednesday will provide the most direct insight yet into how deeply policymakers have been influenced by the U.S.-China trade war, Trump’s insistence on lower interest rates, and recent weaker economic data.
Analysts expect the “dot plot” of year-end forecasts for the Fed’s benchmark overnight lending rate – the federal funds rate – will show a growing number of policymakers are open to cutting rates in the coming months, though nowhere near as aggressively as investors expect or Trump wants.
The Fed is also widely, though not universally, expected to remove a pledge to be “patient” in taking future action on rates, opening the door to a possible cut at its coming policy meetings.
Risks may be rising, but “I don’t think they want to box themselves into a corner,” said Carl Tannenbaum, chief economist at Northern Trust. “The markets are set up for a cut in July, and if they don’t get it, financial conditions will tighten.”
The federal funds rate is currently set in a range of 2.25% to 2.50%.
The Fed’s policy-setting committee is due to release its latest statement and economic projections at 2 p.m. EDT (1800 GMT) on Wednesday after the end of a two-day meeting. Fed Chairman Jerome Powell will hold a press conference shortly after.
MIND THE DOTS
The Fed’s last set of economic and policy projections, released in March, showed most policymakers foresaw no need to change rates this year and only very gradual rate hikes thereafter. (For a graphic of the gap between market and Fed expectations, please see https://tmsnrt.rs/2WzJ6tu.)
But since that meeting the economic outlook has become cloudier.
Recent U.S. retail sales numbers were strong. But while unemployment has held near a 50-year low of 3.6%, U.S. employers created a paltry 75,000 jobs in May. Inflation, which Powell says is low in part because of temporary factors, continues to undershoot the Fed’s 2% target.
The Atlanta Fed forecast on Friday that gross domestic product will increase at a 2.1 percent annualized rate in the April-June quarter, a drop from the 3.1 percent pace of the first three months of the year.
Trade uncertainty has increased as well, with Trump using the threat of tariffs on goods from Mexico to force the country to curb the number of mostly Central American immigrants crossing the U.S.-Mexico border.
He has also vowed to slap more tariffs on Chinese imports if no trade deal is reached when he meets Chinese President Xi Jinping at a Group of 20 summit at the end of this month in Japan.
Concern that mounting tariffs could further slow U.S. and global economic growth is one of the chief reasons traders in interest rate futures loaded up on contracts anticipating three U.S. rate cuts by the end of the year.
Fed officials may have reason to trim their rate outlook a bit, but meeting market expectations would involve a dramatic shift. Nine of the Fed’s current 17 policymakers would have to move their rate projections downward for the median to reflect a single cut, let alone three.
“Powell will do what he can to try to downplay the dots especially if they don’t show what the markets want them to show,” said Roberto Perli, economist at Cornerstone Macro. “He will have a tough time.”
Adding to the pressure for a rate cut is a yield curve inversion in parts of the market for U.S. government debt, historically a precursor of recessions. The three-month Treasury bill, for instance, has paid out a higher rate than a 5-year Treasury note for the last several months running.
And Trump, who has said that rates should be lowered by perhaps a full percentage point or more, continues to publicly berate the Fed and Powell, his handpicked chairman, for refusing to act.
“I’ve waited long enough,” Trump said in an interview with ABC News last week, talking favorably of the “old days” when Presidents Lyndon Johnson and Richard Nixon intervened forcefully in Fed policy – and set the stage, many economists argue, for the high inflation, economic volatility and recessions that followed in the 1970s.
Most of the more than 100 economists polled June 7-12 by Reuters say they are not penciling in a rate cut until the third quarter of next year. But views are shifting rapidly. Forty respondents expected at least one rate cut sometime in 2019, up from just eight who did in the previous poll.
Within the U.S. central bank, St. Louis Fed President James Bullard is the only policymaker who has said a rate cut may be needed “soon.”
Several others have signaled a readiness to move off their wait-and-see stance, with Powell saying earlier this month in a speech in Chicago that the Fed will act “as appropriate” in the face of risks posed by the global trade war and other developments.
The word “patient,” which had been repeatedly used by the Fed since early this year to signal its willingness to hold off further rate hikes, was notably absent from Powell’s remarks, though the Fed chief stopped well short of suggesting a rate cut was coming soon.
The Fed raised rates four times in 2018 but has since abandoned plans to continue lifting borrowing costs this year.
It is likely to avoid signaling any move to cut rates until it is ready to deliver, predicted Bruce Monrad, a high-yield bond portfolio manager at Boston-based Northeast Investors Trust.
Nevertheless, Monrad added, Fed policymakers may have tied their own hands by letting bets in financial markets stray so far. “They have had six months to control the rhetoric. They really haven’t walked back the market.”
(Reporting by Ann Saphir and Howard Schneider; Editing by Paul Simao)
The Trump administration is doing just about everything it can to slow the flood of undocumented Mexicans and Central Americans coming to the U.S. and claiming asylum. But alleviating our growing border crisis is impossible unless Congress changes our immigration laws.
Sen. John Cornyn, R-Texas, was right when he said Tuesday during a congressional hearing on border security that there is “absolutely no justification whatsoever for Congress to sit on the sidelines and watch as this crisis continues to unfold.” The emergency on the border is “getting worse and worse as Congress sits on its hands and does absolutely nothing” to help.
The border pandemonium is literally fatal. Since December, six migrants have died while in the custody of U.S. Customs and Border Protection. Five were children. This isn’t the fault of the Trump administration’s policies that aim to stanch the stream of illegal immigrants. It’s the result of a border patrol collapsing under the weight of hundreds of thousands of migrants making a dangerous and debilitating journey to the U.S. and needing urgent medical care as soon as they arrive.
In fiscal 2018, border agents apprehended nearly 106,000 “family units,” meaning families that made their way illegally onto U.S. soil and, more often than not, claimed asylum. We’re only halfway through this year, and that number has tripled to more than 316,000.
Why is this happening? It is because everyone south of the border knows that to secure indefinite legal protection to stay in the U.S., they need simply to arrive with children, who by law must not be detained for more than 20 days. When the child is released by border patrol, as it inevitably will be, so too is the person who came with them. That’s why the number of apprehensions of supposed families dwarfs apprehensions of single adults.
News media and Trump’s critics blame administration cruelty for the crisis. They’ve started referring to detention centers as “concentration camps” (see P.xx). But the crisis is caused by our nonsensical asylum laws, which are well intentioned but incapable of dealing with the sort of massive run on the border we’re seeing today. Our laws act as a magnet for illegal immigrants, encouraging migrants to make dangerous journeys with children, across Mexico, and enter our country without documentation.
Asylum claims at the border are rising rapidly. The vast majority of migrants who claim asylum, 90%, pass a first screening. They’re ordered to show up at court on a specified date that, because of a backlog of about a million cases, may be five years later. In that time, they’re allowed to work legally within the U.S. Even so, some 40% don’t show up for their court hearings, having disappeared into the country, perhaps forever.
Kevin McAleenan, acting homeland security secretary, is calling for reform, so the asylum process can no longer be abused by migrants who aren’t really fleeing persecution in their own countries but are simply looking for a better way of life in the biggest economy in the world. That’s the lure of the United States. Congress should raise the bar for who can qualify for asylum, McAleenan argues, and make it much easier to remove people quickly if they don’t meet the standard.
Asylum laws are to provide a safe haven to people who arrive at our door with a well-founded fear of persecution. If you’re genuinely fleeing drug gangs out to kill you and your family in Mexico or Canada, you should be let in. If you are persecuted by Iran and can get a flight to America, this country should grant you asylum and keep you safe.
But our crisis is from South American and Central American migrants fleeing El Salvador or Venezuela and merely passing through Mexico. Most arrivals at our southern border are not Mexicans.
The question is, why didn’t they stop in Mexico? And why should they become this country’s responsibility? There are many good reasons to prefer the U.S. to Mexico — more jobs, more freedom, more welfare — but none of these are remotely valid reasons to grant asylum.
These are simple economic migrants, encouraged by massive loopholes in the law and the fecklessness of a Congress unwilling to doing anything about them. Trump has leaned on Mexico to absorb more of them, and that seems to be working. But for a lasting reform, Congress needs to change the law.
More border security, which Democrats say implausibly that they want, and fewer detained migrants: Shouldn’t everyone jump to these reforms?
The problem is that House Democrats have little political incentive to work with Republicans and the White House on any measure that would reduce the flow of illegal immigrants. Democrats are loath to cooperate with the GOP while they, at the same time, hope to drag Trump down to defeat in the 2020 election. It is certainly true that most Democrats are at best muddled on the immigration question and at worst fully in favor of opening the southern border to anyone who wants to come into the country.
But the party of the Left cannot deny that we have a crisis at the southern border. If Democrats are honest, they’ll admit it’s caused by our asylum laws, and they will help fix them.
President Donald Trump on Sunday defended himself against impeachment by partially quoting freshman lawmaker Alexandria Ocasio-Cortez.
“Rep. Alexandria Ocasio-Cortez. ‘I think we have a very real risk of losing the Presidency to Donald Trump.’ I agree, and that is the only reason they play the impeach card, which cannot be legally used!” Trump tweeted.
Ocasio-Cortez, a member of the powerful House Oversight Committee, earlier Sunday during an appearance on ABC’s “This Week,” said the pressure to impeach Trump grows every day and that frustration with House Speaker Nancy Pelosi’s resistance is “quite real.”
“I think every day that passes the pressure to impeach grows. It’s justifiable,” she said. “I think the evidence continues to come in and I believe that with the president now saying that he’s willing to break the law to win re-election, that — that goes — that transcends partisanship. It transcends party lines. This is now about the rule of law in the United States of America. …”
She later said Democrats “have a very real risk of losing the presidency to Donald Trump if we do not have a presidential candidate that is fighting for true transformational change in the lives of working people in the United States.”
Source: NewsMax Politics
President Donald Trump would raise the issue of Hong Kong human rights with China’s President Xi Jinping at a potential meeting of the two leaders at the G20 summit in Japan this month, U.S. Secretary of State Mike Pompeo said on Sunday.
“I’m sure this will be among the issues that they discuss,” Pompeo said in an interview with “Fox News Sunday.”
Source: NewsMax Politics
FILE PHOTO: A personnel of the National Migration Institute (INM) checks passenger’s ID as a member of the Military Police keeps watch at a checkpoint on the outskirts of Tapachula, in Chiapas state, Mexico June 6, 2019. REUTERS/Jose Torres/File Photo
June 16, 2019
By Roberto Ramirez
TAPACHULA, Mexico (Reuters) – Mexican officials detained nearly 800 undocumented migrants on Saturday, the government said, in one of the biggest swoops against illegal immigration in recent months, as members of the National Guard began patrolling the southern border.
Mexico’s National Migration Institute (INM) said in a statement late on Saturday that 791 foreign nationals were found in four trucks stopped in the eastern state of Veracruz, confirming earlier reports about a mass detention.
The apprehension came as Mexico steps up efforts to reduce a surge of migrants toward the U.S. border under pressure from U.S. President Donald Trump, who vowed to hit Mexican goods with tariffs if Mexico does not do more to stem illegal immigration.
As part of those efforts, Mexico has pledged to deploy 6,000 National Guard members along its border with Guatemala.
Although there have been few signs of that deployment so far, a Reuters reporter near the border in Tapachula this weekend saw a handful of security officials wearing National Guard insignia and spoke to others in military outfits who said they were part of the guard.
Mexico made a deal on June 7 with the United States to avert the tariffs, setting the clock ticking on a 45-day period for the Mexican government to make palpable progress in reducing the numbers of people trying to cross the U.S. border illegally.
There has been a jump in apprehensions at the U.S.-Mexico border this year, angering Trump, who has made reducing illegal immigration one of his signature policy pledges.
Most of those caught attempting to enter the United States are people fleeing poverty and violence in three troubled Central American nations, Guatemala, Honduras and El Salvador.
Mexico’s decision to tighten its border and respond to Trump’s threats has caused tensions within the government, and on Friday, the head of the INM, Tonatiuh Guillen, resigned.
He was replaced by Francisco Garduno, who had previously served as the head of Mexico’s prison system.
(Reporting by by Roberto Ramirez in Tapachula and Dave Graham in Mexico City; Editing by Nick Zieminski and Sonya Hepinstall)
Half of American voters say the Trump administration has gone too far on immigration enforcement, and optimism about the U.S. economy, while still high, has slipped over the past quarter as trade tensions ramp up, a Fox News poll shows.
The 50% who say enforcement of immigration laws has “gone too far” is more than double, 24%, those who say actions haven’t gone far enough. About one in five say the measures are about right.
By a wide majority — 73% to 24% — Americans favor giving legal status to young people brought to the U.S. illegally as children, so-called Dreamers. Allocating more agents to the border was a more popular choice than imposing tariffs on Mexican imports or building a wall on the U.S.-Mexican border.
On tariffs, nearly eight in 10 of those polled had concerns that things they buy will be more expensive. More voters say tariffs hurt rather than help the U.S. economy, with 45% saying they hurt and 33% saying they help.
A majority, 57%, said they were optimistic about the U.S. economy. While still positive, that’s down from 63% in February and 66% in January 2017, around the time of President Donald Trump’s inauguration.
The poll was conducted June 9-12 of 1,001 registered voters nationwide by Beacon Research, a Democratic polling operation, and Republican pollsters Shaw & Co. The margin of error was plus or minus three percentage points.
Source: NewsMax Politics
New polls show former US vice president Joe Biden and four other Democrats leading President Donald Trump, were an election to be held today
Washington (AFP) – A nationwide Fox News poll released Sunday shows President Donald Trump trailing former vice president Joe Biden and no fewer than four other Democratic contenders as early campaigning for the 2020 election begins to gain steam.
A separate survey of battleground states, by CBS, shows Democrats strongly favor Biden as the candidate most likely to beat Trump in next year’s elections.
The Fox poll showed Biden leading Trump by 49 percent to 39 percent among all registered voters nationwide, while Senator Bernie Sanders held nearly the same advantage over the president, at 49 percent to 40 percent.
Holding edges of 1 or 2 points over Trump — albeit within the poll’s 3-point margin of error — were Senators Elizabeth Warren and Kamala Harris, as well as Mayor Pete Buttigieg of South Bend, Indiana.
The polling comes more than 500 days before the November 3, 2020 election, an eternity in the political world. One widely viewed tweet this week shows five presidential candidates in recent decades who trailed at this point in their campaigns — including Trump — but who went on to win.
The president does not officially launch his re-election campaign until Tuesday, at a rally-style event in a huge arena in Orlando, Florida.
– Battleground states –
Still, the Fox poll, conducted June 9 to June 12, is seen as heartening by Democrats eager to chip away at Trump’s popularity, particularly in key battleground states like Pennsylvania and Wisconsin.
Trump’s campaign recently dismissed leaked data from its own pollsters showing Biden with double-digit leads in battleground states. The campaign at first denied the data, but then acknowledged it, branding it as “ancient” because it dated from March.
But the new CBS poll confirms a clear Biden lead in battleground states among Democratic voters, as the crowded race for that party’s nomination begins to take shape.
A belief among Democratic voters that Biden is best positioned to defeat Trump in 2020 was cited by three-quarters of Democrats as a decisive factor in their support.
– Warren on the rise –
The CBS News/YouGov Battleground Tracker survey, conducted May 31 to June 12, said Biden had the backing of 31 percent of Democratic primary voters in 18 key early-voting states.
Biden was trailed by senators Elizabeth Warren (17 percent), Sanders (16 percent) and Kamala Harris (10 percent).
The poll, with a 1.5 percent margin of error, looked at states including Iowa, New Hampshire and South Carolina — which hold primary elections in February, at the top of the electoral calendar — as well as states in the upper Midwest, where Trump eked out narrow but decisive victories in 2016.
Elizabeth Warren has been steadily rising in the polls, only recently reaching statistical equivalency with Sanders, whose support has been slipping.
Sanders acknowledged on Sunday that “polls go up and polls go down” but insisted that the survey showed he was the strongest candidate to defeat Trump.
“I think we can win in Pennsylvania, Wisconsin and Michigan and some of the other battleground states,” the self-styled democratic socialist said on “Fox News Sunday.”
Democrats begin more earnestly winnowing down their field of nearly two dozen candidates when they hold successive nights of televised debates on June 26 and 27.
Representative Alexandria Ocasio-Cortez, the 29-year-old New Yorker who has emerged as a heroine to young progressives, suggested Sunday that Democrats could be in trouble in 2020 if they fail to nominate an energizing candidate with working-class appeal.
She said she would support the 76-year-old Biden if he wins the nomination but added on ABC that “we have to really factor in the enthusiasm of voters … an issue that we had in 2016.”
“We need to pick a candidate that’s going to be exciting to vote for — all people, women, people of all genders, races, income levels.”
But the Fox poll found that Democratic voters, by roughly three-to-one, wanted a nominee who would provide “steady, reliable leadership” rather than a “bold new agenda.”