Sunday, May 28, 2017

Today's Headlines

  • Early China Data Shows Slowdown Biting Amid Credit Tightening. The first hints of China’s economic performance this month suggest that a slowdown in growth is taking hold, as policy makers beef up efforts to clamp down on financial risks. The international-investor optimism that dominated in the earlier part of the year is now souring, as curbs on leverage push up the cost of domestic borrowing. Small and medium-sized companies are also reporting dented confidence, and sentiment among sales managers and in the steel market worsened. A surprise cut in China’s debt rating by Moody’s Investors Service last week may mark a turning point for the world’s second-largest economy, as momentum weakens following a better-than-expected expansion in the first quarter. Yet the gloom shouldn’t spread too far, with consumers still spending, factory-gate prices gaining and home prices defying predictions of a hard landing.
  • Merkel Tells Beer Tent Rally That Europe Must Plot Own Course. German Chancellor Angela Merkel said Europe must plot its own course as she plunged back onto the campaign trail 17 weeks ahead of national elections. Fresh from a Group of Seven summit marked by a recalcitrant U.S. President Donald Trump, Merkel sought to shore up support in her bid for a fourth term on Sunday in a Bavarian beer tent, speaking to supporters of her Christian Social Union sister party, which has been hostile to her refugee policy.
  • Mattis Says U.S. Plans to ‘Take Apart’ Islamic State Caliphate. The fight against Islamic State has shifted to “annihilation tactics” to stop potential terrorists who’ve flocked to places such as Iraq and Syria from returning to their home countries to wreak havoc, Defense Secretary James Mattis said Sunday. In his first interview on a Sunday talk show since joining the Trump administration in January, Mattis provided details of the tactical shift he announced at the Pentagon on May 19. “We have already shifted from attrition tactics where we shove them from one position to another in Iraq and Syria,” Mattis said on “Face the Nation” on CBS. “Our intention is that the foreign fighters do not survive the fight to return home to North Africa, to Europe, to America, to Asia, to Africa.”
  • BMW to Stop Production in China, South Africa on Supply Shortage. BMW AG is set to extend production halts in Germany to China and South Africa on Monday as the luxury-car maker grapples with a shortage of steering parts. Production at the factories in Shenyang and Rosslyn is likely to stop for a day, while its plant in Leipzig, Germany, is expected to be partially shuttered, spokesman Michael Rebstock said. The Leipzig site has been closed since Friday, and another facility in Munich was affected last week as an unidentified Italian car-parts supplier has been unable to make the required deliveries, magazine Focus reported earlier Sunday.
  • Stocks Mixed as Yen Rises; Rand Pares Gain on Zuma. The yen rose 0.1 percent to 111.22 per dollar as of 9:12 a.m. in Tokyo. The Topix index fell 0.1 percent. The Kospi added 0.4 percent and Australia’s S&P/ASX 200 Index fell 0.3 percent. The yield on 10-year Treasuries was 2.25 percent at the end of last week. The rand rose 0.4 percent to 12.821 per dollar. The decision increases the chances that Zuma will survive a no-confidence motion called by opposition parties in parliament, whether or not the Constitutional Court orders a secret ballot for the vote. ANC lawmakers occupy 62 percent of the 400 seats in the National Assembly. The Aussie slid 0.1 percent to 74.39 U.S. cents.
Wall Street Journal:
Zero Hedge:

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