Overseas Headlines- July 4, 2019

United States:


U.S. Employment Is Looking Cooler Ahead of Friday’s June Jobs Data

 “U.S. labor market data flashed mixed signals Wednesday ahead of the marquee monthly jobs report for June, with several private reports weakening while jobless claims improved. Hiring at U.S. companies rebounded by less than forecast in June, to 102,000 jobs from a nine-year low of 41,000 in May, according to ADP Research Institute data. The Institute for Supply Management said its measure of employment growth in service industries posted the steepest drop in 16 months. Applications for unemployment benefits, meanwhile, declined for the second time in three weeks and remain near the lowest since 1969, government figures showed. Federal Reserve policy makers are monitoring the jobs market for signs of strain as they consider whether to cut interest rates. A solid headline number Friday could dissuade them from lowering borrowing costs, while poor data could provide a green light. Financial markets are pricing in a rate cut later this month amid uncertainty over trade policy and slowing global growth. At the same time, robust job gains in recent years and the lowest unemployment rate in a half century have been sustaining consumer spending and boosting attitudes, extending the current economic expansion that’s now the longest on record. “Overall it’s still a tight labor market, but it’s becoming less tight,” Jennifer Lee, senior economist at BMO, said by phone from Toronto. “It points to slower job gains at a time when you’re seeing slower growth across the country in almost all areas. I’m not going to hold my breath for something strong Friday.” ”





Europe Set to Keep Hold of IMF Leadership as Lagarde Leaves

 “European governments expect to maintain the seven-decade tradition of selecting the leader of the International Monetary Fund as Christine Lagarde prepares to step down. Lagarde’s likely exit for the European Central Bank will fire up the debate over whether an emerging market candidate would be better suited to running the Washington-based lender. But officials from two key European governments said they anticipate pressing for continuity. The recent appointment of American David Malpass to the presidency of the World Bank continues the unwritten transatlantic agreement on how to split the two jobs and creates leverage given President Donald Trump’s pick faced no opposition from Europe. It remains too early to predict who Europe’s candidate will be with Lagarde only nominated for the ECB presidency on Tuesday after a weekend of haggling between governments. She’s not set to move to the ECB until after October 31 and EU lawmakers need to sign off on the appointment first.”


China and U.K. Escalate Their War of Words Over Hong Kong

China and Britain’s war of words over Hong Kong escalated, with the two sides openly accusing each other of behaving inappropriately toward the former U.K. colony. Foreign Secretary Jeremy Hunt said the U.K. is keeping its options open over its threat of “serious consequences” if China fails to honor the letter and spirit of an agreement that guarantees freedoms in Hong Kong.  “I’m not saying anything about what those consequences might be, that would not be the right thing for me to do as foreign secretary because of course you keep your options open,” Hunt told BBC radio on Thursday. “The U.K. views this situation very very seriously, we are a country that has championed democracy, the rule of law and civil rights across the world for much of our history and we see this situation as very worrying.” China’s ambassador to London, Liu Xiaoming, gave a rare televised statement on Wednesday, accusing the British government of meddling. His comments came after Prime Minister Theresa May told Parliament that she was “shocked” by the scenes of violence when protesters stormed the Hong Kong Legislative Council on Monday. “The U.K. government chose to stand on the wrong side, it has made inappropriate remarks, not only to interfere in the internal affairs of Hong Kong but also to back up the violent lawbreakers,” Liu said. He also said Britain has tried to “obstruct” Hong Kong authorities from “bringing the criminals to justice, which is utter interference in Hong Kong’s rule of law.” Liu was in turn summoned to the U.K. Foreign Office to explain his comments. The row has sabotaged Britain’s attempts to improve relations with China as it prepares to leave the European Union and looks for trade deals around the world.”


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