“Trump and the end of DACA…”

daca

Trump and the end of DACA

Trump has decided to end a program that prevents the deportation of immigrants illegally brought to the US as children. The group is known as Dreamers. Attorney General Jeff Sessions announced the decision of Donald Trump to end the Deferred Action for Childhood Arrivals known as DACA program and called it “an unconstitutional exercise”. Trump will delay the action for six months so that Congress can work on legislation. Many business leaders have underscored the economic contributions made by immigrants many of whom are employed by the largest companies in the US and from a broad range of industries including technology, finance and retail. Some have called on Congress to pass new legislation while others threatened legal action. Many of the comments by executives across several large American industries show that people affected by the DACA decision are employed by some of the nation’s biggest companies. A particular sector that has outspoken on the issue is the tech sector as it employs many immigrants and their children.

North Korea

On Sunday North Korea carried out its sixth and most powerful nuclear test, which was of an advanced hydrogen bomb for a long-range missile. If the United States or its allies were threatened it could trigger a massive military response. On Monday the Japanese yen, gold and sovereign bonds all rose as investors were looking into safer harbours on news about the North Korea latest nuclear test and on reports that Pyongyang is making preparations for another missile launch. President Donald Trump agreed to support billions of dollars in new weapon sales to South Korea after North Korea’s largest nuclear test. Trump’s ambassador to the United Nations said the US will seek the strongest possible sanctions against the regime of Kim Jong Un.

US Economy

After two straight months of hefty increases, the US job growth slowed more than expected in August. Nonfarm payrolls increased by 156,000 last month less than economists had forecast at 180,000. On the contrary, the Institute for Supply Management reported its factory activity index soared to 58.8 in August which is the highest since April 2011. This is the latest sign that global factory growth was increasing. In the oil market prices were subdued due to the closure of US production following the hurricane Harvey and were balanced by an expected downturn in crude demand as the storm hit refineries along the gulf of Mexico.

US – The Debt Ceiling

According to Senate Majority Leader Mitch McConnell said that there are three important things that need to be addressed, the need to provide emergency Harvey aid, keep the government funded and avoid a default. Lawmakers have to address the debt limit before the end of September. There is already bipartisan agreement on the need to fund disaster relief programs for Harvey. The White House asked for nearly $8 billion in emergency aid, which the House is expected to vote on this week. There are signals by officials that President Donald Trump will not put pressure on his demand to fund a wall on the US-Mexico border this month, a measure which is opposed by Democrats. Republicans and Democratic congressional leaders will meet with Trump at the White House Wednesday to discuss the agenda of this month.

US – Florida and Hurricane Irma

Hurricane Irma is moving in a fast way towards South Florida and businesses are bracing for the worst with potentially catastrophic winds. Cruise liners, banks and money managers prepared contingency plans. Since 1992 when Hurricane Andrew devastated the peninsula, South Florida has developed into a financial center attracting hedge fund offices and billions in wealth from across the US, Latin America and beyond. The news about the storm effecting the third most populous US state sent cruise line and insurance stocks plunging.

Australia

The Reserve Bank of Australia left benchmark interest rates unchanged at a record low of 1.5 percent for the thirteenth month as expected.

Brexit Talks

Another round of Brexit talks failed to breakthrough in the negotiations with the EU in particular over the UK’s financial obligations, the enforcement of citizen’s rights and even in the sequence of talks. Furthermore, EU’s deputy Brexit negotiator, Sabine Weyand, told German lawmakers that she is skeptical that officials will be able to begin discussing a trade deal in October as was hoped for. The warning emerged as the opposition Labour party announced it will seek to block May’s plan for a post-Brexit legal regime in London. Theresa May has also suffered the leak of a draft plan for new immigration rules that would end the free movement of workers on the day UK leaves the EU, and impose restrictions on all but highly skilled workers from the region. The document obtained by the Guardian said that immigration should not just benefit the migrants, but “make existing residents better off.” The UK seeks creative bespoke arrangements for the future, while the EU says that any deal will depend on whether Theresa May’s government is willing to fully comply with the legal order already in place within the EU. The EU said that it will not discuss the new free-trade agreement that the UK wants until sufficient progress has been made on the divorce issues, including the financial settlement, the rights of citizens and the border between Northern Ireland and the Irish Republic.

UK Economy

As the worries about Brexit mount the British economy is losing momentum. The IHS Markit services Purchasing Managers’ Index fell to 53.2 in August from 53.8 in July, representing the lowest reading since September 2016, shortly after the referendum decision to leave the European Union. The British economy initially was unaffected by the Brexit vote in June last year before its slowed sharply in early 2017 as rising inflation and a weak wage growth ate into household’s pockets. British shoppers increased their spending in August but there is no indication that the squeeze on spending is easing. Markit’s industry reports which include manufacturing and construction suggest the economy will grow about 0.3 percent this quarter, matching the pace of the three months through June.

Euro Zone business Activity

The IHS Markit final composite Purchasing Manger’s index for the euro zone held steady in August at 55.7, above the 50 mark level that separates growth from contraction since mid-2013. According to Chris Williamson chief business economist at IHS Markit, “the solid PMI readings for July and August set the scene for another strong GDP number for the third quarter.” Forward looking indicators imply that there will be little slowdown this month with new orders, backlogs of work and employment. The output price index rose to 52.1 from 51.7 while inflation got closer at 1.5 percent which is closer to the European Central Bank’s target. A PMI that covers the EU services industry fell to a seven month low of 54.7 in August from the 55.4 in July.

Antonella Mercieca

Client Relationship Manager

Source:

Reuters, Bloomberg

Date:

September 7th, 2017


‘Disclaimer: The information provided on this website is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning investments or investment decisions, or tax or legal advice. Similarly, any views or options expressed on this website are not intended and should not be construed as being investment, tax or legal advice or recommendations. Investment advice should always be based on the circumstances of the person to whom it is directed, which circumstances have not been taken into consideration by the persons expressing the views or opinions appearing on this website. Timberland Finance has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website. You should always take professional investment advice in connection with, or independently research and verify, any information that you find or views or opinions which you read on our website and wish to rely upon, whether for the purpose of making an investment decision or otherwise. Timberland Finance does not accept liability for losses suffered by persons as a result of information, views of opinions appearing on this website. This website is owned and operated by Timberland Invest Ltd.’

Subscribe To Our Newsletter

Be one step ahead with our latest news updates.

Timberland Finance,
CF Business Centre,
Gort Street,
St Julians STJ 9023
Malta