Reuters News - Wall Street hits record on retail boost

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., February 16, 2017. REUTERS/Brendan McDermid

U.S. stocks rose to fresh record highs on Tuesday, boosted by strong earnings reports from Wal-Mart and other retailers and continued optimism about the economic agenda of President Donald Trump.

The Dow Jones Industrial Average .DJI rose 114.88 points, or 0.56 percent, to 20,738.93, the S&P 500 .SPX gained 14.01 points, or 0.60 percent, to 2,365.17 and the Nasdaq Composite .IXIC added 27.37 points, or 0.47 percent, to 5,865.95.

(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)

BBC News - Ceta: EU parliament backs free trade deal with Canada

Protesters tried to block access to the European Parliament ahead of the vote

The European Parliament has approved a landmark free trade deal with Canada.

EU lawmakers backed the Comprehensive Economic and Trade Agreement (Ceta) by 408-254 votes despite crowds of protesters contesting the deal outside.

It means parts of the deal, such as tariff reduction, will come into force eight years after negotiations began.

But other, more controversial aspects of the deal, such as the investor court system, will require ratification by EU member states which could take years.

What is Ceta?

Reality Check: Would Canada's deal with the EU be a good model for the UK?

There were chaotic scenes outside the parliament building in Strasbourg as protesters blocked access ahead of the vote - only to be dragged off by riot police.

The vote was comfortably, though not overwhelmingly, passed, with 33 members of parliament abstaining. Canadian Prime Minister Justin Trudeau will address the parliament on Thursday.

The Ceta trade deal in numbers

98%

The number of tariffs between the EU and Canada that would be eliminated

€500 million

The estimated amount that EU exporters would save in duties annually

• 3.6m The population of Wallonia
• 36.3m The population of Canada
• 508m The population of the EU

Source: StatCan, Europa.eu

Ceta will see the removal of 99% of non-farm duties between the EU's market of 500 million people and Canada's 35 million - trade worth €63.5bn ($67bn; £54bn) in 2015. That will boost growth and jobs on both sides of the Atlantic, supporters say.

But the deal has been extremely divisive, says the BBC's Europe reporter Gavin Lee - it's triggered many demonstrations across Europe, with critics arguing it will erode labour laws, environmental standards and allow multinational companies to dictate public policy.

Ceta's future was put in temporary doubt last October, when after seven years of talks the small Belgian region of Wallonia vetoed the deal until an addendum was added addressing concerns over the rights of farmers and governments.

The future of the global trade system has also been thrown into question by the election of US President Donald Trump - who has withdrawn from the Trans-Pacific Partnership (TPP) and wants to renegotiate the North American Free Trade Agreement (Nafta).

The result was celebrated by backers of the deal - including Jyrki Katainen, European Commission vice-president for jobs, growth, investment and competitiveness.

But opponents - such as Guido Tallman, a campaigner for the UK group Global Justice UK - pointed out that its full implementation would require ratification by dozens of regional and national parliaments.

BBC News - Retail sales fall unexpectedly in January

Image copyright

Retail sales slipped back unexpectedly in January, following on from December's dip.

Official figures, from the Office for National Statistics (ONS), showed retail sales volumes dropped by 0.3% compared with the previous month, well below the 0.9% rise expected.

The ONS said the data indicated the first signs of a fall in the underlying trend since December 2013.

It said evidence suggested higher fuel and food prices were key factors.

Compared with January 2016, sales were up 1.5%, the weakest performance since November 2013.

Figures earlier this week from the ONS showed inflation rose to its highest level in two and a half years at a time when wage growth was slowing down.

Fuel prices jumped 16.1% in January, the biggest changed since September 2011.

Wary

Kate Davies, senior statistician at the ONS, said: "In the three months to January 2017, retail sales saw the first signs of a fall in the underlying trend since December 2013.

"We have seen falls in month-on-month seasonally adjusted retail sales, both in conventional stores and online, and the evidence suggests that increased prices in fuel and food are significant factors in this slowdown."

Analysts said consumers were becoming wary of spending at a time when employment and earnings growth was slowing and inflation rising.

Samuel Tombs at Pantheon Economics said consumers were starting to "crumble" in the face of inflation pressure.

Ruth Gregory, from Capital Economics, said: "January's surprise fall in the official measure of retail sales volumes has brought the recent run of resilient economic news to an abrupt end. And the rest of the year is shaping up to be tough on the high street, given the expected squeeze on consumers' real pay growth."

Bloomberg News - South Africa Regulator Says Banks Colluded on Forex Trades

A South African antitrust regulator said it found that more than a dozen international and local banks colluded to manipulate foreign currency trades and recommended they be fined 10 percent of their annual turnover.

The Competition Commission identified lenders including Bank of America Merrill Lynch, JPMorgan Chase & Co., BNP Paribas SA, Credit Suisse Group AG, HSBC Holdings Plc and Nomura Holdings Inc. as having participated in price fixing and market allocation in the trading of foreign currency pairs involving the rand since at least 2007. It referred the case to an antitrust tribunal, concluding an investigation that began almost two years ago.

“The respondents manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times,” the commission said in an e-mailed statement Wednesday. “They assisted each other to reach the desired prices by coordinating trading times. They also created fictitious bids and offers, distorting demand and supply in order to achieve their profit motives.”

South Africa’s efforts to better regulate foreign-exchange trading follows a price-rigging scandal in which some of the world’s largest banks agreed to pay fines and plead guilty to conspiring to manipulate markets after being accused of using online chat rooms to collude. The country’s antitrust regulator announced in 2015 that it was investigating banks.

‘Serious Matter’

Bank of America, JPMorgan, Standard Chartered Plc, Commerzbank AG and BNP declined to comment when contacted by Bloomberg. Officials from HSBC Bank Plcweren’t immediately able to comment, while Investec Plc didn’t immediately respond to requests for comment.

Investec said it would cooperate with authorities but was unable to comment further because it didn’t have details of their investigations. Barclays Africa Group Ltd. also said it would cooperate with the authorities, while noting that the regulator had not sought penalties against it. Credit Suisse said it looking into the matter.

South Africa’s central bank said it viewed the allegations as serious matter and would allow proceedings to run their course. The tribunal will now notify the banks of the complaint and ask them to respond, Chantelle Benjamin, a spokesman for the body, said by phone. The banks will then file statements and attend a preliminary meeting to set a date for a full hearing, she said.

The commission has previously uncovered collusion in the country’s bread and flour industry, among cement producers and by construction companies that bid to build stadiums for the 2010 soccer World Cup. Those involved were forced to pay hefty fines.

Reuters News - Senate Republicans push for answers on Trump team's Russia ties

By Susan Heavey | WASHINGTON

Senior Republicans issued their boldest challenge yet to U.S. President Donald Trump on Wednesday, promising to get to the bottom of the relationship between his aides and Russia, and calling for ousted national security adviser Michael Flynn to testify before Congress.

Senator Bob Corker, chairman of the Senate Foreign Relations Committee, and other senators in Trump's party pushed for more information as the White House becomes engulfed by questions about contacts between Trump's team and Russia.

The New York Times reported on Tuesday that phone call records and intercepted calls showed members of Trump's presidential campaign and other Trump associates had repeated contacts with senior Russian intelligence officials in the year before the Nov. 8 election in which Trump defeated Democrat Hillary Clinton.

Flynn was abruptly forced out as Trump's national security adviser on Monday after revelations that he had discussed U.S. sanctions on Russia with the Russian ambassador to the United States, before Trump took office, and that he had later misled Vice President Mike Pence about the conversations.

"Let's get everything out as quickly as possible on this Russia issue," Corker told MSNBC's "Morning Joe" program.

"I would want to make sure, with all of this suspicion, that everybody fully understood what has taken place. Otherwise, maybe there's a problem that obviously goes much deeper than what we now suspect," Corker added.

The drama of Flynn's departure was the latest in a series of White House missteps and controversies since Trump was sworn in on Jan. 20. Corker expressed alarm over the way the administration is functioning, referring to "so much back-biting."

"Is the White House going to have the ability to stabilize itself?" he asked, while also voicing concern that the Russia issue could "destabilize our ability to move ahead as a country."

Senator Lindsey Graham of South Carolina, a prominent Republican voice on foreign policy who has been a Trump critic, called for a broader bipartisan congressional investigation, to be conducted by a special committee, if it turns out that Trump's presidential campaign communicated with the Russians.

"If it is true, it is very, very disturbing to me. And Russia needs to pay a price when it comes to interfering in our democracy and other democracies, and any Trump person who was working with the Russians in an unacceptable way also needs to pay a price," Graham told ABC's "Good Morning America."

In a series a series of Twitter posts on Wednesday, Trump called the reported Russian connection with his team nonsense, adding, "The real scandal here is that classified information is illegally given out by 'intelligence' like candy. Very un-American!"

Corker called the leaks to the news media a mere "sub-issue," saying the main issue was "getting to the bottom of what the Russian interference was and what the relationship was with associates of the Trump effort."

U.S. intelligence agencies previously concluded that Russia hacked and leaked Democratic emails during the election campaign as part of efforts to tilt the vote in Trump's favor.

White House press secretary Sean Spicer on Tuesday denied there had been any contact between any member of Trump's campaign team and Russia.

Corker said Flynn's testimony before Congress "would be a very appropriate thing for us to have happen."

Senate Majority Leader Mitch McConnell and House of Representatives Speaker Paul Ryan both dismissed the need for the creation of a special committee to look into the matter but promised the Republican-led Congress would move ahead in existing committees.

The Times, citing current and former U.S. officials, said U.S. law enforcement and intelligence agencies intercepted the communications around the same time they discovered Russia was trying to disrupt the presidential election by hacking into the Democratic National Committee.

Reuters could not immediately confirm the Times report, which the Kremlin dismissed as groundless.

CNN also reported that Trump advisers were in constant contact with Russian officials during the campaign.

The Times said the intercepted calls in its report were different from the wiretapped conversations that Flynn had with Russian Ambassador Sergei Kislyak.

Trump has long said that he would like improved relations with Russian President Vladimir Putin, and Flynn was a keen advocate of this.

Flynn's conversations with the Russian ambassador took place around the time that then-President Barack Obama imposed new sanctions on Russia on Dec. 29, charging that Moscow had used cyber attacks to try to influence the election.

A U.S. official familiar with the transcripts of the calls with the ambassador said Flynn indicated that if Russia did not retaliate, that could smooth the way toward a broader discussion of improving U.S.-Russian relations once Trump took power.

This was potentially illegal under a law barring unauthorized private citizens from interfering in disputes the United States has with other countries.

(Reporting by Susan Heavey; Writing by Will Dunham; Editing by Mohammad Zargham and Frances Kerry)

BBC News - UK inflation highest since June 2014

Inflation has reached its highest rate for two-and-a-half years, mainly as a result of the rising price of fuel.

Annual inflation as measured by the Consumer Prices Index (CPI) reached 1.8% last month, the Office for National Statistics (ONS) said, up from a rate of 1.6% in December.

It is the fourth consecutive month that the rate has risen and takes inflation to its highest since June 2014.

Fuel prices hit a two-year high in early February, according to the RAC.

As well as fuel, the ONS said food prices also contributed to the rise in inflation, as prices were unchanged between December and January, having fallen a year ago.

Offsetting these factors, the prices of clothing and footwear fell by more than they did 12 months ago.

The increase in the inflation rate takes it closer to the Bank of England's target rate of 2%, which was last seen in December 2013.

Inflation is widely expected to pick up this year as a result of the weaker pound, which is making imported goods more expensive.

Earlier this month, the Bank of England said it expected the inflation rate would hit 2.7% next year.

Rate speculation

Separate ONS figures for producer prices showed that input prices - the amount paid for materials and fuel by UK manufacturers - rose at an annual rate of 20.5% in January, the fastest pace since September 2008, and a rapid pick up in pace from the 15.8% figure seen in December.

The prices of goods leaving factories were up 3.5%

ONS head of inflation Mike Prestwood said: "The costs of raw materials and goods leaving factories both rose significantly, mainly thanks to higher oil prices and the weakened pound."

Chris Williamson, chief business economist at analysts IHS Markit, said: "While the further upturn in price pressures will fuel speculation that interest rates may start to rise later in 2017, the most likely scenario remains one of policy staying on hold over the next two years as the economy navigates through Brexit.

"Further upward pressure on prices looks inevitable in coming months as energy costs continue to climb and firms pass rising costs on to customers, pushing inflation up towards 3.0% in the second half of the year.

"Wage growth has crept up to 2.8%. However, our expectation is that it will slow, or at least remain muted, in 2017 as the labour market cools, providing the Bank of England with leeway to keep policy on hold."

Consumer inflation as measured by the Retail Prices Index (RPI), which includes housing costs, rose to 2.6% in January from 2.5% the month before.

---

Analysis: Simon Gompertz, personal finance reporter

A red light is flashing. It's been set off by a jump in what our manufacturers are having to pay for imported raw materials.

They face the same fuel price hike as motorists. Metals have gone up, and foodstuffs as well.

Companies aren't passing on the full 20.5% increase yet. They have only put their own prices up by 3.5% on average.

But the ONS warns that the increases are starting to show up on the High Street.

Shoppers are already faced with higher prices for imported cars, computers and kitchen equipment, the result of the drop in the value of the pound.

Soon our own factories could be charging substantially more as well.

Reuters News - 'Trump trades' on boost to economic growth come back with a bang

People walk through the lobby of the London Stock Exchange in London, Britain August 25, 2015. REUTERS/Suzanne Plunkett/File photo

By Jamie McGeever | LONDON

World stocks and bond yields rose on Monday, lifted by a re-emergence of so-called "Trump trades" as investors bet that the U.S. president's tax reform plans will boost economic growth and corporate profits.

Following on from Friday's record high closes on Wall Street, Asian stocks rallied to 1-1/2-year peaks and European stocks rose for the fifth consecutive session on Monday, their longest winning stretch for two months.

The Japanese yen was the biggest underperformer among major currencies, as is typical when riskier assets like stocks are doing well.

Investors were also comforted by the two-day U.S.-Japan summit held over the weekend apparently having ended smoothly without President Donald Trump talking tough on trade, currency and security issues.

"Markets have continued Friday's upbeat theme," said Kathleen Brooks, research director at City Index in London, noting that the VIX measure of U.S. stock market volatility closed last week below 11 for the third week in a row.

The last time this happened was over a decade ago.

"This is another sign that, for now, the Trump trade is still on. It also suggests that even with the controversy Trump has caused since he took office, financial markets are still willing to give him the benefit of the doubt," Brooks said.

Europe's benchmark index of leading 300 shares was up 0.3 percent at 1453 points, lifted by the mining and basic resources sectors. Basic resources rose 2.5 percent to their highest since August 2014.

Germany's DAX was up 0.4 percent, led by a 15 percent rise in drugmaker Stada after the company said it had received two offers for the acquisition of the company, one of which is private equity group Cinven Partners LLP.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.5 percent, with resource-related stocks again the driving force, while Japan's Nikkei rose 0.4 percent.

U.S. futures pointed to a higher open on Wall Street. The S&P 500, Dow Jones Industrials and Nasdaq Composite all posted record closing highs on Friday.

CONFORMITY

Comments from Trump on Thursday that he plans to announce what he said would be the most ambitious tax reform plan since the Reagan era in the next few weeks rekindled hopes for big tax cuts.

Economic data from major economies has also been upbeat, including Friday's Chinese trade figures, while U.S. corporate earnings have been also solid so far.

In the weekend meeting with Japanese Prime Minister Shinzo Abe, Trump held off from repeating harsh rhetoric that accused Japan of taking advantage of U.S. security aid, stealing American jobs and "playing money markets." Nor were currency issues discussed.

"The U.S. president has shown further signs of conformity in U.S. foreign policy during his weekend summit with Japan's prime minister Abe," Rabobank analysts said in a note on Monday.

Those apparently cordial discussions drove the dollar as much as 0.9 percent higher against the yen to 114.17 yen. It last stood at 113.65 yen, up 0.4 percent on the day and extending its rebound from a 10-week low of 111.59 yen touched last week.

Figures on Monday showed that Japan's economy grew for a fourth straight quarter in the final three months of last year as a weaker yen supported exports, but doubts over the sustainability of the recovery persisted.

The euro's rise of 0.5 percent against the yen to 121.00 yen, helped lift the European currency slightly against the dollar. The euro was last up 0.1 percent at $1.0650, inching further away from Friday's three-week low of $1.0608.

The euro has been dogged by fears about a strong showing for French far-right leader Marine Le Pen ahead of a presidential election.

Ten-year U.S. Treasury yields rose 3 basis points to 2.44 percent.

In commodities, copper hit its highest levels since May 2015 after shipments were shut off from the world's two biggest copper mines - due to a strike in Chile and an export's ban by Indonesia.

It last traded at $6,129 per tonne, up 0.7 percent on the day. On Friday it jumped more than 4 percent, its biggest one-day rise in almost four years.

Oil prices dipped slightly after strong gains on Friday on reports that OPEC members delivered more than 90 percent of the output cuts they pledged in a landmark deal that took effect in January.

International benchmark Brent crude futures fell 0.8 percent to $56.25 per barrel.

(Reporting by Jamie McGeever; Editing by Jeremy Gaunt)