Donald Trump threw down the gauntlet on Mexico, threatening to set tariffs on all imports from America’s southern neighbour unless it stepped up efforts to stop illegal migration. The US president said in a statement on Thursday that goods coming from Mexico would be subject to a 5 per cent levy beginning on June 10 — and would be removed only if the migration “crisis” was “alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment”. Mr Trump added that the tariffs would be increased to 10 per cent in July, 15 per cent in August, 20 per cent in September and 25 per cent in October if the steps were not taken. “We have confidence that Mexico can and will act swiftly to help the United States stop this long-term, dangerous and deeply unfair problem,” he said on Twitter.
Theresa May made her final big gamble as prime minister on Tuesday, offering Labour a “new deal” that included the possibility of a second EU referendum in what she claimed was “the last chance” to deliver Brexit. But the British prime minister’s 10-point plan to build a cross-party consensus was declared dead on arrival by furious Conservative Eurosceptics; Labour leader Jeremy Corbyn called it “a repackaging of the same old bad deal”. Some Conservative MPs called for Mrs May to resign immediately rather than risk another humiliation in the House of Commons; the prime minister intends to present her revamped deal to MPs in two weeks’ time. In a hastily arranged press conference, Mrs May pleaded with her critics to consider her new offer, claiming that if they rejected it they would be “voting to stop Brexit”. She said: “I have compromised — now I ask you to compromise too.”
Hefty quantities of debt could impose severe strains on some US businesses in a downturn but the borrowings do not present a threat to the overall stability of the financial sector, the Federal Reserve chair has said. Jay Powell said regulators are co-operating to better understand the risks presented by leveraged lending, and debts among companies have reached a level that should “give businesses and investors reason to pause and reflect”. “However, the parallels to the mortgage boom that led to the Global Financial Crisis are not fully convincing,” Mr Powell said in a speech in Florida. “Most importantly, the financial system today appears strong enough to handle potential business-sector losses, which was manifestly not the case a decade ago with subprime mortgages.” Regulators around the world have been homing in on the $1.4tn market for leveraged loans — the practice of extending credit to low-rated, more indebted companies — as indebtedness surges and lending standards loosen.
Google has dealt a blow to Huawei’s fast-growing consumer smartphone business by suspending the delivery of key software and technical services to the Chinese company, according to two people familiar with the situation. Huawei, the world’s number two smartphone maker after Samsung, relies on Google’s Android operating system for its phones - of which it shipped more than 200m last year. The suspension, first reported by Reuters, follows Washington’s move last week to add Huawei to its entity list, meaning US companies will need to secure government approval before selling parts or components to Huawei. While the Android operating system is open source and publicly available, Huawei will no longer be able to access proprietary apps and services from Google, according to one person familiar with the move. It will still be able to access the publicly-available version of Android.
Bitcoin is on fire. The cryptocurrency soared above $8,000 this week, pushing its total gains for the year to 125%. Bitcoin is now sitting just under its 52-week highs, but some experts warn a pullback could be coming. “We had rallied above key resistance but then failed on two different occasions,” Anthony Grisanti of GRZ Energy said Wednesday in a “Futures Now ” segment. ”Bitcoin has doubled in the last five months, so I would expect a bit of a pullback, and on the downside, there’s a very interesting gap there, from $6,870 to $6,425.” “If we start getting some profit-taking in this market, it will fill in that gap, but that’s actually very healthy for markets going forward,” Grisanti said.
President Donald Trump is poised to issue an executive order as early as Wednesday that would effectively prohibit US companies from using any telecoms equipment manufactured by China’s Huawei. One person familiar with the situation said Mr Trump planned to issue the order on Wednesday afternoon, just days after the US and China failed to reach a deal to end the trade war between the countries. China hawks in the Trump administration have been pushing the president for months to sign the executive order, as the US security and intelligence establishment sounds the alarm about the Chinese company. Mr Trump previously resisted, partly because he did not want to jeopardise a potential trade deal with China.
Donald Trump’s top economic adviser sought to contain the fallout from the escalation of trade tensions with Beijing, saying there was a “strong possibility” the US president would meet Xi Jinping, China’s president, to rescue a deal at the G20 summit in Japan next month. Larry Kudlow, the director of the National Economic Council, raised the prospect of a face-to-face encounter between Mr Trump and Mr Xi as the US moved to impose sharply higher tariffs on billions of dollars of Chinese imports, dramatically raising the stakes in the trade dispute between the countries. On Monday, the US administration is expected to release details of a further $300bn of Chinese imports that it wants to hit with 25 per cent tariffs if there is no progress in the negotiations with Beijing, after already moving to raise levies on an earlier list of $200bn of Chinese goods from 10 per cent to 25 per cent on Friday.
Theresa May has told senior Tories she will make a fourth attempt to break the Westminster deadlock on Brexit before European elections take place on May 23, as she tries to head off growing demands that she quit. But the prime minister has also promised to meet the executive of the 1922 committee of backbench Conservative MPs next week to discuss a timetable for her departure. “She’s living from day to day,” said one minister. Brandon Lewis, the Conservative chairman, warned a sullen meeting of Tory MPs on Wednesday night to expect the worst in the European Parliament elections. Downing Street fears that the results will lead to a clamour for Mrs May to step down. The prime minister tried to buy time by telling senior Tories that she would bring forward the legislation to ratify her withdrawal treaty in the next two weeks, even though the chances of winning the backing of MPs currently look minimal.
US stocks opened sharply lower on Monday after Donald Trump threatened to raise tariffs on all Chinese imports to 25 per cent, sharply ratcheting up pressure on Beijing to make concessions in trade talks and sending global equities markets sliding. The US president made the threat in a number of tweets on Sunday and Monday just a few days ahead of a make-or-break round of trade negotiations scheduled to begin on Wednesday. Levies imposed on Chinese goods over the past year as part of the trade war with Beijing were “partially responsible for our great economic results” and had “little impact on product cost”, Mr Trump wrote on Sunday. He added that the current 10 per cent tariffs on $200bn of Chinese goods would rise to 25 per cent on Friday, and that $325bn of additional Chinese goods that were currently “untaxed” would “shortly” be subject to tariffs of 25 per cent.
Donald Trump has threatened to raise tariffs on all Chinese imports to 25 per cent, sharply ratcheting up pressure on Beijing to make concessions in trade talks and causing China’s stock markets to tumble 6 per cent in morning trade. The US president made the threat in a pair of tweets on Sunday just a few days ahead of a make-or-break round of trade negotiations scheduled to begin on Wednesday. Levies imposed on Chinese goods over the past year as part of the trade war with Beijing were “partially responsible for our great economic results” and had “little impact on product cost”, Mr Trump tweeted. He added that the current 10 per cent tariffs on $200bn of Chinese goods would rise to 25 per cent on Friday, and that $325bn of additional Chinese goods that were currently “untaxed” would “shortly” be subject to tariffs of 25 per cent.
Investors are flocking back to a complex debt-derivatives product blamed for amplifying losses in the financial crisis, reckoning that the securities are safer now that they are no longer backed by subprime mortgages. The vehicles, known as “synthetic” CDOs, short for collateralised debt obligations, bundle together derivatives whose returns depend on the performance of bonds, loans and other debts — providing hedge funds and other investors another way to bet on the creditworthiness of corporate America. In contrast to standard CDOs, which bundle the bonds and loans themselves, synthetic CDOs proved especially destabilising during the crisis because they allowed multiple bets on the same subprime mortgages. Because the newer vintages are backed by corporate debts, rather than risky home loans, Wall Street banks and investors argue the chances of disaster have been dramatically reduced.
Federal Reserve Chairman Jay Powell said he sees no immediate need to move interest rates either higher or lower, with the central bank still watching intently for a rebound in persistently sluggish inflation. The US central bank kept the target range for the benchmark federal funds rate unchanged at 2.25 to 2.5 per cent on Wednesday, a decision that was widely expected in financial markets. It made a technical tweak to one of its key rates to ensure borrowing costs remain where it wants them to stay. Mr Powell said “solid fundamentals” are supporting the economy and argued temporary factors might be holding down inflation, which was just 1.6 per cent in March, according to the Fed’s favoured measure. “We do think our policy stance is appropriate right now — we don’t see a strong case for moving in either direction,” Mr Powell said during a news conference after the bank’s rate decision was announced.
Apple predicted a quicker rebound than expected from a six-month revenue slide as a slump in iPhone sales moderated, sending its shares up 5 per cent in after-market trading on Tuesday. The company issued revenue guidance of $52.5bn-$54.5bn for the quarter to the end of June, the third of its fiscal year. At the midpoint of the range, that was $1.5bn above most analysts’ estimates and pointed to a slight revenue increase from the $53.3bn in sales of the same quarter the year before. Speaking in an interview ahead of the company’s earnings call with analysts, Luca Maestri, chief financial officer, said the guidance reflected growing confidence in the prospects for the iPhone after the company’s shock profit warning at the start of the year.
The dramatic call to arms by two of Venezuela’s most important opposition figures for the military to oust the regime of Nicolás Maduro started at dawn outside the Carlota military air base in Caracas. By mid-afternoon, the putsch appeared to have failed. One of the leaders, Leopoldo López, took refuge in the Spanish embassy with his family. The other, Juan Guaidó, was blocked by security forces from marching on the presidential palace. Nor were there concrete signs of defections by the army’s top leadership. The unrest was the latest manifestation of a three-month bid for the presidency by Mr Guaidó, who is backed by the US and over 50 other countries. John Bolton, US national security adviser, told reporters that the US’s “primary objective was a peaceful transfer of power”. But he added: “All options remain on the table.” Mr Guaidó, 35, bases his claim to the presidency on being head of the National Assembly, and says that the constitution has been usurped by Mr Maduro following elections last year that many countries consider a sham.
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March 2021
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