Overseas Headlines- January 18, 2019

United States:

Trump Pulls U.S. Delegation Out of Davos Forum, Citing Shutdown

President Donald Trump canceled the U.S. delegation’s trip to the global economic summit in Davos hours after he denied House Speaker Nancy Pelosi a plane to visit U.S. troops in Afghanistan. “Out of consideration for the 800,000 great American workers not receiving pay and to ensure his team can assist as needed, President Trump has canceled his Delegation’s trip to the World Economic Forum in Davos, Switzerland,” White House Press Secretary Sarah Sanders said Thursday in a statement. Trump personally made the decision to cancel the Davos trip Thursday afternoon, two White House officials said. The need to focus on domestic issues has also forced U.K. Prime Minister Theresa May and French President Emmanuel Macron to cancel their plans to go. Treasury Secretary Steven Mnuchin was to lead the U.S. delegation, which was also to include Secretary of State Michael Pompeo and Commerce Secretary Wilbur Ross. Trump had planned to attend but previously canceled his own travel to the event because of the shutdown. Federal money typically already would have been spent on advance preparations for the cabinet secretaries’ trip. Trump informed Pelosi earlier Thursday that she couldn’t use a military plane to visit Afghanistan barely an hour before she was to depart, saying she should stay in Washington to negotiate.



Pessimism About U.K. Housing Is at Its Worst in Two Decades

The gloom gripping the U.K. housing market deepened in December, with real-estate agents reporting falling prices and optimism at its lowest ebb in two decades. The Royal Institution of Chartered Surveyors blamed Brexit uncertainty and a lack of housing supply for the malaise revealed in its latest monthly survey published Thursday. The downbeat assessment came as the Bank of England reported a slump in mortgage demand at the end of last year. Near-term sales expectations fell to their lowest since RICS records began in 1999 and an index of prices slid deeper into negative territory to its worst level since the eurozone sovereign-debt crisis. The 12-month sales outlook was slightly more upbeat, suggesting uncertainty surrounding what form of departure the U.K. will make from the European Union in March is playing a significant role. “It is hardly a surprise with ongoing uncertainty about the path to Brexit dominating the news agenda, that even allowing for the normal patterns around the Christmas holidays, buyer interest in purchasing property in December was subdued,” said RICS Chief Economist Simon Rubinsohn. “This is also very clearly reflected in a worsening trend in near-term sales expectations.”



Hong Kong Home Prices Enter Correction Territory, for Now

Home buyers in the world’s most-expensive property market may finally have something to cheer about — Hong Kong’s housing market is officially in correction territory. Secondary home prices have fallen by 9.8 percent from their peak in August, latest figures from Centaline Property Agency Ltd. released Friday show. That puts them at their lowest level since February 2018. “You can say it’s a correction with a 10 percent drop in prices, though it’s not a collapse,” said Patrick Wong, a real estate analyst with Bloomberg Intelligence. Various factors have combined to put downward pressure on home values, from worsening sentiment due to volatile markets and the U.S.-China trade war, to interest-rate rises and a looming vacancy tax. Prices still probably have about 5 to 10 percent further to drop, Wong said. The dip has been welcomed by would-be home buyers trying to get on the property ladder as well as government officials concerned about affordability. The question is how long the softness will last, particularly considering demand is still strong and there are growing signs the U.S. Federal Reserve may pause its upward trajectory. Citigroup Inc. sees signs of prices bottoming in the next two months as buyers begin to unleash pent-up demand, while Morgan Stanley expects a 2 percent rise this year for the same reason.



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