Monday, July 31, 2017

Bloomberg News - Congress Slaps Putin With More Sanctions. Does He Actually Care?

A Q&A with the Defense Department's former Eastern Europe point person, Evelyn Farkas, on the Russian tyrant's real goals in Ukraine, Syria and beyond.

Friday, July 28, 2017

Reuters News - Fed holds rates steady, expects portfolio cuts 'relatively soon'

Jason Lange and Lindsay Dunsmuir

WASHINGTON (Reuters) - The Federal Reserve kept interest rates unchanged on Wednesday and said it expected to start winding down its massive holdings of bonds "relatively soon" in a sign of confidence in the U.S. economy.
The Fed kept its benchmark lending rate in a target range of 1.00 percent to 1.25 percent, as expected, and said it was on track to continue the slow path of monetary tightening that has lifted rates by a percentage point since 2015.
In a statement following a two-day policy meeting, the U.S. central bank's rate-setting committee indicated the economy was growing moderately and job gains had been solid.
It also noted that both overall inflation and a measure of underlying price gains had declined - trends which have worried some policymakers - but that it expected the economy to continue strengthening.
"The committee expects to begin implementing its balance sheet normalization program relatively soon," the Fed said, adding that it would follow a plan outlined in June to trim its holdings of U.S. Treasury bonds and mortgage-backed securities.
U.S. stock prices rose following the release of the policy statement while yields on U.S. government debt fell. The dollar dropped against a basket of currencies.

Thursday, July 27, 2017

BBC News - UK economic growth rate edges slightly higher

Film crew
A stronger UK film industry helped the service sector to expand, the ONS said.

UK economic growth edged slightly higher in the three months to June, as a stronger service sector offset weaker manufacturing and construction.
The Office for National Statistics (ONS) said the economy expanded by 0.3% in the quarter, up from 0.2% in the previous three months.
But the ONS added there had been a "notable slowdown" from last year.
Within the service sector, the retail and the film industries helped underpin growth, the ONS said.
"While services such as retail, and film production and distribution showed some improvement in the second quarter, a weaker performance from construction and manufacturing pulled down overall growth," said Darren Morgan, ONS head of national accounts.
Although the economy eked out higher growth in the second quarter, it was below levels seen in the final three months of 2016, when gross domestic product grew by 0.7%.
Analysts said the latest ONS data, which is an initial estimate, diminished the chances of an interest rate rise any time soon.
Chris Williamson, chief business economist at IHS Markit, said: "The confirmation of the lacklustre performance of the economy so far this year surely also diminishes the chance of an interest rate hike any time soon, especially as growth prospects for coming months have become increasingly skewed to the downside."
Film production in the UK, plus box-office receipts from cinemas, was one of the best performing parts of the economy during the April-June period.
The ONS said ticket receipts from Wonder Woman and the latest Pirates of the Caribbean film were among the items that had boosted the sector it calls motion picture activities.
That sector grew 8% in the second quarter.
GDP figures
Chancellor Philip Hammond said the UK economy had now grown consistently for four-and-a-half years.
"We can be proud of that, but we are not complacent," he added.
"We need to focus on restoring productivity growth to deliver higher wages and living standards for people across the country."
Labour shadow chancellor John McDonnell said: "Growth for the first half of 2017 is below expectations, and it follows continued data showing working families are being squeezed with wages not keeping up with prices."
Aberdeen Asset Management chief economist Lucy O'Carroll said: "This pick-up will be taken as good news, but it really doesn't amount to much.
"The figures are the first estimate of growth, based on very patchy data. They always get revised over time, and often substantially so.
"It's the underlying trends that matter. They don't look favourable at the moment, given the uncertainties around Brexit and the pressure on household budgets from higher inflation."

Construction: Clients 'concerned over the market'

Andrew Sweeney, Care Building Services
The construction sector weakened in the second quarter, according to the ONS.
That was backed up by Andrew Sweeney, from Care Building Services. He told the BBC: "We seem to be pricing a lot more projects. We price projects for clients; we have estimators in the office. After we've priced it the clients pull it because it is coming over the budget.
"We've been given orders for jobs and at the last minute the clients have pulled them away from us due to concerns over the market."

Kallum Pickering, senior UK economist at Berenberg, said the UK's growth in the first half of the year had been its slowest since 2013.
He added: "Whereas growth has accelerated significantly so far this year in continental Europe and many emerging markets, the UK is missing out.
"While the downside risks from the Brexit vote have not yet played out in a major way, the uncertainty stemming from Brexit is leading to caution in all areas of spending and policy that have long-term implications.
"The UK would probably be growing at 2.5% or above this year were it not for Brexit, with strong gains in real wages and more business investment."
The latest growth figure was in line with economists' expectations, and is unlikely to change expectations that, at its policy meeting next week, the Bank of England will keep interest rates at their current record low.
On Monday, the International Monetary Fund downgraded its forecast for UK economic growth this year because of the weak first-quarter figure.
The IMF said it expects UK GDP to grow by 1.7% instead of its previous projection of 2%.

Wednesday, July 26, 2017

BBC News - UK economy sees pick-up in growth

Breaking News image
The UK economy grew by 0.3% in the three months to June, according to the Office for National Statistics (ONS).
The initial estimate showed growth picking up from the first quarter of the year, when it was only 0.2%.
The ONS said the growth was driven by services, particularly retail and the country's thriving film industry.
The modest rise in growth will add to expectations that the Bank of England will keep interest rates at their current record low next week.
Retailers, hotels and restaurants all had a strong quarter and more than offset falls in output in the manufacturing and construction sectors.
Film production in the UK, plus box-office receipts from cinemas, were the next biggest factor behind the rise.
The GDP figure for the second quarter was in line with analysts' expectations.
On Monday, the International Monetary Fund downgraded its forecast for UK economic growth this year because of the weak first-quarter figure.
The IMF now expects UK GDP to grow by 1.7% instead of its previous projection of 2%.

Tuesday, July 25, 2017

Bloomberg News - Platinum Set to Suffer as Diesel Demand and Jewelry Sales Soften

Anglo American Platinum Ltd. sees a surplus of platinum-group metals this year as demand from makers of jewelry and car catalytic converters drops, weighing on prices and adding to pressure on miners.
Lower demand follows falling sales of diesel vehicles in Europe, which use platinum to cut pollution, and a slowing Chinese jewelry market, the Johannesburg-based company said in a statement Monday. Amplats, as the miner majority owned by Anglo American Plc is known, is the world’s biggest producer of the metal.
“The PGM basket price is likely to remain subdued in the near term and as a result we’ll continue to manage the business for a low price environment,” Chief Executive Officer Chris Griffith said on a call with reporters.
Platinum prices are down almost by half in the past six years as the metal lost popularity as a haven investment. Supply from top producer South Africa has remained high even as demand has flagged from an auto industry moving toward emission-free electric vehicles.
As the largest producer with some of the industry’s lowest cost mines, Amplats is better placed than some. About 65 percent of the industry is loss making and a further 5 percent is "on the breadline," Griffith said. "This kind of production environment is undoubtedly likely to lead to further production cuts."
Amplats fell 2.4 percent to 304.14 rand by 10:20 a.m. in Johannesburg.
The company recorded 2.2 billion rand ($170 million) of asset writedowns in the first half, leading to a 55 percent drop in headline earnings to about 750 million rand. It’s selling or shutting its highest-cost mines and aims to improve productivity, Griffith said. Amplats plans to cuts costs by a quarter at the unprofitable Amandelbult, its second-biggest mine.

Monday, July 24, 2017

BBC News - UK air traffic controllers warn of over-crowded skies

Air traffic controllers are warning that UK skies are running out of room amid a record number of flights.
Friday is likely to be the busiest day of the year, with air traffic controllers expecting to handle more than 8,800 flights - a record number.
They have called for a drastic modernisation in the way aircraft are guided across UK airspace.
It comes as the government launches a discussion to shape the UK's aviation industry for the next 30 years.
Air traffic controllers expect to manage a record 770,000 flights in UK airspace over the summer - 40,000 more than last year.
But the ability of the the UK's National Air Traffic Control Service (Nats) to deal with this surge is being stretched to the limit, it is claimed.
Nats director Jamie Hutchison said: "In the last few weeks we have already safely managed record-breaking daily traffic levels, but the ageing design of UK airspace means we will soon reach the limits of what can be managed without delays rising significantly."
The Department for Transport estimates that, if airspace management remains unchanged, there will be 3,100 days' worth of flight delays by 2030 - that is 50 times the amount seen in 2015 - along with 8,000 flight cancellations a year.
Airbus A380 low over residential housingImagage caption
The government's consultation paper sets out a long-term plan for UK aviation
The government wants the public to submit ideas on a wide range of subjects, from airport bag check-ins in town centres to noise reduction targets.
The six themes it will consult on over the coming months are:
  • Customer service
  • Safety and security
  • Global connectivity
  • Competitive markets
  • Supporting growth while tackling environmental impacts
  • Innovation, technology and skills
Transport Secretary Chris Grayling said: "Our new aviation strategy will look beyond the new runway at Heathrow and sets out a comprehensive long-term plan for UK aviation.
"It will support jobs and economic growth across the whole of the UK."
He said the government wanted to consult "as widely as possible" over the next 18 months on its new aviation strategy.
"We've got to get through the Brexit process, we've got to conclude the negotiations, we need to have new agreements with countries like the United States and Canada," he said.
"I'm off next week to meet with my US counterpart to talk about how we make sure that aviation across the Atlantic has a strong future with all the growth potential that's there."
Martin Rolfe, chief executive of Nats, said the government consultation process could take between two and three years, "so millions and millions of people will have a say in aircraft flying over their house".
He told the BBC's Today programme: "Local communities are very obviously concerned about what more traffic might look like, but actually modernising [airspace] means we can keep aircraft higher for longer.
"We can have them descend more steeply than they currently do because modern aircraft are more capable than the types of aircraft that were in service when this airspace was originally designed."
drone and planeImage copyrigh
Image captionThe consultation paper will look at everything from the future of drone technology to baggage handling
Meanwhile, airport capacity is expanding way beyond Heathrow's new runway.
Friday also marks the start of a £1bn investment programme to double the size of Manchester Airport's Terminal 2.
The number of planes taking off and landing at Stansted has gone up every month for almost four years.
Cardiff Airport has seen an 11% rise in traffic, and Luton is recording growth of 7% this year alone.
Controllers in the tower at Stansted AirportImage copyright
Image captionNats is rolling out a new £600m computer system to make traffic control more efficient
The problem of volume has been complicated by shifts in travel patterns.
Destinations including Egypt, Turkey and Tunisia have lost out to Spain, Italy and the US, which means major changes in the flows of traffic into UK airspace.
Nats itself is rolling out a new £600m computer system known as iTec that could result in more flights and fewer delays.