Closing Wrap - Thursday 13.02
Headlines
  • Fed's Kaplan: Coronavirus Makes 2020 Outlook Less Certain
  • Republican Senator Raises Concerns Over Shelton’s Fed Candidacy
  • Fed Nominee Waller: Would Cut Rates To Zero During Next Downturn
  • US Underlying Consumer Prices Rise In January
  • WH Does Not Have ‘High Confidence’ In China’s Coronavirus Info
  • IMF Sees Resilient Chinese Economy In Mid To Long-Term Despite Virus
  • ECB's Panetta Sees Decision On New Policy Strategy At Year-End
  • EU Leaves Eurozone Growth Forecast Unchanged For This Year And Next
  • UK Economic Policy Left In Disarray After Chancellor Quits
  • IEA: Global Oil Demand Shrinks, Hit By Coronavirus
  • US Adds Racketeering Conspiracy Charge Against Huawei
  • Tesla Plans $2 Bln Offering As Elon Musk Seizes On Stock Surge
  • Tesla Fields Fresh SEC Inquiry After Another Investigation Ends
  • Barclays’ Jes Staley Probed Over Links To Jeffrey Epstein
Commentary
Republican Senator Raises Concerns Over Shelton’s Fed Candidacy

A senior Republican senator raised concerns Thursday over the recent writings of one of President Trump’s nominees to the Federal Reserve Board, clouding the prospects for her Senate confirmation.

 

Economist Judy Shelton has advocated for the Fed to cut interest rates over the past year in part to prevent the U.S. dollar from strengthening relative to other currencies and in response to rate cuts by other central banks.

 

“I think that’s a very, very dangerous path to go down, this beggar-thy-neighbor mutual currency devaluation, and it is not in the mandate of the Fed to pursue it,” said Sen. Pat Toomey (R., Pa.) while questioning Ms. Shelton at a confirmation hearing before the Senate Banking Committee. “I don’t think it’s achievable.”

 

Ms. Shelton defended her views. “We have to be aware of what central banks are doing,” she said. (WSJ - Continue Reading)

EU Forecasts Cast Doubt On Johnson’s UK Growth Ambitions

The executive arm of the European Union is the latest group to cast doubt on the U.K. government’s ambitious growth targets, two weeks after the country formally left the bloc.

 

The economy is set to grow 1.2% both this year and next, the European Commission said in its updated forecasts published Thursday, down from the 1.4% it expected previously. That’s a far cry from Chancellor of the Exchequer Sajid Javid’s ambition to lift U.K. growth towards its post-war average of almost 3% a year.

 

The downgrade follows growth warnings in recent weeks from the Bank of England and the National Institute of Social and Economic Research.

 

Britain formally left the EU at the end of January, and has just 11 months to thrash out a new trading relationship with the bloc, a feat that most trade experts see as unrealistic. (Bloomberg - Continue Reading)

JPMorgan Asset Bets On Treasuries, Aussie Dollar To Cope With Virus Impact

JPMorgan Asset Management is taking a two-pronged approach to trading the impact of the deadly coronavirus, buying Treasuries for safety but also the Aussie and Singapore dollars which it thinks have dropped too far.

 

The money manager is snapping up U.S. five- to 10-year notes as a hedge against a slowdown in the Chinese economy and also against some of the currency risk it is taking, said Julio Callegari, a fixed-income money manager at the firm that oversees $1.7 trillion. JPMorgan Asset is also buying Chinese government bonds on expectations the central bank will introduce more monetary stimulus.

 

 “The virus will have a significant impact, but concentrated in the first quarter,” Callegari said of the effect on China’s economy. “We’ve added a bit of U.S. Treasuries, the idea is to have some quality duration,” while the Aussie has suffered a lot and could see some recovery, he said.

 

In turning bullish on Treasuries, JPMorgan Asset joins the likes of BNP Paribas SA and Saxo Capital Markets. (Bloomberg - Continue Reading)

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