“Trump’s invite to July 14 Bastille Day Celebrations….”

Trump’s invite to July 14 Bastille Day Celebrations

President Trump on Thursday arrived in Paris after an invitation to meet Emmanuel Macron for the July 14 Bastille Day military parade and the commemorations of the entry 100 years ago of US troops into World War One. Both have an incentive to improve ties and amongst the topics to be discussed are shared diplomatic and military endeavours and the civil war in Syria.

Cyber Unit between Russia and US

On Friday President Vladimir Putin and President Donald Trump discussed forming a Cyber Security Unit to address issues like the cyber meddling of elections. It was rejected by several of Trump’s fellow Republicans who questioned why the United States would work with Russia after Moscow’s alleged meddling in the 2016 US election.

Syrian Civil War

The United States, Russia and Jordan on Friday reached a ceasefire and “de-escalation agreement” for southwestern Syria.

US – Employment

The Labour Department said on Friday that nonfarm payrolls increased by 222,000 jobs last month and employers increased hours for workers. This is a sign of labour market strength.  The unemployment rate rose to 4.4 percent from a 16 year low of 4.3 percent in May because people were looking for work, a sign of confidence in the labour market.  Average hourly earnings increased 0.2 percent, in June after gaining 0.1 percent in May.  Employment gains in June exceeded the 186,000 monthly average for 2016, evidence that the economy is regaining momentum in the second quarter. Employment gains were broad in June, with manufacturing jobs increasing by a 1,000 after factories shed 2,000 jobs in May.  The automobile sector lost a further 1,300 jobs as slowing sales and increased inventories forced manufacturers to cut production.  Construction added another 16,000 jobs last month, health care employment surged by 59,100, while the professional and business sector service created 35,000 jobs. Likewise government employment increased by 35,000 jobs.

US – Janet Yellen’s Speech

According to Fed Chair Janet Yellen the US economy is healthy enough to raise rates and start winding down its massive bond portfolio although low inflation and a low neutral rate may leave the central bank with less leeway. Despite a slow growing economy, jobs continued to be added, household consumption was steady and  business investment increased recently.  The economy is also supported by stronger economic conditions abroad.  She said that the Fed “continues to expect that the evolution of the economy will warrant gradual increases in the federal funds rate over time”.  She also added that reductions in the Fed’s securities portfolio of more than $4 trillion are likely to start this year.

US – The email

The lawyer of Donald Trump Junior acknowledged on Monday that his client received an email last year offering a meeting with someone who had potentially damaging information on Hillary Clinton, hours after a report that the younger Trump had been told it was part of a Russian effort to help his father’s campaign. The New York Times reported earlier on Monday that Rob Goldstone (a former British tabloid reporter) told Donald Trump Jr. in the email that the information was coming from a Russian lawyer as part of a Russian government effort to help in his father’s bid for the White House.

China

The People’s Bank of China has added liquidity via open market operations for the first time in 13 days on Tuesday, showing signs that it is ready to pump liquidity back into the country’s financial system. A total of 459.5 billion yuan of funds issued via reverse-repurchase agreements and the PBOC’ s medium-term lending facility comes due this week.  This is the highest since week ending 5 June.

On a different note China posted stronger than expected trade figures for June arising from a higher global demand for Chinese goods and strong appetite for construction materials at home. Exports rose 11.3 percent from a year earlier while imports increased to 17.2 percent.  China posted a trade surplus of $42.77 billion in June (May:  $40.81 billion).

UK  

British Households are continuing seeing their spending power eroded from wage increases and the rising cost of living. The unemployment rate fell to 4.5 percent the lowest since 1975 with employment climbing to a record of 32 million. Pay however remained subdued even though the latest three months saw a healthy demand for labour.  These figures underscore the dilemma facing policy makers as to whether interest rates should be increased.  Earnings in the public and private sector rose by 1.4 percent and 2.2 percent respectively.

Germany

The Federal Statistics Office released strong trade figures on Monday with German exports increasing more strongly than expected in May and higher than imports, widening the trade surplus of Europe’s biggest economy. Seasonally adjusted exports climbed for their fifth consecutive month increasing by 1.4 percent while imports rose by 1.2 percent.  The seasonally adjusted trade surplus climbed to EUR 20.3 billion from a revised EUR 19.7 billion in April.  Germany’s wider current account surplus measures the flow of goods, services and investments which rose to EUR 17.3 billion.  Manufacturing data released on Friday showed industrial output rose more than expected in May.  The International Monetary Fund has raised its growth forecast for the German economy to increase by 1.8 percent in 2017 in real terms from increased domestic demand and recovered exports.

Oil

Libya and Nigeria which so far have been exempted from global cuts this year could be asked to cap their crude output soon in an effort to help re-balance the market said Kuwait Oil Minister Issam Almarzooq. Crude oil fell into a bear territory in June due to concerns that the cutbacks by producers of the OPEC, Russia and other allies are being partially offset by a rebound in Libya, Nigeria and US shale output.  While Libya’s oil output has increased by more than 1 million barrels a day for the first time in four years, Nigeria’s production rose 50,000 barrels a day in June, according to a Bloomberg survey.

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